Gov. Scott Walker introduced a budget repair bill Friday morning that detailed sweeping changes to state employee contributions to pension and health insurance premiums, causing uproar in the public union leadership who took the bill as an attack on more than 50 years of organized labor progress.
If passed, the bill would require employees who use the Wisconsin Retirement System, which covers more than half a million state employees, and Milwaukee County and city employees to finance one-half of their pension fund.
The individual employee would have to contribute about 5.8 percent of his annual pay to the fund.
The bill would also require state employees to more than double their annual health insurance premium payments from about 6 percent to at least 12.6 percent.
“It’s fair to ask public employees to make a pension payment of just over 5 percent, which is about the national average, and a premium payment of 12 percent, which is about half of the national average,” Walker said at a press conference.
Walker added these changes would help the state save $30 million in the last three months of the current fiscal year and are projected to save the state $120 million over the next four quarters.
State unions have responded negatively to the bill, while Republican lawmakers maintained the measures in Walker’s budget repair bill are essential to rein in the state debt.
The president of American Federation of Teachers-Wisconsin, Bryan Kennedy, said Walker is trying to completely dismantle the concept of collective bargaining.
“For 50 years, workers and the management have sat down together to solve problems through negotiation. This bill would turn the clock back to before the 1959 Labor Peace Act,” Kennedy said. “It’ll be like, ‘Sit down, shut up, and do as you’re told.’ ”
Wisconsin AFL-CIO president Phil Neuenfeldt said Walker’s proposed overhaul of collective bargaining “misses the mark” on deficit reduction.
“The right to negotiate both wages and benefits through a union is a fundamental underpinning of our middle class,” Neuenfeldt said in a statement. “It serves as a check on corporate power.”
He suggested in the statement that tackling the deficit should entail a “balanced approach that looks at shared sacrifice from everyone,” but did not offer specific areas to make cuts.
Republican legislators defended the bill, saying such significant actions are critical to reducing the current fiscal year’s $137 million budget shortfall.
Increases in employee contributions were needed so employees pay their fair share, said Mike Mikalsen, spokesperson for Rep. Stephen Nass, R-Whitewater, a member of the Committee on Labor and Workforce Development.
“For years, employees haven’t maintained their share because employers were paying them as benefits,” said Mikalsen. “We are repealing [collective bargaining] for state workers, because there’s no money to bargain over – we have a monumental state debt on our hands.”
He added the governor was basically faced with a choice between cutting jobs and wages, which the unions would not entertain, and repealing collective bargaining.
– Andrew Averill contributed to this report.
