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Showdown in Wisconsin

by john stephenson / /

Picture this: protestors storming the capitol. State workers declaring that their pay and benefits are sacrosanct. University students banging drums and wearing red shirts. Schools shut down. Soldiers on standby ready 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 good ole Madison, Wisconsin.

 

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

 

Walker says he is doing this because he is facing a budget crisis. 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 executive of Milwaukee County, estimates that if he does not have the ability to demand more concessions from public sector unions, he will be forced to layoff 5,500 employees or roll back major government programs, like Medicaid.

 

The public sector unions and their allies have responded strongly in opposition to the proposal. Thousands have turned out to the state capitol, filling the hallways, blocking access to the General Assembly’s chambers, and banging on windows. Public schools in Madison actually closed on Thursday because 40% of the teachers called in “sick.”

 

But the twists and turns continue. Although the Senate scheduled a vote on the Governor’s proposal for Thursday, the vote did not happen; the entire Democrat caucus was nowhere to be found. Republicans control the General Assembly and reportedly have the votes to pass the Governor’s proposal, but they are one vote short of a quorum to conduct business. With the Democrats 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 in Rockford, Illinois, which is outside the jurisdiction of the Wisconsin State Patrol. More rallies, for and against the governor’s proposal, are planned for the weekend. It’s anyone’s guess as to what happens next.

 

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

This entry also appears at State Budget Solutions.