Union-backed bills pose biggest challenges to cities

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As if California cities didn’t have enough problems, the California Legislature passed a slew of new bills that could damage them in order to appease union pressure.

Cities are creatures of the state, so they have to obey. Residents are likely to suffer more and bigger potholes, further declining school test scores and higher taxes – meaning more people will flee the state or head to the suburbs. Here’s a look at some of the worst urban-related union bills this year.

Assembly Constitutional Amendment 1, by Assembly member Cecilia Aguiar-Curry, D-Winters, did not need the governor’s signature. It puts on the Nov. 5, 2024, ballot an initiative dropping from two-thirds to 55% the threshold for passing city, county or special district bonds, paid by taxes, “to fund the construction, reconstruction, rehabilitation or replacement of public infrastructure, affordable housing, including down-payment assistance, or permanent supportive housing or the acquisition or lease of real property for those purposes.”

Supposedly it’s needed to repair roads and build housing for the homeless, but this would only encourage spendaholic habits that already are destroying city and state finances by driving away taxpaying business and citizens. Meanwhile, the state’s and big cities’ homeless strategies have consistently failed, as Pacific Research Institute senior fellows Wayne Winegarden and Kerry Jackson have documented, because they focus on costly “Housing First” policies that incentivize the construction of overly costly facilities rather than more useful, cost-effective and innovative programs.

As Jon Coupal, president of the Howard Jarvis Taxpayers Association, explained, “ACA 1 is a tax increase, and worse – it’s an engine to raise taxes over and over again in every local election, just by calling any government spending ‘infrastructure,’ even if it’s really for salaries, programs or to free up existing revenue to cover pension liabilities.”

If voters approve it, municipal governments would have fewer incentives to reform and privatize their services with an eye toward improving urban life. They’ll simply be able to keep putting measures on the ballot that boost taxes. After the state reduced the vote threshold to 55% for the passage of school bonds, such bonds began passing around 80% of the time.

The governor has two more days to decide on Senate Bill 525 by Sen. Maria Elena Durazo, D-Los Angeles. The current state minimum wage is $15.50 and hour, rising next year to $16. Summarizing the complex language, California Healthline wrote the bill would boost the hourly minimum wage at:

  • Large health facilities and dialysis clinics to $23 next year, $24 in 2025 and $25 in 2026;
  • Community clinics to at least $21 in 2024, $22 in 2026 and $25 in 2027;
  • Other health facilities to at least $21 an hour in 2024, $23 in 2026 and $25 by 2028.

If it becomes law, this would be a victory especially for the SEIU-United Health Workers Union, which lost three initiatives the past five years to pass costly regulations on the dialysis industry supposedly to increase worker pay. Last November’s Proposition 29 would have required, in the petition summary, “physician, nurse practitioner or physician assistant, with six months’ relevant experience, on site during treatment at outpatient kidney dialysis clinics.” It lost by a huge 68% to 32% margin.

Read Pacific Research Institute senior fellow Kerry Jackson’s column about SB 525. 

Read John Seiler’s Free Cities Center article about the challenges faced by urban hospitals.

Although most dialysis is done by private companies such as DaVita, SB 525 also will increase costs for city- and county-run hospitals and clinics such as Los Angeles General Medical Center. If DaVita and other clinics are forced to reduce services or leave the state due to rising costs, patients will be shunted onto public services. Its passage would have ill effects on all California residents, but it will place particular financial pressure on large cities and urban counties.

Fortunately, Gov. Newsom vetoed Senate Bill 799 by Sen. Anthony Portantino, D-Glendale. It would have allowed striking workers to collect unemployment benefits, instead of dipping into union strike funds. That would have encouraged strikes in the private and public sectors. For cities, workers would be more likely to walk off their jobs, leaving city services – road repairs, parks operations, libraries, even police and fire protections – in the lurch. That would bring higher pay for city workers, leading to fewer employees – and services – and higher taxes.

Increased private-sector strikes would hit local businesses, increasing their costs, forcing some out of business and others to leave the state. Thus reducing the tax base. It’s reasonable to expect this measure to come back next session.

This is just a taste of the dozens of union-pushed bills passed this year by the Legislature. Union Power is stronger than ever in California. It’s also part of a national trend. The Washington Post headlined, “UAW strike caps off hot labor summer: Already this year, more than 353,000 workers had walked off the job.” In 1981, the UAW re-affiliated with the giant AFL-CIO, whose largest affiliate since 2005 has been the SEIU. Other strikes have hit Hollywood, coffee shops, locomotive plants, bookstores, legal clinics, hotels and a beer factory. “In addition, 85,000 health-care workers in seven states and D.C. could strike” this month, per The Post.

The reasons: a tight labor market with unemployment under 4% and pro-union policies by the Biden administration. But one reason not cited is the difficulty of fighting union power in one-party, Democratic states such as California, New York and Illinois. Indeed, the SEIU’s clout was shown this month when Newsom appointed Laphonza Butler to the U.S. Senate seat vacated by the late Dianne Feinstein. Most recently the head of Emily’s List, Butler was before that president of SEIU California, representing 700,000 California workers. Through its contributions, the SEIU has a stranglehold on hundreds of local officials in the state.

When Republican clout is moribund – and the party seemingly can’t get its act together, as most glaringly in California – there’s no countervailing power to union demands. Urban residents are most dependent on public services and the tourism and entertainment industries represented by these newly energized unions.

Strikes always are disruptive and can paralyze an economy, damaging city finances and driving away businesses. The rusted-out remnant of Detroit, until the 1960s dubbed the Paris of the West, is a cautionary example. But one California economic sector will benefit for sure: moving companies. Better pack up before they’re unionized, too.

John Seiler is on the Editorial Board of the Southern California News Group. Write to him at [email protected]

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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