Walters: New State Budget a Windfall for Unions

The state budget package Democratic legislators and Gov. Gavin Newsom just enacted is sprinkled with billions of dollars in extra goodies for their most important political constituency, labor unions.

Take, for example, Senate Bill 90, the budget’s omnibus education measure. It would allocate $3.1 billion to reduce mandatory payments that local school districts would otherwise have to make to the State Teachers Retirement System (STRS) and the California Public Employees Retirement System (CalPERS).
CalPERS has been ramping up mandatory contributions from school districts and local governments to deal with tens of billions of dollars in unfunded pension liabilities. Former Gov. Jerry Brown and the Legislature rescued STRS from its similar situation by requiring the state, teachers and school districts contribute more.
By reducing those payments, the appropriations would put that much additional money on the table for school salary negotiations. It bails out districts, such as Los Angeles Unified, Oakland Unified and Sacramento Unified, that have dug deep financial holes by overspending and underwrites salary negotiations in other districts.
Another budget trailer bill, Senate Bill 75, provides $36 million to help pay non-teaching school employees during summer vacations – in effect, extra pay for the unionized workers.

Similar to What Happened a Couple of Decades Ago

SB 75 also allocates $10 million to create records on childcare workers, with the stated goal of making it easier for the Service Employees International Union or some other labor organization to organize them in the future.
The state is pouring hundreds of millions of dollars into expanding what’s called “early childhood education” and unions see the child care industry as ripe for unionization.
It’s similar to what happened a couple of decades ago when workers who care for the elderly and disabled under the federal-state In-Home Supportive Services (IHSS) program were designated as employees who could be unionized.
Speaking of which, still another budget trailer bill, Senate Bill 80, would impose financial penalties on counties that don’t reach a contract agreement with IHSS worker unions, thus giving them leverage in negotiations.
The biggest labor bill of the year, however, is not attached to the budget. Assembly Bill 5 would lock into law a ruling by the state Supreme Court that several million workers who have been treated as contractors must become payroll employees with the attendant benefits and, of course, the potential to be unionized.

Assemblywoman Gonzalez Has Agreed to Only a Few

Unions sought the ruling, saying workers misclassified as contractors were being exploited, citing drivers for on-call transportation services such as Uber and Lyft as examples.

The measure has touched off furious efforts by affected employers, and sometimes their contract workers, for exemptions but the author of AB 5, Assemblywoman Lorena Gonzalez, has agreed to only a few.
Gozalez, a Democrat from San Diego and a former union official, moved the bill through the Assembly easily, but its fate in the state Senate is uncertain. That said, she has a powerful lever because if the Legislature doesn’t act, the Supreme Court ruling’s three-factor test for who’s an employee and who’s not remains in effect.
While a Legislature dominated by Democrats makes its bias for union organization quite obvious, there is one notable exception.
Assembly Bill 969, also carried by Gonzalez, would allow the Legislature’s own workers to become union members. It didn’t even receive an initial hearing in the Assembly’s labor committee.
It’s a stark example, not the first, of the Legislature’s penchant for imposing obligations on others while exempting itself.
CALmatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.