You are getting this as I experience it, so you'll have to bear with me if this post is passionate, angry, biased, and/or filled with typos. Tonight at around 6 p.m., the Republican Senators of Wisconsin implemented a tactic that (although I had realized it was a possibility) I didn't truly think that they would have the gall to implement. As such, the situation in Wisconsin has dramatically evolved, and this may be the first chance that I have to document my emotions and those of my friends, family, and neighbors.
After weeks of stating that the removal of essentially all collective bargaining rights for public employees in Wisconsin was a fiscal issue, that it needed to be passed as part of the Budget Repair Bill, and that it could not be altered and/or removed from the Bill. After releasing e-mails yesterday that showed that Walker's staff had been in contact with the Democratic Senators in IL discussing potential compromises and stating that they were looking for a resolution to the situation. After all of this, at 4 p.m. this afternoon the Republican Senators convened a special committee to essentially 'cut out' the collective bargaining portion of the Budget Repair Bill and make it a separate piece of legislation. They then claimed that (despite their rhetoric to the contrary for over 3 weeks) this issue was NOT in fact a fiscal issue and that they did not need a quorum to vote on the legislation. The committee then approved this new separate legislation and moments later the Senate voted 18/1 and passed this legislation to strip collective bargaining from Wisconsin public employees. And, as can be imagined, all hell now has the potential to break loose.
The feelings of anger and betrayal that many people in Wisconsin are feeling right now is palpable. After insisting that this was a fiscal issue, after Majority Speaker Fitzgerald stated that they would NOT cut out parts of the bill because all of the aspects of the bill were fiscal, to have them do a complete about-face in the course of a few hours is shocking, infuriating, and leaves me with a feeling of awe at Walker's sense of entitlement and superiority. No matter what your feelings on the bill, about unions, or Walker himself, I can find no way to support these actions. And coupled with the e-mails released just 24 hours ago to show Walker's (claimed) desire to discuss concerns, the statements that he made during the imfamous 'Koch' phone call, I can only conclude that this was actually planned some time ago.
There are going to be legal challenges to the actions that happened today, and I am not familiar enough with the law to know how those challenges will be resolved. But I understand strategy enough to see that the Republican's have potentially put the Democrats in a difficult position when it comes to challenging this 'new' bill. And for that, I have to give them accolades for the catch-22 they have potentially arranged. If the Democrats challenge the separation of this aspect of the bill from the other portions, they almost have to argue that the collective bargaining issue was fiscal, which the Democrats have been arguing against since the onset of this bill fight, and that because it is a fiscal issue a vote without a full quorum is not legal. Requiring that the Democrats change their argument after all of their arguments against the collective bargaining being fiscal is (admittedly) brilliant.
Of course, the Republican's have to explain their sudden 'change of heart' in regards to the fiscal issue as well, but I'm guessing they've already thought of their defense where that is concerned. Also, in order to fight this 'new' bill's passage, the Democrats almost certainly have to return to the Capitol, giving the Republican's the quorum they need to pass the other problematic parts of the original bill, including the emergency changes to Medicaid and sale of state property provisions.
Ironically, if you visit Gov. Walker's website ( he has been posting articles for weeks that outline why (he believes) collective bargaining is a fiscal issue. Yet today, after this new bill was passed, he applauded the separation of this section of the bill as a non-fiscal issue. I'll admit that I'm going to be intrigued to see how (or if) they try to explain this backpedaling in the coming days.
Aa I write this, several friends of mine are in the Capitol rotunda. Although the Capitol building is supposed to be cleared out after the close of business each day (per a court agreement that required protesters that had been sleeping there to leave while also requiring that the governor stop limiting access to the Capitol itself), I have a feeling that there will be no leaving tonight. Originally there were reports that people had essentially rushed the doors and were going in through broken windows, but it has now been confirmed in the press (and through my contacts inside the Capitol) that the police basically didn't close the doors at 6 p.m. and were letting people enter without trying to stop them or force then to leave. There are currently thousands of people in the Capitol.
The Department of Administration states that anyone in the building currently is in violation of the court order to vacate after business hours, but I'm hoping that they are not crazy enough to actually try to make people leave. These protests have been loud, but peaceful, up to this point, but I'm fearful that this last bit of disrespect (and apparent disdain for the intelligence of the people of Wisconsin) may tip things. Emotions are high, people feel betrayed and abused, and Walker's statements have been his typical inflammatory rhetoric. In his statement he said that the Democrats had 3 weeks to discuss the bill and that he supported "the Legislature's action today to stand up to the status quo and take a step in the right direction to balance the budget and reform government".
Tomorrow I intend to go down to the Capitol, and I will loudly but respectfully let my feelings on this political maneuvering be known. Just because something CAN be done, does not mean it SHOULD be done. Politics should not be devoid of honor, and actions by your legislators should not leave you feeling like you have somehow been violated, that you have been dismissed as not being worthy of consideration.
There may be several positive outcomes to this action tonight, and I'm trying to keep these in mind. First, there was a single Republican Senator, Dale Schultz, who voted no on this bill. Sen. Schultz was also the only Republican that had offered any potential compromises on the original bill. This gives me hope that not all Republican's are blind followers. Also, it could be that now that the collective bargaining portion has been 'cut out' of the bill, the other concerning sections will recieve more press coverage and may therefore be more likely to change. Of course, the Republicans could just be high on the power trip from this successful stunt today and even less likely to be open to changing the other portions of the bill. And finally, recall actions and the removal of Republican's from the majority in state governement will probably go easier after this. But I do have to feel sorry for true fiscal conservatives, because Walker's actions these past months have killed most of their hopes to make moderate changes over the next decade.
I will try to post regularly from the heart of the storm here in Madison. Let's hope that the peaceful disobediance that has been the hallmark of these protests continues.
Wednesday, March 9, 2011
Monday, March 7, 2011
Gov. Walker's Budget Speech
I am working on writing up my first portion of the evaluation of Gov. Walker's actual budget bill for Wisconsin. However, the bill itself is over 1000 pages long and covers almost every aspect of Wisconsin public service, government, fiscal law, and even some odds-and-ends, so I'm trying to determine the best way to break up the discussion. I've also been swamped with other projects this past week, so I apologize that this segment was not as 'timely' as I had hoped. I'm hoping to be back on a schedule of at least a segment every few days here in the near future to try my best to get through the 'meat' of the budget before (hopefully) some major overhauls are made to it.
Yes, the budget has me very worried and very upset, and since I still have not found a supporter of the current bill(s) to be my co-author on this site, I've determined to (while still trying to keep it fair) let my 'crazy liberal leftist' out a little more often. I think it's important to highlight some of the potential problems with the budget as it stands, especially when coupled with the 'repair bill'. Walker says (as you will see below) that he is an optimist. Unfortunately, I am not as much an optimist as I used to be, I tend to now look at things and see how it could go potentially wrong and/or where the potential abuses of power lie. And there are many in the upcoming legislation...
In the meantime, I thought I'd 'treat' you to the actual text of Gov. Walker's budget speech that was given Tuesday, March 1 in front of a hand-selected group of supporters (as most of the protesters and the general public of WI were locked out of the room and in many cases the Capitol building in preparation for the speech). I'll try to keep my critique to a minimum here, but if I feel the need to comment on something or add emphasis, please bear with me. This is the 'preview' of my upcoming segments, so forgive me if I throw in a little foreshadowing.
Here is the text of the speech:
"Speaker Fitzgerald, Speaker Pro Tem Kramer, President Ellis, Majority Leader Fitzgerald, Minority Leader Barca, Supreme Court Justices, Constitutional Officers, tribal leaders, members of the Cabinet, distinguished guests, members of the Legislature, and most importantly, fellow citizens of Wisconsin.
Each and every one of us gathered in the chamber today hold a diverse set of beliefs – beliefs that we are passionate about sharing - and that serve to guide our actions. Each of us has a vision for a better tomorrow in Wisconsin.
But we all share something in common -- an unrivaled passion for this state and the people who call it home. We all want Wisconsin to be the very best that it can be. Yet, -- because our experiences are unique and our beliefs diverse -- our paths may diverge as we tackle today’s challenges. But even at the height of our differences, we can and must keep our promise to people of Wisconsin that they will always come first.
Democracy does not just expect differences, it demands them. It’s the manner in which we discuss and resolve those differences that leads to bold solutions and innovative reforms. I ask that we continue to be mindful of our differences – as well our similarities – in the coming days, weeks and months. Above all, let us not lose sight of the fact that we were each elected to represent the people of this state by participating in our democratic process.
I applaud the State Assembly and those in the State Senate who are here today for not losing sight of that. (Nice backhanded reference to the WI 14, the Senators that left the state to slow the passage of the Budget Repair Bill.)
Over the past few weeks, a great deal of attention has been focused on Wisconsin. That’s ok because freedom thrives each time there is a passionate debate in our society. Passion and civility can go hand-in-hand and that’s what’s on display here in Wisconsin.
But outside observers need to know that there is more to this state as well. Wisconsin is filled with outstanding workers and multi-generational employers. We have tremendous resources and amazing attractions. Most importantly, we have decent people in this state. (This could easily be seen as a slap at the (to him) 'indecent' protestors outsiders are seeing on the TV.)
The good people of this state come from all walks of life – young and old, urban and rural, Democrat and Republican.
Recently, I learned of yet another story that affirms that sense of decency.
Some of our state employees at the Farm Center spent time with two brothers who jointly operate a dairy farm that was – literally - on the verge of financial collapse. One of the brothers was so stressed that he was considering some horrible options.
The Farm Center staff calmly walked the brothers through a variety options and got them through their immediate crisis. That day, our public employees not only helped someone’s life, they may have actually helped save someone’s life. (Keep this story in mind when I start going over what the budget 'provides' for farmers, like eliminating funds for the Conservation Reserve Program and the 'Buy Local, Buy Wisconsin' program.)
This story says a lot about the people of Wisconsin.
It certainly reinforces the financial strain that so many are experiencing across the state. Without a doubt, it shows the compassion of our people toward their fellow citizens. And it shows the professionalism of our public employees who really care about the people that they serve.
This is why we need to move this process forward and get this state working again.
I have been asked a lot over the past week about what happens next. Well, I’m an optimist. I believe that after our budget repair bill passes, tempers will cool, and we will find a way to continue to work together to help grow our economy. We will position Wisconsin to emerge from this economic downturn stronger than ever, with new opportunities for our workers and our families.
You see, for six weeks we worked together to pass bill after bill to show that Wisconsin is open for business. Most of our legislation received bipartisan support. It is my belief that we will soon get back to that type of cooperation in the Capitol.
We introduced a budget repair bill that is the first step toward addressing the long-term challenges facing our state - while laying the foundation for economic growth. The biennial budget I introduce today is built on the savings supplied by our budget repair bill – legislation, I might add, that we have already modified to address concerns expressed at the public hearing. (I haven't been able to find a details list of what 'modifications' they made based on the hearings, but I continue to look)
We need the savings in the budget repair bill because Wisconsin faces a $3.6 billion deficit. Too many politicians have failed to tell the truth about our financial crisis. They left Wisconsinites in the dark about the extent of our fiscal problems. The facts are clear: Wisconsin is broke and it’s time to start paying our bills today – so our kids are not stuck with even bigger bills tomorrow.
This deficit did not appear overnight. Wisconsin got here through a reliance on one-time fixes, accounting gimmicks and tax increases. Previous governors and legislatures from both parties took money from our tobacco settlement. They raided more than a billion dollars from the transportation fund and $200 million from the patients’ compensation fund. They increased taxes on the sick and set up shell games to draw down additional federal funds.
They relied on one-time federal stimulus dollars as if the money would be there forever – but it’s already gone.
Wisconsin owes Minnesota nearly $60 million and some $200 million to the patient’s compensation fund. In short, they governed for the short-term, with an eye only on the next election – not the next generation.
While families across this state were focused on making ends meet, the state government continued to grow well beyond our taxpayers’ ability to pay. But the time has come for us to make the tough choices necessary to put our state back on the path to prosperity.
We must work together to bring our spending in line with reality. We were elected --not to make the easy decisions to benefit ourselves -- but to make the difficult ones that will benefit our children and grandchildren (Interestin comment when you consider what he suppports in regards to education funding).
We need a commitment to the future so our children don’t face even more dire consequences than what we face today. Together, we will change the way government works in Wisconsin. We will make it work for the people once again.
I have often repeated references to our state’s constitutional lesson, that it is only through frugality and moderation in government that we will see freedom and prosperity for our people.
Our budget holds true to these principles by balancing the $3.6 billion deficit through permanent spending reductions and innovative government reforms.
Specifically, our budget reduces all funds spending by $4.2 billion, or 6.7 percent, and decreases the structural deficit by 90 percent from $2.5 billion to $250 million – the lowest structural deficit in recent history. That’s over $2 billion we are saving from future obligations and for future generations.
That’s worth repeating. Our budget reduces the structural deficit by 90 percent. In fact, it is lower than the last eight budgets presented by Democrats and Republicans alike.
Gone are the segregated fund raids, illegal transfers, and accounting gimmicks. Gone are the tax or fee increases. Our state cannot grow if our people are weighed down paying for a larger and larger government. A government that pays its workers unsustainable benefits that are out of line with the private sector (The truth or inaccuracy of this statement depends on how you evaluate workers benefits and wages compared to skill level/education, but I won't get into all those details here. Suffice to say that just as in the private sector, some public jobs pay more and some pay less, and overall most studies don't show a huge discrepency when education/skill is taken into account). We need a leaner and cleaner state government.
As we decrease spending, we also increase flexibility so local government and state government have the tools to deal with reduced revenue. It’s true we are reducing aid to local government by just over one and a quarter billion dollars, but we are providing almost $1.5 billion in savings through our budget repair bill (I haven't yet been able to find details as to how this estimate was calculated, but I will continue to look). If the 14 Senate Democrats do not come home, their local communities will be forced to manage these reductions in aid without the benefit of the tools provided in the repair bill. On the other hand, if the Senate Democrats do come home, local units of government overall will actually see a net increase in revenue plus savings of more than $150 million (Again, still looking for how this estimate was calculated.).
Let me repeat that despite the reductions in our budget, local governments would gain $150 million overall in the next biennium – but only if the Senate is allowed to act.
While aid to local government represents the state’s largest expenditure, the state’s Medicaid program represents the area of fastest growth. Medicaid costs continue to outstrip growth in general fund revenues. Long-term care expenditures, in particular, are growing much faster than other areas of the budget. Coupled with the use of $1.2 billion in one-time federal funding – the state is facing an unsustainable budget challenge. A challenge in need of a serious and long-term solution.
While maintaining services for our most vulnerable, we must also refocus those services and find efficiencies where possible. That will mean asking some individuals to pay modest co-pays and premiums as they transition from the safety net that these programs provide to gainful employment. This will allow those individuals to begin to transition to a time in the future when they will no longer need government support, while protecting those who need these services the most.
Just as we reform our entitlement programs (slightly inflammatory language, most conservatives do not approve of 'entitlement', so I'm afraid this is foreshadowing on his part as to how he views and will manage programs like Badgercare.) for the 21st century, we must also reform our education system. Clearly, we have to produce graduates who are able to compete - not only with their peers from Chicago or Des Moines - but also from Shanghai or Sydney. (I 'love' this sentence, considering what comes next...)
And we must do so while we balance a $3.6 billion deficit. That is why -- even as we reduce school aids (by almost $1 billion as well as cuts to local revenue and decreasing the per student funding cap) – overall we give schools across the state the tools to make up for those reductions with even greater savings through the budget repair bill.
Again, this is why it is so vitally important for the Senate Democrats to come back and do their jobs. If they do not, our schools face massive layoffs of teachers. However, if they do come back, overall savings for schools across the state will outweigh reductions, ultimately allowing schools to put more money in the classroom.
