Push for charter cities enrages unions

Part 1 of a series on charter cities.

Sept. 30, 2012

By Katy Grimes

SACRAMENTO — The November election is shaping up to be a biggie, and probably even a game changer. In addition to California’s tax increase ballot initiatives and the paycheck protection measure, voters in three California cities will decide whether to approve the proposed city charters.

Escondido, Costa Mesa, and Grover Beach, currently general law cities under the California Constitution, are asking voters to allow the change to charter cities.

The change from a general law city to a charter city is technical, even obscure, but very powerful. Charter cities have significantly more autonomy and flexibility than general law cities to protect taxpayer funds through more careful spending, and exemptions from state-mandated prevailing wage agreements and Project Labor Agreements.

Many Californians believe that the only for cities way to wrestle control away from powerful public employees unions is to file municipal bankruptcy. But Charter Cities are a much better way to accomplish this.

Charter Cities

“A charter needs to give a city full control of its municipal affairs, so it can implement lower taxes, reasonable regulation, fiscal responsibility, limited government, local control and more freedom from corrupt urban legislators,” according to Kevin Dayton, CEO of Dayton Public Policy Institute, an employment and labor specialist, and charter city expert.

There are 121 charter cities in California out of 482 cities. But not all charter cities avail themselves of the prevailing wage exemption. There are currently 70 cities with no exemption, 10 cities with a partial exemption and 41 charter cities with full exemption, according to the California Construction Compliance Group.

The 70 cities with no prevailing wage exemption even include many of the state’s more politically liberal cities: Alameda, Berkeley, Los Angeles, Oakland, Sacramento, Santa Barbara, Santa Cruz and Santa Monica. Included in the list are Stockton, San Bernardino and Vallejo — three of California’s cities to file for bankruptcy.

“Defenders of the status quo prefer California’s advocates of economic and personal freedom to be apologetic, mealy-mouthed, submissive and ineffective. I noted that an ideal charter, with its ‘defiance of excessive state authority,’ would enrage numerous special interest groups,” Dayton said.

That is exactly what has happened.

Dayton said that unions have steamrolled right over smaller cities’ efforts to adopt a charter. “Union leaders get very testy when someone points out that a charter city can establish its own policies concerning government-mandated construction wage rates,” Dayton said.

“Did you know that, under certain home rule provisions in California’s state constitution, voters can exercise a greater degree of local control than that provided by the California Legislature?” the League of California Cities explained. “Becoming a charter city allows voters to determine how their city government is organized and, with respect to municipal affairs, enact legislation different than that adopted by the state.”

Labor Smackdown

A recent California Supreme Court decision will actually help taxpayers bring some balance to the extreme positions coming out of state government.

The Supreme Court upheld the right of California’s 121 charter cities to establish their own policies about government-mandated prevailing wages in municipal construction projects.

This is big, and it is a smack down to California’s arrogant labor unions.

Charter cities

California’s 121 charter cities maintain a governing system defined by the city’s own charter document rather than by the state.

The Supreme Court ruling is significant because it upheld that the state’s charter cities are not required to pay prevailing wages under state law for local public works projects that are funded by local taxpayer funds.

In State Building and Construction Trades Council of California, AFL-CIO vs. City of Vista, the court confirmed that California charter cities maintain the autonomy to be able to decide whether to pay prevailing wages for local construction projects. It’s a step in the direction of the free market.

While some of the recent California cities to file for bankruptcy, including Stockton and San Bernardino, are charter cities, being a charter city does not lead to insolvency as many in the media would have Californians believe.

Los Angeles and San Francisco are also charter cities. Plenty of California’s cities, other than charter cities, are facing financial meltdown. However, being a charter city allows flexibility.

California’s charter cities first were established in the 1870s during difficult economic times, and in response to the state meddling in city affairs. A constitutional revision granting municipalities the charter option was approved and cities revised their own charters.

The beauty of charter cities is that, when used properly, the charter allows them more flexibility to cut costs and use revenues wisely, unlike most state mandates, which always favor certain special interests. This gives a city more control in making decisions more in line with local issues and needs.

But not everyone agrees.

“With a majority of the state’s largest cities chartered and thus suffering from unchecked wages, workers are being hurt statewide,” a story in the Daily Kos reported. “The high court of California had the opportunity to right this wrong but instead sided with the cities and bucked the Building Trades Council which represents 131 local unions in California.”

To understand this thinking, it is important to read further. “Prevailing wage laws are meant to protect wages across the industry, not just for union workers or workers in a given region,” the Daily Kos writer reported. “Republicans argue that such laws are outdated, but it is difficult to argue that preventing unscrupulous contractors from underbidding on contracts only to make up the difference on the backs of workers is a concept with an expiration date.”

What is difficult is to argue that supply and demand don’t matter, or that different regions and locals don’t have differing pay scales and needs.

However, Stockton and San Bernardino were not availing themselves of the ability to not pay higher prevailing wages, whereas most charter cities seek to pay wages more in line with the local economy.

“Significant and recent developments in proposed city charters in California have been related to explicit provisions concerning the establishment of policies for government-mandated prevailing wages, prohibitions on requiring contractors to sign Project Labor Agreements with unions, and requirements for unions to get permission from city employees to deduct money from their paychecks to use for political purposes,” Dayton explained. “In addition, some charters have contained provisions meant to prevent the kind of corruption among city council members and city staff that occurred in the City of Bell in the late 2000s.”

Dayton said that voters need to seriously consider approving the charter city proposals. “If you support lower taxes, reasonable regulation, fiscal responsibility, limited government, local control and more freedom from corrupt urban legislators, vote yes on the charters. If you believe citizens are not yet giving enough of their money to the government, vote no on the charter.”

Look for Part 2 of this Charter Cities series soon.