Unions are all in on their bets on Hillary Clinton and her organized-labor friendly agenda.
Labor unions have made a big bet on Hillary Clinton and her progressive agenda, having given her nearly $12 million — about 96% of the money they have donated to all presidential candidates this cycle. Unions have also funneled $64 million to outside, unaffiliated groups backing a liberal/progressive agenda in federal elections, according to the Center for Responsive Politics.
But even as they spend heavily to influence Washington, unions are making large political investments to win tax increases and labor-friendly regulation in states. Their tool in many places is initiative and referendum, through which labor hopes to circumvent Republican domination of state capitals and the reluctance of moderate Democrats in some places to sign on to their agenda. The effort, led by public sector employee groups, solidifies their reputation as the most powerful force for bigger, more intrusive government at the state level.
“Unions and their allies have pledged to focus increasingly on so-called citizen-initiated ballot measures to circumvent unfriendly legislatures”
Oregon is a bruising battleground, as unions frustrated by a history of compromise by the state's Democratic Party are waging a campaign to win a massive increase in the minimum gross receipts tax a corporation must pay. They're sponsoring Measure 97, which would impose a 2.5% minimum levy on sales above $25 million for businesses.
Under the proposed tax, to take one example, a corporation operating in Oregon with $70 million in sales would have to pay a minimum of $1.16 million to state government even if it did not earn profits--a more than $1 million increase over the current minimum tax, according to an analysis by the state's legislative review office. If successful, the referendum would raise some $2.5 billion a year and grow the state's general fund budget by as much as one-third.
So far, unions have contributed $8.83 million of the $8.95 million raised by the campaign Yes on 97. The National Education Association has given$1.85 million, and its local affiliate, the Oregon Education Association, has contributed $1.75 million. Various units of the Service Employees International Union have added $3 million, while the American Federation of State County and Municipal Employees has kicked in $1.25 million.
The most expensive union-backed ballot initiative this year is also the most cynical. In 2012 California Gov. Jerry Brown won support for a referendum to raise taxes by $7 billion when he promised that much of the money would go to education, and that the higher levies would expire in 2018. Voters increased both the state's sales tax and its income tax on those earning more than $250,000 annually.
Soon after, the state hit school districts with massive increases in teacher pension contributions, draining away much of the new funding. So unions are backing a measure to extend the 2012 tax on rich Californians to 2030. "There's a reason why we tax the 1%," Brown said. "It's because that's a tax people have shown they are willing to vote for."
Not taking anything for granted, California unions have so far contributed $23 million to push the initiative, led by the California Teachers Association, one of the nation's richest public sector union locals, has alone donated $19 million to the effort.
Maine has only 3% of California's population, but the East Coast State is the site of one of this election's most tenacious union tax-raising efforts. Frustrated by Republican Gov. Paul LePage's opposition to tax increases, Maine's teachers unions and their allies are looking to impose a 3% tax surcharge on incomes above $200,000 annually.
Virtually the entire campaign is being funded by the National Education Association, which has given $1.25 million, and its affiliate, the Maine Education Association, which has contributed about $500,000 in cash and in so-called in-kind contributions. LePage has called the initiative, "Just another attempt to extort more taxes from Maine families and businesses without improving education."
Maine is home to another ballot battle that epitomizes this year's union priorities, a campaign to raise the state's minimum wage. Several union-backed national groups have helped kick-start efforts in The Pine Tree State and in Arizona, Washington and Colorado. In Maine, where Question 4 would raise the minimum wage to $12 over four years, the principal contributor to the $1 million campaign is a California group, The Fairness Project, created by the Service Employees International Union to raise wages around the country.
Another player in this effort is the New York based Center for Popular Democracy, backed by unions like the AFL-CIO and the National Education Association. In Arizona, virtually all of the $1.5 million in funding so far for Proposition 206, which would raise the minimum wage to $12 and hour by 2020 and require large corporations to guarantee 40 hours a year of paid sick time, comes from The Fairness Project and Living United for Change in Arizona, a local conduit for the Center for Popular Democracy.
Similarly, in Colorado, the Center for Popular Democracy and the Fairness Group are the two top funders of Amendment 70, having contributed more than $1 million to the effort to boost the state's minimum wage to $12.
Business groups hoping that these campaigns are an exception in 2016 are likely to be disappointed. With Democrats in control of the governorship and legislature of just seven states, compared to 23 for Republicans, unions and their allies have pledged to focus increasingly on so-called citizen-initiated ballot measures to circumvent unfriendly legislatures. These measures represent a powerful tool that labor is likely to employ increasingly in coming years, especially if this year's crop of union-inspired initiatives scores big in November.
This piece originally appeared at Investor's Business Daily
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Steven Malanga is the George M. Yeager Fellow at the Manhattan Institute and a senior editor at City Journal.
This piece originally appeared in Investor's Business Daily