When I campaigned for Governor, I set as a goal that all Wisconsin third graders should be able to read at the 3rd grade level. Many have noted that from Kindergarten to 3rd grade -- our kids learn to read -- and then from 3rd grade on, they use reading to learn. We need to make sure every child can read as they move on from 3rd grade.
That’s why my budget creates a third grade reading initiative that will require all third graders to achieve basic literacy (while cutting funding for school reading specialists). I know we can do this and we owe it to our students to make sure we do.
In addition, we will expand choice and charter programs to insure that every kid gets a great education – no matter what zip code they live in. We lift the cap on the number of students eligible to participate in the Milwaukee parental choice program and phase out the income eligibility limits. And across the state, we allow any University of Wisconsin system four-year campus to create a charter school.
Competing globally also means enhancing higher education. To do this we will give our flagship, the University of Wisconsin-Madison, the tools it needs to remain a world leader in research and instruction - while continuing to be a driver of economic development for our state. This is a decision that we discussed at length with Chancellor Biddy Martin and the leadership at UW. For the past several years, she and other UW leaders have pushed for greater flexibility. Now they will have it and soon the University of Wisconsin – Milwaukee will as well.
Throughout the budget process I am open to working with lawmakers from both political parties on expanding this concept to the other campuses throughout the University of Wisconsin system. (This is really the only time in this entire speach he says that he's open to discussing a topic with both parties. I find it interesting that he waits this long (and then it's on the splitting the UW portion of the speech) to say that's he willing to discuss. Does this indicate that he's NOT willing to negotiate on the other topics?) A few weeks ago, I met with all of the UW chancellors and expressed my willingness to work with them and the members of the Legislature to improve our higher education system.
We also remain committed to keeping our university system accessible to every Wisconsin student, regardless of financial resources. That’s why – even in these tough fiscal times - we maintain our commitment to the state’s financial aid program. Plus, we maintain the state’s tuition reimbursement for our veterans.
As we refocus government, public safety remains a priority. Our budget will restore truth in sentencing by repealing the early release program approved by the last administration.
We will provide additional resources and positions in our DNA lab to assist our criminal investigations. And we will make sure that our children -- those that are dearest to us -- are protected from those who would do them harm. We provide additional resources to investigate on-line predators targeting our children. The state currently has over twenty thousand IP addresses of people who prey on our children, but we didn’t have the resources to track those criminals down. Now we will.
We are proud of the leadership being provided in this area by our Attorney General J.B. Van Hollen and I am thankful that even with a tough budget, we can find resources to protect our kids.
This is a reform budget. It is about getting Wisconsin working again – and to make that happen, we need a balanced budget that works -- and an environment where the private sector can create 250,000 jobs over the next four years.
During our special session on jobs, we created a public-private agency, the Wisconsin Economic Development Corporation that will focus solely on job creation. Our budget includes the resources and the organization to get the WEDC working to stimulate our economy (including taking state fees for recycling programs and funneling that to the WEDC, while removing state aid to community recycling programs themselves).
Working hand in hand with our new public-private efforts at the state level, are seven regional economic development efforts around the state. In this budget, these regional economic drivers continue to receive financial support as they collaborate to get their regions and our state growing again.
Our budget also recognizes the important role that transportation plays in economic development. In order to grow, we need to move goods and people in a cost-effective and timely manner. That is why our budget ends the raids on the transportation fund, and includes a total investment of $5.7 billion in our state’s transportation system (cutting $900 million from schools but finding almost $6 billion for roads.).
That’s money that will create jobs - now - and in the future. Included in our budget is funding for the accelerated reconstruction of the Zoo interchange (which actually saves us $600 million from the original plans) and additional funding to continue construction of the I-94 corridor. It also includes major investments in our transportation system all across the State of Wisconsin.
We will also encourage job growth as I fulfill a campaign promise to lower taxes on those who invest in Wisconsin-based businesses and do so for an extended period of time. We will do this by eliminating the capital gains tax for investors in Wisconsin companies that provide jobs for our people. And we include tax relief for employers who hire more people to work in our state (while eliminating the minimum salary requirement for qualifying for that tax credit. Create a minimum wage job, get a tax reward!).
In this budget, we provide real tax relief for homeowners across the state by implementing property tax reform that locks in property tax levies at the local level. Time and time again, I’ve heard from Wisconsinites who are doing more with less and making sacrifices to keep their families going. Good people like the retired couple on a fixed income or the new parents paying for daycare and the mortgage on their first house or the middle-class working family where mom and dad still have jobs, but keeping them meant taking a pay freeze. All of them, and others like them across Wisconsin, need true property tax relief and this budget delivers.
I campaigned on creating an environment where the private sector can create 250,000 jobs over the next four years. Our budget lays that foundation, by freeing taxpayers to create jobs in the private sector, by limiting the size and scope of government, and by focusing our government on meeting core priorities. Where we must make reductions, we do so wisely, by giving local governments the tools to save even more money than overall reductions in state aid.
As I have said before, our constitution says, “the blessings of a free government can only be maintained by a firm adherence to justice, moderation, temperance, frugality and virtue.”
This is the heart of our budget. We are returning to frugality and are making the long term decisions to balance our budget now -- and more importantly, into the future. We will do the heavy lifting to protect our children and grandchildren from having to make the hard decisions that were once avoided.
I know that things will get better.
Back in the 1980s – when I was growing up in the small town of Delavan – we faced similar circumstances in our state. A tough economy and a tight budget were the top issues 25 years ago.
Tommy Thompson brought into office bold new ideas and strong leadership. At the time, defenders of the status quo took offense. But by the end of his first term, those reforms helped balance the budget and those policies helped the private sector create 258,000 new jobs. I remember Governor Thompson's optimism and the excitement he created when we turned our state around back then. If we did it a generation ago, we can do it again today.
This budget is about our commitment to the future. Like every parent and grandparent in this state, I want my two sons to grow up in a Wisconsin (at least) as great as the Wisconsin I grew up in. Working together, I know we can do it.
Thank you. May God richly bless you and your family. And may God continue to bless the great State of Wisconsin."
Yes, the budget has me very worried and very upset, and since I still have not found a supporter of the current bill(s) to be my co-author on this site, I've determined to (while still trying to keep it fair) let my 'crazy liberal leftist' out a little more often. I think it's important to highlight some of the potential problems with the budget as it stands, especially when coupled with the 'repair bill'. Walker says (as you will see below) that he is an optimist. Unfortunately, I am not as much an optimist as I used to be, I tend to now look at things and see how it could go potentially wrong and/or where the potential abuses of power lie. And there are many in the upcoming legislation...
In the meantime, I thought I'd 'treat' you to the actual text of Gov. Walker's budget speech that was given Tuesday, March 1 in front of a hand-selected group of supporters (as most of the protesters and the general public of WI were locked out of the room and in many cases the Capitol building in preparation for the speech). I'll try to keep my critique to a minimum here, but if I feel the need to comment on something or add emphasis, please bear with me. This is the 'preview' of my upcoming segments, so forgive me if I throw in a little foreshadowing.
Here is the text of the speech:
"Speaker Fitzgerald, Speaker Pro Tem Kramer, President Ellis, Majority Leader Fitzgerald, Minority Leader Barca, Supreme Court Justices, Constitutional Officers, tribal leaders, members of the Cabinet, distinguished guests, members of the Legislature, and most importantly, fellow citizens of Wisconsin.
Each and every one of us gathered in the chamber today hold a diverse set of beliefs – beliefs that we are passionate about sharing - and that serve to guide our actions. Each of us has a vision for a better tomorrow in Wisconsin.
But we all share something in common -- an unrivaled passion for this state and the people who call it home. We all want Wisconsin to be the very best that it can be. Yet, -- because our experiences are unique and our beliefs diverse -- our paths may diverge as we tackle today’s challenges. But even at the height of our differences, we can and must keep our promise to people of Wisconsin that they will always come first.
Democracy does not just expect differences, it demands them. It’s the manner in which we discuss and resolve those differences that leads to bold solutions and innovative reforms. I ask that we continue to be mindful of our differences – as well our similarities – in the coming days, weeks and months. Above all, let us not lose sight of the fact that we were each elected to represent the people of this state by participating in our democratic process.
I applaud the State Assembly and those in the State Senate who are here today for not losing sight of that. (Nice backhanded reference to the WI 14, the Senators that left the state to slow the passage of the Budget Repair Bill.)
Over the past few weeks, a great deal of attention has been focused on Wisconsin. That’s ok because freedom thrives each time there is a passionate debate in our society. Passion and civility can go hand-in-hand and that’s what’s on display here in Wisconsin.
But outside observers need to know that there is more to this state as well. Wisconsin is filled with outstanding workers and multi-generational employers. We have tremendous resources and amazing attractions. Most importantly, we have decent people in this state. (This could easily be seen as a slap at the (to him) 'indecent' protestors outsiders are seeing on the TV.)
The good people of this state come from all walks of life – young and old, urban and rural, Democrat and Republican.
Recently, I learned of yet another story that affirms that sense of decency.
Some of our state employees at the Farm Center spent time with two brothers who jointly operate a dairy farm that was – literally - on the verge of financial collapse. One of the brothers was so stressed that he was considering some horrible options.
The Farm Center staff calmly walked the brothers through a variety options and got them through their immediate crisis. That day, our public employees not only helped someone’s life, they may have actually helped save someone’s life. (Keep this story in mind when I start going over what the budget 'provides' for farmers, like eliminating funds for the Conservation Reserve Program and the 'Buy Local, Buy Wisconsin' program.)
This story says a lot about the people of Wisconsin.
It certainly reinforces the financial strain that so many are experiencing across the state. Without a doubt, it shows the compassion of our people toward their fellow citizens. And it shows the professionalism of our public employees who really care about the people that they serve.
This is why we need to move this process forward and get this state working again.
I have been asked a lot over the past week about what happens next. Well, I’m an optimist. I believe that after our budget repair bill passes, tempers will cool, and we will find a way to continue to work together to help grow our economy. We will position Wisconsin to emerge from this economic downturn stronger than ever, with new opportunities for our workers and our families.
You see, for six weeks we worked together to pass bill after bill to show that Wisconsin is open for business. Most of our legislation received bipartisan support. It is my belief that we will soon get back to that type of cooperation in the Capitol.
We introduced a budget repair bill that is the first step toward addressing the long-term challenges facing our state - while laying the foundation for economic growth. The biennial budget I introduce today is built on the savings supplied by our budget repair bill – legislation, I might add, that we have already modified to address concerns expressed at the public hearing. (I haven't been able to find a details list of what 'modifications' they made based on the hearings, but I continue to look)
We need the savings in the budget repair bill because Wisconsin faces a $3.6 billion deficit. Too many politicians have failed to tell the truth about our financial crisis. They left Wisconsinites in the dark about the extent of our fiscal problems. The facts are clear: Wisconsin is broke and it’s time to start paying our bills today – so our kids are not stuck with even bigger bills tomorrow.
This deficit did not appear overnight. Wisconsin got here through a reliance on one-time fixes, accounting gimmicks and tax increases. Previous governors and legislatures from both parties took money from our tobacco settlement. They raided more than a billion dollars from the transportation fund and $200 million from the patients’ compensation fund. They increased taxes on the sick and set up shell games to draw down additional federal funds.
They relied on one-time federal stimulus dollars as if the money would be there forever – but it’s already gone.
Wisconsin owes Minnesota nearly $60 million and some $200 million to the patient’s compensation fund. In short, they governed for the short-term, with an eye only on the next election – not the next generation.
While families across this state were focused on making ends meet, the state government continued to grow well beyond our taxpayers’ ability to pay. But the time has come for us to make the tough choices necessary to put our state back on the path to prosperity.
We must work together to bring our spending in line with reality. We were elected --not to make the easy decisions to benefit ourselves -- but to make the difficult ones that will benefit our children and grandchildren (Interestin comment when you consider what he suppports in regards to education funding).
We need a commitment to the future so our children don’t face even more dire consequences than what we face today. Together, we will change the way government works in Wisconsin. We will make it work for the people once again.
I have often repeated references to our state’s constitutional lesson, that it is only through frugality and moderation in government that we will see freedom and prosperity for our people.
Our budget holds true to these principles by balancing the $3.6 billion deficit through permanent spending reductions and innovative government reforms.
Specifically, our budget reduces all funds spending by $4.2 billion, or 6.7 percent, and decreases the structural deficit by 90 percent from $2.5 billion to $250 million – the lowest structural deficit in recent history. That’s over $2 billion we are saving from future obligations and for future generations.
That’s worth repeating. Our budget reduces the structural deficit by 90 percent. In fact, it is lower than the last eight budgets presented by Democrats and Republicans alike.
Gone are the segregated fund raids, illegal transfers, and accounting gimmicks. Gone are the tax or fee increases. Our state cannot grow if our people are weighed down paying for a larger and larger government. A government that pays its workers unsustainable benefits that are out of line with the private sector (The truth or inaccuracy of this statement depends on how you evaluate workers benefits and wages compared to skill level/education, but I won't get into all those details here. Suffice to say that just as in the private sector, some public jobs pay more and some pay less, and overall most studies don't show a huge discrepency when education/skill is taken into account). We need a leaner and cleaner state government.
As we decrease spending, we also increase flexibility so local government and state government have the tools to deal with reduced revenue. It’s true we are reducing aid to local government by just over one and a quarter billion dollars, but we are providing almost $1.5 billion in savings through our budget repair bill (I haven't yet been able to find details as to how this estimate was calculated, but I will continue to look). If the 14 Senate Democrats do not come home, their local communities will be forced to manage these reductions in aid without the benefit of the tools provided in the repair bill. On the other hand, if the Senate Democrats do come home, local units of government overall will actually see a net increase in revenue plus savings of more than $150 million (Again, still looking for how this estimate was calculated.).
Let me repeat that despite the reductions in our budget, local governments would gain $150 million overall in the next biennium – but only if the Senate is allowed to act.
While aid to local government represents the state’s largest expenditure, the state’s Medicaid program represents the area of fastest growth. Medicaid costs continue to outstrip growth in general fund revenues. Long-term care expenditures, in particular, are growing much faster than other areas of the budget. Coupled with the use of $1.2 billion in one-time federal funding – the state is facing an unsustainable budget challenge. A challenge in need of a serious and long-term solution.
While maintaining services for our most vulnerable, we must also refocus those services and find efficiencies where possible. That will mean asking some individuals to pay modest co-pays and premiums as they transition from the safety net that these programs provide to gainful employment. This will allow those individuals to begin to transition to a time in the future when they will no longer need government support, while protecting those who need these services the most.
Just as we reform our entitlement programs (slightly inflammatory language, most conservatives do not approve of 'entitlement', so I'm afraid this is foreshadowing on his part as to how he views and will manage programs like Badgercare.) for the 21st century, we must also reform our education system. Clearly, we have to produce graduates who are able to compete - not only with their peers from Chicago or Des Moines - but also from Shanghai or Sydney. (I 'love' this sentence, considering what comes next...)
And we must do so while we balance a $3.6 billion deficit. That is why -- even as we reduce school aids (by almost $1 billion as well as cuts to local revenue and decreasing the per student funding cap) – overall we give schools across the state the tools to make up for those reductions with even greater savings through the budget repair bill.
Again, this is why it is so vitally important for the Senate Democrats to come back and do their jobs. If they do not, our schools face massive layoffs of teachers. However, if they do come back, overall savings for schools across the state will outweigh reductions, ultimately allowing schools to put more money in the classroom.
When I campaigned for Governor, I set as a goal that all Wisconsin third graders should be able to read at the 3rd grade level. Many have noted that from Kindergarten to 3rd grade -- our kids learn to read -- and then from 3rd grade on, they use reading to learn. We need to make sure every child can read as they move on from 3rd grade.
