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Wisconsin faces an economic and fiscal crisis that demands clear thinking and immediate action. Past budgeting practices under the leadership of both political parties created this mess. Our state government made promises and created programs that became unaffordable. Now the state is broke, with bills we cannot pay. We must face reality and make tough choices. In past years our state leaders played an elaborate shell game to hide the facts of our dire fiscal situation. But now all the accounting tricks and gimmicks have been used. There is no escape from the harsh reality we now face. Sales tax and income tax revenues have not kept pace with the ever increasing costs of running our government. Already struggling homeowners and businesses cannot afford ever increasing property taxes. Wisconsin voters have spoken very clearly. It is time to make the tough decisions that will put Wisconsin on the road to sound finances and a healthy growing economy. We face two basic choices. First, will we increase taxes or reduce spending? Wisconsin taxpayers know that the solution to our budget crisis must be spending reductions and not further increases in the tax burden. We must focus on the core functions of government while we relentlessly seek to reduce costs, improve efficiency, and adopt innovative, creative new means of delivering services. Second, will we eliminate programs and services or instead cut the costs of providing the services? Let's start by reducing costs before cutting programs. Governor Walker has proposed that we bring our labor costs down by asking government employees to pay a more reasonable share of the cost of their pension and health insurance plans. No one will lose their job, their pension or their health insurance under this plan. Most Wisconsinites working outside of government already shoulder part or all of these costs for their families. Few private sector employees can retire at age 55 with a guaranteed pension. Yet this is what Wisconsin taxpayers have been providing our public employees, currently at little cost to the worker, something virtually unheard of in the rest of our economy. Reasonable adjustments in this area are a common sense solution to our budget dilemma. In Wisconsin, the average compensation paid to state employees, including salary and benefits, is $76,500. The average compensation for a teacher in Wisconsin is $74,844. Salary and benefit costs comprise the majority of our state and local government expenses, making up two-thirds of the state budget and three-quarters of school district costs. Repairing the huge budget gap without reducing these costs would require massive cuts to programs and services. As an example, even if all state support for the universities was ended and all the prisons were closed, we still wouldn't have a balanced budget. Another alternative to these reforms would involve layoffs of tens of thousands of teachers, local government employees, and state workers. Compared to the painful alternatives, the Governor's proposal is in the best interest of the citizens of Wisconsin. Program cuts may become necessary but cost reduction must come first. Last year Milwaukee's mayor often said it was time for "adult supervision" in Madison. He was right. It won't be easy or pleasant but we must face the difficult choices ahead and take immediate action to correct the problems. We will make every effort to protect the taxpayers, to avoid cuts in essential services, to end the accounting gimmicks and to put the state of Wisconsin in sound financial condition. The people of Wisconsin deserve nothing less. By facing the tough decisions now we can create a better future for everyone in Wisconsin. Frequently Asked Questions on the 2009-2011 Budget Repair Bill Why ask public employees to contribute 5.8% of their salary to fund their pension plan? Our state pension plan, the Wisconsin Retirement System, is among the largest and best run in the nation. Contributions into the plan are made almost exclusively by the taxpayers since government employees typically pay little or nothing to fund the plan. Defined benefit plans like WRS are increasingly rare in the private sector. It is not hard to see why when these plans cost an average of $2.94 per employee work hour compared to the average private sector retirement cost of just $0.44. Asking our public sector employees to pay 5.8% toward this generous retirement benefit is only reasonable. Why ask state employees to pay 12% of the premium costs for health insurance? State employees have health insurance coverage among the best in the nation but at a huge cost. It is reasonable to require our state workers to contribute 12% toward health insurance, an amount that is only half of the 25% required of federal employees. Many private sector employees contribute even larger amounts toward health insurance. Why change the collective bargaining laws for Wisconsin's public employees? The increased pension and health plan contributions will help solve our immediate budget problem. Over the long term Wisconsin must adopt fundamental reform of our state and local governments. Among the most crucial are changes to the collective bargaining system that has prevented common sense reforms. Counties and municipalities, as well as school districts will now have unprecedented flexibility to implement innovative and creative strategies to reduce costs and improve efficiency. The collective bargaining process is expensive, slow and inevitably leads to higher costs. Public sector unions are a Wisconsin tradition for 50 years. Why change now? About half the states have collective bargaining for all state and local government employees. The other half have limited or no union bargaining for public employees. The total compensation cost is 42% higher for unionized state and local workers versus non-union government workers. Are these reform measures just a politically motivated power grab? The fact is that the public employee unions are the most powerful political special interest groups in Wisconsin, spending huge amounts to influence the political process. Reforms like limiting collective bargaining and curtailing forced collection of union dues will put citizens and taxpayers back in control of their governments.
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