Sunday, August 12, 2012

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.

12 comments:

StanH said...

Well I’ll be, as Jed would say. My guess just a hiccup, they’ll get right back to the insanity while no ones looking.

LawHawkRFD said...

Stan: That's probably right, but there are rumblings of "enough" statewide. I think a lot of these big spenders genuinely believed the ride would never end and the money would magically appear.

Tennessee Jed said...

Speaking of Jed, I just got back from a trip to Lawrenceburg, Tn. for the memorial service for my mother-in-law. We will miss her, but she had a very nice long run at 87 years old. Lots happening in my absence, I see.

AndrewPrice said...

I can't see California doing anything the right way except by accident.

tryanmax said...

Why won't California just hit the wall already!?

LawHawkRFD said...

Tennessee: Welcome back. My sympathies on your loss. And it has been a busy few days.

LawHawkRFD said...

Andrew: Even an accident would help. I don't know if they've seen the handwriting on the wall through the mist or what. But even some Democrats are starting to wake up. Moonbeam Brown hasn't endorsed the measure, but he hasn't opposed it either, and he may be looking for it to help his tax measure which is also on the November ballot.

LawHawkRFD said...

tryanmax: Californians have lived in Eden for so long that the residents think it will just go on forever. As bad as its deficit is, it is still in many ways a wealthy state. It's going to take longer to hit the bottom than most. And what a crash that's going to be.

Joel Farnham said...

LawHawk,

It sounds like California has some life still. I hope the democrats are too discouraged to screw it up. You do know that California will be considered lost when no one can get a signal in or out. ;-)

LawHawkRFD said...

Joel: I hope you'll all come and rescue me when that happens. Just announce yourselves first. LOL

Individualist said...

They have pieces of paper with Obama's picture clearly in profile portrait style (reading across the short end of teh paper). They papers are in a breifcase and wrapped in stacks like you wood money. So I am assuming so....

Never once did they expalin why the surving United Federation of Britain would put the big O on their money.

This is not the first time Hollywood has done this. Their was an Eddie Murphy movie a while back about the future (I beleive it was on the moon - I forget) anyways Eddie says here are these Hillaries and throwss money with Hillary Clintons picture on it. This was before OBama's annointment as the Messiah.

The whole thing was laughable. by the way the movie was not that good. They would have been better off doing a seauel and having Arnold star.

LawHawkRFD said...

Indi: Too bad. You're right--a sequel (with Ahnuld) would have made much more sense. These re-makes are almost always disasters. Clash of the Titans immediately comes to mind.

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