That’s why my budget creates a third grade reading initiative that will require all third graders to achieve basic literacy (while cutting funding for school reading specialists). I know we can do this and we owe it to our students to make sure we do.
In addition, we will expand choice and charter programs to insure that every kid gets a great education – no matter what zip code they live in. We lift the cap on the number of students eligible to participate in the Milwaukee parental choice program and phase out the income eligibility limits. And across the state, we allow any University of Wisconsin system four-year campus to create a charter school.
Competing globally also means enhancing higher education. To do this we will give our flagship, the University of Wisconsin-Madison, the tools it needs to remain a world leader in research and instruction - while continuing to be a driver of economic development for our state. This is a decision that we discussed at length with Chancellor Biddy Martin and the leadership at UW. For the past several years, she and other UW leaders have pushed for greater flexibility. Now they will have it and soon the University of Wisconsin – Milwaukee will as well.
Throughout the budget process I am open to working with lawmakers from both political parties on expanding this concept to the other campuses throughout the University of Wisconsin system. (This is really the only time in this entire speach he says that he's open to discussing a topic with both parties. I find it interesting that he waits this long (and then it's on the splitting the UW portion of the speech) to say that's he willing to discuss. Does this indicate that he's NOT willing to negotiate on the other topics?) A few weeks ago, I met with all of the UW chancellors and expressed my willingness to work with them and the members of the Legislature to improve our higher education system.
We also remain committed to keeping our university system accessible to every Wisconsin student, regardless of financial resources. That’s why – even in these tough fiscal times - we maintain our commitment to the state’s financial aid program. Plus, we maintain the state’s tuition reimbursement for our veterans.
As we refocus government, public safety remains a priority. Our budget will restore truth in sentencing by repealing the early release program approved by the last administration.
We will provide additional resources and positions in our DNA lab to assist our criminal investigations. And we will make sure that our children -- those that are dearest to us -- are protected from those who would do them harm. We provide additional resources to investigate on-line predators targeting our children. The state currently has over twenty thousand IP addresses of people who prey on our children, but we didn’t have the resources to track those criminals down. Now we will.
We are proud of the leadership being provided in this area by our Attorney General J.B. Van Hollen and I am thankful that even with a tough budget, we can find resources to protect our kids.
This is a reform budget. It is about getting Wisconsin working again – and to make that happen, we need a balanced budget that works -- and an environment where the private sector can create 250,000 jobs over the next four years.
During our special session on jobs, we created a public-private agency, the Wisconsin Economic Development Corporation that will focus solely on job creation. Our budget includes the resources and the organization to get the WEDC working to stimulate our economy (including taking state fees for recycling programs and funneling that to the WEDC, while removing state aid to community recycling programs themselves).
Working hand in hand with our new public-private efforts at the state level, are seven regional economic development efforts around the state. In this budget, these regional economic drivers continue to receive financial support as they collaborate to get their regions and our state growing again.
Our budget also recognizes the important role that transportation plays in economic development. In order to grow, we need to move goods and people in a cost-effective and timely manner. That is why our budget ends the raids on the transportation fund, and includes a total investment of $5.7 billion in our state’s transportation system (cutting $900 million from schools but finding almost $6 billion for roads.).
That’s money that will create jobs - now - and in the future. Included in our budget is funding for the accelerated reconstruction of the Zoo interchange (which actually saves us $600 million from the original plans) and additional funding to continue construction of the I-94 corridor. It also includes major investments in our transportation system all across the State of Wisconsin.
We will also encourage job growth as I fulfill a campaign promise to lower taxes on those who invest in Wisconsin-based businesses and do so for an extended period of time. We will do this by eliminating the capital gains tax for investors in Wisconsin companies that provide jobs for our people. And we include tax relief for employers who hire more people to work in our state (while eliminating the minimum salary requirement for qualifying for that tax credit. Create a minimum wage job, get a tax reward!).
In this budget, we provide real tax relief for homeowners across the state by implementing property tax reform that locks in property tax levies at the local level. Time and time again, I’ve heard from Wisconsinites who are doing more with less and making sacrifices to keep their families going. Good people like the retired couple on a fixed income or the new parents paying for daycare and the mortgage on their first house or the middle-class working family where mom and dad still have jobs, but keeping them meant taking a pay freeze. All of them, and others like them across Wisconsin, need true property tax relief and this budget delivers.
I campaigned on creating an environment where the private sector can create 250,000 jobs over the next four years. Our budget lays that foundation, by freeing taxpayers to create jobs in the private sector, by limiting the size and scope of government, and by focusing our government on meeting core priorities. Where we must make reductions, we do so wisely, by giving local governments the tools to save even more money than overall reductions in state aid.
As I have said before, our constitution says, “the blessings of a free government can only be maintained by a firm adherence to justice, moderation, temperance, frugality and virtue.”
This is the heart of our budget. We are returning to frugality and are making the long term decisions to balance our budget now -- and more importantly, into the future. We will do the heavy lifting to protect our children and grandchildren from having to make the hard decisions that were once avoided.
I know that things will get better.
Back in the 1980s – when I was growing up in the small town of Delavan – we faced similar circumstances in our state. A tough economy and a tight budget were the top issues 25 years ago.
Tommy Thompson brought into office bold new ideas and strong leadership. At the time, defenders of the status quo took offense. But by the end of his first term, those reforms helped balance the budget and those policies helped the private sector create 258,000 new jobs. I remember Governor Thompson's optimism and the excitement he created when we turned our state around back then. If we did it a generation ago, we can do it again today.
This budget is about our commitment to the future. Like every parent and grandparent in this state, I want my two sons to grow up in a Wisconsin (at least) as great as the Wisconsin I grew up in. Working together, I know we can do it.
Thank you. May God richly bless you and your family. And may God continue to bless the great State of Wisconsin."
Tuesday, March 1, 2011
Budget Bill Part 5 - Collective Bargaining
So now we start our evaluation of the 'collective bargaining' section of the bill. If you've been paying attention to the number of pages I 'skipped' for this section in previous posts, it seems like a large portion of the bill. However, many of the pages of this portion of the bill repeat the same general information, it is simply that there is a portion that covers general public employees, a section that covers public safety employees, and a section that cover school employees. For brevity, I will simply note any significant differences between the 3 'classes' as they occur.
It is necessary to have several terms defined at the beginning, as they will reoccur throughout this section, so bear with me as this post is longer than previous posts. As with all of my sections, if you have an alternative interpretation of a section, please feel free to let me know. But again, if your contribution to the conversation is simply statements like 'Union Power' or “Unions protect bad workers”, I will not guarantee that I will approve the comment. But, if you have some documentation or experience that you feel sheds light on a possible outcome I haven't considered, let me know.
I'll admit up front that this is going to be a difficult section for me to cover. I am a past (private) union member, my husband is currently in a (private) union, and my sister and other family members are also union members. This is also the portion of the bill that has gotten the most press coverage and that many people have a strong opinion either for or against. My goal here is to try to limit my bias as much as possible and simply outline what the bill states are requirements of collective bargaining, what is eligible to be bargained, and how the bill changes/impacts union membership, certification, and dues.
“Collective bargaining” is defined in Section 163 111.02(3) as “the negotiation by an employer and a majority of the employer’s employees in a collective bargaining unit, or their representatives, concerning representation or terms and conditions of employment of such employees, in a mutually genuine effort to reach an agreement with reference to the subject under negotiation”. In very general terms, it means that the employees and the employer gather together to discuss various terms of employment such as wages, benefits, working conditions, safety, etc. This bill, as I will show later, limits the topics allowed to be bargained to simple wages. This loss of voice is a significant concern for many of the people opposed to this bill. This is not the forum to discuss the creation of unions or the changes they helped bring to work environments (although I hope to cover that in a later post), but it can be convincingly argued that unions had a lot to do with the creation of many labor protections we now take for granted, such as the 40-hour work week, child labor and minimum wage laws, and many safety protocols.
A 'collective bargaining unit' is defined in Section 163 111.02(3) as “all of the employees of one employer, employed within the state”, although a group can vote collectively to become a separate bargaining unit. To maximize efficiency, the bill requires that a commission review may re-integrate separate bargaining units as long as the change is agreeable to “all parties affected in any way thereby”. I'll admit to being curious how they intend to define/determine who is impacted by the change, as an argument could be made for the entire community served by the bargaining unit could be impacted, thereby requiring a referendum to people who are neither the employees of the agency nor the employer to have a direct impact on the agency itself. This could be good or bad, the results would be unpredictable at best. The bill does stipulate that any all-union agreements (meaning that an employee hired for a position that is currently part of the collective bargaining unit is automatically a member of the union) remain in effect, but as will be pointed out later there is another stipulation that makes the fact that all-union agreements stay effective essentially pointless.
The definition of employer is fairly straight-forward in this bill. An employer is someone who “engages the services of an employee, and includes a person acting on behalf of an employer within the scope of his or her authority, express or implied.”
A strike is defined in section 183 as “any concerted stoppage of work by employees, and any concerted slowdown or other concerted interruption of operations or services by employees, or any concerted refusal of employees to work or perform their usual duties as employees, for the purpose of enforcing demands upon an employer.” Disregarding the unnecessary inflammatory 'enforcing demands' language, I am interested to see how this definition is interpreted to apply to activities the employee regularly does that are not explicitly outlined in the contract or work requirements of the employee.
For example, teachers often use personal time to write letters of recommendation for college applications for students, even though this is not an activity that they are paid for nor is it outlined in their current job requirements. However, stating that a strike includes 'usual duties' could be interpreted to mean that if teacher refuse to provide this additional service, it would be considered a strike activity. That is concerning to me, as employees should not have to fear retribution for withholding services they are not reimbursed for. Also, strikes are expressly prohibited under section 221 of the bill, leaving the potential for employees to be removed from their position if the engage in ANY activity that could meet the definition of a strike under this bill. Again, clarification of situations like my teacher example need to be addressed to assess the full potential of outcomes with this definition.
Although other portions of the bill I have covered dealt indirectly with collective bargaining by outlining the (health and retirement) benefits that public employees would have access too, Section 151, starting at page 59 directly references collective bargaining. The definition of a local government unit, which is used throughout this section in outlining who is impacted by this bill, is defined in section 150, 66.0506(1) as “any city, village, town, county, metropolitan sewerage district, long−term care district, transit authority... , local cultural arts district ..., or any other political subdivision of the state, or instrumentality of one or more political subdivisions of the state.” This is the definition that lets the 'collective bargaining' section apply to almost all public employees, not just state employees. The logic behind this requirement is assumable because a large portion of local government funding is received from the state, so indirectly these municipal employees impact the state budget. However, I feel the need to point out that my understanding of Republican principals is that they mandate for smaller government and local control, so I find it interesting that this bill eliminates the option for local governments to choose to maintain collective bargaining rights for their employees, effectively removing local control.
After defining what public employees are covered under this section, the bill begins with a discussion of wages. Basically the bill states that if any municipality wants to grant their public service employees an annual wage increase of more than the Consumer Price Index, they must pass a voter referendum approving this raise. This is billed as a cost-saving measure as well as giving more control to the taxpayers that indirectly pay these wages. However, telling someone who wants to devote their life to public service that they will be lucky to get a cost-of-living wage increase each year could have an extremely dampening effect on recruiting quality employees.
Also, requiring raises to be passed by referendum could create an issue with unequal services between poorer districts and more affluent districts. I'd have to check the statistics, but I'm guessing that poorer areas are less likely to have a successful referendum. The bill also requires a specific wording to the referendum that explicitly states the wages in actual dollars of the public employee, which if it is higher than that of the voter, could cause a referendum to be defeated simply out of jealousy. The wording is to read “Shall the .... [general municipal employees] in the .... [local governmental unit] receive a total increase in wages from $....[current total base wages] to $....[proposed total base wages], which is a percentage wage increase that is .... [x] percent higher than the percent of the consumer price index increase, for a total percentage increase in wages of .... [x]?” The wage increase cannot take effect until the referendum is passed (Section 305), and is required to be completed by April for collective bargaining agreements that take effect on July 1. I'm assuming, since there is nothing stating otherwise, that if the referendum is not completed by April that there is no chance for a wage increase above CPI. This could encourage employers to 'drag out' contract negotiations until after April to avoid potential wage increases.
The explicit forbidding of collective bargaining (except on wages as discussed above) is clearly summed up in one sentence, probably explaining why this portion of the bill was so quickly understood. Section 151, 66.0508(1m) states “no local governmental unit may collectively bargain with its employee”. Any local ordinance, law, or resolution that allows for collective bargaining is voided by this bill. There is an exclusion in 111.70(1) of the bill that allows public safety employees to maintain their collective bargaining rights on things other than wages. Walker has not been able to clearly outline why he feels that the different provisions are necessary, other than to state that Wisconsin has a long history of collective bargaining with safety employees. This is true of non-public safety employees as well, so I'm still researching a clearer answer for the different collective bargaining allowances. Local governments are also forbidden from creating a defined benefit pension plan for their employees unless the employees are required to pay at least 50% of the actuarial costs, presumably to steer all municipalities into using the state retirement system discussed in an earlier post.
Employers are forbidden from directly refusing to collectively bargain with employee representatives, but the bill allows that an employer is not refusing to bargain if they file a petition “requesting a determination as to majority representation” and the employer may continue to 'delay' bargaining until an election certifying the representation of the collective bargaining unit has been completed. This, coupled with the annual recertification requirement I will discuss later, effectively could require a collective bargaining unit to vote on representation and certification several times a year, delaying what limited bargaining is allowed, creating more administrative costs and hassles for the union itself, and allowing employers to essentially force a lapse of contract. The bill later eliminates the ability for an existing contract to be extended after the termination date, so a forced lapse of contract is a powerful tool for the employers.
The Budget Repair Bill essentially forbids the withdrawal of union dues from an employees paycheck (Section 205), a standard method of collecting union dues in many collective bargaining units currently. It appears that an employee may be able to personally request (in writing) to have these dues withheld, but I am honestly unclear as to what would then take precedent. The explicit forbidding of withdrawing those dues or the employees written request that dues be withheld. I would need someone with more legal knowledge to evaluate that conundrum for me. In addition to eliminating the paycheck withdrawal of union dues, the bill also states that employees that are part of a collective bargaining unit may remain a part of that union without being required to pay dues to the unit. Public safety employees are excluded from this provision, in retaining all of their collective bargaining rights they also retain the requirement that all union members must pay dues.
The bill allows union members to 'opt out' of dues while (as I will show shortly) greatly increasing the potential administrative costs to the union itself. I'll admit I would (almost) prefer that people be allowed to opt out of the union if they do not want to pay the dues to stating that they can be required to join but you can't make them pay the dues. This is an especially important provision to keep in mind when we discuss how often this bill requires that a bargaining unit survey or put issues to a vote of it's membership. Allowing members to opt out of the dues will limit the funds that a union has available to meet the requirements of this bill in regards to votes, which could mean a slow death to the collective bargaining unit itself (as if the limited collective bargaining rights weren't bad enough).
Arbitration of any disagreements covered in the collective bargaining agreement still exists, but as (except for public safety employees) the only thing allowed to be covered by collective bargaining is wages, this seems like a minor activity at best. There could be disputes over pay rates that could require arbitration, but other things such as disciplinary actions and unsafe working conditions that typically could have been resolved under arbitration would be solely the power of the employer under this bill. While I would like to think that most employers would want a safe, well-maintained workforce, I'm ashamed to say I don't have that much general faith in humanity. Arbitration also allows that if an impasse is reached and the issue cannot be resolved between the parties, the mediating body has the ability to make a ruling on the situation that is binding. The designation of a 'fact-finder' to investigate the situation but who is forbidden from mediating the dispute, only making recommendations to the arbitrator, attempts to make this an unbiased process.
