Union Release Time Was Once Unconstitutional

Lawmakers should retain a healthy skepticism about spending tax money on private interests

Bills in the state Legislature would eliminate the practice of paid union release time, where taxpayers pay public employees to do work for their private union. It’s a rare and brazen practice in which taxpayer money is used for the primary benefit of a private interest — in this case, unions. This is the exact kind of thing that used to be prohibited in Michigan based on a long-standing legal precedent established by former Michigan Supreme Court Chief Justice Thomas Cooley.

I’ll call it the Suppressed Cooley Doctrine, and it goes back to the state’s early history. After the state spent good money on overpriced and underdelivered railroads and canals, voters enacted a constitution that prohibited lawmakers from investing in these type of schemes. It also forbade the state from owning private companies or extending its credit to them.

But railroad fever and other-state-envy got the Legislature to approve some schemes to allow cities to extend their credit to private railroads. When some township officials balked, a railroad company sued and the case went up to the Michigan Supreme Court. Justice Thomas Cooley ruled that while it was prohibited under the constitution, it was furthermore prohibited by a natural and necessary limitation on the power of taxation. He argued that taxes can only be used for public purposes and not for anything that primarily benefits a private interest.

(For a history of this doctrine, see my colleague Patrick Wright’s new paper.)

Fast forward to the current union release time issue. It’s been the practice for some governments to use their resources to pay union officers to do union business. The union is clearly a private entity. Union business clearly goes to the union’s benefit.

During a committee hearing, some legislators pushed back on the idea that these were private benefits. Surely the local managers that agreed to these practices feel that the public gets something out of it — better relationships with their unions and ease in administering employee complaints, they say.

There are benefits to the public from all kinds of occupations that people can enjoy, but that does not mean that they are eligible for taxpayer subsidies. Justice Cooley wrote in his decision:

Certain professions and occupations in life are also essential, but we have no authority to employ the public moneys to induce persons to enter them. The necessity may be pressing, and to supply it may be, in a certain sense, to accomplish a “public purpose;” but it is not a purpose for which the power of taxation may be employed. The public necessity for an educated and skillful physician in some particular locality may be great and pressing, yet if the people should be taxed to hire one to locate there, the common voice would exclaim that the public moneys were being devoted to a private purpose.

So even if there are some benefits that union release time provides to governments — and it’s questionable that there are — they should not be an expense to the public.

Lawmakers should have a healthy skepticism about spending the public purse on private interests like unions, as Justice Cooley had. This is important for another reason that Cooley highlighted. When politicians can use taxes to pay for private interests, it is the politically powerful who benefit at the expense of the rest of us.

[W]hen the State once enters upon the business of subsidies, we shall not fail to discover that the strong and powerful interests are those most likely to control legislation, and that the weaker will be taxed to enhance the profits of the stronger.

Cooley’s decision was the law of the land for 70 years until a later court simply ruled that the public interest can include private benefits. So this is not primarily an argument that such things should be overturned by the courts today, though that question deserves a second look.

Instead, this is an appeal to you that our lawmakers should have that same kind of skepticism that Justice Cooley had. There are real public benefits that the public purse should pay for. Private interests are not among them. And union release time is clearly a private interest.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.