The Teamsters Union has an unprecedented opportunity to build on the unity and successes of the last several years to increase the membership and power of the Teamsters union to benefit working families.

The Commission finds, however, that the work of rebuilding the Union, although resting on a firm foundation of unity and fiscal prudence, has just begun.

When the current Administration took office in March 1999, it found a union with no strike fund, a depleted special organizing fund, and a general fund that was dangerously low, with net assets near zero—having fallen from more than $150 million in 1991, when the former Administration was elected.

The International Union in 2002 is operating on roughly the same income it had in the 1970s and 1980s. However, that income has less than half the buying power that it had at the time. The last time that the Teamster per capita payments from Local Unions was changed was in 1983.

The Net Assets of the International Union have fallen from approximately $300 million in 1979 (in today’s dollars) to close to $5 million today. In 1995, the International Union was forced to impose a $1 assessment on its Local Unions when its assets fell below $20 million.

On a per member basis, the Teamsters Union’s income from per capita payments from Local Unions is lower than any other union in North America.

The Teamster member dues formula of 2x effective hourly earnings was adopted in 1976, when the International had more than 2 million members, and the average Local Union was larger than it is today.

The International Union receives the lowest percentage of Local Union dues dollars of any other union in North America.

The Teamsters Union Defense Fund was depleted in 1994 and the union is now paying 1980s level strike benefits out of its General Fund. One large strike could bankrupt the International Union.

Current International Union organizing resources are inadequate to address the huge task of expanding Teamster membership, increasing Teamster bargaining and political power, and strengthening Teamster contracts.

Teamster leadership has done a good job keeping the International Union afloat over the last three years. It has cut salary and benefits costs and perks for staff and officers and strengthened financial controls and policies. Nevertheless, the International Union is operating on a shoestring and cannot provide basic support and other functions for its Local Unions and members, and at the same time build reserves to finance future conventions, elections, and other extraordinary expenses.

The Commission finds that a fully funded International Union devoted to organizing, strike support, and an aggressive political and bargaining strategy is essential to advance the interests of Teamster members and to produce a climate in which Local Unions can thrive.

The Commission commends President Hoffa, Secretary-Treasurer Keegel, and the entire General Executive Board for their success in restoring the unity of the Teamsters Union, a precondition for tackling the tough problems of Teamster finances and growth. They are also to be commended for developing a system of strong internal financial controls and implementing an audit committee process which generated a court order eliminating the Independent Financial Auditor. Through their efforts, control of International Union finances has been returned to the Union’s elected leaders for the first time in nearly five years.

The Teamsters Union requires an increase in per capita income if it is to rebuild a Strike and Defense Fund and pay adequate strike benefits, have sufficient resources for organizing, maintain and restore needed services, build financial reserves to meet extraordinary demands like contract and corporate campaigns, and fund future International elections and conventions.

The Commission recommends a Teamster Power Plan based on an income at least equivalent to that which prevailed in the early 1980s—between $140 and $150 million in inflation adjusted dollars—if it is to meet the extraordinary opportunities and challenges that face it.

 The Commission recommends a distribution of income as follows—General Fund: 70%, Strike and Defense Fund: 15%; Organizing: 10%; Net Asset Restoration: 5%. The Commission’s recommendation is based on an assumption of $100 million in general operating expenses, which provides adequate services and support to Local Unions and members while allowing the International to adequately fund periodic expenses like conventions and elections.

The Commission recommends reform of the per capita and dues structure that generates sufficient resources for the International Union; generates resources for Local Unions; is simple and easy to understand; provides a one-time solution to Teamster financial issues; is progressive; and keeps the IBT per capita tax on Local Unions below all other International Unions.

The Commission recommends the following reform of the dues and per capita structures of the Teamsters Union: minimum dues would go from two times the effective hourly rate to two-and-a-half times the effective hourly earning rate for members earning more more than $11.00 per hour and the per capita tax would be 22% of Local Union income generated by the minimum dues rate. (The equivalent of one-half hour would be added to any dues rate in excess of the current two times the effective hourly base minimum.) Members making $11 or less would not experience an increase in dues and the per capita tax on those members would be fixed at $5 per member per month.

The Commission recommends that public sector members who do not have the right to strike and, therefore, would not have the benefit of the Teamster Strike and Defense Fund, should pay a dues rate of two-and-a-quarter times the effective hourly earnings rate.

per capita will be $5.00 per month on members with an effective hourly rate of $11.00 per hour or less.

per capita will be 22 percent of 2.25 times the effective hourly rate for public service members who are denied the right to strike by applicable law.

per capita will be 22 percent of 2.5 times the effective hourly rate for all other members.

per capita will be 16.5 percent of the appropriate multiple (public service or other) for members of Local Unions affiliated with Teamsters Canada.

for members with an effective hourly rate of $11.00 or less, there is no change in the basic formula, which sets minimum monthly dues at 2 times that effective hourly rate.

except for members falling within certain specifically defined categories (which are described below and which are explicitly set forth in the amendment), monthly dues will be increased by adding ½ hour per month to the dues in effective on July 1, 2002, thereby establishing a minimum monthly dues of 2.5 times the effective hourly rate.

for public service members who are prohibited from striking by applicable law, monthly dues will be increased by adding ¼ hour per month to the dues effective on July 1, 2002, thereby establishing a minimum monthly dues of 2.25 times the effective hourly rate.

for members employed as flight attendants, monthly dues will be increased to achieve a minimum of 1.125 times the base hourly flight rate.

for members employed as pilots, monthly dues will be increased to 1.56 percent of monthly guarantee.