Section 214 discusses the process for initiating and proceeding with contract negotiations. The provision that requires the employer and bargaining unit to notify of the desire to start negotiations seems straight-forward enough. However, the provision requiring that all negotiations be open to the public is troubling to me. I have to check to see if that is currently the process, if so perhaps I am being concerned for nothing, but if this is a new process I see it as almost solely a political maneuver as opposed to a fiscal issue. Since the general public cannot directly request anything in the negotiations, but public opinion could easily influence the requests made at the table, I see no reason for these meetings to be open to the public. There is a much higher chance that the bargaining unit will fall out of public favor for even requesting a modest raise than there is for the agency to receive negative press for requesting a wage freeze. Since the public will already be required to vote by referendum on any raise above the CPI, I'm unclear what the goal of having these meetings open to the public is. And I typically am a huge proponent of open government and public forums. But since negotiations typically start with the 'dream' offer and then meet in the middle, and since the public will have limited ability to directly influence the negotiations, it seems that it would just provide an opportunity for political grandstanding.
Representatives of the collective bargaining unit are to be elected and certified annually (by December 1 for schools and May 1 for all other bargaining units). I have to research further what the current election terms are for most public unions to determine if this is in-line with the current process. Besides adding (yet another) annual administrative hoop for the unions, the section also states that if none of the candidates receive at least 51% of the vote the commission will decertify the current representative and the employees would be nonrepresented. This 51% requirement, instead of simply installing whichever candidate gets the most votes, could be extremely difficult to meet if the union has more than 2 candidates running for the position. The bill states that the ballot will contain “the names of all labor organizations having an interest in representing the general employees participating in the election.”
It does not specify whether the bargaining unit has the ability to limit the groups listed on the ballot of if any group with any interest is required to be listed. Obviously this is an important point, as the more names there are on the ballot the less likely it is that any one name will get 51% of the votes. This seems to set up a large bias toward the employees becoming unrepresented, which is a concerning situation. The employees can request a 'run off' election where the name that received the least number of votes is dropped from the next ballot, but depending on the number of names originally this could still not provide a likelihood of 51% of the votes to a single name. Plus, each additional vote is an additional administrative and logistic cost to the union. If the employees become unrepresented, they are unable to vote for representation again for a year, and that new vote would be subject to the same 51% vote requirement. The union must also pay a fee to the commission for each election, apparently regardless of whether the election is successful in obtaining representation or not.
Contract duration under this bill is limited to one year and must coincide with the fiscal year. The contracts cannot be extended under this bill. I need to clarify what the current average length of a contract for public employees is to determine if this is a shorter time frame than contracts currently are active. The lack of an ability to extend the contracts is also concerning, especially if there is a delay in the state budget (which impacts individual employer budgets) in getting approved.
So under this bill, every year a collective bargaining unit must vote on representation (possibly multiple times if a run-off is required), resolve any questions of majority representation the employer brings, vote to stay certified, potentially write, defend, and pass a referendum before April, and initiate and complete contract negotiations. And all of these activities must be completed with (presumably) less fee collection because of the inability of the union to enforce collection of dues from members and/or have dues withdrawn from an employee's paycheck. I think it's obvious how this could be administratively and logistically difficult.
If the governor declares a state of emergency (and I'm hoping to research what requirements need to be met to declare a state of emergency), any employee can be fired under section 344 for failing to report to work for ANY 3 working days (these do not have to be consecutive) or participating in strike activities. The bill does require the employee be notified of the discharge in writing, but does not give a time-frame for this notice. The employee does have an 'opportunity to respond' but it doesn't state that the employee has a chance to defend themselves or fight the discharge, just that they can 'respond'.
I am most concerned about the “any 3 working days” part of this section. As there does not appear to be any limit to the length of time that a state of emergency can be active, nor is there any explicit stipulation that the “3 days” requirement only applies to agencies directly providing services related to the emergency, it is possible for an employee to be fired for an illness that takes place during an extended state of emergency or for employees that are not directly in the area impacted to be fired even though they are not 'treating' the emergency. Also, I want to find out more details as to what requirements must be met for a state of emergency to be declared to avoid potential abuse of this power by the governor.
So this completes my overview of Wisconsin's Budget Repair Bill. This bill has passed the state assembly but is currently not able to be voted on in the Senate. Governor Walker is also releasing his actual budget later today (March 1), so I will review that in my next post. After that, I hope to provide reviews of how the budget and the Budget Repair Bill directly impact areas of the state such as Medicaid, school funding, and transportation infrastructure.
It is necessary to have several terms defined at the beginning, as they will reoccur throughout this section, so bear with me as this post is longer than previous posts. As with all of my sections, if you have an alternative interpretation of a section, please feel free to let me know. But again, if your contribution to the conversation is simply statements like 'Union Power' or “Unions protect bad workers”, I will not guarantee that I will approve the comment. But, if you have some documentation or experience that you feel sheds light on a possible outcome I haven't considered, let me know.
I'll admit up front that this is going to be a difficult section for me to cover. I am a past (private) union member, my husband is currently in a (private) union, and my sister and other family members are also union members. This is also the portion of the bill that has gotten the most press coverage and that many people have a strong opinion either for or against. My goal here is to try to limit my bias as much as possible and simply outline what the bill states are requirements of collective bargaining, what is eligible to be bargained, and how the bill changes/impacts union membership, certification, and dues.
“Collective bargaining” is defined in Section 163 111.02(3) as “the negotiation by an employer and a majority of the employer’s employees in a collective bargaining unit, or their representatives, concerning representation or terms and conditions of employment of such employees, in a mutually genuine effort to reach an agreement with reference to the subject under negotiation”. In very general terms, it means that the employees and the employer gather together to discuss various terms of employment such as wages, benefits, working conditions, safety, etc. This bill, as I will show later, limits the topics allowed to be bargained to simple wages. This loss of voice is a significant concern for many of the people opposed to this bill. This is not the forum to discuss the creation of unions or the changes they helped bring to work environments (although I hope to cover that in a later post), but it can be convincingly argued that unions had a lot to do with the creation of many labor protections we now take for granted, such as the 40-hour work week, child labor and minimum wage laws, and many safety protocols.
A 'collective bargaining unit' is defined in Section 163 111.02(3) as “all of the employees of one employer, employed within the state”, although a group can vote collectively to become a separate bargaining unit. To maximize efficiency, the bill requires that a commission review may re-integrate separate bargaining units as long as the change is agreeable to “all parties affected in any way thereby”. I'll admit to being curious how they intend to define/determine who is impacted by the change, as an argument could be made for the entire community served by the bargaining unit could be impacted, thereby requiring a referendum to people who are neither the employees of the agency nor the employer to have a direct impact on the agency itself. This could be good or bad, the results would be unpredictable at best. The bill does stipulate that any all-union agreements (meaning that an employee hired for a position that is currently part of the collective bargaining unit is automatically a member of the union) remain in effect, but as will be pointed out later there is another stipulation that makes the fact that all-union agreements stay effective essentially pointless.
The definition of employer is fairly straight-forward in this bill. An employer is someone who “engages the services of an employee, and includes a person acting on behalf of an employer within the scope of his or her authority, express or implied.”
A strike is defined in section 183 as “any concerted stoppage of work by employees, and any concerted slowdown or other concerted interruption of operations or services by employees, or any concerted refusal of employees to work or perform their usual duties as employees, for the purpose of enforcing demands upon an employer.” Disregarding the unnecessary inflammatory 'enforcing demands' language, I am interested to see how this definition is interpreted to apply to activities the employee regularly does that are not explicitly outlined in the contract or work requirements of the employee.
For example, teachers often use personal time to write letters of recommendation for college applications for students, even though this is not an activity that they are paid for nor is it outlined in their current job requirements. However, stating that a strike includes 'usual duties' could be interpreted to mean that if teacher refuse to provide this additional service, it would be considered a strike activity. That is concerning to me, as employees should not have to fear retribution for withholding services they are not reimbursed for. Also, strikes are expressly prohibited under section 221 of the bill, leaving the potential for employees to be removed from their position if the engage in ANY activity that could meet the definition of a strike under this bill. Again, clarification of situations like my teacher example need to be addressed to assess the full potential of outcomes with this definition.
Although other portions of the bill I have covered dealt indirectly with collective bargaining by outlining the (health and retirement) benefits that public employees would have access too, Section 151, starting at page 59 directly references collective bargaining. The definition of a local government unit, which is used throughout this section in outlining who is impacted by this bill, is defined in section 150, 66.0506(1) as “any city, village, town, county, metropolitan sewerage district, long−term care district, transit authority... , local cultural arts district ..., or any other political subdivision of the state, or instrumentality of one or more political subdivisions of the state.” This is the definition that lets the 'collective bargaining' section apply to almost all public employees, not just state employees. The logic behind this requirement is assumable because a large portion of local government funding is received from the state, so indirectly these municipal employees impact the state budget. However, I feel the need to point out that my understanding of Republican principals is that they mandate for smaller government and local control, so I find it interesting that this bill eliminates the option for local governments to choose to maintain collective bargaining rights for their employees, effectively removing local control.
After defining what public employees are covered under this section, the bill begins with a discussion of wages. Basically the bill states that if any municipality wants to grant their public service employees an annual wage increase of more than the Consumer Price Index, they must pass a voter referendum approving this raise. This is billed as a cost-saving measure as well as giving more control to the taxpayers that indirectly pay these wages. However, telling someone who wants to devote their life to public service that they will be lucky to get a cost-of-living wage increase each year could have an extremely dampening effect on recruiting quality employees.
Also, requiring raises to be passed by referendum could create an issue with unequal services between poorer districts and more affluent districts. I'd have to check the statistics, but I'm guessing that poorer areas are less likely to have a successful referendum. The bill also requires a specific wording to the referendum that explicitly states the wages in actual dollars of the public employee, which if it is higher than that of the voter, could cause a referendum to be defeated simply out of jealousy. The wording is to read “Shall the .... [general municipal employees] in the .... [local governmental unit] receive a total increase in wages from $....[current total base wages] to $....[proposed total base wages], which is a percentage wage increase that is .... [x] percent higher than the percent of the consumer price index increase, for a total percentage increase in wages of .... [x]?” The wage increase cannot take effect until the referendum is passed (Section 305), and is required to be completed by April for collective bargaining agreements that take effect on July 1. I'm assuming, since there is nothing stating otherwise, that if the referendum is not completed by April that there is no chance for a wage increase above CPI. This could encourage employers to 'drag out' contract negotiations until after April to avoid potential wage increases.
The explicit forbidding of collective bargaining (except on wages as discussed above) is clearly summed up in one sentence, probably explaining why this portion of the bill was so quickly understood. Section 151, 66.0508(1m) states “no local governmental unit may collectively bargain with its employee”. Any local ordinance, law, or resolution that allows for collective bargaining is voided by this bill. There is an exclusion in 111.70(1) of the bill that allows public safety employees to maintain their collective bargaining rights on things other than wages. Walker has not been able to clearly outline why he feels that the different provisions are necessary, other than to state that Wisconsin has a long history of collective bargaining with safety employees. This is true of non-public safety employees as well, so I'm still researching a clearer answer for the different collective bargaining allowances. Local governments are also forbidden from creating a defined benefit pension plan for their employees unless the employees are required to pay at least 50% of the actuarial costs, presumably to steer all municipalities into using the state retirement system discussed in an earlier post.
Employers are forbidden from directly refusing to collectively bargain with employee representatives, but the bill allows that an employer is not refusing to bargain if they file a petition “requesting a determination as to majority representation” and the employer may continue to 'delay' bargaining until an election certifying the representation of the collective bargaining unit has been completed. This, coupled with the annual recertification requirement I will discuss later, effectively could require a collective bargaining unit to vote on representation and certification several times a year, delaying what limited bargaining is allowed, creating more administrative costs and hassles for the union itself, and allowing employers to essentially force a lapse of contract. The bill later eliminates the ability for an existing contract to be extended after the termination date, so a forced lapse of contract is a powerful tool for the employers.
The Budget Repair Bill essentially forbids the withdrawal of union dues from an employees paycheck (Section 205), a standard method of collecting union dues in many collective bargaining units currently. It appears that an employee may be able to personally request (in writing) to have these dues withheld, but I am honestly unclear as to what would then take precedent. The explicit forbidding of withdrawing those dues or the employees written request that dues be withheld. I would need someone with more legal knowledge to evaluate that conundrum for me. In addition to eliminating the paycheck withdrawal of union dues, the bill also states that employees that are part of a collective bargaining unit may remain a part of that union without being required to pay dues to the unit. Public safety employees are excluded from this provision, in retaining all of their collective bargaining rights they also retain the requirement that all union members must pay dues.
The bill allows union members to 'opt out' of dues while (as I will show shortly) greatly increasing the potential administrative costs to the union itself. I'll admit I would (almost) prefer that people be allowed to opt out of the union if they do not want to pay the dues to stating that they can be required to join but you can't make them pay the dues. This is an especially important provision to keep in mind when we discuss how often this bill requires that a bargaining unit survey or put issues to a vote of it's membership. Allowing members to opt out of the dues will limit the funds that a union has available to meet the requirements of this bill in regards to votes, which could mean a slow death to the collective bargaining unit itself (as if the limited collective bargaining rights weren't bad enough).
Arbitration of any disagreements covered in the collective bargaining agreement still exists, but as (except for public safety employees) the only thing allowed to be covered by collective bargaining is wages, this seems like a minor activity at best. There could be disputes over pay rates that could require arbitration, but other things such as disciplinary actions and unsafe working conditions that typically could have been resolved under arbitration would be solely the power of the employer under this bill. While I would like to think that most employers would want a safe, well-maintained workforce, I'm ashamed to say I don't have that much general faith in humanity. Arbitration also allows that if an impasse is reached and the issue cannot be resolved between the parties, the mediating body has the ability to make a ruling on the situation that is binding. The designation of a 'fact-finder' to investigate the situation but who is forbidden from mediating the dispute, only making recommendations to the arbitrator, attempts to make this an unbiased process.
Section 214 discusses the process for initiating and proceeding with contract negotiations. The provision that requires the employer and bargaining unit to notify of the desire to start negotiations seems straight-forward enough. However, the provision requiring that all negotiations be open to the public is troubling to me. I have to check to see if that is currently the process, if so perhaps I am being concerned for nothing, but if this is a new process I see it as almost solely a political maneuver as opposed to a fiscal issue. Since the general public cannot directly request anything in the negotiations, but public opinion could easily influence the requests made at the table, I see no reason for these meetings to be open to the public. There is a much higher chance that the bargaining unit will fall out of public favor for even requesting a modest raise than there is for the agency to receive negative press for requesting a wage freeze. Since the public will already be required to vote by referendum on any raise above the CPI, I'm unclear what the goal of having these meetings open to the public is. And I typically am a huge proponent of open government and public forums. But since negotiations typically start with the 'dream' offer and then meet in the middle, and since the public will have limited ability to directly influence the negotiations, it seems that it would just provide an opportunity for political grandstanding.
Representatives of the collective bargaining unit are to be elected and certified annually (by December 1 for schools and May 1 for all other bargaining units). I have to research further what the current election terms are for most public unions to determine if this is in-line with the current process. Besides adding (yet another) annual administrative hoop for the unions, the section also states that if none of the candidates receive at least 51% of the vote the commission will decertify the current representative and the employees would be nonrepresented. This 51% requirement, instead of simply installing whichever candidate gets the most votes, could be extremely difficult to meet if the union has more than 2 candidates running for the position. The bill states that the ballot will contain “the names of all labor organizations having an interest in representing the general employees participating in the election.”
