Texas Constitution Bans Taxpayer Subsidies to Private Parties

It may seem obvious, but tax dollars are supposed to be used for purely public purposes, not the private benefit of an individual, corporation, or association. This principle is supported in nearly every state constitution.

However, many state and local governments grant government unions a direct subsidy known as union release time, a practice that allows public employees to conduct union business during working hours without loss of pay.

Unexpectedly, this practice occurs in Texas. Some of the worst abuses of the subsidy take place in the City of Austin. While researching a study that was published last year, I submitted public records request to the City of Austin regarding the municipality’s union release time costs.   

For example, in Austin, the city’s Police Department (APD), Fire Department (AFD), and Emergency Medical Services (AEMS) granted 10,857 hours of release time in FY 2012 and 16,963 in FY 2013, a cumulative total of 27,820. For the salaries made available, the cost of union release time to Austin taxpayers was $227,530 and $593,783 in FY 2012 and FY 2013, respectively.

In a Fox News article covering my report, even the Austin fire union President Bob Nicks disagrees with the practice. Instead of fighting fires, Nicks collects a six-figure salary and performs union duties 100 percent of the time. “I’ve been fighting to be put back to work at our fire department,” he says. “The chief wouldn’t allow it. How much they have fought against me was crazy.”

Fortunately for taxpayers and union president Nicks, several provisions in the Texas constitution, known as “gift clauses,” ban government subsidies that primarily benefit private entities. Texas’ constitution states:

[T]he Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever.

And a lawsuit against the union release time should be a slam dunk. As I recount in my report, a Texas Attorney General in 1979 has already determined that the union subsidy is unconstitutional:

The issue of the legality of release time was presented to the Texas Attorney General Mark White in 1979. He was asked to determine whether the Fort Worth Independent School District’s union release time policy, begun in 1975, violated the state constitution’s gift clause. The policy gave several teachers unions nine days of union release time for every 100 members and allowed the unions to determine what activity could be conducted on release time. During 1978-1979, one union, the Classroom Teachers Association, used 301 release time days at a cost of $23,000.

White determined: A policy of the Fort Worth Independent School District, which permits teachers to work for professional organizations while being paid salaries by the school district, constitutes an unconditional grant of public funds to a private organization and therefore unconstitutional.

He noted that Texas’s gift clause bans the grant of public funds to private entity “unless the transfer serves a public purpose and adequate contractual or other controls ensure its realization,” and that release time constituted a “benefit financed from public funds. The policy permits teachers to pursue the business of the professional organization while being paid by the school district.”

Given that release time is a benefit of public funds that is granted to a private entity, it must serve a public purpose and have controls in place to ensure that it does so. White found that the school district failed to articulate how release time served a public purpose and the release time program failed to place “adequate controls on the use of released time to insure that a public purpose will be served.”

While attorney general opinions do not create law or undo deleterious impact of current law, they carry great weight with courts when they determine the constitutionality of a given public policy.

Thankfully, today, the good folks over at the Goldwater Institute and Texas Public Policy Foundation filed a lawsuit against the City of Austin and Austin Firefighters Association, Local 975 that challenges the practice of union release time.

Government officials in Texas should honor the state constitution and stop funding activities that only serve special interests without advancing any public purpose.

Read more on the practice of release time here, here and here.