In an attempt to plug a $3.6 billion budget hole, Wisconsin Gov. Scott Walker is pushing a proposal to increase public employees' pension and health care contributions and reduce their collective bargaining rights. The measure has generated a massive backlash from government employees and Democratic legislators, who found themselves in the minority as a result of the November 2010 election. As many as 25,000 public employees have been rallying to protest the proposed changes, jamming the capitol building and calling in sick to work, shutting down schools in many school districts in the process. Others have staged counter-protests, and a Tea Party rally to support the labor and budget reforms scheduled for Saturday was expected to draw a crowd of thousands.
Democratic lawmakers fled the state in order to deny the legislature a quorum and prevent a vote on the measure. Republicans have plenty of votes to pass the measure, but are just shy of the supermajority required for a quorum. The state's 14 Democratic senators have threatened to remain out-of-state and hold up the government for weeks. (Despite the grandstanding and cowardice of the tactic, I couldn't help thinking how nice it would be if legislators left the state indefinitely in my home state of California, where the budgetary problems are even more severe than in Wisconsin.)
Under the governor's proposal, government employees' collective bargaining rights would be limited to wage increases no greater than increases in the cost of living, as measured by the Consumer Price Index, and public employees unions would be prohibited from requiring workers to pay union dues. State and local police and firefighters would be exempt from the measure.
As in California, New Jersey, Illinois, and a number of other states, rising public employee compensation costs in Wisconsin have been a major issue affecting the state budget. The proposal would require employees to contribute 5.8% to the pension system, which Walker asserted was "essentially right at the national average," and 12.6% of the cost of their health care premiums, which he said was about half the national average. The changes are expected to save the state $30 million by the end of the fiscal year ending June 30, and $300 million over the next two years. Gov. Walker estimates that the budget reform bill would prevent the layoffs of 5,500 state employees and an additional 5,000-6,000 local government employees (see press conference below beginning at 2:00).
In his press conference yesterday, Gov. Walker addressed the need for significant reform to balance the state's budget, his proposal to help do so, and the reaction of government employees and Democratic legislators. Below is an excerpt of Walker's comments.
Certainly, the thousands of people here and outside the capitol have every right to be heard, but I want to make sure that, not for one moment, are their voices drowning out the voices of millions of taxpayers all across the state of Wisconsin, who, as I've toured this state over the last couple days and even before that, have made it clear that they think while what we are doing is a politically bold move, it is a modest request of our employees at the state and local level.
It's modest in the sense that what we're asking for is very similar—in many cases, much better than—what the average taxpayer is getting all across the state of Wisconsin.
[. . .]
Doing this helps avoid layoffs. The last thing we need in the public or the private sector in this state is more layoffs at a time when we face an economic and budgetary crisis.
[. . .]
Like nearly every other state across the country, we're broke in Wisconsin. We don't have any more money to give. We don't have anything to negotiate with. It's either a matter of making reductions and making modest requests of our government employees or looking at massive layoffs at a time when we don't need anyone else laid off.
[. . .]
What we offer today is a very reasonable alternative to what they're doing in other states all across the country. It's still getting our budget balanced, putting it in order, without passing on massive tax increases that would cripple our state's economy, but doing it in a way that ultimately diminishes the possibility layoffs and makes sure that our schools and our core services continue to get the support that they need in the classroom and on the streets.
[. . .]
I was elected to get this state working again. I was elected to show that we could do things that would make the business climate better, to create more jobs in this state, and, ultimately, to get this state working again by balancing the budget. That is exactly what we are doing, no more, no less. It's about balancing the budget.
Those on both sides of the debate recognize that the issue is not confined to Wisconsin, but rather is a battle in a larger fight going on across the country. According to the Milwaukee Journal Sentinel, protesters are being bused in by labor groups such as the AFL-CIO and Organizing for America, the White House political operation and part of the Democratic National Committee. Even college students are being bused in. President Obama entered the fray on Wednesday, decrying the Wisconsin budget reform bill as "an assault on unions." And, as the Tea Party rally indicates, fiscal conservatives are mobilizing as well.
While the fights with government employees' unions have so far been rather partisan in nature since Republicans, such as Gov. Chris Christie in New Jersey and now Gov. Walker in Wisconsin, tend to have fewer political ties to Big Labor and thus have proven more willing to take them on, it is inevitable that Democratic leaders will increasingly be forced to butt heads with public employees unions as well. This is because unaffordable government worker pay and pensions is ultimately not a partisan issue. The simple fact is that the more money is spent to compensate current and retired government workers, the less is left over for everything else. Whether one's spending priorities are to reduce the size of government and lighten the burden on citizens by allowing them to keep more of their hard-earned money or to increase funding for welfare programs, the budget must be balanced without destroying the economy and taxpayers with massive tax increases or decimating the core services residents have come to expect.