It does not specify whether the bargaining unit has the ability to limit the groups listed on the ballot of if any group with any interest is required to be listed. Obviously this is an important point, as the more names there are on the ballot the less likely it is that any one name will get 51% of the votes. This seems to set up a large bias toward the employees becoming unrepresented, which is a concerning situation. The employees can request a 'run off' election where the name that received the least number of votes is dropped from the next ballot, but depending on the number of names originally this could still not provide a likelihood of 51% of the votes to a single name. Plus, each additional vote is an additional administrative and logistic cost to the union. If the employees become unrepresented, they are unable to vote for representation again for a year, and that new vote would be subject to the same 51% vote requirement. The union must also pay a fee to the commission for each election, apparently regardless of whether the election is successful in obtaining representation or not.
Contract duration under this bill is limited to one year and must coincide with the fiscal year. The contracts cannot be extended under this bill. I need to clarify what the current average length of a contract for public employees is to determine if this is a shorter time frame than contracts currently are active. The lack of an ability to extend the contracts is also concerning, especially if there is a delay in the state budget (which impacts individual employer budgets) in getting approved.
So under this bill, every year a collective bargaining unit must vote on representation (possibly multiple times if a run-off is required), resolve any questions of majority representation the employer brings, vote to stay certified, potentially write, defend, and pass a referendum before April, and initiate and complete contract negotiations. And all of these activities must be completed with (presumably) less fee collection because of the inability of the union to enforce collection of dues from members and/or have dues withdrawn from an employee's paycheck. I think it's obvious how this could be administratively and logistically difficult.
If the governor declares a state of emergency (and I'm hoping to research what requirements need to be met to declare a state of emergency), any employee can be fired under section 344 for failing to report to work for ANY 3 working days (these do not have to be consecutive) or participating in strike activities. The bill does require the employee be notified of the discharge in writing, but does not give a time-frame for this notice. The employee does have an 'opportunity to respond' but it doesn't state that the employee has a chance to defend themselves or fight the discharge, just that they can 'respond'.
I am most concerned about the “any 3 working days” part of this section. As there does not appear to be any limit to the length of time that a state of emergency can be active, nor is there any explicit stipulation that the “3 days” requirement only applies to agencies directly providing services related to the emergency, it is possible for an employee to be fired for an illness that takes place during an extended state of emergency or for employees that are not directly in the area impacted to be fired even though they are not 'treating' the emergency. Also, I want to find out more details as to what requirements must be met for a state of emergency to be declared to avoid potential abuse of this power by the governor.
So this completes my overview of Wisconsin's Budget Repair Bill. This bill has passed the state assembly but is currently not able to be voted on in the Senate. Governor Walker is also releasing his actual budget later today (March 1), so I will review that in my next post. After that, I hope to provide reviews of how the budget and the Budget Repair Bill directly impact areas of the state such as Medicaid, school funding, and transportation infrastructure.
Monday, February 28, 2011
Budget Repair Bill-Part 4
Page 118 is the next section that is not obviously part of the 'collective bargaining' section of this bill, which as I've stated I will come back to after completing the rest of the bill. I am hoping to be able to finish this review before Gov. Walker releases his actual budget and then review the information contained in that budget as well, but I can't make any guarantees of this at this point as I also have some other projects that I have to complete this week. I am also still interested in finding a supporter of this bill to clarify/debate some of the points of this bill, but thus far I have not had much success in getting volunteers for the project.
Section 365 is found at the bottom of page 118. Much of the first portion of this section deals with appointment/election, salaries, and employment status of judicial employees such as Assistant District Attorneys. The salary information basically just outlines that the pay rate for positions such as Assistant District Attorneys will be based on a statewide pay scale and the ability for municipalities to set their own pay scales will be required to be within this pay scale. This makes sense to me, as allowing more affluent communities to pay their attorneys a much higher rte may limit the ability of poorer areas to attract highly qualified applicants. The Director of the Office of State Employment Relations sets and monitors these pay scales, which seems to be the appropriate department for this type of issue.
Page 120 begins a discussion about staffing at a variety of state departments and commissions. Section 9101 (after section 369, not sure why there was such a significant change in the section numbers here) references that any staffing needs at the Wisconsin Employment Relations Commission will be evaluated by the Department of Administration. The positions to be eliminated are all determined by the Secretary of Administration, so the departments themselves will not determine which positions it is most appropriate to eliminate, an important thing to keep in mind. It's easiest to summarize the individual department changes by each department, these are not necessarily in the exact order they appear in the bill:
-Department of Administration - This section also authorizes the creation of additional full-time employee (FTE) positions within the Department of Administration, including the creation of 1 FED position and 4 PR positions. I find this odd in a bill that is supposed to be used to limit/decrease state spending. It may be that these positions are required for some project that is not outlined in this bill, but the responsibilities of these positions are not outlines at all in this bill.
-Department of Agriculture, Trade, and Consumer Protection – The two subsections of this section are a bit confusing. It appears that FTE staffing to this department is decreased by 3.0 GPR positions
for general staffing but then INCREASED by 3 GPR positions specifically to be unclassified division administrators. This seems to be decreasing staff while increasing management, which I find odd for a 'budget balancing' bill, but again the responsibilities of the created positions are not outlines so perhaps they are not superfluous. It's also possible that this is simply to re-assign people who would be considered part of a collective bargaining unit into another 'non-union' classification.
-Department of Children and Families – This department will have 1 PR position, 1.85 GPR positions, and 0.15 FED positions eliminated for (apparently) general staff while increasing the 'unclassified division administrators' for this department by the same amount. The same concerns as I outlined for the Department of Agriculture apply here as well. Section 9208 (page 134) also outlines an increase of $37,000,000 for the second fiscal year to support an increase in the earned income tax credit program.
-Department of Corrections – The same theme repeats again. This department is decreased by 3 GPR positions while increasing 'unclassified division administrators' by 3 GPR positions. Adult Correctional Services (section 9211, page 135) would receive a direct increase in funding by $19,537,900 as well as several potential transfers from appropriation accounts.
-Department of Financial Institutions – FTE positions in this department are decreased by 2 PR positions while increased by 2 PR 'unclassified division administrators'.
-Department of Health Services – FTE positions are decreased y 1 FED and 2 GPR positions while being increased by 1 FED and 2 GPR 'unclassified division administrators'. Funding for Community Aids Appropriation (page 137) will be decreased by $3,100,000 in the second fiscal year while the funding for Medical Assistance General Purpose Revenue Appropriation would be increased by $127,000,000 in the second fiscal year. Medical Assistance Administration Appropriation ill be increased by $16,000,000 and Income Maintenance Appropriation will be increased by $2,500,000.
-Office of the Commissioner of Insurance – FTE positions are decreased by 2 PR positions while being increased by 2 PR 'unclassified division administrators'.
-Department of Natural Resources – FTE positions decreased by 3 SEG positions while increasing by 3 SEG positions for division administrators.
-Public Service Commission – Decreased FTEs by 3 PR positions while increasing by 3 PR positions for division administrators.
-Department of Regulation and Licensing – Decreased by 2 PR positions and increased by 2 unclassified division administrator PR positions
-Department of Revenue – Decreased by 3 FTE GPR positions and increased by the same number for 'unclassified division administrators'.
-Department of Employment Relations – Decreased by 1 PR position while increased by 1 PR position for a division administrator. This section also requires that the Department of Employment Relations investigate offering a low-cost insurance option and/or a high-deductible plan with a Health Savings Account (has) option as well as study the feasibility of requiring state employees to receive health coverage through a health benefits exchange. I am not familiar enough with benefit exchanges to complete a review of this requirement at this point, but I'm hoping to come back to that in the future.
-Department of Tourism – Decreased by 1 GPR position while increased by 1 'unclassified division administrator'.
-Department of Transportation – Continuing the theme, this department is decreased by 3 SEG positions while being increased by 3 SEG positions for division administrators.
-University of Wisconsin Hospitals and Clinics Board – The first section of this portion establishes that when this bill takes effect, any employees of the UW Hospital Board are transferred to be employees of the UW Hospital and Clinics Authority. There are not FTE changes explicitly listed for this department.
-Department of Workforce Development – FTE positions are decreased by 2 PR positions and increased by 2 PR positions for 'unclassified division administrators'.
-Wisconsin Quality Home Care Authority – This bill merges the assets, liabilities, and property of this department into the Department of Health Services. There are no FTE changes explicitly listed, so the assumption is that the current staff of this department would remain as they are currently.
-Joint Committee on Finance – Finding for the Federal Program Supplement will be decreased by $37,000,000 and the General Purpose Revenue Funds General Program Supplementation program's funding will be decreased by $4,590,400.
There are several requirements for departments to 'lapse' a specified portion of their budget during the fiscal year, but I didn't think it was necessary to list all of those changes as well as the direct increases/decreases listed in the bill.
Changes to the Employee Trust Fund are more significant so I wanted to designate a large section to these changes after outlining the changes to other departments. These changes are explained starting in section 9115 (at the bottom of page 123). For simplicity in the coming description, think of the state health plan as having 3 tiers of plans available. Tier 1 is the lowest employee premium costs, tier 2 is the middle, and tier 3 is the highest employee premium costs. This section outlines that employees covered under the state employee health plan will have premiums of $84/month for individual ($208 for family) coverage under any of the tier 1 plans, $122 individual/$307 family for the tier 2 plans, and $226/individual and $567/month under tier 3 plans. I assume that these amounts meet the percent contribution that Walker has insisted are necessary for balancing the budget, although I would need to know the dollar amounts that are currently required to state that for certain. Teaching assistants, graduate assistants and employees-in-training in the UW system (as defined in Section 40.02 (25)) are required to pay 50% of these costs. This section also allows for retroactive premium withdrawal from paychecks if 'an employer is unable to modify payroll procedures in sufficient time to collect employees' increased share'. The current date for the increased employee contributions to take affect is listed as March 13, 2011, which does not coincide with the actual fiscal year that would start on July 1. It's unclear why this change would take affect so far in advance of the actual fiscal year, but I assume it is to help cover the budget shortfall that is predicted for the remainder of this fiscal year.
Changes to the Wisconsin Retirement System proposed in this bill include instituting a vesting period for employer contributions to the retirement system on an employees behalf. This period is not explicitly stated, although examples of 1, 5, or 10 years are listed. A vesting period is fairly common in private industry for employer contributions to retirement accounts, although many companies institute the vesting as a percent of contribution per year of employment vs. an all-or-nothing approach. This bill does not state if the vesting would be phased in per employment time or an all-or-nothing vesting, presumably because the charge of this bill is to require the evaluation of the option and therefore doesn't completely outline the option itself. This section would also allow for review of the health insurance credit program (the use of banked sick time to cover premiums in retirement) that I wrote about earlier. There is also a short reference to allowing employees to not make required contributions in (apparent) exchange for limited retirement benefits.
It appears that this bill includes several strategies and ideas to deal with the expected increase in insurance premiums and administration costs in the future. One strategy would allow the use of $28,000,000 in reserves from the Wisconsin Retirement System to be used to reduce employer costs for providing group health insurance to state employees. Although this may help to avoid cuts in the future, I'm always leery of using a surplus from a system that retirees depend on to fund other projects. There have been issues in the past questioning the legality of using Wisconsin Retirement System funds for other budget issues (but I still have to research those past issues further to determine if this would fall under the same concerns). This bill also requires that the Group Insurance Board design health insurance plans for 2012 that reduce premium costs by at least 5%. While this could be a significant cost savings, it is important to point out that one of the surest ways to decrease the cost of an insurance plan is to cut benefits, increase out-of-pocket expenses like deductibles or copays, or both. This could significantly increase the costs to plan members over and above the required increase to premium payments, as well as opening questions of how the benefits to be provided are reviewed.
The changes discussed above basically take us through the remaining portion of the Budget Repair Bill. The final 5 pages outline general changes, reiterate what sections apply to collective bargaining, and define the term of employment of Supreme Court judges in terms of eligibility for the Wisconsin Retirement System. The final section of this bill to be covered is the highly contentious 'collective bargaining' section that takes up the central portion of the bill. By the time I have that section completed, hopefully the actual budget itself will have been released so that I can evaluate that as well in the context of the authorities outlined in this bill.
Section 365 is found at the bottom of page 118. Much of the first portion of this section deals with appointment/election, salaries, and employment status of judicial employees such as Assistant District Attorneys. The salary information basically just outlines that the pay rate for positions such as Assistant District Attorneys will be based on a statewide pay scale and the ability for municipalities to set their own pay scales will be required to be within this pay scale. This makes sense to me, as allowing more affluent communities to pay their attorneys a much higher rte may limit the ability of poorer areas to attract highly qualified applicants. The Director of the Office of State Employment Relations sets and monitors these pay scales, which seems to be the appropriate department for this type of issue.
Page 120 begins a discussion about staffing at a variety of state departments and commissions. Section 9101 (after section 369, not sure why there was such a significant change in the section numbers here) references that any staffing needs at the Wisconsin Employment Relations Commission will be evaluated by the Department of Administration. The positions to be eliminated are all determined by the Secretary of Administration, so the departments themselves will not determine which positions it is most appropriate to eliminate, an important thing to keep in mind. It's easiest to summarize the individual department changes by each department, these are not necessarily in the exact order they appear in the bill:
-Department of Administration - This section also authorizes the creation of additional full-time employee (FTE) positions within the Department of Administration, including the creation of 1 FED position and 4 PR positions. I find this odd in a bill that is supposed to be used to limit/decrease state spending. It may be that these positions are required for some project that is not outlined in this bill, but the responsibilities of these positions are not outlines at all in this bill.
-Department of Agriculture, Trade, and Consumer Protection – The two subsections of this section are a bit confusing. It appears that FTE staffing to this department is decreased by 3.0 GPR positions
for general staffing but then INCREASED by 3 GPR positions specifically to be unclassified division administrators. This seems to be decreasing staff while increasing management, which I find odd for a 'budget balancing' bill, but again the responsibilities of the created positions are not outlines so perhaps they are not superfluous. It's also possible that this is simply to re-assign people who would be considered part of a collective bargaining unit into another 'non-union' classification.
-Department of Children and Families – This department will have 1 PR position, 1.85 GPR positions, and 0.15 FED positions eliminated for (apparently) general staff while increasing the 'unclassified division administrators' for this department by the same amount. The same concerns as I outlined for the Department of Agriculture apply here as well. Section 9208 (page 134) also outlines an increase of $37,000,000 for the second fiscal year to support an increase in the earned income tax credit program.
-Department of Corrections – The same theme repeats again. This department is decreased by 3 GPR positions while increasing 'unclassified division administrators' by 3 GPR positions. Adult Correctional Services (section 9211, page 135) would receive a direct increase in funding by $19,537,900 as well as several potential transfers from appropriation accounts.
-Department of Financial Institutions – FTE positions in this department are decreased by 2 PR positions while increased by 2 PR 'unclassified division administrators'.
-Department of Health Services – FTE positions are decreased y 1 FED and 2 GPR positions while being increased by 1 FED and 2 GPR 'unclassified division administrators'. Funding for Community Aids Appropriation (page 137) will be decreased by $3,100,000 in the second fiscal year while the funding for Medical Assistance General Purpose Revenue Appropriation would be increased by $127,000,000 in the second fiscal year. Medical Assistance Administration Appropriation ill be increased by $16,000,000 and Income Maintenance Appropriation will be increased by $2,500,000.
-Office of the Commissioner of Insurance – FTE positions are decreased by 2 PR positions while being increased by 2 PR 'unclassified division administrators'.
-Department of Natural Resources – FTE positions decreased by 3 SEG positions while increasing by 3 SEG positions for division administrators.
-Public Service Commission – Decreased FTEs by 3 PR positions while increasing by 3 PR positions for division administrators.
-Department of Regulation and Licensing – Decreased by 2 PR positions and increased by 2 unclassified division administrator PR positions
-Department of Revenue – Decreased by 3 FTE GPR positions and increased by the same number for 'unclassified division administrators'.
