Is California Following Wisconsin's Lead?

I'm not talking about becoming fiscally responsible, or possibly going from blue to purple to red. California is permanently blue and its economic scorecard will be printed in red ink for decades to come. But there is one small ray of hope for some fiscal sanity. The legislature has refused to do what is necessary to get public employee debt under control, so the people may end up doing something about it via a state initiative.

The move doesn't match Wisconsin's, but it's a start.

The ship has hit the sand in the formerly Golden State. Employee pensions and benefits for public union employees have already bankrupted three of its cities—Vallejo, Stockton, and San Bernardino. Others are quickly approaching the brink. The whole state can't be far behind. Two major cities have addressed the problem with local ballot measures. San Diego, California's second largest city, passed a measure curbing future increases in the huge city-paid public employee pensions and drastically reducing those benefits for new employees. That is not a huge surprise, since San Diego is California's cleanest and most efficient big city, and leans moderate/Republican.

San Jose, California's third largest city, is a bit more of a surprise. San Jose recently passed a similar ballot measure, and it passed by a whopping 70%. San Jose leans heavily Democratic. Even more surprising is the fact that the Democratic mayor of San Jose, Chuck Reed, led the charge for pension reform and limits on public employee union direct involvement in political matters. It goes without saying that the representatives of the public employees unions immediately filed suit to stay implementation of the reforms. San Jose has temporarily avoided bankruptcy largely because of the huge taxes paid by its industries, including the computer industry and major dot.com companies like Google. But oppressive state taxes are driving major players out of Silicon Valley and into more business-friendly states.

The state initiative measure is less drastic, but moves the debate to the entire population and accomplishes a couple of major goals. It would specifically prohibit unions and corporations from contributing directly to candidates. It wouldn't have any effect on PACs. But as a companion to that, the measure includes the previously-failed “paycheck protection” provisions. Unions collect dues from their members whether they like it or not. And whether the members like it or not, a huge percentage of those dues go not to employee protection, but rather to left wing, Democratic political causes.

Currently, the weak and confusing decision in Beck v Communications Workers has had little effect on the unions' ability to use dues for political causes. If a member does not want to be an active union employee, he or she must file a “Beck statement,” which limits the dues collected to narrowly-defined activities. His or her dues must then be reduced by the percentage the union spends on political causes.

The unions routinely lie, and reduce the dues by 2% to 5%, depending on the weather. But the National Right to Work Foundation has filed multiple suits proving that the political spending is (depending on the union) somewhere between 18% and a stratospheric 48%. The NRTW Foundation has not lost a single case, but because of the arcane rules, it can only file for complaining individuals rather than entire groups. So the unions take a temporary loss, and move on to bigger and better extortion.

Wisely, the organizers of the measure included corporations in their restrictions. It is consistent with the Citizens United case. But it also corrects the problem that caused the paycheck protection plan to fail previously. This measure includes both unions and corporations, where the previous failed measure addressed unions only. Under this measure, no organization can use forced deductions to pay for candidate campaigns. Not from stockholders, employees or union members.

In the past year, public-sector unions and trade unions contributed $2.7 million to political candidates (96% Democratic) in California, while large corporations gave $4.3 million, almost evenly distributed. Under this measure, neither could make any direct contributions to candidate campaigns. The supporters of the measure have very smartly pointed that out, and emphasized instead that “special interests” should be curtailed. But the real distinction is that unlike unions, businesses cannot forcibly take money from their employees to support candidates that many of the employees oppose. This measure would fix that problem for union members and have no effect whatsoever on non-union employees.

In short, the measure prohibits the unions from forcing deductions from the member's paycheck for political candidates, and it equally prohibits the corporations from deducting that money from their union employees' paychecks. Sauce for the goose, sauce for the gander. In the case of public employees particularly, this is a big hit. Not a Wisconsin-style hit, but a hit nonetheless. Paycheck deduction is automatic for public employees (unless they want to fight a Beck case). In the private sector, paycheck deduction is allowed, but not required. Most union employees just go along with it because it relieves them from having to write a check once a month and getting fined and disciplined by the union if they forget to write that check.

The measure levels the playing field a bit, but until Californians are ready to seriously restrict public employee contracts and collective bargaining a la Wisconsin, this is just a band-aid on a cancer. And until the state does so, it is headed the way of Vallejo, Stockton, and San Bernardino. Democratic politicians should pay heed to the efforts of the San Jose mayor and city council.