California union members could possibly come into a small windfall next tax season alongside a growing membership among an elite workforce. California’s latest budget included the “Workers Tax Fairness Credit,” a tax credit that allows union members to receive a tax credit, not deduction, for their union dues, thereby allowing the state to underwrite the cost of union dues.
Given recent declines in union membership over the past several decades, including a nearly 2% decline in California between 2020 and 2021, this bill can be viewed as an effort to promote union membership, especially in the aftermath of a 2018 U.S. Supreme Court decision outlawing state laws that require public employees to pay dues even if they are not members of a union. Despite this decline, California still has some of the highest union membership rates in the state, hosting a 15.9% union membership rate, more than 54% above the national average.
A notable exception to the Workers Tax Fairness Credit has been the state legislature itself, likely to avoid an apparent conflict of interest. Assemblyman Mark Stone, however, recently added language to a bill to allow legislative employees to unionize. The bill, which has already passed the Senate Labor, Public Employment and Retirement Committee, could soon face a full Senate vote, after which it could pass in the Assembly, where similar such bills have been put down in committee. Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon both support unionizing the legislature, which suggests passage is likely.
While Governor Newsom did support the Workers Tax Fairness Credit, given the bill’s single exemption for California’s legislature, it’s unclear whether or not he would sign the measure if it makes it to his desk.