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Legislative Update – February 2, 2011

Posted by Chris Liebenthal on February 3, 2011

Walker:  Wisconsin’s Budget Shortfall Situation is “An Opportunity” to Transform Government; Reduce “Entitlement Programs” and “Legacy Costs”

 

On Feb. 1, Governor Scott Walker gave his first “State of the State” speech in which he laid out two key policy goals:  to improve the state’s business environment and to use Wisconsin’s budget situation as an “opportunity to reduce government” and “transform the way government works in Wisconsin”.

He said lawmakers need to take “swift, corrective action” to stop Medicaid (entitlement programs) and state employee benefits (legacy programs) from “eating up more and more of the operating budget.”

Gov. Walker said that Wisconsin, like other states, has major fiscal challenges due to the decline in the global economy.  He also said states across the nation are facing a $1 trillion shortfall due to public sector retirement benefits, and noted that state and local governments are saddled with heavy debt.  This is true, but not for most of Wisconsin. Gov. Walker did not mention that the Wisconsin Retirement System, which covers some 550,000 state residents (active and retired), is fully funded and is not at risk.

It is misleading and reckless for the state’s highest executive to present facts that are not true or relevant in Wisconsin to make a case for asking/forcing state employees to begin paying pension payments.  He said state workers would be asked to pay “just over 5%” of their pensions, as well as 12% (up from an average of 6%) of the cost of healthcare premiums.

He also said that “the difficult reality is that healthcare costs and pension costs have risen dramatically and that has created a benefit system that is simply unsustainable.  Government benefits have grown while so many others in the private sector have seen their benefits adjusted in order to protect jobs.”

It is unclear when the Governor intends to act on cutting Medicaid costs and state worker benefits, but it could be sooner rather than later. He intends to introduce a budget repair bill to fix what he says is a $200 million shortfall for the rest of the current fiscal year (which ends June 30). The budget repair bill will focus on “..the most immediate fiscal challenges our state must address to avoid massive layoffs or reductions in critical services.”   He did not provide specifics.

A budget repair bill can be introduced and acted on quickly, with limited opportunity for public input, if past practice is any indication.  In contrast, the regular 2011-2013 state budget bill is expected to be introduced on February 22, and there is a lengthy process involving budget briefings, public hearings that usually take place in 5 or 6 communities across the state, and then the agency-by-agency painstaking voting process, all of which allow for ample input by the public (and lobbyists).

The governor made several references to the concessions that workers in private corporations have made to keep their jobs.  He added that “While state government can’t pick up and move, I hope that our state employees feel as if they’ve been treated fairly over the years, but- like all of us- they should recognize that we are in difficult economic and fiscal times.”

 

Perhaps that comment would be easier to accept and understand if there had been some recognition of the $100+ in concessions state workers had agreed to give up in the bargaining sessions which produced the contracts that were rejected by the Legislature in December.  It also might be easier to accept if the Governor had made any attempt to reach out to employees.  Since taking office, his administration has talked about concessions it plans to extract, but has not made any attempt to contact AFSCME, which represents more than 23,000 state employees.

That comment also would have been more acceptable to state workers had the Governor made a strong, public commitment to spread the cuts across the board to state services and programs, in as fairly as possible, as Governor Doyle proposed in his last budget.

It is worth mentioning that in previous speeches, Gov. Walker has specifically mentioned the benefits of both state and local government employees, although in Tuesday’s speech, that message was not as evident.  Nevertheless, the Governor also stated that “…we must provide flexibility to our leaders at all levels.”  In a recent previous speech, when he referred to giving local elected officials “flexibility” he meant pension payments, healthcare payments and changes to tilt the local collective bargaining law in favor of the employer.

The full speech is available on-line at http://www.wisgov.state.wi.us/ or on WisPolitics.com or The Wheeler Report (www.thewheelerreport.com).

AFSCME members can learn more about the Wisconsin Retirement System can read the AFSCME “Green Sheet” on the WRS and public employee pensions.  That four-page document is available on the AFSCME Council 11 website: http://www.wiafscme.org.  AFSCME in Wisconsin and AFSCME International have a ton of information on pension systems.  Much of it is easy to read and understand and will help prepare members for the discussions and challenges that face us.

For more information, contact your AFSCME lobbyists at 608-836-6666 or go to http://www.wiafscme.org.

 

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