FUN & GAMES WITH THE BIENNIAL BUDGET

The 2011-13 state budget will certainly go down in the record books as the most controversial and acrimonious budget in memory. Just the events that have happened in the past three weeks have been crazy and bewildering. What has already transpired in the past few weeks at the capitol is unprecedented.

As our members know, last month it was announced that Governor Scott Walker was going to eliminate collective bargaining rights (for health insurance and pensions, but not salaries) for many of Wisconsin’s unions (most of the police and fire unions were exempted). That announcement blew the roof off the capitol and packed it to it’s rafters with protestors. These protestors banged drums, pounded on doors and sang songs all day long.  They were packed into the building like sardines. Many never left the capitol, preferring to sleep on the floors each night. Union leaders rallied their troops and massed large groups of union supporters to attend anti-Walker rallies. Then, activists from around the U.S. descended onto Madison to join in the fun and games. Jesse Jackson, Michael Moore (film producer), singers, authors, etc. all made appearances and derided Governor Walker’s proposal. Half-truths, innuendos and misleading statements were floated throughout the crowds to keep their anger at a fever pitch.

So, what has the legislature been doing during this time (besides getting headaches from the constant noise in the capitol)? Well, first the Senate attempted to pass a budget repair bill to address the projected $137 million deficit in the budget year that ends this June 30. The Republicans control the Senate 19-14, however, 20 senators need to be present for a quorum to vote on fiscal-related bills. But, there were not 20 available votes since all 14 Democratic Senators hurriedly left WI and are currently hiding out in Illinois. Without at least one Democratic Senator showing up for a roll call, the Senate cannot take any further action on this budget repair bill.

Since the Senate’s hands were tied, the Assembly took up the budget adjustment bill. In an attempt to filibuster
the bill and delay its passage, the Assembly Democrats introduced hundreds of amendments. After three days
of debating each amendment, the Assembly passed the bill. The bill passed 51-17. 31 representatives did not
vote. No Democrats voted for the bill. With the passage of the bill in the Assembly, it moved back to the Senate
to await further action once the Senate Dems return.

This political theater most certainly involves more than just WI. Many eyes are carefully watching this state.  This bill, along with the Governor’s proposed biennial budget has huge implications for unions and the Democratic Party in the United States. If Walker is successful in taking away the unions collective bargaining rights, the face of politics may drastically change. Here’s why:

• Governor Walker’s budget bill not only proposes to take away collective bargaining rights, but it also states that unions could not automatically withdraw union dues from employee paychecks and employees will have greater freedom of choice if they wish to join a union that represents their given profession. The unions are adamantly opposed to this. If this passes, unions will not be able to automatically collect dues, plus employees will have more freedom to opt out of their unions. If this happens, unions will see significant reductions in income and membership. How will this affect politics? A recent non-partisan study showed that 97% of
  union dues go to the Democratic Party and its candidates. Unions, especially teachers unions, have long been the backbone of the Democratic Party and have been its primary money machine for those candidates.  Since elections have become so exhorbantly expensive and if unions have less money to give to Democratic candidates, it will be more difficult for those candidates to raise sufficient sums of money to compete against their Republican opponents. That, in turn, could sway some elections.

• Another ramification of what comes out of WI is that if Governor Walker is successful in passing his bill and unions lose their collective bargaining rights, other states will surely follow. Most of the states in this country are facing budget deficits which have been exacerbated by the recession the past couple years. Already governors in Ohio and New Jersey are following in Walker’s footsteps and taking similar actions to address their deficits. Remember, these governors were all swept into office last November by a population of voters who were dissatisfied with how things had been going the past two years. They won elections and received public mandates to turn things around fiscally and get the economy going. These governors and Republican
  legislators know that they have a window of opportunity to implement budgets and programs they believe will heal the ailing economy. They also know that the window of opportunity will not be open for long and that they are on a short leash. If they don’t produce immediate improvements, the public will vote them out and try someone different. So, they have to act quickly. What the Republicans have in their favor is that the economy is already showing signs of improvement, even before any of these cost-saving measures are approved.  Through normal fiscal improvement, this economy will keep getting better and that will certainly
  play into the hands of the Republicans. Politicians love to take credit for a robust economy (even though they have little effect on the monetary matters) and blame others when the economy sours. With the economy gradually improving, the GOP may be able to tout their programs as the impetus for the healthier economy. If the economy starts chugging along again and the unions lost their abilities to collect dues and bargain for their members, the 2012 elections may be a repeat of what happened in 2010.

• What’s happening in Wisconsin, Ohio, New Jersey, etc. also has strong implications for the 2012 presidential race. President Obama needs key state like WI, OH, etc. in order to be re-elected. With the national electorate pretty much split 50-50 between the two political parties, a handful of states will decide the presidential race in 2012. But, if the Republican governors and legislators in these key states are successful in passing their agendas which limit unions and their policies are associated with improved economics, the Democratic party in these states will be severely weakened and of little help to President Obama in his
  quest to win these key states.

