Walker Will Pitch Wisconsin Budget Cuts as Union Protests Enter Third Week

Wisconsin Governor Scott Walker, whose proposal to curb collective bargaining for government workers spurred protests across the U.S., plans to present a two-year budget that cuts local aid by more than $1 billion.

Walker’s presentation, planned for a joint session of the Legislature today, follows two weeks of demonstrations at the Capitol in Madison to protest the Republican governor’s so-called budget repair bill. Union leaders have decried the measure as an attack on workers’ rights and their organizations.

“We’re going to have more than $1 billion in reductions in aid to local governments,” Walker, 43, said in a Feb. 24 briefing for reporters. “The only way to ensure that doesn’t negatively affect our schools and our cities” is to ensure they have the tools to deal with it, he said.

The governor yesterday called on Senate Democrats to end a legislative boycott aimed at preventing a vote on his repair measure. He said a failure to return by today would jeopardize a $165 million debt refinancing designed to help mitigate his cuts. Votes in the Republican-controlled Senate on budget bills can’t occur unless at least one Democrat is present.

“Whether people choose to believe another unsubstantiated Walker statement that today is the deadline to approve the debt restructuring or not, the real issue should be if the bank will even agree to the loan,” State Representative Mark Pocan, a Madison Democrat, said yesterday in a prepared statement. He said a nonpartisan legislative research office estimated that the refinancing would cost the state $42 million over 10 years. “Walker needs to make his rhetoric match reality,” he said.

Photographer: Scott Olson/Getty Images

Wisconsin Governor Scott Walker. Close

Wisconsin Governor Scott Walker.

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Photographer: Scott Olson/Getty Images

Wisconsin Governor Scott Walker.

Budget Repair Plan

In his repair bill, Walker proposes limiting union contract talks to wages. He would also raise what most government workers pay for pension and health benefits. The governor has said that the bill would give local authorities new ways to manage their fiscal affairs to cope with his proposed cuts.

Walker’s two-year spending plan will call for a reduction of as much as $900 million from aid to local school districts, the Associated Press reported late yesterday. The governor has said his repair bill would more than offset such reductions.

The repair measure’s $1.44 billion in savings for cities and towns “will exceed the amount of reductions to aid to local governments in the next state budget,” Walker said Feb. 25 in a briefing for reporters. “That’s what’s really at stake here.”

Former County Executive

Walker, a former Milwaukee County executive, was elected governor in November as fellow Republicans swept to control of the state Legislature.

“I think it has been made fundamentally clear not just in the past couple weeks but in the past couple months and even before that in the election, that we were going to have to make fundamental changes,” Walker said in the Feb. 24 briefing. “What we’re trying to achieve through this measure is giving these local governments the tools they need to balance those budgets,” he said.

The repair bill aims to close a projected $137 million deficit for the current fiscal year and a $3.6 billion gap in the next biennium. It passed the Republican-controlled Assembly in the early morning of Feb. 25, after more than 60 hours of debate. The bill remains pending in the Senate.

School districts statewide have sent out notices that job cuts may be made in anticipation of his planned aid reduction, Walker said. He has said as many as 1,500 state jobs may be cut by June if the repair bill wasn’t passed “very soon.”

Nationwide Focus

The measure made Madison a focal point for protests against Republican-led efforts in states including Ohio and Indiana to cut benefits and the bargaining power of government unions. Walker has said it will generate $30 million in cost savings for the state this fiscal year and $300 million in the next two years. The bill calls for workers to pay 5.8 percent of their wages into their pension plans, and cover about 12 percent of their health-insurance premiums.

Unions have agreed to accept the increased costs for their members if Walker drops the limits on collective bargaining, Senate Democratic Leader Mark Miller of Monona, among those Senators who left the state to stall the bill, said last week.

The repair bill also calls for voter approval of wage increases that exceed inflation, requires union recertification votes every year and ends automatic dues withdrawals from paychecks, according to the governor’s office. Failure to pass the repair bill may have “unintended consequences” such as delaying Medicaid payments, Walker has said.

Most Americans -- 60 percent -- oppose the attempts by states to curb the collective-bargaining power of government unions, compared with 33 percent who favor the moves, a New York Times/CBS News poll said yesterday. The telephone poll of 984 adults was conducted Feb. 24-27 and had a margin of error of plus or minus 3 percentage points.

To contact the reporter on this story: Esmé E. Deprez in Madison, Wisconsin, at edeprez@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

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