-Department of Employment Relations – Decreased by 1 PR position while increased by 1 PR position for a division administrator. This section also requires that the Department of Employment Relations investigate offering a low-cost insurance option and/or a high-deductible plan with a Health Savings Account (has) option as well as study the feasibility of requiring state employees to receive health coverage through a health benefits exchange. I am not familiar enough with benefit exchanges to complete a review of this requirement at this point, but I'm hoping to come back to that in the future.
-Department of Tourism – Decreased by 1 GPR position while increased by 1 'unclassified division administrator'.
-Department of Transportation – Continuing the theme, this department is decreased by 3 SEG positions while being increased by 3 SEG positions for division administrators.
-University of Wisconsin Hospitals and Clinics Board – The first section of this portion establishes that when this bill takes effect, any employees of the UW Hospital Board are transferred to be employees of the UW Hospital and Clinics Authority. There are not FTE changes explicitly listed for this department.
-Department of Workforce Development – FTE positions are decreased by 2 PR positions and increased by 2 PR positions for 'unclassified division administrators'.
-Wisconsin Quality Home Care Authority – This bill merges the assets, liabilities, and property of this department into the Department of Health Services. There are no FTE changes explicitly listed, so the assumption is that the current staff of this department would remain as they are currently.
-Joint Committee on Finance – Finding for the Federal Program Supplement will be decreased by $37,000,000 and the General Purpose Revenue Funds General Program Supplementation program's funding will be decreased by $4,590,400.
There are several requirements for departments to 'lapse' a specified portion of their budget during the fiscal year, but I didn't think it was necessary to list all of those changes as well as the direct increases/decreases listed in the bill.
Changes to the Employee Trust Fund are more significant so I wanted to designate a large section to these changes after outlining the changes to other departments. These changes are explained starting in section 9115 (at the bottom of page 123). For simplicity in the coming description, think of the state health plan as having 3 tiers of plans available. Tier 1 is the lowest employee premium costs, tier 2 is the middle, and tier 3 is the highest employee premium costs. This section outlines that employees covered under the state employee health plan will have premiums of $84/month for individual ($208 for family) coverage under any of the tier 1 plans, $122 individual/$307 family for the tier 2 plans, and $226/individual and $567/month under tier 3 plans. I assume that these amounts meet the percent contribution that Walker has insisted are necessary for balancing the budget, although I would need to know the dollar amounts that are currently required to state that for certain. Teaching assistants, graduate assistants and employees-in-training in the UW system (as defined in Section 40.02 (25)) are required to pay 50% of these costs. This section also allows for retroactive premium withdrawal from paychecks if 'an employer is unable to modify payroll procedures in sufficient time to collect employees' increased share'. The current date for the increased employee contributions to take affect is listed as March 13, 2011, which does not coincide with the actual fiscal year that would start on July 1. It's unclear why this change would take affect so far in advance of the actual fiscal year, but I assume it is to help cover the budget shortfall that is predicted for the remainder of this fiscal year.
Changes to the Wisconsin Retirement System proposed in this bill include instituting a vesting period for employer contributions to the retirement system on an employees behalf. This period is not explicitly stated, although examples of 1, 5, or 10 years are listed. A vesting period is fairly common in private industry for employer contributions to retirement accounts, although many companies institute the vesting as a percent of contribution per year of employment vs. an all-or-nothing approach. This bill does not state if the vesting would be phased in per employment time or an all-or-nothing vesting, presumably because the charge of this bill is to require the evaluation of the option and therefore doesn't completely outline the option itself. This section would also allow for review of the health insurance credit program (the use of banked sick time to cover premiums in retirement) that I wrote about earlier. There is also a short reference to allowing employees to not make required contributions in (apparent) exchange for limited retirement benefits.
It appears that this bill includes several strategies and ideas to deal with the expected increase in insurance premiums and administration costs in the future. One strategy would allow the use of $28,000,000 in reserves from the Wisconsin Retirement System to be used to reduce employer costs for providing group health insurance to state employees. Although this may help to avoid cuts in the future, I'm always leery of using a surplus from a system that retirees depend on to fund other projects. There have been issues in the past questioning the legality of using Wisconsin Retirement System funds for other budget issues (but I still have to research those past issues further to determine if this would fall under the same concerns). This bill also requires that the Group Insurance Board design health insurance plans for 2012 that reduce premium costs by at least 5%. While this could be a significant cost savings, it is important to point out that one of the surest ways to decrease the cost of an insurance plan is to cut benefits, increase out-of-pocket expenses like deductibles or copays, or both. This could significantly increase the costs to plan members over and above the required increase to premium payments, as well as opening questions of how the benefits to be provided are reviewed.
The changes discussed above basically take us through the remaining portion of the Budget Repair Bill. The final 5 pages outline general changes, reiterate what sections apply to collective bargaining, and define the term of employment of Supreme Court judges in terms of eligibility for the Wisconsin Retirement System. The final section of this bill to be covered is the highly contentious 'collective bargaining' section that takes up the central portion of the bill. By the time I have that section completed, hopefully the actual budget itself will have been released so that I can evaluate that as well in the context of the authorities outlined in this bill.
Saturday, February 26, 2011
Part 3 - State Medical Assistance (pg 40 - 58)
We left off at page 40, the section of the bill that explains how retired employees can use accumulated sick and vacation time as credits toward their insurance in retirement. The majority of this post focuses on the potential changes to Medical Assistance in Wisconsin. I decided that I will skip the section of the bill that deals with the collective bargaining rights and come back to that at the end. I think that it's important to go through the lesser known portions of the bill. There are some portions of the bill that I will cover in this section that are less explicit in dealing with collective bargaining, they cover issues of insurance selection. The discussion of the collective bargaining rules and restrictions has the potential to get very contentious, and I'm still hoping to find a bill supporter as a co-author for this write-up to give a more rounded evaluation.
Page 40 and 41 continue the discussion about the use of sick time to cover insurance. Page 42 (Section 101, 40.51) references the selection of health care coverage an employer (other than the state) can offer employees. Employers are steered to the group insurance board (which I discussed in Part 1). This section gives individual departments the ability to establish their own eligibility rules and contribution requirements, which allows for some flexibility to meet the department needs. This section also explicitly restricts an employer from paying more than 88% of the average premium for the insurance plan, enforcing the employee contribution of at least 12% that Walker insists is necessary. The group insurance board in this section is also given the ability to designate the insurance terms for graduate assistants, teaching assistants, and employees-in-training in the University of Wisconsin System. The board is required to consult with the UW Board of Regents when making these decisions, so it is possible that the questionable non-partisanship of the group insurance board may be balanced by the recruiting requirements of the UW system.
Section 112 starts at the bottom of page 44 and relates to potential changes to the state of Wisconsin's Medical Assistance program (Badgercare, Medicare, Seniorcare, etc.). The first portion of this section is devoted to outlining the study of various types of potential changes to these programs that should be investigated. It is easiest and most accurate to copy this section here, so:
“The department shall study potential changes to the Medical Assistance
state plan and to waivers of federal law relating to medical assistance obtained from
the federal department of health and human services for all of the following
purposes:
1. Increasing the cost effectiveness and efficiency of care and the care delivery system for Medical Assistance programs.
2. Limiting switching from private health insurance to Medical Assistance programs.
3. Ensuring the long−term viability and sustainability of Medical Assistance programs.
4. Advancing the accuracy and reliability of eligibility for Medical Assistance programs and claims determinations and payments.
5. Improving the health status of individuals who receive benefits under a Medical Assistance program.
6. Aligning Medical Assistance program benefit recipient and service provider incentives with health care outcomes.
7. Supporting responsibility and choice of medical assistance recipients.”
If any of these studies find potential increased efficiency and/or cost efficiency for these programs, this bill gives authority to make a multitude of changes to the program, such as:
“1. Require cost sharing from program benefit recipients up to the maximum allowed by federal law or a waiver of federal law.
2. Authorize providers to deny care or services if a program benefit recipient is unable to share costs, to the extent allowed by federal law or waiver.
3. Modify existing benefits or establish various benefit packages and offer different packages to different groups of recipients.
4. Revise provider reimbursement models for particular services.
5. Mandate that program benefit recipients enroll in managed care.
6. Restrict or eliminate presumptive eligibility.
7. To the extent permitted by federal law, impose restrictions on providing benefits to individuals who are not citizens of the United States.
8. Set standards for establishing and verifying eligibility requirements.
9. Develop standards and methodologies to assure accurate eligibility determinations and redetermine continuing eligibility.
10. Reduce income levels for purposes of determining eligibility to the extent allowed by federal law or waiver and subject to the limitations under par. (e) 2.”
I'm hoping to review the current state Medical Assistance codes soon to determine how many of these potential changes are already in existence and how many would be new potential changes to the program. While some of these potential solutions are concerning, such as requiring managed care plans in areas with limited doctor availability, others (like changes to reimbursement models) seem like they would be common review processes. Any changes like those listed above are supposed to be submitted to the joint committee on finance for review prior to taking effect, but if the joint committee on finance doesn't schedule a meeting within 14 working days to review the rule, the rule takes effect without any further review (“(d) Before promulgating a rule under par. (c), the department shall submit to the joint committee on finance the proposed rule and any plan that the department develops as a result of the study under par. (b). If the co-chairpersons of the committee do not notify the department within 14 working days after the date of the department’s submittal that the committee has scheduled a meeting for the purpose of reviewing the proposed rule or plan, the proposed rule may be promulgated and
any plan may be implemented as proposed by the department”). This could lead to the potential of changes to Medical Assistance without a complete review. If the committee does notify the department that they have scheduled a meeting to consider the changes within 14 days, the rule may only be implemented if it is approved by the committee. If any of the rules considered do not meet federal guidelines, the bill requires that the department submit a waiver request to the federal government.
Another concerning statute in this part of the bill states “the department may promulgate a rule under par. (c) as an emergency rule... the department is not required to provide evidence that promulgating a rule under par. (c) as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated”. While the ability to make short-term changes to a state program during emergencies is understandable, the lack of a requirement to prove the 'emergency' leaves a concern of abuse of this section. These emergency rules would remain in effect either until their repeal date is reached or they are accepted as permanent rules, but there is no information in the bill as to how the repeal date would be determined and/or how the department would determine this repeal date, so the 'emergency' rules could in fact be in effect for quite some time.
Starting at section 15 the Bill outlines general guidelines for payment for medical services under Medical Assistance. Basically it seems geared at explicitly stating that providers treating Medical Assistance patients can be paid up to, but not more than, their standard per visit rate. This seems to make sense, as paying a provider more than they would get for standard visits would not be a cost-saving measure. Ultimately the department determines the pay rate for each service, and one would anticipate that rate would actually be below the flat fee that the provider would normally charge. There's a small section (49.45) that references payments to pharmacists who identify cost-saving measures for people on Medical Assistance. It doesn't clarify what type of cost saving measures they envision, but I'm assuming it's things like steering patients toward generic alternatives and/or counseling services for chronic medication usage. This has the potential to have some significant cost impacts, as pharmacists are in a unique position to counsel patient's about medications. Section 122 also limits the cost of prescription drugs for a person on Medical Assistance to $12/month if that person designates and uses a single pharmacy for all of their prescription needs, but this amount can be changed by the rules process discussed above.
From this point to page 58, where the retirement and pay/collective bargaining for public employee section starts, there are multiple small sections about identifying eligible participants for Medical Assistance, more clarification of payment schedules, etc.
Page 40 and 41 continue the discussion about the use of sick time to cover insurance. Page 42 (Section 101, 40.51) references the selection of health care coverage an employer (other than the state) can offer employees. Employers are steered to the group insurance board (which I discussed in Part 1). This section gives individual departments the ability to establish their own eligibility rules and contribution requirements, which allows for some flexibility to meet the department needs. This section also explicitly restricts an employer from paying more than 88% of the average premium for the insurance plan, enforcing the employee contribution of at least 12% that Walker insists is necessary. The group insurance board in this section is also given the ability to designate the insurance terms for graduate assistants, teaching assistants, and employees-in-training in the University of Wisconsin System. The board is required to consult with the UW Board of Regents when making these decisions, so it is possible that the questionable non-partisanship of the group insurance board may be balanced by the recruiting requirements of the UW system.
Section 112 starts at the bottom of page 44 and relates to potential changes to the state of Wisconsin's Medical Assistance program (Badgercare, Medicare, Seniorcare, etc.). The first portion of this section is devoted to outlining the study of various types of potential changes to these programs that should be investigated. It is easiest and most accurate to copy this section here, so:
“The department shall study potential changes to the Medical Assistance
state plan and to waivers of federal law relating to medical assistance obtained from
the federal department of health and human services for all of the following
purposes:
1. Increasing the cost effectiveness and efficiency of care and the care delivery system for Medical Assistance programs.
2. Limiting switching from private health insurance to Medical Assistance programs.
3. Ensuring the long−term viability and sustainability of Medical Assistance programs.
4. Advancing the accuracy and reliability of eligibility for Medical Assistance programs and claims determinations and payments.
5. Improving the health status of individuals who receive benefits under a Medical Assistance program.
6. Aligning Medical Assistance program benefit recipient and service provider incentives with health care outcomes.
7. Supporting responsibility and choice of medical assistance recipients.”
If any of these studies find potential increased efficiency and/or cost efficiency for these programs, this bill gives authority to make a multitude of changes to the program, such as:
“1. Require cost sharing from program benefit recipients up to the maximum allowed by federal law or a waiver of federal law.
2. Authorize providers to deny care or services if a program benefit recipient is unable to share costs, to the extent allowed by federal law or waiver.
3. Modify existing benefits or establish various benefit packages and offer different packages to different groups of recipients.
4. Revise provider reimbursement models for particular services.
5. Mandate that program benefit recipients enroll in managed care.
6. Restrict or eliminate presumptive eligibility.
7. To the extent permitted by federal law, impose restrictions on providing benefits to individuals who are not citizens of the United States.
8. Set standards for establishing and verifying eligibility requirements.
9. Develop standards and methodologies to assure accurate eligibility determinations and redetermine continuing eligibility.
10. Reduce income levels for purposes of determining eligibility to the extent allowed by federal law or waiver and subject to the limitations under par. (e) 2.”
I'm hoping to review the current state Medical Assistance codes soon to determine how many of these potential changes are already in existence and how many would be new potential changes to the program. While some of these potential solutions are concerning, such as requiring managed care plans in areas with limited doctor availability, others (like changes to reimbursement models) seem like they would be common review processes. Any changes like those listed above are supposed to be submitted to the joint committee on finance for review prior to taking effect, but if the joint committee on finance doesn't schedule a meeting within 14 working days to review the rule, the rule takes effect without any further review (“(d) Before promulgating a rule under par. (c), the department shall submit to the joint committee on finance the proposed rule and any plan that the department develops as a result of the study under par. (b). If the co-chairpersons of the committee do not notify the department within 14 working days after the date of the department’s submittal that the committee has scheduled a meeting for the purpose of reviewing the proposed rule or plan, the proposed rule may be promulgated and
any plan may be implemented as proposed by the department”). This could lead to the potential of changes to Medical Assistance without a complete review. If the committee does notify the department that they have scheduled a meeting to consider the changes within 14 days, the rule may only be implemented if it is approved by the committee. If any of the rules considered do not meet federal guidelines, the bill requires that the department submit a waiver request to the federal government.
Another concerning statute in this part of the bill states “the department may promulgate a rule under par. (c) as an emergency rule... the department is not required to provide evidence that promulgating a rule under par. (c) as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of emergency for a rule promulgated”. While the ability to make short-term changes to a state program during emergencies is understandable, the lack of a requirement to prove the 'emergency' leaves a concern of abuse of this section. These emergency rules would remain in effect either until their repeal date is reached or they are accepted as permanent rules, but there is no information in the bill as to how the repeal date would be determined and/or how the department would determine this repeal date, so the 'emergency' rules could in fact be in effect for quite some time.
