News Release: State Government Paid $17.6 Million to Unions in 2008, According to Documents Secured by FOIA Request

“Agency fee” clause means state taxpayers contribute to unions, Mackinac Center analyst says

For Immediate Release
Tuesday, March 3, 2009

Paul Kersey
Director of Labor Policy

MIDLAND - In 2008 the state of Michigan made union dues and agency fees payments in excess of $17.6 million to six union organizations, according to state documents obtained through a Freedom of Information request filed by Paul Kersey, director of labor policy at the Mackinac Center for Public Policy.

This figure covers state government employees only; union dues paid by universities, local governments, school districts and businesses with state contracts are not included. This money was turned over with little or no oversight, and much of it will likely be redirected into electioneering and lobbying, Kersey said.

"It's common to think of union dues as something that workers pay, but in actuality it's the state that turns this money over to unions, under the terms of contracts negotiated by the state" said Kersey. "This money really comes out of taxpayers' pockets."

The following unions received "membership dues" payments from the state:

UAW Local 6000 $5,838,655.20
Michigan Corrections Organization (SEIU Local 526M) $4,959,645.28
SEIU Local 517M $2,433,129.78
Michigan State Employees Association (AFSCME Local 5)
Michigan State Police Troopers Association $1,125,395.91
AFSCME Council 25 $1,050,559.04
TOTAL: $17,595,198.81

According to the Michigan Civil Service Commission, unions represented 38,504 state government employees in 2008. On average, the unions listed above received $456.97 per employee. These payments are necessary because of "agency fee" clauses in collective bargaining agreements between the state and the unions. The agency fee clause states that all employees covered by the contract must either join the union or pay a fee in lieu of dues. These membership dues and fees are then collected by the state and turned over to the union.

"Unfortunately, many of these unions are not required to account for their spending under federal law," said Kersey. "Nor does Michigan require any accounting for unions that represent state or local government employees. Those unions that do file federal financial reports have a mixed record." According to Kersey's review of union LM-2 reports, less than half of union spending went into employee representation. Unions typically claim that political activism and lobbying make up a modest portion of their activities, but both SEIU and AFSCME records show political spending making up more than 10 percent of their budget. Kersey found that many unions attempted to characterize political activism as representation or charitable activity, meaning that the actual percentage is likely to be higher.

"Officials at unions that represent state employees have a direct interest in making state government more expensive, and gain little by making it more effective or efficient" said Kersey. "The practical effect is more than 17 million taxpayer dollars are being used to fund a permanent lobby for big government."

In order to relieve Michigan taxpayers of the burden of supporting government employee unions, Kersey recommends a state right-to-work law, which would allow individual workers to decide whether or not to join or pay fees to a union. A second alternative would be for the state to reject agency fee clauses.