Governor Walker has presented a biennial budget which he believes will finally fix the state’s budget deficit. WI has been facing budget deficits for many years. The state constitution requires that budgets are balanced. However, in the past this has been done by accounting gimmickry. According to Todd Berry, president of the Wisconsin Taxpayers Alliance, a non-partisan research organization, there has been 15 years of fiscal misbehavior in dealing with Wisconsin’s biennial budgets. He says WI has over-committed itself to funding programs
and social services while using accounting tricks to technically balance the budget without addressing Wisconsin’s ever-running deficit. In addition to accounting tricks, the legislature has hiked taxes and fees, raided key funds (i.e. transportation and tobacco settlement funds to name just a few), and used one-time money sources for long-term programs. For WDPA members, over the past decade, over $4 million has been taken from the Food Safety Program to balance the budget. This money comes from the fees your companies pay to DATCP and are only supposed to be used for food-related expenses. 

The 2011-13 biennial budget introduced by the governor in early March addresses a $3.6 billion deficit. According to Walker, Wisconsin is broke and he will not continue pushing the on-going deficit into future years in which it will just keep growing. His plan is to make actual reductions in spending. According to Walker, these cuts will be painful in the short term, but necessary to get Wisconsin’s fiscal ship back on course. The reason he is proposing to take away the unions’ collective bargaining rights is because state employees’ pension and health benefits are a major cost factor in the annual budget. 

The same principal is being proposed for schools. Walker’s budget is proposing to make significant reductions in the amount of money that the state gives to school districts. That has brought a cry from protestors that Walker is killing education in Wisconsin. However, Walker’s budget states that by requiring teachers to pay for 5% and 12% of their pensions and health benefits, the schools will save approximately the same amount of money that they will no longer receive from the state. In other words, according to Walker, it’s a wash. 

Walker’s budget proposal also withholds large amounts of money from the municipalities. Madison, for one, will have a hard time with their budget without these state funds. Madison is in a greater dilemma than some other cities because its city council rushed through new two year contracts with all the unions in anticipation of Walker’s ban on collective bargaining rights. Therefore, for the next couple years, Madison cannot make city employees pay more for their pensions and health benefits in an effort to reduce city expenses.  Madison’s fiscal hands are tied. 

So, how will this all end? Who knows. Right now, the 14 Senate democrats are getting a great deal of encouragement from the national unions to not return to the capitol so that Walker’s budget repair bill cannot be passed. Technically, we have a political stalemate. More than likely, some type of political compromise will be brokered in order to get the senators back home. If a compromise can’t be reached then all bets are off. The protests at the capitol will continue. The budget hearings that the Joint Finance Committee holds every two
years to receive public testimony on the governor’s proposed budget will be an actual circus. Wisconsin will stay in the media limelight and will be closely watched by politicians throughout the country. 

Next month’s WDPA Newsletter will provide an update on this political drama, as well as present DATCP’s budget proposal for the next biennium.

Late News: The latest news on the budget controversy is that on March 9, a conference committee was convened to vote on a revised budget repair bill. A conference committee is utilized in the legislature when a similar bill has been passed in both houses that still has some differences. A conference committee– comprised of leaders of both parties in both houses– meet to iron out the differences. Since the Assembly already passed the budget repair bill and the Senate’s hands were tied due to the 14 Senate democrats hiding in Illinois, the Senate leadership decided to hold this conference committee meeting and remove all fiscal items from the budget repair bill. The conference committee immediately passed the revised bill (over the loud objections of the Assembly Minority Leader, Peter Barca) and sent it to the Senate. At 6:00 on March 9, the Senate was able to pass the bill without the Democrats since it no longer contained fiscal items and therefore a quorum of 20 senators was not necessary. This revised bill will now go to the Assembly for expected approval and then signed by the governor.  Remember, the key item in this bill is the new restrictions on collective bargaining. 

The quick action by the Senate March 9 brought protestors’ emotions to a breaking point. The protestors and Democratic legislators are outraged and are looking to challenge these actions in court. There’s also talk about instigating recall actions against Republican legislators. However, any attempt by the Dems to prove that the actions taken on the 9th were illegal may be futile. It appears that the Republican leadership and Governor’s office thoroughly explored all legal ramifications before embarking on this action. In fact, the Senate Chief Clerk and legislative attorneys all stated that proper rules were followed. 

What happened March 9 came a day after emails from Republican leadership, the Governor’s office and some Senate Democrats were leaked out showing that the Republicans were offering some compromises to this bill.  However, the Dems turned them down. What happened on March 9 was the Republicans becoming tired of waiting three weeks for the Senate Dems to return and knowing that action had to be taken soon to pass some type of bill that addresses the $137 million deficit in this year’s budget.