Wisconsin state budget (2011-2012)

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Proposed Budget

Governor Scott Walker delayed actually introducing his proposed budget bill until tackling the estimated $3.1 billion budget shortfall for the previous fiscal year.[1][2][3]

The proposed budget included:[4]

  • Reducing $800 million in school spending
  • Reducing the ability for schools to make up the difference in cut funding through property tax increases
  • Cutting University of Wisconsin System funding by $250 million
  • Eliminating $500 million from the state's Medicaid programs
  • Establishing an enrollment cap on the Family Care program designed to keep poor, elderly people out of nursing homes
  • Holding property taxes nearly flat with the projected increase on the average home about $50 over the next two years
  • Eliminating benefits for some poor families under the Earned Income Tax Credit and freezing benefits under the homestead tax credit program

The proposed budget included the possibility of selling power plants at state facilities, including university campuses and prisons.[5] State agencies requested $1.1 billion in new funding for a "cost to continue" budget for the 2011-13 biennium.[6]

Gov. Walker introduced his proposed 2011-2013 budget on March 1, 2011.[7] The proposed budget did not raise taxes or fees but reduced school and local government aid from the state by $1.5 billion.[7] The plan cut aid to schools by approximately eight percent, and called for local school districts to be limited in how much they could raise in property taxes.[7]

The extent to which the governor's budget cut spending was a topic of debate. The governor's office said that his budget reduced spending overall by six percent. Two other analyses, however, found that the governor's budget transferred spending to new quasi-public authorities and at the University of Wisconsin-Madison and that those figures were considered outside of the budget but that, when those numbers were factored in, the governor's budget actually increased spending by 1.5 percent.[8]

The debate over Gov. Walker's budget plan, which Democrats decried as an attack on the middle class, was delayed June 15, 2011, while both parties waited for a host of changes to be drafted to the $66 billion spending plan.[9] Republicans controlled the Assembly 59-38-1 with one vacancy. They also controlled the Senate 19-14.

Despite the state's budget issues, Wisconsin may give some $200 million to out-of-state financial management companies willing to invest in small businesses as part of a bigger economic development initiative. The bill would create a Wisconsin Venture Capital Authority aimed at boosting start-up businesses by setting up two venture capital investment programs, a Badger Jobs Fund and a Jobs Now Fund, totaling $400 million, which could end up costing the state up to $590 million over the 17-year life of the legislation, according to the Department of Revenue.[10]

Capital Budget

On March 14, 2011, Gov. Walker recommended a capital budget of $1.1 billion for building projects over the next two years, down 28.8 percent from FY 2011's capital budget. To reduce the budget, the proposal recommended deferring a number of large projects.[11]

Education Funding

Walker's first proposed budget cut $792.2 million, or 7.1 percent, in state aid for K-12 schools over the biennium ending June 2013, according to the Legislative Fiscal Bureau. However, school districts faced an even steeper $1.6 billion net reduction in funding because Walker's budget slashed the amount of money school districts could legally raise through property taxes. Most districts were able to offset much of the lost revenue by having employees pay more for pension and health insurance premiums. Many switched health insurance plans.[12]

Three out of four districts also reduced staff, according to data released last week by the Department of Public Instruction. More than 2,300 positions were cut statewide, but a disproportionate number came from three districts -- Milwaukee, Kenosha and Janesville -- where employee unions refused to accept pension and health insurance contributions. A record number of retirements also mitigated the number of layoffs.[13]

Public Employee Unions and the Budget Bill

Gov. Walker introduced and the legislature passed a budget bill that impacted what state employees paid for their health care costs as well as their ability to collectively bargain.[14] Initially the legislative language regarding collective bargaining and employee health insurance and pension fund contributions was part of a budget bill, but it was taken out of the budget bill and used to create a separate bill, [[Wisconsin Act 10, the "Scott Walker Budget Repair Bill" (2011)|Wisconsin Act 10]. The bill polarized lawmakers and up to 40,000 union protesters filled the state capitol in protests that lasted for weeks.[7][2] The governor signed the bill into law on March 11, 2011.[15]

Protests erupted over the governor's proposed budget bill that would require state employees to contribute 5.8 percent of their salary toward their pensions and also pay 12.6 percent of their health insurance premiums.[2][16] Gov. Walker said that asking employees to pay half the national average for health care was "truly a modest request."[17] Walker also denied that his proposal tried to break unions.[17][18]

