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Budget Repair Bill SS AB 11
Frequently Asked Questions about the Budget Adjustment Bill:
What happens if we don’t pass this budget repair bill?
We are left with a situation where unless quick and decisive action is taken the state will run out of money by July 1st to fund our prisons and take care of our most vulnerable citizens on Medicaid. We also will be forced to lay off up to 1500 workers in the upcoming weeks and up to 6000 in the next biennium.
Why is the Governor rushing through radical changes that would take away rights from workers, without making any effort to talk to those workers, much less negotiate a fair agreement with those workers?
We are not rushing; we are moving quickly in a clear and transparent fashion because we need to act swiftly and decisively to bridge the $137 million gap for FY2011 and the $3.6 billion shortfall for the next biennium in order to keep Wisconsin fiscally solvent. We cannot possibly move quick enough to address our state’s near double-digit unemployment rate and our crippling deficits. The Joint Finance Committee held over 17 hours of public testimony on this bill – something the previous administration did not when they passed a budget adjustment bill with hundreds of millions of dollars in tax increases.
Why can’t we re-open contract negotiations?
After nearly 17 months of no concessions state employee contracts were quickly ratified after the November elections and attempted to be pushed through the legislature in a lame duck session in December despite Governor Walker asking that negotiations remain open. After the Democrat controlled legislature failed to pass contracts in December, union heads—including AFSCME Wisconsin leader Marty Beil said “We will make no overtures toward them.” We can no longer accept short term fixes and kick the tough decisions down the road. Union leaders who say they are willing to accept the 5% and 12% are using it as a red herring. These are the same people who tried to ram through a contract in December without negotiation, and who a week ago said they couldn’t afford the 5% and 12%. Over the last decade the average state employee contract was signed 15 months late (even though they contained compensation increases) and until a new contract is signed the existing one stays in place. We do not have that kind of time.
Why do we need to move so quickly on passage?
Department of Administration Secretary Mike Huebsch says for the state to realize debt restructuring savings in the budget repair bill, the legislation must be passed this week. Since the state is required to make debt service payments on March 15, the bill must be enacted by Feb. 25th to allow time to sell the refinancing bonds. Governor Walker has also indicated if we do not meet this deadline he will have to begin to lay off more than 1,500 state employees.
Didn’t you create this budget deficit by passing all those tax breaks in January?
The truth is that the tax bills enacted by the legislature and Governor Walker have a $0 impact on the current fiscal year. The State of Wisconsin was facing a $137 million budget shortfall in fiscal year 11 before passage of the bills, and it is facing a $137 million budget shortfall after enactment of the legislation. The economic growth bills do not apply to this fiscal year.
Didn’t the Legislative Fiscal Bureau say we had budget surplus?
When read in isolation the memo does show a $121.4 million general fund gross balance as of June 30, 2011 and a net balance of $56.4 million. However, the rest of the memo spells out at least $315.7 million in unpaid bills or expected shortfalls in programs such as Medicaid services for the needy (153.2 million alone), the public defender’s office and for corrections. In addition we owe Minnesota, $58.7 million dollars for income tax reciprocity (for which we are paying a daily fine of $4500) and we must pay back a $200 million raid on the Patients Compensation Fund.
Why were police and fire exempted? Is this political payback?
There are 314 fire and police unions in Wisconsin. Only four of them endorsed Governor Walker last fall and did not contribute large sums of money to his campaign. Wisconsin Statutes have long treated police and fire very differently when it comes to a whole series of rights and responsibilities. We cannot afford to have police and fire walk off the job for even a short period of time like many teachers did last week.
Why are you trying to balance the budget entirely on the backs of the union?
We are asking for $300 million in concessions by the end of the next biennium or, less than 10 percent of our massive deficit. Truly putting the deficit on the backs of the union would be the alternative: 1,500 public employee layoffs in the next several weeks and 6,000 by the end of the next biennium. On the positive side, this plan will allow wages to grow with inflation, something that hasn’t happened since the contracts expired almost 2 years ago. We are also giving local control to voters to let them decide if they want compensation increases above the cost of inflation for their teachers.
Why are you asking public employees to take such a large hit?
