Nick Dranias

No Taxpayer Subsidies for Public Employee Unions

Posted on September 21, 2011 | Type: Policy Report | Author: Nick Dranias
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Arizona may be a right-to-work state, but a new investigation by the Goldwater Institute shows that public-employee unions still wield outsized influence on elected officials—and they are using that power to feather their own nests.

Reporter Mark Flatten’s investigation shows that Phoenix taxpayers are picking up the tab for the full salary and benefits of some city employees who do nothing but union work while on the clock. Unions that represent city workers have used their clout to negotiate contracts with the city that pay union bosses to do union business. This cost taxpayers $3.7 million last year, and allowed the unions that represent city workers to rack up as many as 73,000 hours doing union business at taxpayer expense.

Flatten also reveals that Phoenix is only the tip of the iceberg. Similar contracts exist between public-sector unions and the cities of Tempe, Mesa, Chandler and Glendale. Among major valley cities, only Scottsdale has refused to offer unions this perk.

The reason for such taxpayer abuse is simple: Public-sector unions essentially vote for their bosses.

Investigative Report: Read Mark Flatten's "Money for Nothing" here


Every elected official knows his or her political future may be determined by union turnout and behind-the-scenes campaigning during the next election. And this is particularly true in city elections, held in off-years when turnout is low, government insider interest is high, and the power of special interests such as government-employee unions is magnified.

Not surprisingly, many elected officials choose to act in accordance with union desires—and approving contracts that pay union management with taxpayer dollars is just one example of government waste caused by union influence.

But in today’s tough times, state and local governments are coming to realize that the old way of smoothing-over labor relations with unearned pay and benefits is no longer feasible. Increasingly, they understand that public-sector unions have used collective bargaining and its close cousin, “Meet and Confer” negotiations, as political devices to secure outsized compensation packages and benefits.

More and more elected officials realize they now have no choice but to structurally reform the public-sector labor relationship to eliminate structural deficits and avoid chaos in government finances. As a result, particularly in Wisconsin and Ohio, there has been an explosion of legislative activity and interest aimed at restricting the ability of public employees to bargain collectively.

In a forthcoming policy report, the Goldwater Institute will fully assess the burden public sector unions impose on taxpayers. It will underscore that there is a huge distinction between unions in the public sector and unions in the private sector.

Public-sector unions are labor monopolies in a situation where the government is also a monopoly supplier of their services. It is far too easy for union labor and government management to collude and pass excessive costs onto the taxpayer.

Moreover, no less than elected officials, public employees are trustees of the power delegated by citizens to the government. Public-sector unions violate a basic public trust when they use collective bargaining to secure one-sided and obviously unsustainable benefits. For these reasons and others, the Goldwater Institute recommends that Arizona join North Carolina and other states that completely prohibit state and local government officials from contracting with public employee unions, requiring all employment relationships to be individually negotiated.

Flatten’s investigation also shows that one very simple reform could save millions of dollars: State and local government should not pay public employees for time spent working exclusively on union business. The practice should be banned by the Legislature or by charter amendment at the local level.

Unions claim that city employees should be paid to work exclusively on union business in order to facilitate employee grievance processes or to enhance training opportunities. Policymakers should reject those claims. Facilitating employee grievance processes is the responsibility of unions, not taxpayers. What else is the purpose of union dues?

The bottom line is that millions of hard-earned taxpayer dollars must not be handed over to union bosses for nothing. We must put an end to this practice today.

Nick Dranias holds the Clarence J. and Katherine P. Duncan Chair for Constitutional Government and is director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the Goldwater Institute.

Investigative Report: Read Mark Flatten's "Money for Nothing" here

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