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Politics & Government

Vos Explains the Rationale Behind Walker's Budget Repair Bill

Tough times call for tough decisions, here's how Walker proposes to fix the budget for now.

Governor Scott Walker has just put forth an aggressive agenda to correct the state's fiscal crisis.  I believe the time has come to stop spending money we don't have and set the stage for future balanced budgets. 

Major corporations and small businesses have had to deal with the massive downturn of the economy. Individual families have had to do more with less money.  It’s our turn to make good decisions with taxpayers' best interests in mind. We are nearly $140 million in the hole for the budget cycle that ends June 30th.  The Governor's Budget Office projects a $3.6 billion dollar deficit for the next 2-year budget cycle.   

Other states across the country are experiencing a similar situation but they are taking drastic measures.  In California, some public employees are getting a 10 percent pay cut.  Even though Illinois just enacted a massive income tax increase, some public employees are being forced to take 24 furlough days.  New York's governor first considered a budget proposal that would layoff up to 12,000 workers, but later opted for a 10 percent cut to the state university system and a 7.3 percent reduction in school aids.

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I believe what Governor Walker is proposing is reasonable.  The Governor is not asking public employees to take furlough days, he is not proposing large pay cuts, and he is not laying-off workers.  I think it’s only fair that public workers contribute to their own pensions and pay just under the national average for their health care contributions.  Plus, state employees will still enjoy the same civil service benefits and get back 3 percent of their salaries that the state took for furlough days.

Let's take a closer look at the facts.  The average Wisconsin state employee compensation with salary and fringe benefits in 2010-2011 was $76,500 according to the non-partisan State Fiscal Bureau.  Employee salary and fringe benefits make up two-thirds of the state government's operating costs.  By asking employees to make a contribution to their pensions and more of a contribution to health care, we can realize a savings of $30 million for this fiscal year.  The savings would be ten-fold for the next budget cycle.

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I want to make it clear that every public employee has a valued job. These cost savings measures have nothing to do with the great work that public employees do across our state.  It is not their fault that previous legislatures have overspent to the point of no return.  We have no choice now but to clean up this fiscal mess.

 

If we don't pass the budget repair bill, there could be a large number of layoffs.  The Governor estimates a first round of layoffs of 1,500 state workers before July and 200,000 children would have to be taken off Medicaid programs.  In the long run, without this budget repair bill, the governor office suggests 60,000 public employees and up to 10,000 teachers could see pink slips.  We don't want to put people of out work.  We are asking for a team effort to right-size our government.

With a projected $3.6 billion dollar deficit, the goal is to give local governments the tools they need to balance their budgets by helping them save on employee costs.  The bill puts a cap on salary increases to no more than the consumer price index unless voters approve it in a referendum.  Public employees will still have the option of joining a union but won't be forced to pay union dues.

The budget repair bill also restructures our debt to help pay for one-time costs of repaying the $200 million owed to the Patients Compensation Fund that was raided by a previous legislature and make a $58 million dollar payment under the old Minnesota-Wisconsin tax reciprocity program.

The budget repair bill will not be a quick fix but it is the first step to help restore fiscal discipline in Wisconsin, create jobs and turn our economy around.

 

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