November 6

November 6, 2007

FINAL STATUS REPORT

2007-09 BIENNIAL WISCONSIN STATE BUDGET

There are welcome victories for labor in the 2007-2009 Biennial State Budget that was finally passed by the Legislature and signed into law by Governor Doyle on October 26. There are also areas where we will need to fight on. One thing is clear: the labor movement has emerged from this state budget battle much stronger and more united to fight the Republican extremists in the Legislature, who take every opportunity to attack working families and their unions—even using the state budget to do so.

Thanks to all affiliated unions, labor councils and union members and activists who responded to the legislative alerts to contact legislators on specific budget issues. Thanks to those who attended budget hearings and town hall meetings, organized special lobby day events, joined in solidarity with public sector workers in their long budget vigil at the Capitol and attended the massive rally in Madison in late October. All of your efforts helped to finally achieve a state budget and build union solidarity in the process.

Many of the budget victories involve the defeat of anti-worker, anti-union attacks that were included in the version of the budget passed by Assembly Republicans. These were removed during budget negotiations due to the strong opposition of the labor movement, along with support for labor’s priorities from Senate Democrats and Governor Doyle. Based on this experience, there’s no doubt about what must be done in 2008. We need to work harder than ever in the elections to support labor’s friends in the Legislature and defeat those who take every chance to attack the economic interests of working families. The labor movement should not have to invest precious time, energy and resources to defend the protections, benefits and rights that workers won over many years of struggle. We need to move ahead! The 2008 elections will give us that chance.

The following report summarizes some of the major concerns that the Wisconsin State AFL-CIO addressed during the lengthy budget debate and how they were resolved:

Labor Victories

Preserved funding for the UW-Extension School for Workers. The Assembly Republican version of the budget cut all state funding for the School for Workers and prohibited the UW System from providing any public funds for the School. This would have closed the oldest university-based labor education program in the country. Every year, nearly 4,000 working adults participate in about 150 programs offered by the School for Workers. The School provides instruction on occupational health and safety, Worker’s Compensation, time study, job evaluation, the design of wage and benefit systems and union administration, plus provides assistance to joint labor-management committees. Funding for the School for Workers was restored in the final version of the budget.

Preserved collectively-bargained benefits for state employees. Rolled back efforts to privatize public services. The Assembly Republican version tried to reduce or eliminate benefits and protections that public employees have achieved at the bargaining table over many years of difficult bargaining. These agreements were made by union members in good faith with the State of Wisconsin and include those related to sick days, health insurance, pension benefits and contracting out protections. Republicans even specified that state employees would receive a paycheck once a month, rather than every two weeks, and made that issue a prohibited subject of bargaining. These attempts to unilaterally reduce contract benefits through the budget process were defeated.

Restored major cuts to the State Building Program. The Assembly Republican version made deep cuts in state building projects, effectively eliminating close to $600 million in state construction for UW System facilities in Superior, La Crosse, Kenosha, Oshkosh, Stevens Point, Whitewater, River Falls and Madison. Every dollar of construction spending on these projects is estimated to generate $2.20 of economic activity in the local and regional economy. These projects are necessary to maintain our public infrastructure and also provide family-sustaining job opportunities for workers in the building and construction trades. The state building projects were substantially, but not entirely, restored in the final budget.

Preserved current collective bargaining rights for local government employees.

The Assembly Republican version included changes to the Municipal Employment Relations Act (MERA) that would: (1) allow local government employers to change health care plan providers without bargaining the issue; (2) place artificial caps on final bargaining offers sent to an arbitrator; and (3) make contracting out of services a permissive (not mandatory) subject of bargaining and establish a cost-benefit analysis for privatization that substantially disadvantages public employees. All changes would strengthen the hand of local public employers against unions in the negotiating process. These changes were removed from the final budget.

Supported the state’s transportation infrastructure. Transportation funding was increased and infrastructure improvement can move forward, but the budget relies heavily on increased vehicle registration fees and more borrowing, which will shift the debt burden to future taxpayers. Unfortunately, Gov. Doyle’s proposed assessment on Big Oil profits to help fund transportation needs was dropped due to Republican opposition. The oil companies will continue to avoid paying their fair share for the transportation infrastructure from which they benefit.

