Unions' Taxpayer Subsidized Activity

By Trey Kovacs

Taxpayers expect their government to spend tax dollars only on activities that benefit the public. But in Kentucky, the City of Louisville and Jefferson County school district routinely funnel hundreds of thousands of citizens' tax dollars to government-employee unions -- for nothing of value in return and with no control over how the money is spent.

Like numerous government entities throughout the country, under a practice known as "union release time," Louisville and the Jefferson County school district grant employees paid leave to work entirely on union business. Worse, neither Louisville nor the Jefferson County Board of Education (JCBE) has made any effort to explain how union release time serves a public purpose, or to impose controls to ensure that it does.

Fortunately, through the Bluegrass State's Open Records Act, taxpayers have a right to learn how their money is being spent -- and my organization, the Competitive Enterprise Institute, recently obtained the records. Further, a provision in the state's constitution provides an avenue for redress.

Kentucky law does not address release time directly. Rather, this union subsidy is agreed upon in the collective-bargaining agreements between unions and local governments. In fiscal year 2012, Louisville authorized a total of 6,955 hours in union release time at a cost to the taxpayers of approximately $156,242. In FY 2011, Louisville authorized 6,321 hours. In FY 2013, the Jefferson County School District granted the Jefferson County Teachers Association (JCTA) 1,536 hours (192 full work days) at a cost to taxpayers of around $67,215.

While the city of Louisville either refuses to divulge or does not keep track of the activities its employees perform while on union release time -- it did not specify in its response to our open-records request -- JCTA members spent their release time on various union activities, including attending JCTA board meetings, as well as organizing committee meetings, union staff interviews, National Education Association conferences, and board meetings of Jobs with Justice (a union front group that conducts campaigns against employers). None of this can be construed as serving a public purpose.

However, one JCBE member has taken notice. During the most recent negotiations between the school board and the teachers union, member Debbie Wesslund remarked that union release time not only is inappropriate but could possibly be illegal. She's on to something.

Kentucky's constitution contains a little-used provision known as the "gift clause" that limits what kind of expenditures municipal governments in the state can make. The gift clause is meant to stop local politicians from using taxpayer funds to reward their supporters.

Section 179 of Kentucky's constitution states, "The General Assembly shall not authorize any county or subdivision thereof, city, town or incorporated district, to become a stockholder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association or individual."

A similar situation arose in Arizona in 2011 -- and again in 2013 -- when the Goldwater Institute challenged the practice of union release time in that state. Both times, the Maricopa County Superior Court found union release time to be illegal under the state's gift clause.

In 2010, the Arizona Supreme Court had clarified the parameters of the state's gift clause. To determine whether public funds aiding private interests violate the gift clause, courts in the state use a two-part analysis: 1) expenditures of public funds must promote a public purpose; and 2) the public entity must receive proportionate, quantifiable, and direct benefit for the aid given.

What does this mean for Kentucky taxpayers? Good news, because Kentucky's gift clause is nearly identical to Arizona's, and it is likely to be interpreted in a similar fashion by the courts.

Taxpayers of Louisville and Jefferson County need to ask their public officials how giving away their tax dollars to unions is in keeping with the state's gift clause. They also need to ask the unions to explain how union release time serves a public purpose. If an answer is not forthcoming in either case, Kentucky's attorney general should seek an injunction against the practice of local governments funding private political agendas.

Trey Kovacs is a labor-policy analyst at the Competitive Enterprise Institute.

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