Wisconsin Makes High-Stakes Gamble on Budget

   By Melissa Leu - (Illinois Statehouse News) - 2/27/2011 - SPRINGFIELD — Illinois lawmakers may be feeling a sense of deja vu as they look to neighboring Wisconsin's struggle to solve a pension and budget deficit. Illinois last March reformed its public employee pensions when the General Assembly passed legislation that created a “two-tier” pension system.
   However, Wisconsin has added collective bargaining rights to the mix, muddying the waters.
   Amid widespread protest, Wisconsin Gov. Scott Walker proposed a budget repair bill that would require public workers to contribute more to their pensions and health insurance and reduce their collective bargaining rights.
   Wisconsin Democratic senators have fled the Capitol in protest of the repeal of most collective bargaining rights, leaving the rest of the GOP-led legislature to ponder how to close the state’s $136.7 million budget deficit for the current year. Walker's plan passed the Assembly chamber early Friday morning, but still needs to clear the Senate before hitting Walker's desk for his signature.
  Illinois' reforms allow current employees to keep their existing pension plan, changing the rules only for new employees hired after Jan. 1. The retirement age increased to 67, maximum salaries were capped at $106,800 and payouts became based on a worker's highest salary during eight consecutive years of the last 10.
   At the time, Illinois was facing a roughly $13-billion budget deficit. Although the measure angered unions, it was passed and ratified without much legislative opposition — 92-17 in the House and 48-6 in the Senate.
   Jim Nowlan, a research fellow at the Institute of Government and Public Affairs at the University of Illinois Urbana-Champaign, attributes the diverging reactions from each state to a contrasting political climate.
   “The speaker of the (Illinois) House did strike very quickly last year and surprised the public employee unions, which did mount some opposition,” Nowlan said.
   Illinois House Speaker Michael Madigan, D-Chicago, pushed the measure through in a single day.
   Nowlan attributes the lack of comparable opposition to a Democratic majority in the Illinois Legislature — typically backed by labor unions — that led the charge for pension reform. He likened Madigan's Democratic push to that of the late Republican President Richard Nixon's visit to China.
   “Only President Nixon could go to China back in his administration. A Democratic president would not have been able to get away with going to China to face and meet with the Communist leader of the world,” Nowlan said.
   In contrast, Wisconsin Republicans hold majorities in both the House and Senate. Walker, also a Republican, has made national news recently for moving to restrict union collective bargaining rights.
   Illinois state Sen. Dave Syverson, R-Rockford, who recalls last year's pension reforms, said he approves of how Wisconsin Republicans are handling the current situation.
   “Illinois is just putting off for a few months, maybe a year, what is inevitably going to be some painful decisions, because of the fact they refused to make small improvements over the last few years,” Syverson said.
   David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University-Carbondale, said the widespread protests aren’t surprising considering the financial crisis and recent political turnover in Wisconsin leadership.
   “It's one thing to raise questions about the level of benefits, about the numbers of state workers, and it's another thing to question whether unions really have a right to exist. So that's bound to spark a great deal of militancy on the part of labor leaders,” Yepsen said.
   Walker has threatened layoffs of state workers if his budget repair bill doesn't pass within the next few days.
   Anders Lindall, a spokesman for the American Federation of State, County and Municipal Employees, said an attack on public unions is an attack on middle-class America.
   “There is no good public policy justification for any of these attacks on vital services that teachers, firefighters, police officers, nurses and public service workers provide to the state of Illinois,” said Lindall.
   Like the proposal itself, even Wisconsin’s future seems to be a place of contention.
   “I think Wisconsin, at the end of the day, is going to pay a terrible price for this,” Yepsen of the Simon Institute said. “The Republicans may well win in the short term, but they are going to create levels of personal animosity that will make it difficult for their policy makers to work together. They're going to create levels of union militancy that's going to affect the delivery of public services.
   Syverson, the Rockford senator, however, had a more positive outlook.
   “What's going to happen a year from now is that people are going to look back and say the tough decision that Wisconsin made as regard to their budget has made them financially sound,” Syverson said. “Their bond rating is going to be good. They're going to be attracting more business (and) more jobs because they’re going to be a financially sound state.”
   Story courtesy of Illinois Statehouse News. Originally published 2/24/2011.

Photo by Steve Rensberry (c) 2014