Supreme Court Justices Take Up Payroll Deductions for Union Politics

Published February 1, 2009

The U.S. Supreme Court is considering a case addressing whether the First Amendment to the U.S. Constitution requires local governments to collect political funds for government employee unions, a decision with major implications for future elections.

The case centers on Idaho’s Voluntary Contributions Act, which became law in 2003. The act prohibits state and local governments from using their payroll systems to collect political contributions automatically from employees’ paychecks.

Important Issues

The Supreme Court heard arguments on November 3. The case raises important public policy questions of whether taxpayer resources should be used to collect political funds for a private organization and whether unions should get special government assistance in raising money.

A decision in favor of the unions also would raise the question of whether other organizations, such as the National Rifle Association or Sierra Club, should receive similar favors. The Court is expected to issue a ruling by June.

Claimed Free Speech Violation

Several unions challenged the Idaho law as a violation of their free speech rights. In 2007 the U.S. Ninth Circuit Court of Appeals ruled although the state could regulate its own payroll systems, it could not regulate payroll systems of local governments.

During the Supreme Court arguments, Idaho Deputy Attorney General Clay Smith argued in favor of the law, saying if the state can properly regulate its own payroll systems, as the unions concede, it could regulate the payroll systems of local governments, which are legal subdivisions of the state.

The justices appeared divided on the issue. Justice John Paul Stevens suggested there was a partisan motivation behind the law. “There’s no evidence whatsoever that it serves the purpose that everybody is talking about,” he said.

Justice Ruth Bader Ginsburg also was concerned about targeting labor unions. “Does the ban affect any other organization? Isn’t it simply union speech that’s at stake?”

Special Benefit Cited

On the other side, Justice Antonin Scalia pointed out the distinct privileges unions enjoy when representing government employees. “It doesn’t seem to me particularly discriminatory to say that … in making those deductions, no part of it will be given for political activities. I mean you’re only addressing a narrow class, but it’s a narrow class that has a special benefit.”

Jeremiah Collins, arguing for the Pocatello Education Association, said the law regulates a form of political speech and therefore must survive the Court’s highest standard for review. Justice Stephen Breyer said he struggled with this argument, pointing out jury rooms are reserved for trial deliberations, and no one claims a violation of free speech if other activities are prohibited in the jury room.

Collins also argued the state does not subsidize local payroll systems and should not be entitled to regulate political withholdings. Ginsburg questioned that distinction. “Isn’t there some state tax money that goes to fund local units?”

Justice David Souter likewise criticized that argument. “Why isn’t the state in exactly the same position in making that judgment, whether it’s talking about money that goes directly into the state coffer or public tax money that happens to be going into a town coffer?”

Skeptical Response

During his argument, Collins raised some eyebrows when he said, “When [the statute] says to local governments, who in the state of nature can allow whatever they want in the way of speech, when it says that we will not allow these kinds of deductions, it’s blocking speech that would take place but for the government intervention.”

Justice Anthony Kennedy dryly responded, “I’ll read Rousseau again, but I didn’t think Pocatello, Idaho was part of the state of nature.”

Michael Reitz ([email protected]) is general counsel of the Evergreen Freedom Foundation, a free-market policy institute in Olympia, Washington. He helped write an amicus brief filed with the Supreme Court in support of the Idaho law.