Lack of Transparency in Public Contract Negotiations Would Lead to Higher Taxpayer Costs

Kerry Jackson
Kerry Jackson is a Fellow at the California Center for Reform at the Pacific Research Institute.

No state needs to reform the relationship that governments have with public-employee unions more than California. Yet lawmakers keep going in the wrong direction.

Contract negotiations between government and the labor unions who represent the public employees should be transparent. Too often, both sides are working toward a common goal – a generous deal for the unions.

Simply put, there isn’t much bartering between state and local governments and the public-sector unions. Union bosses secure the contracts they want because there is little push back during collective-bargaining sessions. This arrangement has been finely tuned. Unions have for decades delivered cash and manpower to elect friendly candidates to state and local office. 

Representatives of local and state officials are obliged to represent the taxpayers during labor negotiations. But it’s in their political interest to keep the government dollars flowing so the unions will keep pumping dollars into their campaigns.

The more taxpayers know about this double-dealing, though, the more likely they are to demand change. No wonder Sacramento wants to make the talks secret.

Assembly Bill 1455, which is currently awaiting a State Assembly vote, would conceal the material content of collective bargaining talks with public-employee unions from taxpayers, who have to pay for above-market wages, hordes of duplicative and often unnecessary positions, and luxurious retirements.

The floor analysis of AB 1455 says that the bill “exempts from required disclosure under the California Public Records Act the records of local agencies related to collective bargaining if those records reveal a local agency’s deliberative processes, impressions, evaluations, opinions, recommendations, meeting minutes, research, work products, theories, or strategy” associated with discussing union contract talks.

The bill’s author, Assemblyman Raul Bocanegra, argues that “the purpose of such exemptions is to allow public employee unions and public agencies to engage in candid and fully informed collective bargaining negotiations without the potentially disruptive effects of public disclosure of those negotiations.” In other words, don’t let those who have to pay for the sweet union deals have any voice in the process.

Maybe the most unintentionally humorous passage of the floor analysis is that under “Fiscal Effect,” it lists “None.”

But there will be a fiscal impact, and it will grow as unions become more politically powerful and less accountable while taxpayers’ influence wanes.

Public-sector unions already “have become the nation’s most aggressive advocates for higher taxes and spending,” the Manhattan Institute’s Steven Malanga noted in the Orange County Register a few years ago. “They sponsor tax-raising ballot initiatives and pay for advertising and lobbying campaigns to pressure politicians into voting for them. And they mount multimillion dollar campaigns to defeat efforts by governors and taxpayer groups to roll back taxes.”

Seven years ago, Steven Greenhut, then director of the Pacific Research Institute’s journalism center, wrote a book entitled “Plunder! How Public Employ Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation.” He uncovered “a massive transfer of wealth from the private sector to the public sector, from taxpayers to tax consumers.”

A few years later, the Pacific Research Institute’s Wayne Winegarden said that “the large compensation premium earned by government workers compared to workers in the private sector is an economic inefficiency whose costs are borne by California’s current and future taxpayers.” Now the latest research from the California Policy Center found that unionized government employees in the state “make twice as much” as private-sector workers, “and that the gap is widening.”

Unionized public-sector employees also enjoy princely health care coverage, and gold-plated pensions that generally begin significantly earlier than private-sector workers’ retirements.

Again, this is at everyone else’s expense. The Stanford University California Pension Tracker estimates that the state’s public-employee pension systems have run up a debt of nearly $970 billion, when calculated on a market basis. Each California household’s share of the debt is more than $75,000, which is $13,000 more than the state’s median household income. If that debt were to be paid “exclusively through tax increases,” Winegarden said in a report last year, it “would require the largest tax increase in California’s history.”

Given the huge financial stakes, lawmakers should think twice before taking away an important tool that taxpayers can use to hold their representatives accountable during future contract negotiations.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

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