Walker releases details of his budget repair bill

By: Chris Baylor, WEAU 13 News Staff Email
By: Chris Baylor, WEAU 13 News Staff Email

Governor Scott Walker says drastic measures need to be taken to get the state back on track. That's why he wants to get rid of state employee's bargaining rights and cut down on some of their benefits.

Under the proposal, Walker says $30-million could be saved by this summer and $300-million during the next two years.

Everyone we talked to said they expected cuts to be made this year but union employees say they didn't expect anything this drastic this quickly.

"We all know it's tough times and we were expecting we would have to trim our belts a little bit but I don't agree with the degree of the cuts," says Dr. Thomas Kemp, Associate Professor and UWEC Faculty Union President.

He says he doesn't believe the cuts will help with job creation like Walker suggests.

"This is a significant change, this is obviously a bold and aggressive change but I believe the people of this state elected me and members of the legislator to be bold and aggressive to help the private sector put people to work," says Governor Walker.

Walker says if changes aren't made the state could be forced to cut nearly 6,000 jobs during the next two years. His plan would require higher pension and health insurance contributions from state workers and one of the biggest shocks to state employees, the plan would nearly remove collective bargaining rights for unions. That means state employees couldn't get a raise without a vote by taxpayers.

"People are really shocked at what the governor has done, state employees wanted to be part of the solution, but the governor hasn't taken the steps he needed to sit down and negotiate with public employees," says State Senator, Kathleen Vinehout (D).

"We're in a desperate situation the bill collectors are at the door right now," says State Representative Thomas Larson (R).

Along with the budget repair bill, Walker will also introduce a proposal to address the state's biennial budget deficit of about $3.6-billion.

“I think when people look at the totality of what we're proposing they'll understand that we have great respect, even in terms of the process that we're using here today," says Governor Walker.

“The across the board cuts are going to do a lot of damage to the state in both short and long run," says Kemp.

Walker says local police, fire and state troopers are exempt from the changes.

Madison– Governor Walker today released details of his budget repair bill.

“We must take immediate action to ensure fiscal stability in our state,” said Governor Walker. “This budget repair bill will meet the immediate needs of our state and give government the tools to deal with this and future budget crises.”

The state of Wisconsin is facing an immediate deficit of $137 million for the current fiscal year which ends July 1. In addition, bill collectors are waiting to collect over $225 million for a prior raid of the Patients’ Compensation Fund.

The budget repair bill will balance the budget and lay the foundation for a long-term sustainable budget through several measures without raising taxes, raiding segregated funds, or using accounting gimmicks.

First, it will require state employees to pay about 5.8% toward their pension (about the private sector national average) and about 12% of their healthcare benefits (about half the private sector national average). These changes will help the state save $30 million in the last three months of the current fiscal year.

“It’s fair to ask public employees to make a pension payment of just over 5%, which is about the national average, and a premium payment of 12%, which is about half of the national average,” said Governor Walker.

The budget repair will also restructure the state debt, lowering the state’s interest rate, saving the state $165 million.

These changes will help the state fulfill its Medicaid spending on needy families of about $170 million; funding that the previous administration did not have in its budget. It will also allow the state to spend an additional $21 million in the Department of Corrections.

Additionally, the budget repair bill gives state and local governments the tools to manage spending reductions through changing some provisions of the state’s collective bargaining laws.

The state’s civil service system, among the strongest in the country, would remain in place. State and local employees could continue to bargain for base pay, they would not be able to bargain over other compensation measures. Local police, fire and state patrol would be exempted from the changes. Other reforms will include state and local governments not collecting union dues, annual certification will be required in a secret ballot, and any employee can opt out of paying union dues.

A full summary of the Governor’s budget repair bill is below.

Fiscal Year 2010-11 Budget Adjustment Bill Items

Employee Compensation:

Pension contributions: Currently, state, school district and municipal employees that are members of the Wisconsin Retirement System (WRS) generally pay little or nothing toward their pensions. The bill would require that employees of WRS employers, and the City and County of Milwaukee contribute 50 percent of the annual pension payment. The payment amount for WRS employees is estimated to be 5.8 percent of salary in 2011.

