Teacher Union Don Seeks Taxpayer-Funded Bailout

New Jersey NEA Chief Backs Trillion-Dollar Federal ‘Loan Program’

(source: National Right to Work September 2015 Newsletter)

For decades, many government union chieftains across America have enjoyed what effectively amounts to the ability to “elect our own boss,” as the late Victor Gotbaum once put it in a conversation with journalist Ken Auletta.

Mr. Gotbaum, the powerful head of New York City-based District Council 37 of the American Federation of State, County and Municipal Employees from 1965 to 1987, was referring to a flagrant conflict of interest that routinely occurs in modern politics.

In jurisdictions where forced government union dues and fees are permitted and union monopoly bargaining in the public sector is authorized, union bosses negotiate with public employers over civil servants’ pay, benefits and working conditions.

At the same time, government union chiefs funnel a large portion of the compulsory dues and fees they collect from employees into efforts to influence the outcomes of state and local elections.

Forced Dues-Influenced Elections Determine Who Sits at Bargaining Table

And the outcomes of those elections often determine who represents the public at the bargaining table.

“In city after city and state after state, government union bosses have wielded their forced-dues privileges to amass huge war chests, with which they support and oppose candidates for public office,” noted Mark Mix, president of the National Right to Work Committee.

“One consequence of the rise of monopolistic government unionism has been that ordinary citizens have less and less say regarding how public employees are compensated and managed.

“And another consequence has been that union officials have time and again wielded their special privileges to jack up governments’ long-term spending commitments.”

Annual Cost of Paying Off New Jersey’s Full Debt Could Be $10 Billion or Even More

Big Labor-dominated New Jersey is a cautionary example.

As a July 30 news story for the Newark-based Star-Ledger acknowledged, the Garden State is “home to one of the worst-funded public pension systems in the nation . . . .”

And an analysis of state Treasury records conducted in June by the New Jersey Watchdog website found that the state has amassed $82.7 billion in unfunded liability for state employee pension plans. New Jersey also must deal with a $20.7 billion shortfall for local government employee pensions, and $53 billion in unfunded health benefits for state retirees.

New Jersey Watchdog has estimated that filling the massive gap in funding for public employee retirement benefits in the Garden State could cost “roughly $10 billion per annum,” even if elected officials could somehow obtain today a 30-year loan to cover the entire shortfall and pay only 1% a year in interest.

Given the dire circumstances, the first thing elected officials in New Jersey must do is stop deepening the hole the state has dug for itself.

That means eliminating, or at least sharply restricting, the coercive privileges of government union bosses who currently wield monopoly-bargaining power over 64% of New Jersey’s public employees.

Make Federal Taxpayers Pay For What Union-Label State Politicians Did?

Unfortunately, state Senate Majority Leader Steve Sweeney (Gloucester) is clearly not interested in helping New Jersey citizens reassert control over how public resources are allocated by fighting to roll back government-sector monopoly bargaining and forced union dues.

Instead, Mr. Sweeney and a number of his fellow Democrat politicians are opting to try to get Congress to shift the burden to federal taxpayers.

In late July, Mr. Sweeney (who moonlights as an ironworkers union official) publicly called for the establishment of a trillion-dollar federal “loan program.”

In practice, the Sweeney scheme would force taxpayers in Right to Work states whose elected officials have managed their budgets more responsibly to bail out union-label politicians in Big Labor-dominated states like New Jersey.

During a July 29 news conference in Trenton, Mr. Sweeney said his office was already enlisting the support of union officials across the country to help him convince the U.S. Congress to take up his bailout plan.

And perhaps the most powerful Big Labor chieftain in the Garden State, New Jersey Education Association (NJEA/NEA) teacher union President Wendell Steinhauer, immediately warmed up to Mr. Sweeney’s concept of a so-called “loan program.”

“The numbers are working,” cooed Mr. Steinhauer.

Seven States With Highest Pension Liabilities Per Capita Lack Right to Work

Committee President Mix acknow-ledged that politicians everywhere have a bad habit of making spending promises that taxpayers can’t reasonably be expected to fulfill. But Right to Work laws now on the books in 25 states do evidently help keep politicians’ irresponsibility from getting completely out of hand.

To back up his point, Mr. Mix cited “Promises Made, Promises Broken,” an ongoing analysis of public pension plans prepared by the nonpartisan group State Budget Solutions (SBS).

In an update published in November 2014, SBS editor and attorney Joe Luppino-Esposito reported that, in the aggregate, state public pension plans are underfunded by $4.7 trillion.

That adds up to over $15,000 per American. But debt levels vary sharply from state to state.

The 26 states that lacked Right to Work protections as of last year had an average unfunded liability of $18,125 per capita. In contrast, Right to Work states had a large, but much more manageable per capita pension liability that is 38% lower.

“All of the seven states with the greatest per capita pension liability as measured by SBS — Alaska, Connecticut, Hawaii, Illinois, New Jersey, New Mexico and Ohio — lack Right to Work laws,” said Mr. Mix.

“At the same time, nine of the 10 states with the lowest per capita pension liability — Arizona, Florida, Georgia, Idaho, Indiana, Nebraska, North Carolina, South Dakota and Tennessee –- already had Right to Work laws in 2014.”

Fiscal Realities May Finally Force States Like New Jersey To Emulate Wisconsin

The only state among the 10 with the lowest per capita unfunded liabilities that did not prohibit forced union dues across the board, Wisconsin, actually had adopted a statute in 2011 protecting the Right to Work of all K-12 employees and many other public-sector workers. (This year, Wisconsin became the 25th Right to Work state.)

Mr. Mix concluded: “Steve Sweeney and Wendell Steinhauer must be aware that the debt-ridden U.S. government is in no position to make massive loans to spendthrift states like New Jersey at a far-below market rate.

“And this is one reason why Congress is unlikely to be foolish enough to adopt Mr. Sweeney’s plan or anything like it.

“But Mr. Sweeney and Mr. Steinhauer evidently hope that, by putting it on the table, they can undercut renewed efforts to require unionized government employees to pay for a higher share of their pension benefits and curtail public-sector union bosses’ monopoly privileges.

“The last thing Big Labor and its puppet politicians want is a New Jersey version of Wisconsin’s Act 10, the 2011 statute under which the Right to Work of most public-sector employees in the Badger State was restored.

“But fiscal realities may finally be pushing the Garden State in that direction despite the best efforts of Mr. Sweeney and Mr. Steinhauer.”