In addition to requiring state employees to pay more for pensions and health care, the law eliminated almost all union bargaining rights on everything except salary.[19][20] Unions would also be unable to seek pay increases above those pegged to the Consumer Price Index unless approved by a public referendum.[16] In addition, unions would have to hold annual votes to stay organized and would be unable to force employees to pay dues.[16]

Local police and firefighters, along with the state patrol, retained their bargaining rights. Walker counted on the public worker concessions generating about $300 million in savings to the state over the next two years to help balance the budget.[21]

Vote on the Healthcare and Collective Bargaining Provisions

On March 9, 2011, the Wisconsin State Senate moved to separate the collective bargaining language from the fiscal budget legislation language, because a quorum was not needed for a non-budgetary bill, allowing the Senate to vote on the collective bargaining language.[22]

When Senate Majority Leader Scott Fitzgerald read the bill to a joint conference committee, Rep. Peter Barca objected, saying the committee's meeting was in violation of the state's open meetings law. The vote was held and the measure was approved.[23]

After the Senate vote, the collective bargaining bill moved to the Wisconsin State Assembly on March 10, 2011, amid intense protests that prevented lawmakers from entering. Capitol police closed the building and removed demonstrators inside who refused to leave and reopened one entrance to the building, allowing lawmakers to enter for the vote.[24] The Assembly passed the bill that afternoon.[25]

Gov. Walker signed the bill into law on March 11, 2011.[26]

Layoffs

Republican lawmakers said collective bargaining rules had to be changed so governments could avoid laying off thousands of workers.[27] Walker said that he would have to lay off up to 6,000 state workers if the measure did not pass.[16] On March 4, 2011, the governor sent letters to state employee unions informing them that layoff notices would go out to 1,500 state employees in 15 days, but he rescinded those layoff notices once the bill was approved, saying that the bill would lead to sufficient savings and that layoffs would not be necessary.[28][29]

Democratic Senators Leave State

To avoid a vote on the measure, 14 Senate Democrats disappeared and could not be found.[30] They reportedly went to a hotel in Illinois.[16] Republicans controlled the Senate by 19 to 14, but in order to have a vote on fiscal matters, 20 senators had to be present.[30] The Senate Democrats, however, threatened to stay away for weeks.[31] The Senate scheduled votes on other bills of interest to Democrats, hoping that they would return to vote on them.[32] On March 2, 2011, the Senate voted to levy fines of $100 a day for the 14 Senators who fled Wisconsin to stall the vote.[33] The remaining senators passed a unanimous resolution finding the missing Senators in contempt and ordering them to return to the Senate, with threat of arrest if they resisted.[34]

The Assembly passed the bill just after midnight on February 25, 2011.[35] Assembly Democrats, however, tried to stall the proposal by offering more than a hundred amendments.[36] On February 24, 2011, the Assembly reached a deal to limit amendments and debates and appeared to be close to voting on the bill.[37] State troopers were then sent to the homes of the 14 missing Democrats, but they were not found. Democratic Sen. Jon Erpenbach said all 14 senators remained outside of Wisconsin and would not return until Walker was willing to compromise.[37]

The governor said that if the bill was not passed and signed into law before February 26, 2011, a key part of the proposal would be lost because a refinancing of state debt that would free up $165 million would be lost if not complete by then and more cuts would be needed to balance the budget.[32] A payment on state debt was due by March 15, 2011.[35]

In the case of a walkout, Walker put the National Guard on alert.[38]

School Closures

More than 15 school districts, including the Madison Metropolitan School District were closed for four days due to teachers and staff calling in sick.[39][40] Judge Maryann Sumi of the Dane County District Court denied the Madison school district requests for an injunction against Madison Teachers Inc. so that schools could reopen.[39]

Recall Election

The governor's actions related to collective bargaining in the state led Democrats to collect over 900,000 valid signatures to recall Gov. Walker. The Wisconsin Government Accountability Board voted unanimously for the recall election. It set the primary on May 8, 2012 and the general election for June 5, 2012.[41]

Exit polls following the April 2012 presidential primary showed Walker had strong support from Republican voters. Republican primary voters overwhelmingly — by about 8 in 10 — approved of Walker’s job as governor.[42]

Polling indicated that the recall battle would be tight. A poll from Marquette University Law School showed Walker with a slight advantage over two of his possible Democratic challengers. Measured against Milwaukee Mayor Tom Barrett, whom Walker defeated for governor in 2010, Walker had a two point lead of 47 percent to 45 percent. Against former Dane County executive Kathleen Falk, Walker had a 4-point lead of 49 percent to 45 percent.[43]