Health insurance contributions: Currently, state employees on average pay approximately 6 percent of annual health insurance premiums. This bill will require that state employees pay at least 12.6 percent of the average cost of annual premiums. In addition, the bill would require changes to the plan design necessary to reduce current premiums by 5 percent. Local employers participating in the Public Employers Group Health insurance would be prohibited from paying more than 88 percent of the lowest cost plan. The bill would also authorize the Department of Employee Trust Funds to use $28 million of excess balances in reserve accounts for health insurance and pharmacy benefits to reduce health insurance premium costs.

Health insurance cost containment strategies: The bill directs the Department of Employee Trust Funds and the Group Insurance Board to implement health risk assessments and similar programs aimed at participant wellness, collect certain data related to assessing health care provider quality and effectiveness, and verify the status of dependents participating in the state health insurance program. In addition, it modifies the membership of the Group Insurance Board to require that the representative of the Attorney General be an attorney to ensure the board has access to legal advice among its membership.

Pension changes for elected officials and appointees: The bill modifies the pension calculation for elected officials and appointees to be the same as general occupation employees and teachers. Current law requires these positions to pay more and receive a different multiplier for pension calculation than general classification employees. Under the state constitution, this change will be effective for elected officials at the beginning of their next term of office.

Modifications to Wisconsin Retirement System and state health insurance plans: The bill directs the Department of Administration, Office of State Employment Relations and Department of Employee Trust Funds to study and report on possible changes to the Wisconsin Retirement System, including defined contribution plans and longer vesting periods. The three agencies must also study and report on changes to the current state health insurance plans, including health insurance purchasing exchanges, larger purchasing pools, and high-deductible insurance options.

General fund impact – Authorize the Department of Administration Secretary to lapse or transfer from GPR and PR appropriations (excluding PR appropriations to the University of Wisconsin) to the general fund estimated savings of approximately $30 million from implementing these provisions for state employees in the current fiscal year (2010-11). Segregated funds would retain any savings from these measures.

State and Local Government and School District Labor Relations:

Collective bargaining – The bill would make various changes to limit collective bargaining for most public employees to wages. Total wage increases could not exceed a cap based on the consumer price index (CPI) unless approved by referendum. Contracts would be limited to one year and wages would be frozen until the new contract is settled. Collective bargaining units are required to take annual votes to maintain certification as a union. Employers would be prohibited from collecting union dues and members of collective bargaining units would not be required to pay dues. These changes take effect upon the expiration of existing contracts. Local law enforcement and fire employees, and state troopers and inspectors would be exempt from these changes.

Career executive transfers – The bill would allow state employees in the career executive positions to be reassigned between agencies upon agreement of agency heads.

Limited term employees (LTE) – The bill would prohibit LTE's from being eligible for health insurance or participation in the Wisconsin Retirement System.

State employee absences and other work actions – If the Governor has declared a state of emergency, the bill authorizes appointing authorities to terminate any employees that are absent for three days without approval of the employer or any employees that participate in an organized action to stop or slow work.

Quality Health Care Authority – The bill repeals the authority of home health care workers under the Medicaid program to collectively bargain.

Child care labor relations – The bill repeals the authority of family child care workers to collectively bargain with the State.

University of Wisconsin Hospitals and Clinics (UWHC) Board and Authority – The bill repeals collective bargaining for UWHC employees. State positions currently employed by the UWHC Board are eliminated and the incumbents are transferred to the UWHC Authority.

University of Wisconsin faculty and academic staff - The bill repeals the authority of UW faculty and academic staff to collectively bargain.

Debt Restructuring – The bill authorizes the restructuring of principal payments in fiscal year 2010-11 on the state's general obligation bonds. These principal repayments will be paid in future years. Since the state is required to make debt service payments by March 15th, the bill must be enacted by February 25th to allow time to sell the refinancing bonds. This provision will reduce debt service costs by $165 million in fiscal year 2010-11. This savings will help address one‑time costs to comply with the Injured Patients and Families Compensation Fund state Supreme Court decision and make payments under the Minnesota‑Wisconsin tax reciprocity program.


