Two Arizona taxpayers aided by a free-market think tank have successfully challenged the practice of paying public workers to do work for their unions.  Represented by lawyers from the Goldwater Institute, they have won a precedent-setting court order ending paid leave for Phoenix police to perform union duties on the taxpayers’ clock.  The Arizona court ruled that paid union administrative leave was an illegal gift of public funds to a private entity, the union. In our first report in this series, we discussed how the City of Albuquerque is struggling to shake off this practice, inherited form collective bargaining agreements negotiated by the administration of former Democratic Mayor Marty Chavez.  The Arizona case may show Albuquerque the way to get it done.

Money for Nothing

A Goldwater Institute study entitled “Money for Nothing: Phoenix Taxpayers Foot the Bill for Union Work,” by investigative reporter Mark Flatten, found that Phoenix taxpayers for years had been paying full salary and benefits for city employees to work exclusively for labor unions. This practice is replicated in New Mexico, though on a smaller scale.  As we reported previously, the president of Albuquerque’s AFSCME local works full time for the union on a city salary.  Santa Fe gives firefighter union officers paid leave to engage in political activity.  Other New Mexico communities also pick up the cost of having city workers serve as union officials to a lesser extent.

The Goldwater Institute’s investigative reporter Mark Flatten discovered that taxpayers paid $3.7 million per year for more than 73,000 hours of “release time” for public workers to engage in unsupervised and unaccountable activities on behalf of their unions.  Six police union officials worked full-time for the union on paychecks cut by the City of Phoenix.  Their collective bargaining agreement even entitled them to 160 hours of overtime–to be earned doing their union’s business, but without any need to show they did anything.

Phoenix police and firefighters unions received 500 hours of paid leave for their lobbyists.  The firefighters union got a secretary paid by taxpayers.

The level of taxpayer subsidies for public sector unions in Phoenix exceeds anything comparable to what we have found so far in New Mexico (specifics to follow in later report).  But paid union administrative leave or release time is common to varying degrees across the country. To New Mexico’s north, Colorado school districts subsidize union activities on a scale that surpasses the entire budgets of many New Mexico communities.

According to Ben DeGrow, senior policy analyst of the Independence Institute’s Education Policy Center of Denver, Colorado, the practice of paid time for union activities “is very common in every unionized school district.”  Districts provide paid union leave either through specified employee salaries or through a pool of hours made available to the union to assign and use as it chooses.  In the Jefferson County School District, Colorado’s largest, the union is given 275 days a year it may allocate in its discretion.  The school district then must pay a substitute teacher to fill the opening caused by a unionized teacher being absent from work to do union business.

In 2010, DeGrow says his organization documented teachers on paid leave lobbying the legislature in connection with a bill concerning teacher evaluations.

The cost of union administrative leave is not easily quantified.  A substitute teacher to fill in for a regular teacher performing union work costs over $100 per day, says DeGrow.  Just the pool time arrangement for the Jefferson School District amounts to a $27,500 taxpayer subsidy of union activities.  But taxpayers also pay for union officials and stewards to attend hearings, labor board meetings, investigate grievances and engage in negotiations with managers.  Flatten noted in his article on the practice in Phoenix that it took the city a very long time to provide an answer to his question on how much the program cost.  [Our inquiry to the City of Santa Fe on this subject has received no answer though we've been waiting for two weeks].

A study by the Denver Post of the state’s 20 largest school districts found that from 2006 to 2011 taxpayers had paid $5.8 million to subsidize the activities of teachers unions.   “It’s a shame the money isn’t getting into the classrooms and to students,” the report quoted Walker Stapleton, the Republican state treasurer. “It’s another example of the stranglehold that unions have on education funding in Colorado.”

Public sector unions argue that paying employees to do union work, as counter-intuitive as it may appear, is really a good deal for taxpayers.  They claim it heads off labor-management conflicts, improves morale and increases worker productivity.  They contend that they are “administering” the collective bargaining agreement and thereby providing valuable consideration in exchange for paid leave.  In New Mexico,  at least one District Court judge has accepted those arguments at face value, without requiring a scintilla of proof.  Union attorneys have embellished that isolated ruling to the point of seeking to erect a conclusive presumption that ends the debate.

In the Arizona case, the Goldwater Institute lawyers tackled the unions’ arguments head on.  They drilled into the facts.  What they discovered compelled the Arizona judge to order an immediate halt to the practice of paid leave for union business.