If successful in challenging Walker, Falk promised to veto any budget that did not repeal Walker's collective bargaining reforms. Barrett said that strategy would not work. Barrett said he would attempt to repeal Walker's union reforms by calling a special legislative session.[44]

Court Challenges

On March 30, 2012, Wisconsin Federal District Court Judge William Conley ruled that some portions of Wisconsin’s Act 10 violated the equal protection rights of state employee unions. The judge found that the law’s prohibition of automatic dues collecting and the requirement that the affected unions hold annual recertification elections was unconstitutional because police and firefighter unions were exempt from those portions of the law.[45]

Dane County Circuit Court Judge Maryann Sumi struck down Gov. Walker's controversial bill stripping collective bargaining rights from public employees. Sumi ruled the March 9, 2011 meeting of the state Legislature's Joint Committee of Conference violated the Wisconsin Open Records Law and that the budget bill "consequently has no force or effect."[46]

Democratic lawmakers left the state to block the Republican majority from passing the budget legislation, which included a controversial measure to diminish collective bargaining rights. But in an unexpected move, Walker and the Republican lawmakers split their bill into two, allowing the non-budget collective bargaining measure to fly through with no Democrats in the room. The Senate’s 19 Republicans approved the measure, 18 to 1, in less than half an hour, without any debate on the floor or a single Democrat in the room.[47]

In her ruling Sumi wrote "This was not a case in which proper notice was missed by a few minutes or an hour. Not even the two-hour notice justified by 'good cause' was provided." The judge said state lawmakers were "understandably frustrated by the stalemate" but added frustration does not justify foregoing compliance with the Wisconsin Open Meetings Law in order to move the budget bill forward. "This case is the exemplar of values protected by the Open Meetings Law: transparency in government, the right of citizens to participate in their government, and respect for the rule of law."[48]

Sumi said that the legislature could fix it all by giving new, adequate notice of a meeting and then passing the law again.[49]

Sumi's May 23, 2011 ruling was a reaffirmation of a ruling she made March 18, 2011 that halted the implementation of the governor's bill. However, the governor challenged Sumi's initial stay of his budget plan. The Wisconsin Supreme Court heard arguments in June 2011 to determine if Sumi had the authority to block Walker's budget bill.[50]

On June 14, 2011 the state Supreme Court reinstated Gov. Walker's plan that impacted collective bargaining for public workers. The court was divided in its decision, ruling 4-3 to overturn the lower court's decision. The court found a committee of lawmakers was not subject to the state's open meetings law, and thus did not violate that law when they hastily approved the measure.[51]

The high court said Judge Sumi had exceeded her jurisdiction, "invaded" the Legislature's constitutional powers and erred in halting the publication and implementation of the collective bargaining law.[51]

Thousands of opponents to Walker's collective bargaining actions had filled the streets of the state capital protesting the proposed legislation. Following the Wisconsin Supreme Court's overturning of Sumi's ruling, thousands returned to the capitol to again protest the legislature's plan to end collective bargaining.[52]

Six of the Republican senators who supported the law, and three of the Democratic senators who opposed it faced special recall elections in July 2011.[53]