Address FY11 Medicaid deficit – Medicaid costs are expected to exceed current GPR appropriations by $153 million. The bill would increase the Medicaid GPR appropriation to address this shortfall.

Authorize DHS to restructure program notwithstanding current law – Medicaid costs have increased dramatically due to the recession and expanded program eligibility. In order to reduce the growth in costs, the bill authorizes the Department of Health Services to make program changes notwithstanding limits in state law related to specific program provisions. The department is expected to develop new approaches on program benefits, eligibility determination and provider cost-effectiveness. The proposed changes will require passive approval of the Joint Committee on Finance before implementation.

Technical correction – Act 28 included language that required unused GPR expenditure authority in the Medicaid GPR appropriation at the end of the biennium to be carried over to the subsequent biennium. The bill repeals this provision in order to ensure unspent funds in Medicaid lapse to the general fund balance.

Aging and Disability Resource Centers (ADRC) – The bill transfers an estimated $3 million in savings in this appropriation to Medicaid. ADRC's are the intake and assessment element of the state's Family Care program.

Corrections – The bill provides $22 million GPR to address shortfalls in the Department of Corrections adult institutions appropriation. These shortfalls are due to health care costs, overtime, and reductions in salary and fringe benefit budgets under Act 28.

Temporary Assistance to Needy Families (TANF) Funding for Earned Income Tax Credit (EITC) – The bill allocates $37 million of excess TANF revenues to increase TANF funding for the EITC from $6.6 million to $43.6 million in fiscal year 2010-11. By increasing TANF funding, GPR funding for the EITC is reduced by a commensurate amount.

Income Augmentation Revenues – Allow the Department of Children and Families and Department of Health Services to utilize $6.5 million of already identified income augmentation revenues to meet fiscal year 2010-11 lapse requirements.

Act 28 Required Lapses by DOA Secretary – Under Act 28, the Department of Administration Secretary is required to lapse or transfer a total of $680 million in 2009-11 from appropriations made to executive branch agencies to the general fund. The bill would reduce this amount by $79 million to ensure the lapses can be met in the next five months as this was ineffectively addressed by the previous administration.

Lapse of Funding from Joint Committee on Finance (JCF) Appropriation – The JCF appropriation includes $4.5 million related to estimated fiscal year 2010-11 implementation costs of 2009 Wisconsin Act 100 (operating while intoxicated enforcement changes). This funding is not anticipated to be needed in fiscal year 2010-11 and the bill lapses these amounts to the general fund balance.

Sale of State Heating Plants – The bill authorizes the Department of Administration to sell state heating plants. The proceeds from any sale, net of remaining debt service, would be deposited in the budget stabilization fund.

Shift Key Cabinet Agency Positions to Unclassified Status – The bill creates unclassified positions for chief legal counsel, public information officer and legislative liaison activities in cabinet agencies. An equivalent number of classified positions are deleted to offset the new unclassified positions. These activities are critical to each cabinet agency's overall mission and should have direct accountability to the agency head.

