The death of U.S. Supreme Court Justice Antonin Scalia likely spared public-employee unions a devastating legal defeat. In Scalia’s absence, the 4-4 stalemate in Friedrichs v. California Teachers Association allowed labor groups to continue charging an “agency fee” to employees who don’t want to join a union. Now, powerful government-employee unions face another legal challenge, this time from disgruntled taxpayers who object to paying the salaries of union officials engaging in political activities.
Most state constitutions—47 out of 50, according to one expert—bar “gifts” of taxpayer funds yielding no public benefit. Texas’s constitution prohibits the grant of public funds to private parties except for a legitimate public purpose, a “clear” public benefit, and with adequate contractual controls. Yet, despite a 1979 ruling by the state attorney general that “release time” constitutes an illegal gift of taxpayer funds, some local governments in Texas grant such subsidies in public-employee union contracts, at an annual cost to taxpayers approaching $1 million.
Texas’s current attorney general, Ken Paxton, recently intervened in a taxpayer lawsuit in Travis County district court challenging the practice of “release time” in a contract between the city of Austin and the union representing the city’s firefighters, Austin Firefighters Association, Local 975. (Disclosure: I am one of the plaintiffs in that case.) The AFA Local 975 contract provides for 5,600 hours per year of salary subsidies to the union, almost the equivalent of three full-time employees. In Austin alone, the cost of “release time” for the city’s unionized police, firefighters, and emergency medical personnel in 2012 and 2013 exceeded $800,000. (While the terms of public-employee union contracts are not readily available, researchers from the Competitive Enterprise Institute have identified similar provisions in contracts between the City of San Antonio and its public-safety unions, which cost taxpayers about $400,000 annually.)
What exactly are union officers allowed to do on the taxpayers’ nickel while on “release time”? Under the current union contract, the officers of AFA Local 975 can participate in negotiations, adjust grievances, attend dispute-resolution proceedings, attend union conferences and meetings, and even engage in partisan political activities related to “wages, rates of pay, hours of employment, or conditions of work” affecting members of the union. In other words, city officials have empowered officers of AFA Local 975 to lobby against the interests of the taxpayers—while being paid by the taxpayers.
Public-employee unions mimic the private-sector collective bargaining model created in 1935 by the federal National Labor Relations Act, though the NLRA is predicated on a supposed “inequality of bargaining power” between capital and labor that doesn’t exist in the public sector. The extent and expense of government services are quintessentially political decisions. Due to economic competition, businesses have strong incentives to resist paying overly generous wages and benefits, the costs of which are passed through to consumers in the price of their products. The marketplace constrains private employers’ generosity.
Public-sector “managers” responsible for “negotiating” with public-employee unions face no such constraint. Taxpayers must pay for government services regardless of cost or quality. In fact, public-employee unions campaign for the election of “friendly” politicians who will reward their support with lavish contracts. The taxpayer has no champion in public-sector collective bargaining; the unions effectively negotiate with themselves. Even the most ardent New Dealer, President Franklin D. Roosevelt himself, opposed collective bargaining in the public sector.
“Release time” amounts to a direct subsidy of political activity, which Texas attorney general Paxton contends isn’t permitted by the state constitution. “In Texas, a public purpose has never been defined to include political activity by a private organization,” he argues. Moreover, there are no controls on Local 975’s use of release time. Local 975, like all public-employee unions, makes contributions to political candidates, lobbies for and against legislation, and endorses candidates for office. “Granting public funds to private political entities is not a legitimate public purpose,” Paxton maintains.
The union defends the release-time provision as the result of a negotiation, not a gift. Local 975 president Bob Nicks, a full-time union functionary whose six-figure salary is paid by the taxpayers, calls the lawsuit “a state-wide attack on all public sector employee groups, not just the AFA.” The president of the Texas State Association of Fire Fighters stated that the release-time provision is “common practice across the state and the nation.” The lawsuit against AFA Local 975 is in its early stages, and the losing party will certainly appeal, making the final outcome years away. In the meantime, similar taxpayer challenges to release time are pending in Idaho and Pennsylvania.
In October, the Arizona Supreme Court upheld—by a 3-2 vote—a release-time provision in the contract between the City of Phoenix and its police union. Phoenix taxpayers won in the trial court and at the intermediate court of appeals, but lost at the state supreme court, because Justice Clint Bolick, whom Governor Doug Ducey recently appointed, was forced to recuse himself. Bolick had handled the litigation while working at the Goldwater Institute (which, along with the Texas Public Policy Foundation, also serves as counsel in the Austin case). The justice assigned to replace Bolick in the case voted in the union’s favor, agreeing with the majority that release time served a public purpose. The logic? Release time is part of the overall compensation package negotiated by the city, which benefited from a “harmonious and cooperative relationship” with its police union.
Public-employee unions are among the most powerful and well-financed interest groups in America, wielding tremendous influence at the state and local level. Elected officials betray the taxpayers they represent by subsidizing—and thus further empowering—these unions with unlawful “gifts” of public funds. The flukish result in Arizona won’t affect the Austin litigation because—thanks to federalism—each state is responsible for interpreting its own constitution. Texas and Arizona gift-clause jurisprudence differ in important respects. Likewise, neither the Supreme Court’s stalemate in Friedrichs nor the results of the 2016 presidential election will prevent additional legal challenges to public-employee unions under state constitutions.