Why the Stakes Are So High in Wisconsin

Q&A: The Wis. protests and what they mean for nation

By Dennis Cauchon, USA TODAY

Q: Why are the stakes so high in Wisconsin?

A:. Money and political power. What happens could spread to other states and influence how campaigns are financed nationwide.

 

Q: What are the financial issues?

A: Republican Gov. Scott Walker wants most government workers to pay more for pensions and health care. His proposal requires employees to pay:

• Half the cost of pensions — about 5.8% of pay. They generally pay nothing now.

• 12.6% of health care costs, up from about 6% today.

The changes would save taxpayers — and cost employees — about $150 million a year in a $13 billion budget.

The unions have indicated they may accept the financial demands. In return, Walker has promised no layoffs if the cost reductions are accepted.

Q: So why no deal?

A: The power of unions is the sticking point.

Wisconsin was the first state, in 1959, to let government workers unionize. Strong public employee unions are part of the state's heritage and a key source of financial and political support for Democrats.

Q: What limits would be placed on unions?

A: Public employee unions could bargain only on wages. Even pay hikes could not exceed inflation without voter approval. In addition:

• The government would stop deducting union dues from paychecks. Unions would have to collect dues themselves — $400 to $1,400 a year, depending on the union. This practice elsewhere has cut union revenue by about one-third.

• Workers would have to reapprove the union every year, by a majority of all workers, not just those voting.

•Future contracts could not set benefits, work rules or layoff policies. Existing contracts would remain valid until they expire.

Unions say the proposals are an effort to bust union power and weaken their financial support of the Democratic Party.

Police, firefighters and state troopers — whose unions supported Walker in the election — are exempt.

Q: Why does Walker say he wants to limit union power?

A: Walker says the managers of cities and schools need freedom to run their operations more efficiently — like a business — especially because state aid will be cut.

He cites excessively detailed union contracts that, for example, prohibit teacher staff meetings on Monday — to avoid conflicting with union meetings — that hurt government's ability to operate and drive up costs.

Q: What is Walker's background?

A: He was a conservative state legislator who was elected county executive in traditionally Democratic Milwaukee County in 2002.

Walker, now 43, was known for extreme frugality, packing his own lunch and returning more than $300,000 in personal salary during his term.

He also slashed the county workforce by 1,000 to 5,200, privatized some operations and limited government spending. In 2009, the county borrowed $400 million to boost its underfunded pension.

Q: Why does Wisconsin matter elsewhere politically?

A: After big wins in November, Republicans are trying to execute big policy changes in Congress and in the states to reduce the size of government. "Transform the Nation" is the No. 1 priority of the Republican Governors Association.

Republicans took over both legislative chambers and the governor's job in Wisconsin in November. Twenty-one state legislative chambers flipped from Democratic to Republican. A dozen or more states are considering cutting union benefits or power. Wisconsin went first.

Q: What are the politics?

A: Public employee unions are the biggest source of campaign funding for Democrats. If union campaign donations are cut, the political landscape could change in favor of Republicans at the national, state and local level.

A restriction of unions' ability to support candidates could influence a range of seemingly unrelated issues — the environment, abortion, foreign policy — and the 2012 presidential election. The Supreme Court ended limits on corporate political spending in 2010, boosting Republican fundraising in last year's elections and making access to union contributions more important than ever for Democrats.

"This is an effort to silence people who disagree with you. It doesn't have anything to do with jobs," says Kerry Korpi, research director at the American Federation of State, County and Municipal Employees.

Q: What are other states doing?

A: Ohio — under new Republican Gov. John Kasich— could vote on a similar law in two weeks. Protests are scheduled Tuesday. In other states, proposals vary and their chance of success partly depends on what happens in Wisconsin.

Florida's new Republican governor wants workers to contribute to pensions for the first time. A Tennessee Senate committee approved ending collective bargaining for teachers. Iowa's Republicans foresee limits on unions, although less than in Wisconsin.

Q: How does collective bargaining work at the state level?

A: States make their own rules. Rules differ widely among states and even within states for teachers, firefighters or state employees.

Thirty states have collective bargaining laws. Others permit contracts through practice or court decisions.

Twelve states don't allow collective bargaining for state workers. Five states — Virginia, North Carolina, South Carolina, George and Texas — ban it for teachers.

States differ on what a contract can decide — work rules or pensions, for example — and whether government will deduct union dues.

Q: How many people are affected?

A: Every taxpayer. Governments employs 22 million people — 2.8 million for the federal government, 5 million for states and 14.2 million for cities and schools. About 36% are unionized compared with 7% in the private sector.

Q: How does public pay compare with the private sector?

A: Federal workers make more than private workers in four out of five jobs. However, state and local workers get salaries similar to the private sector's.

The big difference is benefits. State and local workers get a benefit package — pensions, health care, vacations — worth 60% more than in the private sector, about $17,000 a year, according to Bureau of Economic Analysis data.

Q: How do these costs affect taxpayers?

A: Compensation consumed $1.1 trillion of the $2 trillion state and local governments spent in 2009. For cities and school districts, labor costs often account for 80% of costs.

Compensation costs soared in the past decade — 40% above the inflation rate — as workforces grew, benefits became more costly and workers retired. In response, governments raised taxes, cut spending elsewhere and borrowed to finance pensions. Illinois will borrow $3.5 billion Tuesday to make its pension contribution.

 

For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.

Posted 4d 5h ago | Updated 3d 7h ago

via usatoday.com

State workers are not being asked to simply "contribute more" to Wisconsin' s retirement system (or as the argument goes, "pay their fair share" of retirement costs as do employees in Wisconsin' s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.