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Analysis: Four years ago, UTLA increased its member dues by 33 percent. What did the union do with the money?

Mike Antonucci | January 14, 2020

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Mike Antonucci’s Union Report appears weekly at LA School Report.

United Teachers of Los Angeles president Alex Caputo-Pearl (Photo by Scott Heins/Getty Images)

In the summer of 2015, Alex Caputo-Pearl, president of United Teachers Los Angeles, gave a state of the union speech in which he alerted members to the dire necessity of raising dues by 33 percent. Without the increase, he said, UTLA would be “bankrupt or dramatically weakened” in the years to come.

Though there was considerable squawking from the rank-and-file, they ultimately approved the increase in February 2016.

Did the increase have an impressive effect on UTLA’s finances and avert a cataclysm to its bottom line? An examination of the union’s financial disclosure reports to the Internal Revenue Service both before and after the dues hike indicates it didn’t do much except pad UTLA’s payroll and bank account.

Before the increase went into effect, UTLA collected $41 million in dues, of which about $9.4 million was spent on officer and staff compensation. The union’s net worth was about $28.5 million, of which about $7.9 million was in non-interest-bearing cash. This hardly appears to be a case of impending doom.

The dues increase led to an additional $5.8 million in revenue, of which about $1.4 million was added to staff salaries and benefits. The number of UTLA employees earning more than $100,000 ballooned from 12 to 23 in just two years.

The union had other windfalls. Its legal expenses fell by more than one-third, and its accounting expenses by two-thirds.

So where did the bulk of the increase end up? In cash, apparently. UTLA’s non-interest-bearing cash assets stood at almost $11.6 million at the end of the 2017-18 school year, an increase of more than 47 percent in two years.

The dues hike might never have passed had it been sold to the membership as a means to boost staff compensation and add to already large bank account. There was never any danger of UTLA going bankrupt. But since the union’s dues increases no longer require a rank-and-file vote, its leaders no longer have to resort to subterfuge. They can pass dues hikes on their own.

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