K-12 Tax & Spending Climate: State Finance and Mandatory Union Agency Fees

Daniel DiSalvo and Stephen Eide:

Blue-state Democrats have denounced last year’s tax reform as a partisan attack. Thanks to the new $10,000 cap on deductions for state and local taxes, households in places like California and New York will soon feel the stinging cost of big government. This will make raising taxes more difficult, which is why politicians are lamenting that the cap will limit their fiscal flexibility.

The U.S. Supreme Court may soon ride to the rescue. On Monday the justices will hear arguments in Janus v. American Federation of State, County and Municipal Employees. If the court rules against government labor unions, as most observers expect, state and local politicians will gain much more control over their budgets, and they will be under less pressure to toe the union line.

The question in Janus is whether it is constitutional that government employees who have decided not to join a union are still required to pay “agency fees.” Under federal law, workers cannot be forced to join a union. But laws in 22 states say that nonmembers must nonetheless pay unions a fee to cover the cost of collective bargaining and contract administration. The difference usually isn’t much. The agency fee at issue in Janus totals 78% of full union dues.

Related: Act 10.