Stephen Delie and Michael D. LaFaive, Mackinac Center for Public Policy
A new bill in the state House would force Michigan taxpayers to subsidize unions and their political activities. House Bill 4235, which was introduced early this month by Rep. Alabas Farhat, D-Dearborn, with more than 30 Democratic co-sponsors, would provide a refundable tax credit to dues-paying union members as of January 1 of this year. If union members’ dues exceed their state tax bill, the treasury will cut them a check.
This description only hints at the radical change this bill would cause. This proposal means taxpayers, not union members, will be paying 100% of union dues ? and the dues themselves will most likely increase once the bill is enacted. Union members get a full dollar’s worth of refundable credits for every dollar they spend on union dues. Union dues would cease to be a financial obligation of the union’s members and instead would become a Michigan taxpayer obligation.
This would incentivize unions to hike their dues. Members do not suffer financial consequences if they are reimbursed for every dollar they pay. The burden would instead be borne by Michigan taxpayers. The law contains no limits on how much unions can receive in money from Michigan taxpayers. This legislation actually makes the repeal of Michigan’s right-to-work law look tame by comparison.
The impending repeal of that popular law already means the tens of thousands of workers who have opted not to pay their union will be forced to do so again. Overnight, 60,000 workers who previously made a choice to avoid union membership will face a new one: Pay the union or lose your job.
If one assumes that 60,000 private-sector workers would be forced to pay union dues again, and that their average dues were $600 annually, then unions would rake in an additional $36 million per year. With the special interest tax break offered in HB 4235, these dues would cost union members nothing, so why not double or triple them? The Michigan Legislature is on the cusp of providing labor unions carte blanche to hike dues without fear of backlash from their members.
This is important to understand because typically only a small fraction of dues dollars is used for bargaining and representation. For example, in 2022, only 26% of dues collected by the Michigan Education Association went to such work, according to federal filings. The more money raised by increased dues, the more money organized labor can spend on political candidates and causes.
That spending does not reflect the diverse views of union members ? and it certainly doesn’t reflect the views of Michigan taxpayers who will be paying for all of it. Five of Michigan’s larger unions made more than 98% of their political campaign donations to Michigan Democrats in the last election cycle, according to Bridge Michigan. Michigan’s largest unions made $3 million in political donations across the Great Lake State recently. All but $51,000 went to Democrats.
Worse still, this bill is only part of a larger package which would enshrine unions as privileged political actors. House Bills 4230-4237 are a gift to Michigan’s unions, offering them a host of benefits unknown to any other entity in Michigan law. House Bill 4234 warrants special attention. This bill would allow unions to act as political action committees and permits unions to make unlimited campaign contributions without the need to register as a PAC. Taken together, HB 4234 and 4235 would fundamentally reshape Michigan politics by allowing unlimited taxpayer-funded union contributions to influence campaigns.
In other words, your tax dollars will pay for union politics and policies. With a river of new tax-supported dues money flowing to union coffers, what could go wrong?
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Steve Delie is the director of labor policy at the Mackinac Center for Public Policy. Michael LaFaive is the senior director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy, where he has worked since 1995.
