What The...?

MEDC grant to SEIU raises all kinds of questions

The MEDC's decision to extend a $2,000,000 refundable tax credit to the Service Employees International Union is, to put it mildly, very questionable. This is a deal that warrants the strictest of scrutiny from the media and the public. The following are just a few of the questions relating to this grant for which the public deserves answers:

SEIU is the collective bargaining agent for more than 12,000 state employees. Will this grant affect the relationship between the state as employer and the SEIU as a union? Was there a quid-pro-quo involved?

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In 2008 the SEIU received close to $6.4 million from the state of Michigan in the form of union dues and agency fees, to which the union is entitled under the terms of collective bargaining agreements it negotiated from the state. While final figures are not available, they should receive close to that amount in union dues and agency fees again this year. Hasn't the SEIU received enough from taxpayers already?

Our own study of union financial reports indicates that only 47.2 percent of SEIU dues are spent on representation. A typical non-profit spends close to two-thirds of its budget on its core programs. Is it wise for the state to subsidize such an inefficient organization?

In our recent report on public-sector labor law we showed that as a government employee union, the SEIU is in a position to affect government operations through collective bargaining. The negotiation process empowers SEIU to impact the state's budget and operations. Is it appropriate for the state to provide funds to an organization with such particular influence over state government itself?

SEIU itself is a very politicized organization. At the national level it is allied with the discredited Association of Community Organizations for Reform Now (ACORN), which has been accused of voter registration fraud in several states. A quick check of the SEIU's Michigan State Council Website (MEDC's own announcement links here!) shows SEIU support for insurance regulation, the federal stimulus package, state tax increases and national health care legislation. Can MEDC guarantee that the "Member Action Service Center" that its funds are to be used for will not be a political operation itself? Can MEDC guarantee that the facility will not be used for political activities after hours? Shouldn't such a heavily politicized group be barred from receiving any discretionary grants from the state?

Rightly or wrongly, many employers see unionization as damaging to their economic prospects. Will this facility be used by SEIU or other unions as a base of operation for organizing? As employers learn that the state is using economic development funds to subsidize union activity, will this have a negative effect on the state's efforts to attract other employers?

Even if the state's motivations are entirely pure, there are numerous ways that SEIU could abuse this grant. The value of MEDC itself is dubious and this grant is especially so. We will be examining this decision very closely, and urge Michigan taxpayers to pay close attention as well.

Shouldn't such a heavily politicized group be barred from receiving any discretionary grants from the state?