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Governor Calls Wisconsin ‘Broke’ in Arguing for Union Bill

Protesters display their signs during a rally against a pending budget bill at the Ohio Statehouse. Photographer: J.D. Pooley/Getty Images
Protesters display their signs during a rally against a pending budget bill at the Ohio Statehouse. Photographer: J.D. Pooley/Getty Images

Feb. 23 (Bloomberg) -- Wisconsin Governor Scott Walker appealed to the public to support his bill that would restrict collective bargaining for government workers, saying that the state’s future depended on it.

“We’re broke in this state because time and time again, politicians of both political parties ran away from the tough decisions and punted them down the road for another day,” Walker said in a 10-minute televised address yesterday. “We can no longer do that.”

Walker spoke as 14 Democratic senators spent a fifth straight day in Illinois to prevent the chamber from having the quorum needed to vote on a bill to restrict collective-bargaining rights for public employees.

Democratic House members in Indiana are using the same tactic to stall Republican-sponsored bills, the New York Times reported. In Ohio, an estimated 5,500 protesters came to the Statehouse in Columbus for a Senate hearing on a collective-bargaining bill amid complaints by Democrats that not all demonstrators were allowed inside.

“If you’re a bondholder, it is great news,” James Reynolds, chief executive officer of Loop Capital Markets LLC, said today of the demonstrations in Ohio and Indiana.

“The fiscal discipline now you’re starting to see exerted by the leadership in the states is pretty big,” Reynolds said from Chicago on Bloomberg Television’s “In the Loop with Betty Liu.”

State Flexibility

States face deficits that may reach a combined $125 billion in the next fiscal year, and Republican governors including Walker, Ohio’s John Kasich and New Jersey’s Chris Christie are trying to change rules for collective bargaining and worker contributions for health care and pensions. In Madison, Walker’s bill has prompted days of protests at the Capitol.

The governors say the changes are needed to give state and local governments flexibility to manage costs in the face of budget cuts. Labor leaders say the efforts are intended to destroy or weaken unions.

Before Walker’s address, the Republican-controlled Wisconsin Assembly convened yesterday for the first time since Feb. 18 to debate the bill. Democrats proposed amendments to slow its progress, Representative Kelda Roys, a Madison Democrat, said in an interview.

“The Republicans don’t want to vote in the dark of night,” she said.

The bill would limit collective bargaining by public workers only to wages. Voters would have to approve raises higher that exceeded the increase in inflation, based on the Consumer Price Index.

‘Unease and Uncertainty’

Public workers also would have to pay 5.8 percent of their salaries for pension costs. They pay nothing now. They would have to foot about 12 percent of their health-care premiums, up from 6 percent. Police and firefighters wouldn’t be covered by the measure.

Walker has delayed the release of his budget by two weeks, until March 1, a move that MF Global Holdings Inc. said in a finance bulletin “may continue to feed a sense of unease and uncertainty.”

“The fight is about politics, not economics,” wrote Joshua Zeitz, a research analyst for the New York-based futures and options broker. “We continue to believe that Wisconsin is not in the throes of a real budget crisis.”

In Ohio, protesters packed the Statehouse atrium. A crowd gathered on the steps outside because the Highway Patrol limited the number of people inside for safety, said Joe Andrews, a spokesman for the Department of Public Safety.

Court Order

Representative Armond Budish, the House minority leader, threatened to seek a court order to allow more demonstrators in the Statehouse.

“This is a very sad day for the state of Ohio and the people of Ohio when they can’t get into the house they own,” Budish said at a press conference.

Gregg Dodd, the Statehouse spokesman, estimated the crowd at about 5,500 inside and out.

Kasich’s bill would forbid collective bargaining for state workers and limit negotiations to wages only for local government employees.

“There are some things that shouldn’t be negotiated,” Kasich told CNN. “There are things that managers need to control.”

In Indiana, Democratic House members stayed away from a legislative session, stalling Republican-sponsored bills including one that would allow workers to opt out of private-sector unions, the Times reported.

“We’re fighting over right-to-work, bills that deal with schools, prevailing wage,” Brett Voorhies, a United Steelworkers activist, said in an interview in Indianapolis. “We’re fighting the attack on families.”

To contact the reporter on this story: Mark Niquette in Columbus, Ohio at mniquette@bloomberg.net

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

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