Can California’s biggest state worker union pay its bills? Split budget vote confuses members

The president of California’s largest state employee union created confusion over whether the organization can pay its employees and its bills after leaders of SEIU Local 1000 failed to adopt a budget last week.

SEIU Local 1000 President Richard Louis Brown called a meeting of the union’s board on Dec. 29 to vote on a three-year budget proposal. Brown livestreamed the meeting on Facebook.

During the meeting, a union official asked Brown what would happen if the board didn’t approve the proposal, which calls for $47 million in spending in 2022.

“People don’t get paid their salaries,” Brown said. “ … So our operations will cease. But like I stated earlier, as the president of Local 1000 I will not let this union fall downhill.”

Two attorneys reached by The Sacramento Bee said nonprofits may spend money without an approved budget, and Brown said employees would continue to get paid. But the meeting added to the disarray at the divided organization representing 100,000 state employees, whose board of directors has been trying to constrain Brown since shortly after his election in May.

Twenty-four of the 56 participating board members voted against the budget proposal, while 23 voted for it and nine abstained.

The proposal assumes the union will reverse a slow decline in its membership rate in recent years and make large gains over the next two years, boosting revenues from dues.

About 53% of the employees the union represents are dues-paying members, according to State Controller’s Office data.

Brown’s budget proposal, prepared by the union’s controller, projects membership will surge to about 65% this year and 75% next year. The projected surges would boost revenue by $2 million this year and $7 million next year, according to the proposal.

Some meeting participants expressed skepticism over the targets, noting the union could run up a deficit if the recruitment falls short of the goals. Brown pointed out the union has operated with a deficit in the past and expressed confidence in new recruitment efforts.

Chris Brackett, the union’s controller, said the budget could be adjusted if the targets aren’t met.

“This is about trying to set a goal that is something to shoot for, something that can be motivating,” Brackett said.

Emergency union meeting

Brown called an emergency meeting for last week’s budget vote. It followed a regularly scheduled meeting the weekend of Dec. 18 and 19 during which the board was supposed to have considered the budget. But Brown didn’t officially call that meeting, which was held online, to order.

At last week’s emergency budget meeting, scheduled for 6:30 p.m., participants spoke for about four hours before Brown officially called the virtual meeting to order. Arguments ensued, and Brown called for all the members to be muted. He unmuted them individually to vote.

After the vote failed, Brown said, “This staff will continue to get paid and these operations will continue to go on, period.”

Legally, there’s nothing to stop that from happening, said Eric Gorovitz, a principal attorney at San Francisco-based Adler and Colvin.

“As a matter of corporate operation, it doesn’t impose legal constraints,” Gorovitz said. “It’s just a planning device that leadership uses to make sure it manages its money.”

Gorovitz’s firm doesn’t have Local 1000 as a client.

Gary Messing, a partner with Sacramento-based firm Messing, Adam and Jasmine, which specializes in labor, agreed. An attorney at Messing’s firm does some work for Local 1000.

The budget dispute comes amid an increasingly tense standoff between Brown and a segment of the board of directors that has been trying to strip his powers and transfer the powers to a board-appointed chairperson.

At a meeting of 33 or 34 board members in October, a majority of participants selected Bill Hall as chairman.

Brown has called the meeting illegitimate, since the union’s governing documents give the president authority to call meetings.

SEIU International, the California union’s parent organization, has been communicating with both Hall and Brown while raising the possibility that the larger organization could intervene.

Hall said this week that Brown had refused to consider an alternative budget proposal.

“We’re in the land of it’s Richard’s way or no way,” Hall said. “And that’s unfortunate. That hurts everybody.”

Hall has said the dispute likely will end up in court.

Brown didn’t respond to a text or a call this week.

Raise for Local 1000 employees?

In a live-streamed video of himself on Jan. 3, he said last week’s vote was a tie, not a “no” vote.

“Somebody had voted yes and they fell asleep,” he said. “We’re going to count that vote.”

He then discussed the possibility that the union’s employees, who are represented by UAW 2350, could demand another raise of him, on top of the 14% over three years that was approved last year.

“If the UAW 2350, along with management, if they come together this week and put together a joint labor management committee, and they tell me by Friday by 4 p.m., we want 7% more money, we want a 7% increase on top of that 14%, if that’s what they tell me because of the lack of respect they were given, hoo boy, the hysteria, the hysteria that will create,” he said. “Because they will force me into a corner. They will force me into a decision.”

This story was originally published January 6, 2022 at 5:00 AM.