Starting at section 15 the Bill outlines general guidelines for payment for medical services under Medical Assistance. Basically it seems geared at explicitly stating that providers treating Medical Assistance patients can be paid up to, but not more than, their standard per visit rate. This seems to make sense, as paying a provider more than they would get for standard visits would not be a cost-saving measure. Ultimately the department determines the pay rate for each service, and one would anticipate that rate would actually be below the flat fee that the provider would normally charge. There's a small section (49.45) that references payments to pharmacists who identify cost-saving measures for people on Medical Assistance. It doesn't clarify what type of cost saving measures they envision, but I'm assuming it's things like steering patients toward generic alternatives and/or counseling services for chronic medication usage. This has the potential to have some significant cost impacts, as pharmacists are in a unique position to counsel patient's about medications. Section 122 also limits the cost of prescription drugs for a person on Medical Assistance to $12/month if that person designates and uses a single pharmacy for all of their prescription needs, but this amount can be changed by the rules process discussed above.
From this point to page 58, where the retirement and pay/collective bargaining for public employee section starts, there are multiple small sections about identifying eligible participants for Medical Assistance, more clarification of payment schedules, etc.
Friday, February 25, 2011
Budget Repair Bill Part 2 (Pages 21 - 40)
So moving on with our dissection of the Wisconsin Budget Repair Bill. I'll be covering pages 22 through 40 here. Much of this section revolves around accounting standards, which I'll admit to not being that familiar with. I'll try my best to translate it, but if anyone out there has a different interpretation of one of the sections I cover, please let me know. I'm debating whether I'm going to keep going through the bill in order and cover the collective bargaining section next (as it starts around page 59) or, since that is the part that has been in the news the most, skip that section for now and continue on with the lesser known portions of the bill. I'd come back to the collective bargaining portion in the end if that is the case. Let me know if you have any preferences. I plan to post the next section later this weekend.
The first thing to note on page 22 is that “This section does not apply to the sale of any state−owned heating, cooling, and power plant. Any sale of such a plant is governed exclusively by s. 16.896”. I'll get to section 16.896 soon enough, but keep this exclusion in mind as we discuss the upcoming portions. I'll admit that it's unclear if that means that anything listed in the next sections CANNOT be applied to state utility plants or if that just means that whatever the current process is stays in place. I'm hoping that it's the later, because section 41 of this bill is what authorizes the state to “furnish engineering, architectural, project management, and other building construction services whenever requisitions therefor are presented to the department by any agency”. Any funds received for these services is to be deposited into the general fund as revenue. If utility plants are excluded from this portion and the current procedure is not 'grandfathered' in, this could mean that the state does not have to pay for services to the utility plants. I find it hard to believe that is the intent of this section, if the state is not responsible for state power plant costs then who is? However, alternative interpretations are important to consider, and one alternative is that this portion of the bill essentially cuts off funding for state utility plants. This is more concerning when coupled with the 'sales' provision that will be discussed shortly.
Page 23 discusses the fees that are allowed to be charged to an agency each fiscal year, basically outlining budgets in very rough (no actual numbers) terms. This section does allow departments to charge agencies a 'premium' for certain services, including investigative services, litigation costs, data processing and staff support, and the cost of insurance contracts. Although the charges for these services are to be allocated annually, the bill also allows for departments to periodically assess agencies a portion of the expenses incurred by the department. I assume this is to allow for 'unpredicted' expenses to be 'billed' in a timely manner, such as increased security costs for an unexpected event, disease outbreak, or natural disaster.
Page 24 starts the section that covers the sale of state-owned utility plants. Besides the collective bargaining section of this bill, this is probably the portion that has received the most (but still not much) attention. This section provides the ability for state-owned “heating, cooling, and power plants' (I'll just say utility plants for short) to be sold to or contracted to a private entity “with or without
solicitation of bids, for any amount that the department determines to be in the best interest of the state.” I think the most concerning portion of that sentence is the 'without solicitation of bids' portion. Typically when an asset is being sold the goal is the accept the highest offer on the property. This section would allow that utility plants could be sold without asking for multiple offers, essentially making it a 'first come, first served' type of sale. The argument has been made that the offers that would be received for these plants would be minimal because of necessary technology upgrades and concerns about updates to federal pollution guidelines, but I don't think these arguments alone legitimize not even asking for competitive bidding on the sales. Plus, there is a high potential for abuse in this scenario. With no true oversight allowed for in these sales, it is entirely too possible that the sales would be available first to political contributors and/or that the offers would be outrageously low. Saying that the amount only has to be determined to be 'in the best interest of the state' doesn't really give a lot of guidance into the anticipated purchase price. Plus, the sales are excluded from needing approval or certification of the public service commission, again leaving no true oversight into the sales. Any utility plant sale is “considered to be in the public interest and to comply with the criteria for certification of a project”. The assumption made by this section is that any utility plant sold is a good thing, although it is not outlined as to how that determination was made. I'm assuming the argument is that a private company could operate the plants more efficiently than the current public process, but as there are no provisions for maintaining the current staff after the sale, efficiency changes would have to account for the potential training of new employees, plus there are no provisions the ensure that the cost of the utilities provided would not greatly increase when managed by a private company, potentially costing the state more in the long-run.
This section also states that any outstanding public debt on any utility plants sold would be covered by the net proceeds of the sale. Ideally, this would encourage some competitive bidding as one would assume the state would want to sell the plant for enough to at least cover this debt. However, there is no indication of what happens to that debt if the sale price of the plant does not cover the debt itself. If the sale is still determined to be 'in the best interest of the state', does that debt that is not covered by the sale price then get added to the general state debt? As there is no provision stating sales cannot take place for less than the amount of outstanding debt, this is an important question to answer.
Any profits from the sale of utility plants (after all state and federal debts on the plants are paid off), is to be deposited in a 'budget stabilization fund'. This sounds fine to me, although I would need details as to what the 'budget stabilization fund' is to be used for, how the funds are to be managed or invested, and who is responsible for overseeing this fund. Later in this bill (pages 25-26) it appears that the Secretary is given oversight of any profits from these sales, and any agency that wants to use the funds from sale of utility plants must petition for approval from the Secretary. If an agency's utility plant is sold, they do not have the ability to use the profits from that purchase on agency projects without Secretary approval, even though it appears that the agencies themselves have little to no say in the decision to sell that plant. Essentially, this takes away the agencies plant AND any benefit they might get from the sale. On one hand this could be good as it may minimize the temptation to sell plants for short-term gain, but on the other hand it seems that the agency should see some benefit from the sale if they have no ability to stop it.
The purchaser of any state utility plant is subject to any provision that the state feels it is necessary to place on the sale, including submitting to any rulings of the public service commission. So although the public service commission is essentially unable to weigh in on the sales before hand, they are allowed to chose to oversee the plant after the sale. This seems appropriate, although I'm unclear why they are then excluded for say in the sale if they are later allowed to oversee the plant anyway. If they are good enough to manage it after the sale, shouldn't they maintain that jurisdiction before and during the sale as well? This section also states that unless it is agreed to “between the parties' (I assume this means the state department overseeing the sale and the purchaser), the purchaser of the plant is required to keep them in good repair and continued operation to “provide adequate...power to meet the state's current and future needs”. This avoids someone purchasing the plant just to shut it down and then charge the state facility served by that plant to purchase power from another location. However, if the state and the purchaser agree to closing the plant, that is still a possibility.
The Secretary also has the ability, after the sale of a utility plant, to decrease the number of full-time positions in the plant by whatever number he/she feels necessary. I think the intention is to allow the Secretary to eliminate any positions in the agency that were associated with the operation of the utility plant, so again the issue of training new employees and it's impact on efficiency (and safety) at the plant rears it's head.
Page 27 starts a section that (indirectly) deals with the major collective bargaining section that is later in the bill. Although this section doesn't deal with collective bargaining rights, which is what is getting the majority of the current press coverage of this bill, it does deal with things like collective bargaining notice, administrative costs, studies, etc. This section requires notification of the end of a contract period and the reopening of negotiations, but does not give a time frame for that notification or outline the required methods of notification. Without this being outlined, it is possible that the contract could expire, minimal notice could be give (say, with a single announcement posted on a board down a lightly-used hallway) and therefore discussion would be limited. I'd like to think that wouldn't happen, but the pessimist in me requires that I point out that possibility. Any funds necessary to complete actuarial and other types of studies relating to insurance and retirement must be approved by the secretary of administration. It makes sense that someone would have to approve the distribution of these funds, but I would want assurances that the determination is not made based on political ideals. It is easy to imagine an administration only approving funds for studies done by groups that share their ideological or political beliefs, which is not the way to get accurate or unbiased information.
Page 29 refers to collective bargaining grievance arbitration, stating that agencies will reimburse the state for the costs of arbitration. This section seems a little odd to me, seeing as later in the bill the collective bargaining rights are limited to simply wages. It is possible that there would be arbitration necessary on that topic, but as little else will be available for arbitration it seems almost unnecessary to have the stipulation as to who pays for said arbitration.
Page 30 refers to the refinancing of existing state debt. This is the portion that Gov. Walker believes required that the Bill be passed by Friday, February 25th in order for the debt to be amortized. This section allowed for $474,000,000 to be contracted for debt incurred before July 1, 2011. I have heard the best explanation of this portion is to think about a mortgage. If you have 10 years left on your 30-year mortgage, you have a set payment you make each month. You can refinance that 10 years of remaining debt out another 30 years, your payments each month/year will go down but the overall amount you will pay on this debt will increase because of the interest you will pay for the 'new' 20 years of the loan. In essence, this doesn't reduce your debt, it just reduces the payments you make each month. I can't take credit for that explanation, a Republican explained it to me, but it seemed the clearest way to cover that portion of the bill. Most people have a general understanding of loans and interest.
The bottom of Page 32 introduces the discussion of salaries for appointed positions in government, as long as those appointed positions are not subject to a collective bargaining agreement. I won't go into all the details of what each rank of government is eligible to be paid, but I will say that the pay appears to be based on what the highest rank would get paid, with each rank below that getting a salary range 'one range below' the preceding rank. On one hand this seems appropriate, the higher rank you have in any company the higher your pay scale, in general. However, there is no detail as to what a 'range' is considered in actual dollars and cents, so it is possible that the pay differences could be minimal OR extreme. Also, there is no mention of a potential cap on the salaries of the top rank, leaving a potential for skyrocketing costs if an agency head is appointed at an inflated pay rate. The Secretary of Administration is responsible for approving the funds for the agencies and a 'board' is responsible for reviewing the pay ranges. This board also has the ability to establish salaries for new appointments or increase salaries as they see fit to 'correct a salary inequity or to recognize competitive factors', leaving potential abuse for political appointees to be paid inflated rates.
Page 34 has a provision that is easily overlooked, but I find interesting. “The board shall not permit a facility that would be privately owned or operated to be constructed on state−owned land without obtaining prior approval of the building commission... the board may sell or dispose of such property as provided by law, or any part thereof when in its judgment it is for the best interests of the system and the state.” There is an exception to this, that being the state utility plants. So not only does this reinforce the limited oversight into the sale of state utilities, but it also gives the board the ability to approve the sale of any state property simply by determining its in the state's best interest. This could include state forests, state-owned parks and wildlife preserves, state commercial-zoned properties, etc. The only restriction, besides the 'best interest' clause, is that if there is a physical building on the property the sale must be approved by the building commission. The Natural Resources Manager in me is picturing clear cutting state forests and hotels in Devil's Lake State Park, but hopefully that is just my pessimism talking. But it is important to consider that this bill does not DISallow that type of activity...
Page 35 deals with insurance, specifically for part-time or limited term employees. The important topic here, in my opinion, is that although this bill no longer eliminates benefits for these employees it does potentially have a major impact on their benefits. Specifically, it allows the group insurance board to modify “the standard plan to establish a more cost effective benefit plan design or providing optional insurance coverages as alternatives to the standard insurance coverage when any excess of required premium over the premium for the standard coverage is paid by the employee”. Allowing modifications based on 'cost effectiveness' is pretty open. Lets face it, the most cost-effective option for the state would be the employees paying the entire insurance bill themselves, and this section essentially, if not explicitly, allows for that. The group insurance board would simply have to accept as the standard plan an insurance policy with so little coverage it is essentially useless and then offer a supplemental plan with decent coverage but highly increased employee contributions. This seems like an end-run allowing the previous exclusion of part-time employees from insurance coverage to still be possible. Unless I am mis-reading this section, “For each participating employee whose formula rate is determined under s. 40.23 (2m) (e) 2., an amount equal to one−half of all actuarially required contributions, as approved by the board under s. 40.03 (1) (e).” it also appears that part-time employees would be responsible for at least half of their insurance costs no matter what plan they choose or is chosen for them. Although it is understandable that part-time employees would pay more for their benefits, I would need to review the current benefit structure to determine if 50% is in line with the current benefits. This section ends with a description of how unused sick and vacation time can be used by a retired employee as 'credits' toward continued coverage of health insurance premiums.
There are lots of sub-sections in this bill, so I apologize if my review seems haphazard at times. In attempting to go through the Budget Repair Bill page by page, the flow of the explanation is not always smooth. As always, if you have any alternative suggestions or comments, please feel free to chime in to the discussion, but remember, I reserve the right to not approve any comment that is abusive, violent, or does not substantively add to the conversation.
The first thing to note on page 22 is that “This section does not apply to the sale of any state−owned heating, cooling, and power plant. Any sale of such a plant is governed exclusively by s. 16.896”. I'll get to section 16.896 soon enough, but keep this exclusion in mind as we discuss the upcoming portions. I'll admit that it's unclear if that means that anything listed in the next sections CANNOT be applied to state utility plants or if that just means that whatever the current process is stays in place. I'm hoping that it's the later, because section 41 of this bill is what authorizes the state to “furnish engineering, architectural, project management, and other building construction services whenever requisitions therefor are presented to the department by any agency”. Any funds received for these services is to be deposited into the general fund as revenue. If utility plants are excluded from this portion and the current procedure is not 'grandfathered' in, this could mean that the state does not have to pay for services to the utility plants. I find it hard to believe that is the intent of this section, if the state is not responsible for state power plant costs then who is? However, alternative interpretations are important to consider, and one alternative is that this portion of the bill essentially cuts off funding for state utility plants. This is more concerning when coupled with the 'sales' provision that will be discussed shortly.
Page 23 discusses the fees that are allowed to be charged to an agency each fiscal year, basically outlining budgets in very rough (no actual numbers) terms. This section does allow departments to charge agencies a 'premium' for certain services, including investigative services, litigation costs, data processing and staff support, and the cost of insurance contracts. Although the charges for these services are to be allocated annually, the bill also allows for departments to periodically assess agencies a portion of the expenses incurred by the department. I assume this is to allow for 'unpredicted' expenses to be 'billed' in a timely manner, such as increased security costs for an unexpected event, disease outbreak, or natural disaster.