Defeated new restrictions on unions and the ability of workers to participate in the political process—known as “paycheck deception” regulations. Assembly Republicans targeted the labor movement by including in their budget version a new regulation that would effectively silence the only organized voice that working families have in our legislative and political process—the one available through their unions. The corporate interests that want to weaken unions and silence workers call this regulation “paycheck protection”: the more accurate name is “paycheck deception”. This anti-union regulation requires any employer that agrees to provide a payroll deduction for union dues to have written consent from each union member for any money deducted that might be used as a contribution to a political committee, with the consent reauthorized every year. The employer must keep detailed records regarding each payroll deduction, which must be available for public inspection on demand. Even though many unions do not contribute to candidates or parties, and others raise money for political contributions through special fundraisers designated for that purpose, employers will insist (for their own legal protection) that they cannot conduct any payroll deduction of dues unless a separate authorization is received from each union member. This would be a powerful harassment tool for employers to use against unions and workers, which is its true purpose. The “paycheck deception” regulation was removed from the final version of the budget.

Restored needed funds for the Compensation Reserves Fund. The Assembly Republican version cut $94 million from the Compensation Reserves, which is the source of funds that both union and non-union state employees rely on to cover their wage and benefit increases. The needed funding for the Compensation Reserves was restored.

Preserved initiatives to achieve energy independence in our state. The Assembly Republican version eliminated Governor Doyle’s proposed Office of Energy Independence. Given the predicted rise in the price of oil, Wisconsin must take steps now to reduce its dependence on this source of energy. State agencies need to work in partnership with the private sector to promote renewable energy production and consumption, and encourage the design of new energy efficiency programs in building maintenance and construction. This public investment will promote economic development and create jobs, especially in the manufacturing and construction sectors of the economy. The final budget did preserve the Office of Energy Independence and include $22 million for the Renewable Energy Grants and Loan Program.

Achieved substantial funding for Wisconsin Shares and Family Care. The final budget includes $69 million in additional funding for the Wisconsin Shares child care subsidy program which aids working families. The Assembly Republican version had made substantial cuts to this program. The budget also includes $20 million to expand Family Care, which provides managed long-term care services to elderly and disabled recipients throughout Wisconsin. This expansion had also been opposed by Republicans. A state income tax deduction for a portion of child and dependent care expenses will be phased in over several years, starting in tax year 2009.

Defeated preferential tax exemptions for Health Savings Accounts. The Assembly Republican version offered their “consumer-driven solution” to our health care crisis, which promotes Health Savings Accounts (HSAs). In order to qualify for a tax exemption, a Health Savings Account must be combined with a very high-deductible, catastrophic insurance plan (a minimum deductible of at least $1,100 for an individual and minimum of $2,200 for a family, under current federal guidelines). Research shows that these accounts mainly benefit the healthy and the wealthy, but do nothing for the vast majority of workers and their families who need comprehensive medical coverage, or cannot afford to deposit thousands of dollars into a Health Savings Account to cover out-of-pocket health costs. It doesn’t make sense for the state to lose millions of dollars in revenue from these tax-free accounts and still not address the health care crisis for working families and the uninsured. The HSA tax exemption was not included in the final budget.

Supported economic development: worker education and training

Technical College Education. Assembly Republicans insisted on a 4 percent levy limit on technical college districts which would mean that students could be forced to pay higher tuition or face program cuts. Governor Doyle vetoed this limit. Wisconsin’s employers are facing a shortage of skilled workers and the 16 technical colleges provide much of the workforce training which generates $6 for every $1 invested. WTCS offers more than 300 programs awarding two-year associate degrees, one and two-year technical diplomas and short-term technical diplomas. More than half of all adults in our state have accessed the technical colleges for education and training, so adequate funding for the WTCS System is of major benefit to working families. The budget also included $3 million in job training grants.