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  • by Frank Location: Kenosha on Feb 24, 2011 at 07:02 PM
    I have been fair to other peoples ideas and thoughts. If you have a different opinion than what I do, thats fine. I am a conservative republican. That is my choice. I have my beliefs in what government should and should not do in the daily life of it's constituents. Does that mean that my beliefs are better than yours? Because you think something differently than me does that mean that your beliefs are more important than mine? Are we not allowed to have are own beliefs? If I read, research, watch, & listen to all points of view, then come to an educated conclusion, if it goes against what you believe then I'm living in a one sided world? I have always looked at both sides of an argument. Even though I am a conservative Republican there have been many times that I have sided with democrat point of contention. In this case. I firmly stand behind what Gov Walker is proposing. I also believe it is what is the best thing for the State, Counties, Towns, Cities, Municipalities, villages a
  • by enough is enough Location: kenosha on Feb 24, 2011 at 08:33 AM
    I would like to clarify the issue of firefighters being left out because they backed this tyrant. The only fire dept that I am aware of that backed him is Milwaukee, ( who oddly enough is not part of WRS). They were fed a web of lies that he would include them in WRS. In turn he is dismantling the state retirement package so Milwaukee will see no benefit at all. The local I am associated with did not back this moron for obvious reasons. The budget deficit was on course to have a surplus in 3 years by adding a 1% tax to anyone making $300k or more a year. These same people that would have to pay a 1% tax increase then duped all into believing that there was a budget crisis and spent millions to get this moron elected. Payback to these elite has already begun. Open your eyes and inform yourself instead of making comments that cannot be backed.
  • by Anonymous on Feb 21, 2011 at 03:59 AM
    I think it's funny people are saying he is trying to jam this bill through before it can be read or anyone can debate it. Gee that sounds familiar, say like, the HEALTH CARE BILL or OBAMA CARE whatever you want to call it!
  • by Rebecca Location: Green Bay on Feb 20, 2011 at 02:30 PM
    @ dans: no one answered why we want our bargaining rights so here goes: Most of the requests the union makes for us have nothing to do with money or benefits. We bargain for PLANNING TIME (to create lessons, grade), PROFESSIONAL DEVELOPMENT REQUIREMENTS (to learn new technqiues to increase student success), NON-SCHOOL DAY REQUIREMENTS (how often and how long are parent-teacher conf.), WORKING CONDITIONS (safety proceedures/policies, class size), ETC. I have taught 5 periods a day of up to 30 kids each period and a study hall of 40 kids (more kids than desks in the room). It is nearly impossible to get all 30 kids focused on a task and for them to all be interested. Teachers have to be "on" all the time to engage the students in the learning, ensure their safety, and help the grow as students AND as people. We can't have an "off" day.
  • by Anonymous on Feb 16, 2011 at 01:30 AM
    Though the press often makes it look many are opposing Governor Walker, you have to consider that these large public demonstations are organized by groups/unions who have the ability to organize their members simply and tell them to attend. In reality the masses are supporting what Govenor Walker is saying, appreciating that he has the guts to make tough, but necessary decisions. Don't be short sighted and self serving in supporting what has to be done here folks.
  • by EauClaireReferendum.com Location: Eau Claire on Feb 15, 2011 at 07:55 PM
    Public Employee information is public and here are two links to look at Eau Claire teachers as a whole and individually. Even though this information is public through the Wisconsin Dept. of Public Instruction you won't ever find a usable file so here goes: http://www.eauclairereferendum.com (overall http://www.eauclairereferendum.com/Salary.html (individuals)
  • by Anonymous on Feb 15, 2011 at 07:32 PM
    @ BOB: Do you understand standard deviation and how the law of averages works? Probably not! Anyways, Ron Martin is an educator, not the CFO or the director of marketing or the human resources officer for a private company, he is a public servant/educator!
  • by Anonymous on Feb 15, 2011 at 07:17 PM
  • by Dan Location: Elmwood on Feb 15, 2011 at 05:40 PM
    This is an awful lesson to teach our youth. "College educations reeeeaaaaalllly aren't worth much anymore." I'm a teacher, I make a $40,000 salary. I don't make a $75,000 attorney salary because I didn't go to college for that. I don't make $150,000 like doctors because I didn't go to college for that. I don't make $20,000 like a daycare provider because I didn't go to school for that. I make $40,000 because that's what I did to further myself along. I think some people need to take RESPONSIBILITY for THEIR choices and I'll take RESPONSIBILITY for MY choices.
  • by Bob Location: EC on Feb 15, 2011 at 05:27 PM
    Yes Doug, that's what 'private sector' means (not payed by tax payers). Are 'public sector' workers in some kind of lower class so they deserve less pay than what they would get working at a similar job in the 'private sector'? Is this some kind of a USA caste system?
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