Paid Union Leave:  Unsupervised, Unaccountable, Unconstitutional

Ferraris for union members were not inconceivable, the president of Phoenix’s police union said in his deposition.  The city and the union could negotiate whatever they wanted, including having taxpayers provide every union member with a hot Italian sports car.

The police union president had been working for the union for 18 years, while having his salary paid by Phoenix taxpayers.  Five other police officers also worked full-time for the union on paychecks cut by the city.  What was the public getting for subsidizing union work?  Goldwater Institute lawyers wanted to know.

They examined the officers’ time sheets.  How did they report the taxpayer-paid time they spent on union business?  They had no supervisor looking over their shoulder.  What were they doing every day, every week, every month?

Pretty much whatever they wanted, as it turns out.  The union officials decided how to use their taxpayer-compensated time, and reported only raw numbers on the hours spent doing union business.  At most they would describe attending an event or meeting, but not explain what was done in the meeting or why the meeting was even a good use of their time.  The city had no way of auditing what occurred during their work day.  The officers did not even report to a city facility where their use of time could be observed.  “The City neither controls nor even has any idea how the release time is being used,” the plaintiffs’ application for a preliminary injunction observed.

The Goldwater Institute lawyers also hammered away at the fact that, while the city had obligated itself to provide paid leave for union business, the union had made no obligations to the city in how the time would be used or what would be accomplished to benefit the city.  The union, “in return for extravagant release time, has promised and obligated itself to exactly nothing,” plaintiffs argued.

There exists no standard of performance to which the city could hold the officers working on union business.  Complete control of paid union leave, how the hours were used and what was accomplished, was out of the city’s hands.  The city had no enforceable expectation by which to hold the union and officers to the contract that paid for their time.  The contract was a one-way street, with money flowing out of the city to the union and no requirement of any measurable benefit flowing back.

Judge Katherince Cooper of the Superior Court of Maricopa County issued an order on June 5, 2012, finding that the use of public funds to pay for the conduct of union business violated that state’s constitutional Gift Clause.  New Mexico’s equivalent is called the Anti-Donation Clause.  Both constitutional provisions prohibit donating or gifting public funds in aid of private corporations and associations.

Judge Cooper found that the payment of union leave time was a “gift” and not a contractractual payment for provision of services because the time benefited the union and the city could not demand anything be produced for its own benefit in exchange for the employees’ salaries.

She found as a matter of fact:

PLEA [Phoenix Law Enforcement Association] controls and oversees release time. It decides which officers will receive the full-time positions and which officers may use time from the bank of hours. PLEA determines the activities of the full-time officers and the purposes for the bank hours. The City does not know or control what the release-time officers do with that time.

The court found that “no public ownership or control exists over the benefits allocated to PLEA for release time. It is a subsidy subject to the Gift Clause analysis.”  Judge Cooper found that the officers used at least some of the time to benefit the union directly, without benefit to the city.

Significantly, though, the ruling did not turn on a factual finding as to how the time was being used.  The city’s obligation to pay union leave was halted because of the very terms of the arrangement, regardless of what the officers did with their time.  This was because the city’s contract with the union did not obligate the union “to perform any specific service or give anything in return” for paid union leave.   “It does not state that PLEA will commit a certain number of hours to work in furtherance of the City’s (as opposed to PLEA’s) interests. PLEA activities may indirectly benefit the City. Indirect benefits, however, are not consideration.”

The taxpayers won their injunction only three weeks before the union’s contract expired.  They have refiled their complaint challenging the new contract containing some of the same provisions the court has already found illegal.  The union and the city attempted to address how release time could be used to avoid a repeat of the court’s injunction.  But Taylor Earl, one of the Goldwater Institute attorneys, told the Phoenix New Times that the new contract is “more of the same” that contains only “token language.” Earl told New Mexico Watchdog that his clients expect a hearing and a similar ruling on their renewed challenge in the coming months.

Lessons for New Mexico

In Arizona, the city and the unions were on the same side of the case, trying to defend an agreement they had reached without taxpayers in the room.  It took a talented legal team from the Goldwater Institute to shake up a cozy arrangement that had been costing taxpayers millions of dollars each year for many years.

In Albuquerque, it is the administration of Mayor Richard J. Berry demanding an end to a practice inherited from a prior administration.  Instead of a private organization waging the fight, this time it is the lawyers from the office of the City Attorney wading into court. In other communities faced with shrinking budgets, there may be a shared desire to end a practice that diverts increasingly reduced public resources to subsidize union activities. In our next report we will examine the New Mexico details of paying for union time on the taxpayer dime and see how Arizona’s road map to ending this practice might be extended across our shared border.