Why Budgeting Reforms are Needed
By Representative Tyler August (R-Walworth)
With Wisconsin facing an immediate shortfall of $137 million and a $3.6 billion deficit over the next budget biennium, the budgeting sins of the past are finally coming due. It is imperative that we finally balance the budget, and do so without harmful tax increases. The budget repair bill implements the reforms needed to accomplish this, and that is why I voted in favor of the bill.
The controversial budget repair bill contains three major budgetary reforms which give the state, local governments, and school districts the flexibility and tools they need to absorb the upcoming reductions in state aid. The reductions are partially needed due to legislative Democrats irresponsibly using $789 million in one-time Federal Stimulus funds to pay for ongoing school costs in the last state budget, which state taxpayers are now on the hook for. Overall, the following provisions will save local government and school boards over $1.44 billion, thereby avoiding thousands in layoffs or massive increases in already-too-high property tax bills.
The first two provisions of the bill require government employees at the state and local levels to increase contributions for their benefits. The contributions are still less than those in the private sector despite, according to an analysis by USA Today, government employees in Wisconsin making more than their private sector counterparts. Although the contributions will be tough for many, it should be noted Governor Walker has announced he is canceling furloughs, to restore a 3% pay cut.
In recent weeks, the most controversial provision of the budget repair bill eliminates certain collective bargaining privileges (but not all) for many state government employees. It is important to note that most federal government employees are not allowed to collectively bargain. This budgeting reform measure is needed for multiple reasons.
To begin, collective bargaining has been costly. For example, collective bargaining has resulted in allowing for a year’s worth of pay for 30 days work in the Green Bay School District, teachers receiving two pensions in Milwaukee Public Schools, and bus drivers making $150,000 in the City of Madison.
Specifically, this bill will finally allow all school districts the flexibility to choose their own health care provider, which has often been prohibited by collective bargaining agreements. If all school districts dropped the teachers union’s health care provider, WEA trust, taxpayers would see a savings of around $68 million per year for joining the state employee health plan with similar benefits levels.
The bill will also allow for school districts to implement merit pay programs. This will allow for rewarding good teachers based on performance, rather than simply based on seniority. For example, just last year the winner of the “Outstanding First Year Teacher” award was laid off due to collective bargaining agreements that based priority on seniority rather than merit.
Furthermore, collective bargaining in the public sector is prone to major problems and conflicts of interests. In the private sector, you have professional arbiters on both sides who hash out differences. If the business or corporation gives away too unrealistic of benefits, they go out of business. In the government, the politicians have expanded benefits beyond the taxpayers’ ability to pay, which has resulted in an unsustainable strain on out state and local budgets as well as an increased tax burden.
The public sector unions, who have made enormous campaign contributions, have been negotiating with amateurs (politicians). In fact, according to the WI Democracy Campaign, labor unions have contributed nearly $7 million to state candidates in Wisconsin over the last six election cycles. The benefit of this investment by the unions can be seen during Governor Doyle’s time in office. For example, in 2001 taxpayers contributed $423 million to state employee health insurance premiums, while in 2011 taxpayers contribute more than $1 billion. Even President Franklin Delano Roosevelt made the connection by saying, "All government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service."
Additionally, there have been many myths and misconceptions about the bill, which also need to be addressed.
It is important to note this change only applies to public sector government employees, not those in the private sector. The bill does nothing to affect unions outside of state government.
Also, government workers will still have strong civil service protections, which are contained in state law code. These include: the right to a harassment/discrimination free workplace, grievance and appeal rights, ability to compete for positions, and very generous vacation and sick leave benefits.
Government unions are not being eliminated or “decertified.” Collective bargaining over wages will still be allowed. Ultimately, the bill will simply allow for government employees to have a choice to join a union or not. Union dues will not be automatically withdrawn and a yearly vote will be required. For teachers, not paying union dues would save on average about $700 to $1,000 per year.
To conclude, it is clear that Wisconsin cannot sustain the path we have been on. The budgeting reforms in this bill will allow us to finally balance the budget without increasing the already high taxes or laying-off government employees.