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Showdown in Wisconsin

by John Stephenson / /

Picture this: protestors storming the capitol. State workersdeclaring that their pay and benefits are sacrosanct. University studentsbanging drums and wearing red shirts. Schools shut down. Soldiers on standbyready to assume control of vital government services. Am I talking about Paris,France? Or Athens, Greece? Nope, I just described the scene right now in goodole Madison, Wisconsin.

 

The brouhaha in Wisconsin is in response to Governor Scott Walker’s proposal to end the ability of mostgovernment employees to collectively bargain for benefits such as health careand pensions. Although workers could still bargain for wages, increases wouldbe capped at the CPI or another rate through a voter referendum. Walker alsowants to require state workers to contribute 5.8% of their salary towardspensions and pay 12.6% of their health insurance premiums. By contrast, privateworkers contribute 7.5% towards retirement and pay 20% of health insurancepremiums, on average.

 

Walker says he is doing this because he is facing a budgetcrisis. Wisconsin will run a budget deficit of $137 million this year and a$3.6 billion deficit in the next budget. The governor, a former chief executiveof Milwaukee County, estimates that if he does not have the ability to demand moreconcessions from public sector unions, he will be forced to layoff 5,500employees or roll back major government programs, like Medicaid.

 

The public sector unions and their allies have respondedstrongly in opposition to the proposal. Thousands have turned out to the statecapitol, filling the hallways, blocking access to the General Assembly’schambers, and banging on windows. Public schools in Madison actually closed onThursday because 40% of the teachers called in “sick.”

 

But the twists and turns continue. Although the Senatescheduled a vote on the Governor’s proposal for Thursday, the vote did nothappen; the entire Democrat caucus was nowhere to be found. Republicans controlthe General Assembly and reportedly have the votes to pass the Governor’sproposal, but they are one vote short of a quorum to conduct business. With theDemocrats gone, there are not enough Senators in the chamber to hold a vote.According to some reports, the caucus decamped to a Best Western hotel inRockford, Illinois, which is outside the jurisdiction of the Wisconsin StatePatrol. More rallies, for and against the governor’s proposal, are planned forthe weekend. It’s anyone’s guess as to what happens next.

 

The unions are targeting this reform because collectivebargaining is the source of their power. By reforming collective bargaining,governors and legislators would have a stronger hand in contract negotiationsto demand concessions to balance budgets and save taxpayers money. Some arguethat reforming collective bargaining and labor laws could be a more realisticalternative to dealing with health care and pension costs than statebankruptcy. The stakes are high for both sides. Whatever happens in Wisconsinover the next several days will have ramifications for the rest of the nation.

This entry also appears at State Budget Solutions.