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Supreme Court Eyes Unions Politicking With Fees Compelled From Workers

Unions spent $1.7 billion on politics in 2016 cycle; a ruling this June could bring that down

In a 2014 Rolling Stone article titled, “Three New Ways The Koch Brothers Are Screwing Americans,” the author wrote of an “outpouring of money” from billionaires Charles and David Koch.

The article reflected fears prevalent on the left and in the mainstream media related to the 2010 Supreme Court ruling in the case Citizens United v. Federal Election Commission. It held that government restrictions on political spending by corporations — including nonprofit corporations organized by individuals motivated by ideology or political views — infringe on free speech rights recognized by the First Amendment to the U.S. Constitution.

In 2016, The New York Times echoed the fears of the 2014 Rolling Stone article with a report that the Koch political network planned to spend $900 million on a political campaign, which the newspaper called “unparalleled.”

Similar stories often downplay that the Citizens United ruling also struck down restraints on political spending by labor unions.

Largely underreported is U.S. unions spent $1.7 billion during the 2016 election cycle, according to an analysis by the National Institute for Labor Relations Research.

Some of that political spending was by union political action committees, which are funded by voluntary contributions by union members and others. But 75 percent of union political spending came from what are called “treasury funds.” This money does not come from voluntary contributions, but from union “agency fees" and dues. These are fees that workers in a unionized workplace are compelled to pay to the union as a condition of employment.

In June, another case before the Supreme Court, Janus v. AFSCME, could have major impact on future political spending by big labor.

Mark Janus is an Illinois state employee who sued because he believes these compulsory union agency fees violate his free speech rights by making him pay for political activities he does not support. His lawyers also argue that in the context of a government workplace, union collective bargaining itself is inherently a political act because the outcomes relate directly to public policy decisions by government.

If Janus prevails, government employee unions will lose their power to compel government employees to pay agency fees. This would be equivalent of adopting a nationwide right-to-work law for public employees.

“The unions spent $1.7 billion on politics in 2016, just about all of which went in a leftward direction,” said Larry Sand, president of the California Teachers Empowerment Network. “If the Janus case is successful for the plaintiff, it will be interesting to see how much union political spending habits will be impacted. Will the union spend more on right-of-center candidates to attract members? Will they be content to keep spending on progressives but with fewer members/dollars? Only time will tell.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

School District Gets More From State For Fewer Students, Super Calls It Inadequate

Holland Schools’ budgets also stressed by factors common to districts across the state

Another public school official in Michigan is talking about inadequate state funding as one of the reasons his district is financially strapped.

Holland Public Schools Superintendent Brian Davis told the MLive news site that Michigan has to begin funding schools adequately if it wants to improve education. In the same story, MLive stated that “inadequate state funding” was partly to blame for the district’s fiscal problems.

Yet in the 2016-17 school year, the Holland district received an extra $816 per student from the state compared to 2010-11, even after adjusting for inflation. A big problem for the Holland district is having 345 fewer students than it did in 2010-11. The largest part of state funding is based on enrollment, and the district’s student counts are down 9.1 percent over this period, from 4,120 students in 2011 to 3,775 in 2016-17.

But even with fewer students, the district still received $25.8 million overall from the state last year. That is up $2.9 million since 2010-11, in part due to the higher per-pupil funding. The district also received other revenue streams from the state.

The Holland district’s budgets are being stressed by a number of issues common to many public schools across the state. Contributions to the state-run school employee pension system cost Holland Public Schools $8.5 million in 2016-17, up from $4.7 million in 2010-11.

The district has also seen a decline in federal funding. It received $7.5 million from the federal government in 2010-11, when dollars from the Obama administration’s stimulus program were flowing. By 2016-17, federal funding was down to $5.0 million.

“Michigan has fallen behind because of its funding,” Davis told MLive. “Over the years, we’ve seen stagnant funding, a significant decline, and last year, an up-growth that was still below the rate of inflation.”

He continued, “For example, he said the district current's $7,631 in per-pupil funding, is just slightly above the $7,448 Holland was receiving almost 10 years ago.”

But these numbers include only one stream of state funding, the district’s per-pupil foundation allowance, determined by a formula that includes both state and local school tax dollars. The foundation allowance accounts for only about 75 percent of what a typical Michigan school district gets from the state.

For example, Holland Public Schools received $1.5 million in extra “at-risk” funding for students from low-income households, $2.3 million for special education, and $3.2 million to help cover those rising pension costs. Those three items came to an additional $7 million on top of the state foundation allowance.
Davis didn't respond to an email seeking comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.