Many taxpayers last year realized the difference between their compensation packages and the relatively luxurious compensation received by public employees. Since this differential came to light, public unions have increasingly come under fire for aggressively negotiating for repeated pay increases and essentially taking state budgets hostage. Someone should tell the unions (in Wisconsin, at least) that there is a new sheriff in town.

Wisconsin Governor Scott Walker released his plans on February 11, 2011, to take on the public employee unions. He plans to limit total wage increases for union public employees to the rate of inflation, unless voters approve the increase by referendum. His proposal requires unions to take a yearly vote to maintain their status as a union and prohibits public employers from collecting union dues for unions.

Walker is also taking aim at retirement benefits for public workers. He wants to require state employees to contribute 5.8% of their pay to their pensions and also pick up at least 12.6% of the cost of their health care premiums.  He also wants to trim overall benefits in health plans. During his campaign, Walker received endorsements from the Wisconsin Troopers’ Association and the unions representing Milwaukee cops and firefighters, which would be exempted from those changes.  Walker has gone so far to say that the National Guard is prepared for unrest among state workers.

Not too far away, Ohio is coming down even harder on its public unions. Senate Republicans released a new plan to wipe out collective bargaining for all state workers, including higher education. The boldest attempt in nearly 30 years, the measure would take the teeth out of unions’ ability to insist on pay raises and lavish retirement benefits. Public unions have come out in strong opposition to the proposal, obviously.

Public unions aren’t the only corner of state government feeling the budget crunch, and Republicans aren’t the only ones pursuing reform. Governors from both parties are making painful cuts amid budget crisis across the U.S. Many of the Governors of both parties finally are starting to get it.  “Democratic and Republican governors alike are sounding similar themes, as they slash once sacrosanct programs such as education, health care for the poor and aid to hard-pressed local government…It really has sunk in that governors and state legislatures have to put state government on a long-term sustainable path,” said Raymond C. Sheppach, executive director of the National Governors Association. “Even if revenues pick back up, the hole is so deep that the economic recovery is not going to save them.” 

Not everyone is serious about reform, though. Illinois’ recent astronomical tax increase has made national news and some would have other states follow in their footsteps. Despite the excellent scholarship of economists like Arthur Laffer, who points out that higher taxes can actually decrease revenue, and empirical evidence from ALEC to support his arguments, groups like the liberal Center on Budget & Policy Priorities again call for tax increases and the use of rainy-day funds as opposed to cuts in services.  

Examples abound on both sides of the issue. In order to help solve his state’s budget shortfall of $3.6 billion, Florida Governor Scott announced plans to cut $5 billion in spending, eliminate 9,000 positions; and reduce Medicaid by $4 billion.  By contrast, Minnesota Governor Mark Dayton just vetoed $901 million in proposed budget cuts, leaving a $6.2 billion deficit.

Here are the latest budget projections.

·         Arizona: $763.6 million through June 30, 2011; $1.2 billion for FY 2011.  Governor’s Budget. 1/11

·         California: $25.4 billion through June 2012. Foxnews.com. 1/22/11.

·         Colorado: $1.5 billion. Denver Post. NPR.  1/12/11

·         Connecticut: $3.67 billion.  The CT Mirror.  1/25/11

·         Delaware: $216.4 million.  Delawareonline.com 1/28/11

·         Florida: $.3.6 billion. FOX NEWS.com 2/1/11

·         Georgia: $1.5 billion  for FY 2012.  Savannahnow.com. 2/6/11

·         Hawaii: $71 million (FY 2010-11); $771 million (FY 2011-13).  KITV.com. 12/20/10

·         Idaho: $185 million between now and June 30, 2012.  Idahopress.com. 1/28/11

·         Illinois: $13 billion (FY 2010-11) WSJ.  1/12/11

·         Iowa: $700 million (FY 2011-12). Bloomberg.com. 12/22/10

·         Kansas: $550 million (FY 2011-12). Kansascity.com. 1/5/11

·         Louisiana: $1.6 billion FOX 8. 12/30/10

·         Maine: $840 million.  The Portland Press Herald. 11/27/10

·         Maryland: $1.3 billion (FY 2011-12) Afro.com. 1/27/11

·         Massachusetts:  $1.5 billion.  Telegram.com. Masslive.com 1/17/11

·         Michigan: $1.85 billion (FY 2011-12) WNEM.com.  12/28/10

·         Minnesota: $6.2 billion Brainerd Dispatch.com. 1/2/11

·         Mississippi: $634 million. Thegovmonitor.com. 11/16/10

·         Missouri: $1 billion.  Kansas City Business Journal. 8/5/10

·         Montana: $388 million (FY 2011-12). Bloomberg Businessweek. 10/8/10

·         Nebraska : More than $1 billion (FY 2011-13) Action3news.com. 1/6/11

·         Nevada: $2.2 billion.  Examiner.com. 2/7/11

·         New Hampshire: $800 million. Sentinelsource.com. 9/22/10

·         New Jersey: $10.5 billion (FY 2011-12).  Blogs.APP.Com. 7/22/10

·         New Mexico: $452 million).  Bloomberg Busineeweek.com.  11/11/10

·         New York: $9 billion NY Times. 1/1/11

·         North Carolina: $2.7 billion (FY 2011-12) WRAL.com.   2/8/11

·         Ohio: $4-8 billion (FY 2011-13) Ohio.com. 1/1/11

·         Oklahoma: $600 million for FY 2011-12.  Kfor.com. 2/7/11

·         Oregon: $3.5 billion (FY 2011-13). NRToday.  11/23/10

·         Pennsylvania: $4 - 5 billion (FY 2011-12). The Philadelphia Inquirer. 12/17/10

·         Rhode Island: $365 million (FY 2011-12)). WPRI.com. 11/10/10

·         South Carolina: $829 million (FY 2011-12). GoUPstate.com. 1/7/11

·         South Dakota: $32 million (FY 2011-12) $107 million (FY 2012-13).  Yankton press. 1/30/10

·         Tennessee: $1 billion. WSMV.com. 1/31/11

·         Texas: $15 billion. Chron.com. 1/18/11

·         Utah: $700 million. KCPW. 12/11/10

·         Vermont: $112 million (FY 2012-13).  5WPTZ.com. 8/22/10

·         Virginia: $200 million (FY 2011-12). WashingtonExaminer.com. 12/17/10

·         Washington: $600 million (FY 2000-11) $4.6 billion (FY 2011-13)  12/17/10

·         West Virginia: $150 -$160 million (FY 2011-12). Charleston Gazette. 6/7/10

·         Wisconsin: $137 million FY 2010-11) and $3.6 billion (FY 2011-12). JSOnline.com. 2/7/11

 

 

 

Filed Under : Spending Cuts, Employee Benefits, Pensions

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