Public-Sector Unions Are a Major Obstacle to Fighting Waste, Abuse

Published February 1, 2007

Recent studies by Citizens Against Government Waste (CAGW) show public-sector unions are among the biggest obstacles to efforts aimed at addressing state and local government waste, fraud, and abuse. The organization’s ongoing series of Piglet Books chronicle wasteful government spending in individual states.

In almost every state examined so far, public-sector unions flexing their political muscle create budget problems, hurt government performance, and threaten states’ and cities’ economic health, according to the CAGW reports.

Source of Waste

Undue labor influence is a major source of waste in the education system. The Los Angeles Daily News reported on November 28, 2005, for example, that the cash-strapped Los Angeles Community College District (LACCD) lost nearly $1 million over the past three years on its food-service operation. Cafeteria workers in the LACCD were paid $15 an hour plus benefits, the article noted.

State law requires the district to use unionized employees to flip the burgers and ring the registers. The political strength of public employee unions makes it difficult for local school districts to contract out food services, transportation, and basic facilities maintenance.

Teachers’ unions are often more powerful in setting school policy than parents, voters, and elected officials.

To express their displeasure with a contract offer by the Ramona school district in California, about 135 members of the Ramona Teachers Association showed up at a board meeting in January 2006 to oppose an unrelated bond measure. In a bold display of hardball, the union president told trustees the bond campaign would never go forward unless the union’s demands were met first.

Claims of Underfunding

Also in January 2006, Oklahoma’s largest labor union, the Oklahoma Education Association (OEA), joined three school districts to file a lawsuit claiming school funding in Oklahoma is inadequate. But according to the Oklahoma Council of Public Affairs, the per-pupil cost of education in Oklahoma was $11,250 in 2003.

That’s about $200,000 per classroom. One district, Jenks, was so “underfunded” it had 18 football coaches for nine K-12 schools.

Two weeks after the labor union filed its lawsuit, Cole Hargrave Snodgrass & Associates asked 400 Oklahoma voters, “Which of the following comes closest to your beliefs?” While 41 percent said, “the simple fact is that our schools need more money,” 52 percent said, “our schools would have enough money if they spent it appropriately instead of wasting it.”

Burgeoning of Bonuses

Including pay, perks, and pensions, total compensation for public employees is vastly superior to that in the private sector. In Los Angeles, public-sector employees have hit the jackpot.

Intense labor negotiations have led to a quadrupling of bonus payments over the past five years.

Los Angeles police and firefighter bonuses soared to $80 million in fiscal 2005, accounting for nearly three-quarters of the $117 million in bonus payments to all municipal workers. In the fire department, the annual increase in bonuses has averaged a whopping 41 percent since 2001.

City Controller Laura Chick told the Los Angeles Daily News for a March 21, 2006 article, “I think the most pure and simple answer is labor asked for these bonuses, and the city gave them.”

Los Angeles is battling a projected budget deficit of nearly $300 million over the next five years.

Record Pay Raises

In June 2006, California state firefighters received the largest one-time pay increase ever obtained by members of a state labor union, costing taxpayers $38.7 million in fiscal 2007.

Some raises reached an average of 22 percent, and some employees will be able to retire with pensions higher than even their final salary.

And this does not include retiree health benefits. New government accounting rules that have recently gone into effect require the reporting of retiree health benefit liabilities, and preliminary figures indicate in many cities, retiree health care will soon be nearly double the cost of existing workers’ heath care.

Calculating health care costs for state government workers, the University of California, and local school districts, California taxpayers could be liable for up to $140 billion or more over the next 30 years.

Need for Transparency

With their sky-is-the-limit approach to government benefits, unions are oblivious or indifferent to the drastic tax increases or deep spending cuts that will be necessary down the road. Much of this information is now available thanks to a change in California accounting standards, whereby “governments must account today for future costs of guaranteed medical benefits for retirees.”

However, the trend toward increasing transparency is not universal. The Marin Independent Journal reported on January 25, 2006 that Marin County officials have a new privacy policy prohibiting the public from obtaining names of public employees and their pay.

For more than 130 county employees, Marin officials doled out more than $120,000 in annual pay raises for 2006. The Marin County Board of Supervisors discussed the raise with union groups and individuals … but not with the taxpaying public.

Chic Perks

Some union contracts even require chic perks such as bottled water for employees. The San Francisco Chronicle on November 26, 2006 reported that San Francisco has spent more than $2.3 million of taxpayers’ money in the past four-and-a-half years on bottled water, despite having access to some of the best-tasting tap water in the nation.

Unions also lobby against measures designed to hold public employees accountable.

In Minnesota, for example, the original intent of the Quality Compensation (Q-Comp) Aid program was to replace a teacher pay system based on college degrees and tenure with a system based on student performance. What ultimately emerged from the legislative process was a watered-down version to appease the union.

The new pay system complements, but does not replace, the old system, providing a funding windfall to school districts.

Systemic Abuse

In CAGW’s Piglet Books series, there emerges a pattern of systemic abuse of taxpayers by public-sector unions. The books show government unions use their strength to lobby for extravagant pay and benefits, dictate public policy, and undermine transparency and accountability, behaving more like masters than public servants.

There are certainly many hardworking government employees who produce results and make sacrifices in their line of work. But the public must distinguish between those workers and the politically driven unions that represent them, the books make clear.

Tom Schatz ([email protected]) is president of Citizens Against Government Waste, a nonpartisan, nonprofit organization representing more than one million members and supporters nationwide.

For more information …

All of Citizens Against Government Waste’s Piglet Books are available online at