Wisconsin Manufacturing Extension Partnership (WMEP). The budget provides annual funding of $1.2 million for manufacturing extension partnerships. [A previous report indicated annual funding of $850,000.] The Wisconsin Manufacturing Extension Partnership (WMEP) will be able to access a significant portion of these funds. WMEP is a non-profit consulting firm that helps small and mid-size manufacturers, including many union employers, to implement lean manufacturing processes that will help retain and create jobs in Wisconsin in the face of global competition.

Youth Apprenticeship. Governor Doyle’s original budget doubled the funding for the Youth Apprenticeship program, but Assembly Republicans cut new funding and eliminated staff positions. The final budget does double the funding to $2.2 million by the second year of the budget, allowing as many as 3,600 juniors and seniors statewide to participate in this effective school-to-career program. Students who are interested in pursuing careers in manufacturing, skilled trades and health care are especially aided by the Youth Apprenticeship experience.

Additional Budget Victories.

Defeated provisions that support corporate interests over workers. Assembly Republicans tried to use the state budget to add numerous provisions that expanded the rights of corporations and employers over victims and workers. The following are some of the provisions that were removed from the final budget: (1) limit the liability of manufacturers, distributors and sellers of defective products that cause injury or death; (2) give a sales tax exemption for temporary help agencies; (3) allow employers to reward or punish employees financially to alter their use of lawful products; (4) allow employers to discriminate against a job applicant or employee based on his/her conviction record, whether or not the offense relates to the job; and (5) add voter identification requirements which make it more difficult to exercise voting rights. All of these provisions were removed in the final budget.

Beyond the Budget: The Fight Goes On

Healthy Wisconsin. This proposal to provide comprehensive, secure health care coverage for all was included by the Senate Democrats in their version of the state budget, but it was fiercely opposed by Republicans. In the interests of reaching a compromise, Healthy Wisconsin was set aside, but it will be introduced as separate legislation. For the first time in Wisconsin’s history, labor’s goal of health care for all has made significant progress in the Legislature. Senate Democrats deserve a huge amount of credit for making health care a priority in our state and the labor movement will continue to press legislators to enact fundamental reform. (Other provisions of the budget include a phased-in tax deduction for a portion of health insurance premiums paid by employees beginning in tax year 2008, along with an expansion of BadgerCare.)

Collective Bargaining Rights for UW System Faculty and Academic Staff. The Assembly Republicans rejected the proposal by both Governor Doyle and Senate Democrats to include collective bargaining rights for nearly 17,000 UW System faculty and academic staff in the state budget. Currently, these employees are denied even the possibility of self-organization through a union of their own choice, even if a majority supports that goal. They deserve the freedom to organize that is afforded to virtually all other public and private sector employees in our state, except for farm workers (and they deserve that right, too.) Legislation will be introduced to continue the fight for UW System faculty and academic staff bargaining rights.

Property Tax Relief / Shared Revenue. The State of Wisconsin shares with local governments some of the tax revenue it receives; this is done through a system called shared revenue. This practice dates back to 1911 and every dollar from the state helps relieve the pressure on local property taxes. Shared revenue aid is essential to help cover the cost of many services that local governments are directed to provide, such as police and fire protection, garbage and snow removal, child protective services, the court system, etc. Unfortunately, the 2007-09 State Budget continues to severely shortchange local communities. Governor Doyle’s original budget did include a $15 million increase for shared revenue, but due to Republican opposition the final budget provides no additional aid. Republicans actually insisted on a double penalty in this budget—denying necessary local aid plus placing a 2 percent levy limit on property tax increases (or the percentage increase in property values due to new construction, whichever is greater) for 2007 and 2008. Governor Doyle used his veto pen to raise the levy limit to 3.86 percent for 2007 only. The lack of adequate state financial support for local communities will continue to increase pressure on property taxes, or result in cuts to vital services. This is a problem that will only grow worse as a result of this budget, and the Republican strategy of starving local governments cannot continue if we are to maintain a decent quality of life in our state.