References

  1. The Milwaukee Journal Sentinel, "Poll show misperceptions about state budget," November 21, 2010
  2. 2.0 2.1 2.2 The Green Bay Press Gazette, "Union supporters across Wisconsin protest Gov. Scott Walker's budget proposal," February 15, 2011
  3. The Milwaukee Journal Sentinel, "Assembly's abrupt adjournment caps chaotic day in Capitol," February 18, 2011
  4. BusinessWeek, "Wis. budget debate to begin under security," June 13, 2011
  5. The Milwaukee Journal Sentinel, "Walker proposes selling state-owned power plants," February 14, 2011
  6. Watchdog, "Wisconsin State Agencies Determined to Spend More," September 29, 2010
  7. 7.0 7.1 7.2 7.3 The New York Times, "Wisconsin Budget Would Slash School and Municipal Aid," March 1, 2011
  8. The Milwaukee Journal Sentinel, "Spending would increase 1% under Walker budget," March 28, 2011
  9. Superior Telegram, "Wisconsin Assembly delays budget debate to Wednesday," June 15, 2011
  10. Wisconsin State Journal, "State budget: Venture capital idea draws fire from both sides," June 14, 2011
  11. The Milwaukee Journal Sentinel, "Walker unveils $1.1 billion capital budget plan," March 14, 2011
  12. Superior Telegram, "Education expected to be a 'major issue' in Walker recall election," April 23, 2012
  13. Superior Telegram, "Education expected to be a 'major issue' in Walker recall election," April 23, 2012
  14. CNN.com, "Live: Wisconsin Assembly passes controversial labor bill," March 10, 2011
  15. MSNBC.com, "Wis. governor officially cuts collective bargaining," March 11, 2011
  16. 16.0 16.1 16.2 16.3 16.4 MSNBC.com, "Wis. union vote on hold after Democrats leave state," February 17, 2011
  17. 17.0 17.1 CBSNews.com, "Wis. gov: I took 'bold political move' on budget," February 18, 2011
  18. Wall Street Journal, "Union Fight Heats Up," February 18, 2011
  19. The Milwaukee Journal-Sentinel, "Budget bill draws a crowd," February 15, 2011
  20. The Milwaukee Journal Sentinel, "Wis. state workers and allies descend on Madison to protest halt to collective bargaining," February 15, 2011
  21. Forbes, "Latest union proposal exempts Wis. transit workers," June 14, 2011
  22. Fox News, "Wisconsin Republicans Plan to Pass Budget Bill Without Democrats, Sources Say," March 9, 2011
  23. MSNBC.com, "Wis. GOP votes to push through anti-union bill," March 9, 2011
  24. [http://www.cnn.com/2011/POLITICS/03/10/wisconsin.budget/index.html?hpt=T1&iref=BN1 CNN.com, "Wisconsin Capitol re-opens as state Assembly takes up bill," March 10, 2011
  25. CNN.com, "Live: Wisconsin Assembly passes controversial labor bill," March 10, 2011
  26. MSNBC.com, "Wis. governor officially cuts collective bargaining," March 11, 2011
  27. Reuters, "Thousands of Wisconsin union workers protest budget plan," February 15, 2011
  28. The Washington Post, "Wis. governor begins process for layoffs," March 4, 2011
  29. The New York Times, "Wisconsin Governor Rescinds Layoff Notices," March 11, 2011
  30. 30.0 30.1 The New York Times, "Democrats Missing, Wisconsin Vote on Cuts Is Delayed," February 17, 2011
  31. Yahoo! News, "Wisconsin Democrats could stay away for weeks," February 18, 2011
  32. 32.0 32.1 Milwaukee Journal Sentinel, "Both sides in Wisconsin budget battle dig in deeper," February 23, 2011
  33. ABCNEWS.com, "Ohio Public Employee Unions Lose; Wisconsin And Indiana Democrats Seek Deals," March 2, 2011
  34. The Wall Street Journal, "Pressure Mounts on Absent Democrats in Wisconsin, Indiana," March 3, 2011
  35. 35.0 35.1 Reuters, "Wisconsin Assembly approves plan to curb unions," February 25, 2011
  36. Reuters, "In Wisconsin, a jarring new note in discordant debate," February 23, 2011
  37. 37.0 37.1 MSNBC.com, "Wis. stalemate: Deal struck, cops sent to Dem homes," February 24, 2011
  38. The Chicago Tribune, "Walker says National Guard is prepared," February 11, 2011
  39. 39.0 39.1 WKOW.com, "MMSD denied temporary restraining order," February 18, 2011
  40. WFRV.com, "Madison schools remain closed, Fourth day in a row," February 21, 2011
  41. Politico, "Scott Walker recall set for June 5," March 30, 2012
  42. The New York Times, "In Wisconsin Exit Polls, Hints at the Leanings of November Voters," April 3, 2012
  43. ABC, "Gov. Scott Walker: Most Polarizing Man In Wisconsin?," April 4, 2012
  44. Weekly Standard, "Tom Barrett Undermines Efforts to Undo Walker Reforms," April 12, 2012
  45. Forbes.com, "Federal Judge Strikes Down Part Of Scott Walker's Anti-Collective Bargaining Law," March 30, 2012
  46. Legal News Online, "Wisconsin Judge Rules Against Governor's Budget Bill," May 24, 2011
  47. New York Times, "Judge Strikes Down Wisconsin Law Curbing Unions," May 35, 2011
  48. Legal News Online, "Wisconsin Judge Rules Against Governor's Budget Bill," May 24, 2011
  49. MSNBC, "Judge Strikes Down Wisconsin Union Right Law," May 25, 2011
  50. Legal News Online, "Wisconsin Judge Rules Against Governor's Budget Bill," May 24, 2011
  51. 51.0 51.1 Milwaukee Journal Sentinel, "Supreme Court reinstates collective bargaining law," June 14, 2011
  52. Public News Service, "Thousands Protest WI Budget," June 15, 2011
  53. Reuters, "Divided Wisconsin Supreme Court upholds anti-union law," June 14, 2011