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California government employees represented by the Service Employees International Union (SEIU) will soon be getting “bonus checks” of $2,500. It remains unclear what this “bonus” is for, but it is not tied to any performance measure such as greater efficiency or accountability. The office of California’s state controller, which sends out the checks, had planned to issue the bonus money as “discrete checks.” Trouble is, this would be considered supplemental income and taxed at a higher rate. So the controller plans to combine the bonuses with the state employees’ regular pay, allowing for taxation at the normal rate. How this might go down with the IRS remains uncertain, but taxpayers should know what is going on.
This is the state doing special favors for the SEIU, the biggest union in state government with some 95,000 workers. As we noted, the SEIU likes to demonstrate outside the state capitol proclaiming, “We’re letting them know this is our house!” The SEIU bosses are right about that. They help elect big-government, tax-hiking politicians such as Jerry Brown, who then give the SEIU essentially everything they want. Last December the state gave the SEIU a 42-month deal hiking government employees’ pay by 11.5 percent, with the $2500 “bonus” now conveniently tucked into regular pay.
According to the Bureau of Labor Statistics, a full 84.1 percent of California workers, a vast majority, are not union members. Those embattled workers might try to recall the last time the state did anything to make their tax burden lighter. The last time the state refunded surplus money to taxpayers was 1987, when George Deukmejian was governor. Thirty years later, California workers pay the highest income and sales taxes in the nation. The state is now coming back for more with a $5.2 billion hike to fix the roads Caltrans has neglected to maintain. This will further punish the workers with higher prices for gasoline and diesel.