PHOENIX — A new ruling by the Arizona Supreme Court could undermine agreements that Arizona cities have with their labor unions.
In a unanimous decision, the justices said the contract that Phoenix negotiated with one of its unions illegally gives away city resources because it allows employees to work on union issues on city time while being paid. The court said there was no evidence that the cost to taxpayers was in any way commensurate with the benefits they got.
Tucson City Attorney Mike Rankin said Wednesday’s ruling will require him to review the contracts that the city has with four different unions. He said it is possible that what the city agreed to is now no longer considered legal.
Rankin said changes could be made to those contracts to meet some of the concerns in the high court ruling. These include things like having those employees working on what has been considered union business file reports of what they are doing and how that benefits the city and placing a limit on the paid time off.
But even with alterations, he told Capitol Media Services, it still might not be enough to satisfy the justices. Rankin said the court could still review the contract, even one with city oversight of employees during their paid time off, and conclude that it still does not meet the requirement that there needs to be a “public purpose’’ for any funds spent.
Central to the question is what is known as the Gift Clause of the Arizona Constitution.
It says that neither the state nor its political subdivisions, including cities, “shall ever give or loan its credit in the aid or, or make any donation or grant, by subsidy or otherwise, to any individual, association or corporation.’’
Justice Clint Bolick, writing for the court, said the language, taken from constitutions of other states, is designed primarily to keep tax dollars from going into what ultimately are private businesses.
There is a two-part test.
First, does the expenditure serve a public purpose.
Cities have argued that allowing some employees to work on union business helps smooth relations between government and the workers. Those paid employees also can help with personnel matters.
But there’s more.
Courts have said that there also needs to be “adequate consideration.”
What that means is a government needs to show is a relationship between the amount of taxpayer dollars spent and the benefits to the community. More to the point, it must be a direct benefit as opposed to some anticipated future benefit like better relations.
In this case, the justices said, the agreement Phoenix has with one of its unions falls short, calling the costs and benefits “one-sided,’’ favoring the union.
It is that test, said Rankin, that now needs to be examined in the deals Tucson has with four of its unions: police, fire fighters, other employees who are not related to public safety, and one for blue-collar workers.
He said those contracts were crafted relying on the precedents in earlier Gift Clause rulings. But Rankin said the thinking of the justices has evolved over time.
“It’s harder and harder to know what violates the Gift Clause — unless and until the court says they think it does,” he said.
So, for example, he said, one question might be how much control the city has over the workers when they are free from doing their assigned jobs but still being paid. Other issues might be how much reporting these employees have to provide about what they are doing, what are their specific tasks and how do those tasks benefit the city.
“We’re going to have to go through each of those (contracts) and try and determine if any of them are still valid in light of today’s case,’’ Rankin said.
What could happen, he said, is the city could make some tweaks in its release time provisions with an eye on ensuring the contracts pass constitutional muster.
“We could tighten up what it could be used for,’’ Rankin said. “We identify how each of those things actually does benefit the employer and how many hours are reasonable.’’
Still, he said, all of that is no guarantee the Supreme Court would give a contract its blessing.
Rankin said it goes beyond any proof Tucson presents about the public purpose served by the release time provisions. He said that, based on what’s in Wednesday’s ruling, the court could still decide it fails the second test of “adequate consideration’’ that taxpayers are getting a benefit equal to the money being spent.
