Wisconsinites are still celebrating the Green Bay Packers’ win in Super Bowl XLV, but taxpayers in the Badger State may be on the verge of an even bigger victory. Newly elected governor Scott Walker has taken a page out of Chris Christie’s playbook. He is going to deal with the state’s budget crisis by tackling the special interests that helped cause it.
Wisconsin is broke. The current budget is already $137 million in the red. The 2011–2013 biennial budget faces a $3.6 billion hole. So Governor Walker has called the legislature into special session and presented them with an emergency budget. His plan closes the deficit without raising taxes.
Government employees in Wisconsin get amazing benefits. They get a generous defined-benefit pension with minimal contributions on their part. They also only pay 6 percent of the cost of their health-care premiums. Few taxpayers enjoy anything this generous.
Government employees get these benefits because of the special privileges government unions enjoy. Government workers in many states — including Wisconsin — must pay union dues or lose their jobs. The state subsidizes their fundraising by using its payroll system to collect these forced dues.
This gives the union movement billions of dollars, which it uses to elect favored candidates. The American Federation of State and County Municipal Employees (AFSCME) spent more than any other outside group in the last election. Government unions have used this political clout to hijack state government to serve their interests.
Governor Walker could have raised taxes or fired 6,000 state employees. Instead, like Governor Christie, he decided to actually fix the problems that brought Wisconsin to this point. His budget limits government collective bargaining to just wages, taking benefits and work rules off the bargaining table. He would also require voters to approve any raises above inflation. Walker would prevent government unions from forcing taxpayers to cough up for their gold-plated benefits.
Having done that, his budget requires state and local employees to contribute half of the cost of their pension contributions — roughly 6 percent of their salary. He also requires them to pay 12 percent of their health-care premiums. By private-sector standards these are modest changes, but they will help close Wisconsin’s budget gap.
Walker’s budget removes the special privileges that give government unions their outsize influence. His plan allows workers to quit their union without losing their job. He requires unions to demonstrate their support through an annual secret-ballot vote. He also ends the unfair taxpayer subsidy to union fundraising: The state and local government would stop collecting union dues with their payroll systems.
These measures do not go as far as they could, and Walker exempted the politically popular police and firefighters unions. Still, they represent a major step forward for Wisconsin. They would also serve as a model for other states with similar problems.
The Wisconsin legislature could vote on the emergency budget as early as Thursday. Unions are campaigning hard against it. Conservatives should enthusiastically root for these reforms. If they pass, Governor Walker will deserve recognition as Wisconsin taxpayers’ MVP.
— James Sherk is senior policy analyst in labor economics at the Heritage Foundation.