Union-Boss Bailout Scheme Blocked For Now

Real Solution to State Fiscal Woes Must Include Labor-Law Reform

During the waning days of the 116th U.S. Congress late last year, the news hit union-label Govs. J.B. Pritzker (D-Ill.), Gavin Newsom (D-Calif.), and Andrew Cuomo (D-N.Y.) like a cold slap in the face.

For months, they had counted on politicians inside Washington, D.C.’s Beltway to bestow on their states and those of other Big Labor politicians tens of billions, if not hundreds of billions, of dollars in “no-strings-attached” federal taxpayer money.

They were planning on using this money to paper over catastrophic deficits and soaring long-term debts caused primarily by poor budgetary decisions made by themselves and their like-minded predecessors.

But on January 2, the 116th Congress finally came to an end, and no union-boss bailout legislation had been sent to the White House.

Taxpayers ‘In Well-Run States Should Not Have To Bail Out Illinois’

“Thank Heaven for small mercies,” said National Right to Work Committee President Mark Mix.

“The $900 billion in so-called ‘COVID-19 relief’ sent to outgoing President Donald Trump’s desk on December 21, along with another $1.4 trillion in omnibus appropriations, as H.R.133 was widely and correctly seen as a bloated mess.  

Indiana under Forced-Unionism
Forced-unionism Illinois is projected to have more than $10 billion in unpaid bills by June 30. And according to Moody’s Investor’s Service, the aggregate unfunded liabilities in Illinois government pension plans exceed $260 billion. (Credit: Scott Stantis, Chicago Tribune)

“It includes, for example, roughly $54 billion for overwhelmingly unionized government K-12 schools. This payoff went through even though, largely because of the outsized clout of teacher union bosses, only about a third of kids in government schools today are attending in-person classes full time.  

“But Big Labor and its cheerleaders were nevertheless disappointed by what H.R.133 didn’t include, specifically, blank checks for states and localities that are fiscally struggling today primarily because of decades of fiscal mismanagement. 

“This is an incremental, but important victory for National Right to Work Committee supporters and staff who fought persistently in 2020 to prevent putative ‘COVID-19 relief’ from being turned into a bailout for government union boss-stronghold states like Illinois, California, and New York. 

“As the premier newspaper in one of these states, the Chicago Tribune, acknowledged in an editorial published right after H.R.133 was sent to the White House, the bailout scheme by Big Labor politicians like House Speaker Nancy Pelosi [D-Calif.] was simply wrong.

“In the words of the Tribune’s editors, “taxpayers across the country and particularly in well-run states should not have to bail out Illinois . . . .”

Desperate Union-Label Politicians Seized on COVID-19 as an Opportunity

For decades, a number of states that lack Right to Work protections for employees and authorize extensive government-sector union monopoly bargaining have been piling up unfunded liabilities for taxpaying employees and employers in their jurisdictions.

Early last year, in desperation, politicians in these states seized upon COVID-19 and the huge economic shock resulting from efforts to contain it as an opportunity to make citizens of less profligate states pick up the tab for Illinois, California, New York, et al.

Their instrument of choice was the so-called “HEROES” Act (H.R.6800), a $3 trillion, federal taxpayer-funded bailout package.

Gavin Newsom and Eric Heins
Just last June, Big Labor California Gov. Gavin Newsom (left, pictured with former state teacher union chief Eric Heins) signed a multi-billion-dollar tax increase on job-creating businesses. Now union bosses are hungry for more. (Credit: Roberto Rodriguez)

It included nearly $1.1 trillion in funds for state and local governments, supposedly to help public officials close temporary budget gaps directly resulting from COVID-19 and COVID-19 shutdowns.

The reality of the scheme was it would have enabled Big Labor-ruled states to continue to avoid addressing their fundamental problems. These problems are rooted in longstanding policies that authorize the firing of employees for refusal to pay union dues or fees as a job condition and grant monopoly privileges to government union bosses.

The HEROES Act was rubber-stamped by the U.S. House last May.

Pensions Set to Consume 29% Of Illinois Budget in Coming Fiscal Year

Mr. Mix recalled:

“After rabidly pro-forced unionism Speaker Pelosi got her way and H.R.6800 sailed through the House, Right to Work staff repeatedly communicated with then-Senate Majority Leader Mitch McConnell’s [R-Ky.] office about the need to prevent it or any other union-pension bailout from being passed by his chamber.

“And the momentum for a massive federal bailout gradually declined last year as it became clear that the overwhelming majority of the 27 Right to Work states were in a far better position to weather the COVID-19 storm than were the bastions of compulsory unionism.

“Contrary to Ms. Pelosi’s expectations, Right to Work state governors and lawmakers never joined their counterparts from forced-unionism states in pressing for a federal bailout.

“Finally, rather than put this political hot potato in the hands of incoming Democrat President Joe Biden, Ms. Pelosi decided to settle for H.R.133.”

With the possibility that federal taxpayers will be forced to plug the holes in their state budgets now greatly diminished, at least in the short term, politicians like J.B. Pritzker, Gavin Newsom, and Andrew Cuomo are scrambling to come up with other ways of getting out of their fiscal jams.

Gov. Pritzker is in the worst fix of all.  Illinois’ budget in Fiscal 2021 is $4 billion out of balance. The state is projected to have more than $10 billion in unpaid bills by June 30. According to Moody’s Investor’s Service, the aggregate unfunded liabilities in Illinois government pension plans reached $261 billion last year.

Unfunded liabilities are expected to keep expanding even with pensions poised to consume nearly 29% of Illinois’ budget in Fiscal 2022!

To Save Beleaguered States, Union Monopoly Privileges Must Be Revoked

“If Illinois and other states that are plummeting into fiscal abysses want to salvage their futures,” said Mr. Mix, “it is absolutely necessary that they remove, within the next few years, government union bosses’ monopoly-bargaining power over employee pay, benefits, and work rules.

“Other reforms will also undoubtedly be necessary. But without monopoly-bargaining repeal no other reform or set of reforms will suffice.

“Under the current labor laws of Illinois, California, and New York, union bosses can and will wield their special privileges to block common-sense reforms in the way public employees are compensated.

“Unfortunately, even now that they know that federal taxpayer-funded bailouts won’t be coming their way soon, Big Labor state politicians are clearly not ready yet to do what they need to do to save their constituents from looming catastrophes.

“Instead, having apparently failed to foist the burden of their own mismanagement on taxpayers across the U.S., union-label politicians are looking to foist the entire burden on their own taxpaying constituents.”

Scandal-Ridden Illinois Speaker Backs Across-the-Board Income Tax Hike

Mr. Mix elaborated:

“In Illinois, embattled House Speaker Mike Madigan [D-Chicago] was pushing early this year for an across-the-board income tax hike.

Gov. Cuomo is concocting state tax hikes that will, he admits, “hurt families and hurt the economy.” (Credit: WSYR-TV (Syracuse, N.Y.))

“In New York, pro-forced unionism Gov. Andrew Cuomo [D] has been warning lately that he plans to ram through ‘devastating’ and ‘dramatic’ state tax increases that will ‘hurt families and hurt the economy’ rather than try to curtail government union bosses’ monopoly-bargaining power.

“In California, Big Labor and some of its puppet politicians are even backing a new, seemingly unconstitutional law empowering the state government to continue extracting taxes from people long after they’ve moved to another state. 

“I’m hopeful the citizens of Illinois, New York and California won’t tolerate such abusive behavior by their elected officials much longer. In the meantime, citizens of relatively fiscally responsible states must remain vigilant to ensure they aren’t forced to pay for Big Labor-dominated states’ mistakes.”