By: Ted Dabrowski and John Klingner
A key benefit Mark Janus brought to the Supreme Court case against “fair share” union dues is that he’s from Illinois. Workers from the 22 other states that force workers to pay “fair share” dues could have sued. But Illinois is special: it serves as the most glaringly obvious example of the disruptive and coercive power of public-sector unions.
Illinois’ dysfunction, in large part influenced by the power of Illinois’ unions, made the majority’s decision inevitable. They couldn’t help but find that forced dues violate free speech, considering the negative impact Illinois’ public sector unions have had on the state and its residents.
Take the demands of AFSCME in the most recent contract negotiations with the state, which have dragged on since 2015 when the last contract expired. Illinois’ AFSCME 31 was the defendant in the Janus case.
The state has been asking for major concessions from AFSCME. In particular, the state asked for a salary freeze and a more fair contribution by state workers toward their health insurance costs. The state successfully negotiated similar concessions from 19 other unions in Illinois in recent years.
Illinois isn’t unreasonable in its requests. Public sector pensions already consume more than a quarter of the state budget – multiple times more than most states. Illinois’ finances are wreck, too, as evidenced by the nation’s worst credit rating – just one notch above junk. And Illinois state and local taxes are already among the highest in the U.S., with Illinoisans paying the nation’s highest property taxes. All that’s led to a massive exodus of Illinoisans. Illinois has shrunk for four consecutive years.
And it’s not like AFSCME workers as a whole are wanting. Wirepoints’ research found that state of Illinois employees have the second highest salaries in the nation when adjusted for cost of living. Most AFSCME retirees get free health insurance, a gift for working twenty years. Health care for active workers is massively subsidized – at about $15,000 per employee. In total, the average total compensation for an AFSCME employee is nearly $110,000.
As Illinois workers have struggled to keep up with inflation, AFSCME contracts have continued to guarantee its workers automatic raises far larger than those of the people who pay for them.
So how did AFSCME respond to the state’s requests for concessions? As Alito highlighted in the court’s majority opinion:
“Among other things, [AFSCME] advocated wage and tax increases, cutting spending “to Wall Street financial institutions,” and reforms to Illinois’ pension and tax systems (such as closing “corporate tax loopholes,” “[e]xpanding the base of the state sales tax,” and “allowing an income tax that is adjusted in accordance with ability to pay”).”
Changing tax structures, targeting individual groups or industries, and changing pension laws are all inherently political. The court came to that conclusion:
“To suggest that speech on such matters is not of great public concern—or that it is not directed at the “public square,” — is to deny reality.”
The court also noted that public sector union power has manifested itself in generous pension benefits – benefits that have proven to be increasingly punishing to the residents that are forced to fund them. Alito added in the majority opinion, “Illinois’ pension funds are underfunded by $129 billion as a result of generous public-employee retirement packages.”
He’s correct. Wirepoints found that Illinois promised pension benefits have grown 1,100 percent since 1987, multiple times more than the state budget, the economy and taxpayers ability to pay for them.
Back in 1987, Illinois owed $18 billion in promised public sector pension benefits to its active state workers and retirees. Today, total pension promises have skyrocketed to $215 billion.
And it’s not just state-level pension benefits that are hurting most states. Draconian collective bargaining laws are destroying the finances of communities across the country. As the court noted: “Unsustainable collective bargaining agreements have also been blamed for multiple municipal bankruptcies.”
It’s happening in Illinois. Though the state does not have bankruptcy laws, many municipalities are headed toward virtual insolvency – bankruptcy in all but name.
Recent Wirepoints’ research found that over 200 cities across Illinois are in danger of having their revenues garnished by the state for their failure to pay their police and fire pension funds – the result of a newly-enacted pension funding law. Many of those cities are struggling to pay both their day-to-day payroll and their pension obligations. More than half of Illinois’ 650 police and fire funds have less than 60 percent of the money they need on hand today to pay out future benefits.
Collective bargaining laws, and the power of Illinois’ unions, are largely responsible for the collapsing finances of Illinois’ municipalities. A review of Danville, Illinois, and its struggles to keep its community alive is very telling of just how draconian Illinois’ collective bargaining laws have become.
The justices only needed to see a fraction of Illinois’ dysfunction and failures to reach the conclusion they did about the politics of unions and how they deprive workers of their free-speech rights.
Illinois made it abundantly clear.