Employee salary and fringe benefits currently comprise more than 60% of state government’s general purpose revenue operation costs and more than 75% of total school district expenditures statewide. Therefore, we must give state and local government, including school districts, the tools to address how to control costs in the largest area of their budgets. We are asking that public employees pay 5.8% of their retirement fund beginning April 1st. The state and local government has being paying close to 100% of this contribution for years. This is no longer sustainable. In addition, each state employee will contribute 12.6% towards their health care costs beginning April 1st. Presently, state employees contribute roughly 6%. The national average for workers’ contributions in the private sector is 25% so this is not an unreasonable request of our state workers. A study by The Segal Co., a private benefits firm, that looked just at state government workers across the nation showed a majority paying between 20% and 60% of their premium costs for family coverage. If Wisconsin workers are paying around 6%, that puts them in the bottom fifth nationally among state employees and will still put them below the national average. The proposed changes would cost the average state employee an additional $1,560 per year for family coverage, but the amount they would pay ($2,496) would still be significantly less than the $3,875 average premium contribution at large private‐sector employers in southeastern Wisconsin.
What does this mean for local government workers’ health insurance?
Local government employers that do not participate in the state health insurance plan will still be able to choose the amount they wish to contribute to their employees’ health care plans.
Why are you dismantling collective bargaining rights of public employees? What does that have to do with fixing our budget deficit?
We are not dismantling collective bargaining. Public employees are not losing their rights. They can still negotiate salaries, and they can still be a member of the union on a voluntary basis.
This is a fiscal issue for several reasons:
Example #1 WEA Trust
Currently many school districts participate in WEA trust because WEAC collectively bargains to get as many school districts across the state to participate in this union run health insurance plan as possible. Union leadership benefits from members participating in this plan. If school districts enrolled in the state employee health plan, it would save school districts up to $68 million per year. Beyond that if school districts had the flexibility to look for health insurance coverage outside of WEA trust or the state plan, additional savings would likely be realized.
Example #2 Viagra for Teachers
The Milwaukee Teachers’ Education Association (MTEA) tried to use a policy established by collective bargaining to obtain health insurance coverage that specifically paid for Viagra. Cost to taxpayers is $786,000 a year.
Reference: http://abcnews.go.com/Health/milwaukee-schools-ban-viagra-teachers-union-suesdiscrimination/story?id=11378595
Example #3 Unrealistic Overtime Provisions
On a state level, the Department of Corrections allows correctional workers who call in sick to collect overtime if they work a shift on the exact same day. The specific provision that allows this to happen was collectively bargained for in their contract. Cost to taxpayers $4.8 million.
Example #4 Paid-Time Off for Union Activities
In Milwaukee County alone, because the union collectively bargained for paid time off, fourteen employees receive salary and benefits for doing union business. Of the fourteen, three are on full-time release for union business. Milwaukee County spent over $170,000 in salary alone for these employees to only participate in union activities such as collective bargaining.
Example #5 Surrender of Management Rights
Because of collecting bargaining, unions have included provisions in employee contracts that have a direct fiscal impact such as not allowing management to schedule workers based on operational needs and requiring notice and approval by the union prior to scheduling changes.
Does this bill decertify public unions?
No. Although the state and local government would no longer administratively deduct union dues from paychecks individuals could still choose to send their dues in directly. Additionally, an annual vote must be taken to certify union representation.
How will state and local workers have any protections if this bill passes?
Wisconsin has some of the most comprehensive civil service protections in the nation and those remain in place. The appeal and grievance process through Wisconsin Statutes s. 230.44 and Wisconsin Administrative Code ER 46 currently protect the job rights of thousands and non-represented employees and will do the same for represented employees. In addition, the changes made by the Joint Finance Committee require that local units of government also establish a civil service system and any grievance procedure must contain a) a grievance procedure that addresses employee terminations; b) employee discipline; and c) workplace safety.
Will state employees still have to take furlough days after July 1, 2011?
No. Governor Walker’s budget repair bill contains no furlough days and he has promised his 2011-13 budget will not contain any either. While existing furlough days put into place by Governor Doyle will still have to be carried out, once July 1, 2011 occurs state workers will be getting back what is the rough equivalent of 3% of their pay back. This will help offset some of the additional costs of pension and state health insurance increases.
As an elected official are you making these same sacrifices?
Yes. Since being elected in 2008 I have donated my pay raise from the previous session back to the state and to local food charities in my district. I do not take sick leave and have authored legislation to abolish it for all elected officials. I have also voluntarily taken the 16 furlough days instituted by Governor Doyle and in January (before the budget adjustment bill was even introduced) I informed our human resources department that I wanted to begin voluntarily paying for my portion of my pension benefits. Finally, since being elected I have not taken the state employee health insurance plan and will only do so in the future if I have no alternative health insurance options.
I am a retired public worker. How will this affect my pension?
There will be no impact to current retirees.