THE FINANCIAL POWER OF PUBLIC SECTOR UNIONS

Across the United States, public sector unions collect and spend at least $4.0 billion per year. Virtually all of this money is spent to influence politics, either directly through political contributions, or indirectly through “soft” money that unions deploy to mobilize “volunteers,” fund “educational” programs, and pay a permanent professional army of union employees who supposedly spend most of their time on collective bargaining but in reality are full-time political operatives.
Source: Public Sector Unions Spend $4.0 Billion per Year in U.S., March 23, 2012

California’s public sector unions collect and spend over $1.1 billion per year. Estimating total annual dues revenue for California’s public sector unions is relatively straightforward. Multiplying 1,407,504 reported members paying either dues or agency fees by an average of $775 per year equals $1,090,699,318, or not quite $1.1 billion. Since the payroll data provided by the state controller does not include K-12 teachers, nor local police and firefighters, professions where the annual dues are almost always over $1,000 per year, this estimate of $1.1 billion is probably low.
Source: California Public Sector Union Revenue Exceeds $1.0 Billion Per Year, September 18, 2012

California’s public employee unions spend at least $250 million per year on politics. These are direct political expenditures for lobbying, campaign contributions, and independent expenditure campaigns.
Source: Public Sector Unions & Political Spending, September 23, 2010

Public sector unions have minimal financial reporting requirements. This dearth of oversight is a significant contrast from the financial reporting laws that govern private sector unions, most of which impose a much greater level of openness and transparency than is found with public sector unions. At the end of 2010, at the close of the mid-term election cycle, California’s public sector unions were estimated to have over $200 million in cash-on-hand with minimal debt.
Source: Understanding the Financial Disclosure Requirements of Public Sector Unions, June 20, 2012

Business interests outspend unions in federal elections by a margin of approximately 2-to-1, not 15-to-1, as frequently claimed by union spokespersons. But union spending is almost exclusively on behalf of Democrats, whereas corporate spending is almost perfectly balanced between Republicans and Democrats.
Source: Which Special Interests Are Partisan?, December 15, 2011

Public sector unions exercise nearly absolute power over the political process in California. They have been attempting to suppress the state initiative process as well as local efforts at fiscal reform. With their supermajority in the state legislature they can be expected to resume their attacks on direct democracy.
Sources:

California’s Government Unions Fight Reformers, September 9, 2011
Unions Continue Efforts to Suppress California Initiatives, August 3, 2011
California’s Legislature Continues to Propose Laws to Preserve Union Power, July 13, 2011
California Legislature Targets Initiatives, June 13, 2011

THE COMPENSATION OF CALIFORNIA’S STATE AND LOCAL GOVERNMENT WORKERS

California’s average state or local government worker earns over $100,000 per year. The average total compensation (pay, overtime, and employer paid benefits) for a state or local government employee in California is at least $102,000 per year – much more if you lower the pension fund’s earning projection of 7.5% per year. The average private sector worker in California makes at most $57,000 per year.
Source: Calculating Public Employee Total Compensation, December 19, 2010

California’s state controller has provided misleading data that grossly understates public employee compensation. A “transparency” website unveiled in November 2012 by California’s State Controller provides “average wage” information for state and local government workers, but includes in the average part-time employees and does NOT include in the average any overtime pay, “other” pay, or employer paid benefits. Here are three examples of just how much these averages are being understated:

State Controller: Anaheim city worker’s “average wages” = $53,927.
Truth: Anaheim city worker’s average total compensation = $146,551.

State Controller: Costa Mesa city worker’s “average wages” = $71,379.
Truth: Costa Mesa city worker’s average total compensation = $146,863.

State Controller: San Jose city worker’s “average wages” = $61,308.
Truth: San Jose city worker’s average total compensation = $149,907.

Source: California State Controller’s Employee Pay Tracker Grossly Understates Actual Compensation, November 14, 2012

Over 80% of the state budget goes to pay employee compensation. Once “pass-throughs” to local agencies are deducted from the denominator, over 80% of the state budget is used for employee compensation, far more than is generally admitted by government or union spokespersons. Virtually 100% of Bond Funds and Federal Funds are pass-throughs to local governments and agencies, and about 70% of the General Fund are passed through to local governments and agencies. This leaves between 30% of the General Fund and 100% of the Special Funds to pay for state employees, i.e., $49.7 billion in FYE 6-30-2010. Using these numbers, state employee compensation consumes 84% of the state revenues that are retained by the state and not passed through to local governments. Similar percentages, i.e., between 70% and 80%, of local government budgets go to pay government employees.
Source: What Percent of California’s State and Local Budgets are Employee Compensation?, February 11, 2011

The average California firefighter makes over $200K per year in average total compensation, including the annual employer paid costs of funding their current benefits and future retirement benefits:
Source: California’s Firefighter Compensation, August 31, 2010

Public safety employees in California saw their total compensation increase by 20-30% more than the rate of inflation during the period 1991-2011:
Source: California’s Public Safety Compensation Trends 2000-2010, October 2011 

California’s public university employees average well over $100,000 per year in total compensation. A mid-level, mid-career employee working in as support staff in the U.C. System makes, on average, direct pay of $74,290 per year. Adding employer paid benefits, they make on average total compensation of $115,322 per year. A mid-level, mid-career professor or other senior professional working in the U.C. System makess, on average, direct pay of $131,712 per year. Adding employer paid benefits, they make on average total compensation of $203,621 per year.
Source: The Real Reason for College Tuition Increases, June 8, 2010

THE REAL COST OF PENSIONS FOR CALIFORNIA’S UNIONIZED GOVERNMENT WORKERS

The average public employee retires after a full career with a pension that exceeds $60,000 per year. When union or pension fund spokespersons claim that the “average pension” for a CalPERS or CalSTRS retiree is only $25,000, or “three quarters of CalPERS retirees collect pensions of $36,000 or less,” they are misleading the public. Because these averages include people who didn’t work their entire career in public service, barely vesting any pension, and these averages also include people who retired decades ago, before rates of pension eligible pay and pension benefit formulas were elevated to today’s unsustainable levels. In reality, the average CalPERS or CalSTRS retiree who has worked 30 or more years for the government, and who has retired in recent years, is over $60,000 per year. If a government worker puts in 40 years of service, which is typical in the private sector, their pensions average over $80,000 per year.
Source: CSEA Understates Average State Pension, May 31, 2011

For every 1.0% that the return on investment to the pension funds drops from the current projection of 7.5%, taxpayers will have to pay an additional $10 billion per year into the funds. If pension funds only earn 3.8% per year, which is the rate CalPERS uses when calculating how much a city has to pay to opt-out of their system, every taxpaying California household would have to pay an additional $8,600 per year in taxes just to keep the California’s government worker pension funds solvent.
Source: How Much Could California’s Government Pensions Cost Taxpayers?, January 27, 2012

If pension fund returns drop by 1.0%, pension fund contributions have to increase by 10% of payroll. Put another way, for every 1.0% that the return on investment to the pension funds drops from the current projection of 7.5%, participants in the plan – or taxpayers, since the participant’s contribution via withholding is frozen per collective bargaining agreements – will have to contribute at least another 10% of pension eligible salary to the fund.
Source: A Pension Analysis Tool for Everyone, April 2, 2012

Public employee unions exercise strong influence over pension fund management. Public employee union members, including officers and former officers, occupy board memberships on the major public employee pension funds as well as a super majority on the board of the influential National Conference on Public Employee Retirement Systems (NCPERS).
Source: Unions & Pension Funds, December 22, 2010

 

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