Page 24 starts the section that covers the sale of state-owned utility plants. Besides the collective bargaining section of this bill, this is probably the portion that has received the most (but still not much) attention. This section provides the ability for state-owned “heating, cooling, and power plants' (I'll just say utility plants for short) to be sold to or contracted to a private entity “with or without
solicitation of bids, for any amount that the department determines to be in the best interest of the state.” I think the most concerning portion of that sentence is the 'without solicitation of bids' portion. Typically when an asset is being sold the goal is the accept the highest offer on the property. This section would allow that utility plants could be sold without asking for multiple offers, essentially making it a 'first come, first served' type of sale. The argument has been made that the offers that would be received for these plants would be minimal because of necessary technology upgrades and concerns about updates to federal pollution guidelines, but I don't think these arguments alone legitimize not even asking for competitive bidding on the sales. Plus, there is a high potential for abuse in this scenario. With no true oversight allowed for in these sales, it is entirely too possible that the sales would be available first to political contributors and/or that the offers would be outrageously low. Saying that the amount only has to be determined to be 'in the best interest of the state' doesn't really give a lot of guidance into the anticipated purchase price. Plus, the sales are excluded from needing approval or certification of the public service commission, again leaving no true oversight into the sales. Any utility plant sale is “considered to be in the public interest and to comply with the criteria for certification of a project”. The assumption made by this section is that any utility plant sold is a good thing, although it is not outlined as to how that determination was made. I'm assuming the argument is that a private company could operate the plants more efficiently than the current public process, but as there are no provisions for maintaining the current staff after the sale, efficiency changes would have to account for the potential training of new employees, plus there are no provisions the ensure that the cost of the utilities provided would not greatly increase when managed by a private company, potentially costing the state more in the long-run.
This section also states that any outstanding public debt on any utility plants sold would be covered by the net proceeds of the sale. Ideally, this would encourage some competitive bidding as one would assume the state would want to sell the plant for enough to at least cover this debt. However, there is no indication of what happens to that debt if the sale price of the plant does not cover the debt itself. If the sale is still determined to be 'in the best interest of the state', does that debt that is not covered by the sale price then get added to the general state debt? As there is no provision stating sales cannot take place for less than the amount of outstanding debt, this is an important question to answer.
Any profits from the sale of utility plants (after all state and federal debts on the plants are paid off), is to be deposited in a 'budget stabilization fund'. This sounds fine to me, although I would need details as to what the 'budget stabilization fund' is to be used for, how the funds are to be managed or invested, and who is responsible for overseeing this fund. Later in this bill (pages 25-26) it appears that the Secretary is given oversight of any profits from these sales, and any agency that wants to use the funds from sale of utility plants must petition for approval from the Secretary. If an agency's utility plant is sold, they do not have the ability to use the profits from that purchase on agency projects without Secretary approval, even though it appears that the agencies themselves have little to no say in the decision to sell that plant. Essentially, this takes away the agencies plant AND any benefit they might get from the sale. On one hand this could be good as it may minimize the temptation to sell plants for short-term gain, but on the other hand it seems that the agency should see some benefit from the sale if they have no ability to stop it.
The purchaser of any state utility plant is subject to any provision that the state feels it is necessary to place on the sale, including submitting to any rulings of the public service commission. So although the public service commission is essentially unable to weigh in on the sales before hand, they are allowed to chose to oversee the plant after the sale. This seems appropriate, although I'm unclear why they are then excluded for say in the sale if they are later allowed to oversee the plant anyway. If they are good enough to manage it after the sale, shouldn't they maintain that jurisdiction before and during the sale as well? This section also states that unless it is agreed to “between the parties' (I assume this means the state department overseeing the sale and the purchaser), the purchaser of the plant is required to keep them in good repair and continued operation to “provide adequate...power to meet the state's current and future needs”. This avoids someone purchasing the plant just to shut it down and then charge the state facility served by that plant to purchase power from another location. However, if the state and the purchaser agree to closing the plant, that is still a possibility.
The Secretary also has the ability, after the sale of a utility plant, to decrease the number of full-time positions in the plant by whatever number he/she feels necessary. I think the intention is to allow the Secretary to eliminate any positions in the agency that were associated with the operation of the utility plant, so again the issue of training new employees and it's impact on efficiency (and safety) at the plant rears it's head.
Page 27 starts a section that (indirectly) deals with the major collective bargaining section that is later in the bill. Although this section doesn't deal with collective bargaining rights, which is what is getting the majority of the current press coverage of this bill, it does deal with things like collective bargaining notice, administrative costs, studies, etc. This section requires notification of the end of a contract period and the reopening of negotiations, but does not give a time frame for that notification or outline the required methods of notification. Without this being outlined, it is possible that the contract could expire, minimal notice could be give (say, with a single announcement posted on a board down a lightly-used hallway) and therefore discussion would be limited. I'd like to think that wouldn't happen, but the pessimist in me requires that I point out that possibility. Any funds necessary to complete actuarial and other types of studies relating to insurance and retirement must be approved by the secretary of administration. It makes sense that someone would have to approve the distribution of these funds, but I would want assurances that the determination is not made based on political ideals. It is easy to imagine an administration only approving funds for studies done by groups that share their ideological or political beliefs, which is not the way to get accurate or unbiased information.
Page 29 refers to collective bargaining grievance arbitration, stating that agencies will reimburse the state for the costs of arbitration. This section seems a little odd to me, seeing as later in the bill the collective bargaining rights are limited to simply wages. It is possible that there would be arbitration necessary on that topic, but as little else will be available for arbitration it seems almost unnecessary to have the stipulation as to who pays for said arbitration.
Page 30 refers to the refinancing of existing state debt. This is the portion that Gov. Walker believes required that the Bill be passed by Friday, February 25th in order for the debt to be amortized. This section allowed for $474,000,000 to be contracted for debt incurred before July 1, 2011. I have heard the best explanation of this portion is to think about a mortgage. If you have 10 years left on your 30-year mortgage, you have a set payment you make each month. You can refinance that 10 years of remaining debt out another 30 years, your payments each month/year will go down but the overall amount you will pay on this debt will increase because of the interest you will pay for the 'new' 20 years of the loan. In essence, this doesn't reduce your debt, it just reduces the payments you make each month. I can't take credit for that explanation, a Republican explained it to me, but it seemed the clearest way to cover that portion of the bill. Most people have a general understanding of loans and interest.
The bottom of Page 32 introduces the discussion of salaries for appointed positions in government, as long as those appointed positions are not subject to a collective bargaining agreement. I won't go into all the details of what each rank of government is eligible to be paid, but I will say that the pay appears to be based on what the highest rank would get paid, with each rank below that getting a salary range 'one range below' the preceding rank. On one hand this seems appropriate, the higher rank you have in any company the higher your pay scale, in general. However, there is no detail as to what a 'range' is considered in actual dollars and cents, so it is possible that the pay differences could be minimal OR extreme. Also, there is no mention of a potential cap on the salaries of the top rank, leaving a potential for skyrocketing costs if an agency head is appointed at an inflated pay rate. The Secretary of Administration is responsible for approving the funds for the agencies and a 'board' is responsible for reviewing the pay ranges. This board also has the ability to establish salaries for new appointments or increase salaries as they see fit to 'correct a salary inequity or to recognize competitive factors', leaving potential abuse for political appointees to be paid inflated rates.
Page 34 has a provision that is easily overlooked, but I find interesting. “The board shall not permit a facility that would be privately owned or operated to be constructed on state−owned land without obtaining prior approval of the building commission... the board may sell or dispose of such property as provided by law, or any part thereof when in its judgment it is for the best interests of the system and the state.” There is an exception to this, that being the state utility plants. So not only does this reinforce the limited oversight into the sale of state utilities, but it also gives the board the ability to approve the sale of any state property simply by determining its in the state's best interest. This could include state forests, state-owned parks and wildlife preserves, state commercial-zoned properties, etc. The only restriction, besides the 'best interest' clause, is that if there is a physical building on the property the sale must be approved by the building commission. The Natural Resources Manager in me is picturing clear cutting state forests and hotels in Devil's Lake State Park, but hopefully that is just my pessimism talking. But it is important to consider that this bill does not DISallow that type of activity...
Page 35 deals with insurance, specifically for part-time or limited term employees. The important topic here, in my opinion, is that although this bill no longer eliminates benefits for these employees it does potentially have a major impact on their benefits. Specifically, it allows the group insurance board to modify “the standard plan to establish a more cost effective benefit plan design or providing optional insurance coverages as alternatives to the standard insurance coverage when any excess of required premium over the premium for the standard coverage is paid by the employee”. Allowing modifications based on 'cost effectiveness' is pretty open. Lets face it, the most cost-effective option for the state would be the employees paying the entire insurance bill themselves, and this section essentially, if not explicitly, allows for that. The group insurance board would simply have to accept as the standard plan an insurance policy with so little coverage it is essentially useless and then offer a supplemental plan with decent coverage but highly increased employee contributions. This seems like an end-run allowing the previous exclusion of part-time employees from insurance coverage to still be possible. Unless I am mis-reading this section, “For each participating employee whose formula rate is determined under s. 40.23 (2m) (e) 2., an amount equal to one−half of all actuarially required contributions, as approved by the board under s. 40.03 (1) (e).” it also appears that part-time employees would be responsible for at least half of their insurance costs no matter what plan they choose or is chosen for them. Although it is understandable that part-time employees would pay more for their benefits, I would need to review the current benefit structure to determine if 50% is in line with the current benefits. This section ends with a description of how unused sick and vacation time can be used by a retired employee as 'credits' toward continued coverage of health insurance premiums.
There are lots of sub-sections in this bill, so I apologize if my review seems haphazard at times. In attempting to go through the Budget Repair Bill page by page, the flow of the explanation is not always smooth. As always, if you have any alternative suggestions or comments, please feel free to chime in to the discussion, but remember, I reserve the right to not approve any comment that is abusive, violent, or does not substantively add to the conversation.
Thursday, February 24, 2011
Bill Part 1 (through page 21)
I have been seeing many people on both sides of the debate argue that people need to 'ready the bill before they form an opinion'. Well, this bill is currently 144 pages long (http://legis.wisconsin.gov/JR1SB-11.pdf), most of it in legal-eze that is difficult to follow and read. I though it would be interesting to take the bill apart bit by bit and look at it in more detail. Although I will copy-paste some sections out of the bill itself to illustrate what I am talking about, I intend for this mostly to be a 'layman's terms' evaluation of the bill itself. If you want to read the entire legal section, you can find the bill itself on the WI Legislature Website. To start out, I figured it made the most sense to start at the beginning, page 8 is where the summary stops and the actual bill language start.
13.172
In this section, “agency” means an office, department, agency, institution of higher education, association, society, or other body in state government created or authorized to be created by the constitution or any law, that is entitled to expend moneys appropriated by law, including the legislature and the courts, and any authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 52, 231, 233, 234, 238, or 279.
The first portion of this section reaffirms that agencies are supposed to allow their employees to serve as election officials without loss of fringe benefits, seniority, pay, etc. However, it does reference that employees who are part of a collective bargaining unit are subject to the requirements of the collective bargaining agreement. Since, later in this bill, there are provisions that would remove collective bargaining rights from everything but pay, it is tricky to predict how this provision would impact these union employees. It could be that, since the collective bargaining agreement should only apply to pay, their employer will be required to allow them to be election officials. However, if the collective bargaining agreements are still allowed to contain provisions that are not actually subject to collective bargaining, it would be possible for employers to put in punishments for being an election official. I assume that federal guidelines preventing this would still need to be followed, but it is something to be aware of.
Page 9 starts the discussion about agency-owned properties and buildings. The sections of note here are provisions that would exclude agency buildings from being subject to local building codes other than zoning. This means that local governments would have limited ability to enforce local codes and guidelines in regards to building materials, construction supervision, permitting fees, etc. It's unclear, but implied, that this could also restrict the ability of local governments to enforce height, facade, and other restrictions that are often put in to avoid buildings being created that detract from local history or neighborhood design. This could make preservation of historic neighborhoods more difficult. However, allowing state agencies more flexibility in their ability to build facilities that better meet their needs could also avoid duplication of services and/or speed up the approval process.
Page 11 starts the description of several Boards, including the Legislative Fiscal Bureau (LFB) and Group Insurance Board (GIB). The LFB is descibed basically as a state audit agency that has the ability to access any documents of any agency that related to the agencies "expenditures, revenues, operations, and structure". Structure is not defined, so it could mean either the buildings 'structure' or the management/ staffing 'structure', or both. I was actually surprised that with all the other definitions in this bill, 'structure' was not clearly defined. This agency is 'strictly nonpartisan' according to the description, but certain factors discussed later make it impossible to determine how this nonpartisanship will be achieved or maintained. This section also defines a 'quarom' as a majority of the board, which again if the nonpartisanship charge is carried out should not be a concern. The GIB, however, is stated as being composed of 'the governor, the attorney general, the secretary of administration, the director of the office of state employment relations, and the commissioner of insurance or their designees, and 6 persons appointed for 2-year terms". As these positions are either elected officials or appointees, it is difficult to see how nonpartisainship will be achieved and/or maintained.
Starting on page 12 the bill outlines that the secretary and employees of the Department of the Secretary may enter agency offices and "'examine their books and accounts and any other matter that in the secretary's judgement should be examined and may interrogate the agency's employees publicaly or privately". It also states that employees of the agency being examined are required to cooperate with the investigation. These rules are understandable in the case of an audit-type investigation, and outlining every type of information that may be important for the investigation would be impossible and time-consuming, so giving the secretary the ultimate ability to decide makes sense from a time standpoint. However, there are no details outlining what safeguards are in place to avoid a partisanship issue, so the carte blanche ability to demand access could be a concerning consolidiation of power.
Page 14 contains an interesting provision stating “No change in the number of full−time equivalent positions authorized through the biennial budget process or other legislative act may be made without the approval of the joint committee on finance, except for position changes made by the governor”. Although this could mean that the governor could increase the staffing at an agency, it also could give the governor the ability to essential order an agency to decrease staffing without any legislative oversight or committee review. This could create an intersting dynamic of potential abuse, essentially allowing for the elimination of agencies the governor does not approve of/agree with by allowing him/her to limit their staffing to unsustainable levels. A section that appears to have had to potential to limit the ability to abolish positions appears to have been repealed. This section also contains a provision that limits pay increases to those within a predescribed pay range, which could help to eliminate unsustainable raises for employees, but it's unclear if this limit also applies to appointed positions vs. hired positions.
Section 27 (page 16) appears to be an efficiency issue, as it requires simply that any agency that recieves an improper invoice is required to notify the sender within 10 working days. There are no actually penalties listed for not meeting this 10-day requirement. Since many billing cycles are run on a 30-day timeframe, I'm unclear who is responsible for determining if the invoice is correct. The person responsible for sending payments on an invoice may or may not have first-hand knowledge of the project the invoice relates too so they may not be the best person for determining if the invoice is correct. However, designating a person with first-hand knowledge of each project and routing each invoice to that person for review seems like it would be an additional administrative hoop and might be difficult to complete in 10 days. It may be that agencies already have a requirement that invoices must be reviewed by a designated person and this just changes the required time frame, but I don't know that I've got the time or energy to dig through the statutes to find out. Efficiency can almost never be a bad thing, though, right?
Page 17 starts a rather extensive section dealing with how agencies deal with contractors, mostly relating to issues of discriminatory practices. Mostly this section outlines that contractors must not discriminate in their hiring practices, and that if they are suspected of discrimination an investigation will be conducted. If discrimination is found, the contractor is at risk of being placed on a 'black list' of unapproved contractors for future work. However, the contractor may still be paid the contract rate for the job with little to no financial consequence for the discrinimation. If the contractor works in several states, being 'black listed' in Wisconsin may not actually be a great financial burden and may not discourage discrimination. There is a statute in the bill that would allow for the agency to terminate a contract with a contractor in the case of discrimination, but that appears to be a last resort, probably to avoid the increased overhead and administrative costs in getting a new contractor to finish a job already in the works.
So there's my overview of the first 21 pages of Wisconsin's Budget Repair Bill. I'll post an overview of the next 20 or so pages soon. In the meantime, feel free to put forth any additional/contrasting interpretations you may have. Just be aware, I reserve the right to not approve/remove comments that do not add anything to the discussion itself. Statements just saying "Kill the Bill", "Go Walker", or using derogatory or abusive language will not be approved as they do not increase education or debate.
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