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9/25/2012 4:58:00 AM
In wake of court decision, both sides swing into action
Unions want fast contracts; Walker warns of negative credit implications

Richard Moore
Investigative Reporter

It might be called Wisconsin’s version of Fast and Furious – the political jockeying taking place in the wake of Dane County judge Juan Colas’ ruling that the state’s collective bargaining reforms are unconstitutional.

While the state appeals, both conservatives and liberals are ramping up public opinion and political efforts, with unions pushing for a quick return to the bargaining table and Republicans trying to mobilize the grassroots.

With the law gone unless a judge issues a stay – and that decision could be weeks away ­– teachers and other municipal unions from Merrill to Milwaukee were trying to jumpstart negotiations to sign contracts while the law is in limbo.

In Dane County, the county board did complete an agreement Thursday night. With a new contract in place, that means the union’s bargaining gains will remain whether the law is reinstated or not. The contracts will run through 2015.


The grassroots

The quick contract drew the ire of state Rep. Steve Nass (R-Whitewater), who said liberals on the Dane County Board of Supervisors were taking advantage of the “horrible” ruling.

Dane County board chairman Scott McDonell didn’t deny the charge, telling the Wisconsin State Journal, “We have a window here, and we’re going to take advantage of it.” 

But Nass said the county’s actions would harm taxpayers statewide.

“From some of the judges to many of the elected officials, Dane County is about as close to a banana republic as you can find anywhere,” Nass said. “Eventually, the house of cards will collapse in Dane County with significant costs. In the next budget, I will fight any effort to send more state money to this county.”

Nass said that Dane County and city of Madison officials were constantly trooping to the capitol with hats in hand for more funds through various state programs. 

“These officials constantly work to increase government cost by implementing extremely liberal local policies, and then come to the capitol demanding that taxpayers from around Wisconsin foot the bill,” he said.

Nass said the failure of Dane County to utilize the long-term cost savings tools of Act 10 would  eventually lead to a significant fiscal crisis, and he said the consequences of that crisis should be Dane County’s alone.

Nass also criticized the hurried nature of the contract negotiation. The county gave less than 48 hours public notice, he said.

Meanwhile, Gov. Scott Walker and his campaign team got in on the action. The campaign announced a petition campaign to gather signatures in support of collective bargaining reforms, while Walker himself pointed to a Moody’s warning of negative credit implications if the law is ultimately struck down.

The Friends of Scott Walker communications director Tom Evenson pointed to the fiscal success of the reforms.

“We are asking Wisconsinites to sign this petition in support of Gov. Walker and his reforms that have already saved taxpayers over $1 billion and counting,” Evenson said. 

The petition, which can be found at Scott Walker.org, reads, “An activist judge in Madison chose to put politics ahead of your votes by striking down Governor Walker’s good government budget reforms. When the big special interests lose at the ballot box they turn to activist judges to legislate from the bench. The fight to defend the Wisconsin taxpayer is not over, and you have another chance to make your voice heard loud and clear. Please sign this petition today to stand with Governor Walker and his reforms that are working for Wisconsin families.”


The credit implications

Walker emphasized the Moody’s report.

The report, entitled “Wisconsin’s Act 10 Ruled Unconstitutional; Credit Negative for Local Governments,” observed that state attorney general J.B. Van Hollen had filed for a stay of the ruling while the appeals process moves forward but warned of the consequences if the law falls.

“If the hold is granted, it is unlikely that the ruling would affect local governments’ fiscal 2013 operating budgets,” the report stated. “However, if the ruling is upheld and Act 10 is ultimately overturned, Wisconsin cities, counties, villages, and school districts would lose an effective tool to manage personnel expenditures that account for a high portion of local government spending. If continued revenue pressures accompany a repeal of Act 10, we would expect the financial profile and the credit quality of some Wisconsin local governments to weaken during the next several years.”

In the end, it could lead to a negative outlook for local governments, the report concluded.

“Ultimate repeal of these Act 10 provisions would be a credit negative for Wisconsin (Aa2 stable) local governments because it would materially restrict their budgetary flexibility at a time when budgetary challenges show no signs of letting up,” the report states. 

Walker said the report underscored the  the importance of receiving a stay on the decision. 

“Moody’s recognizes the importance and positive impact of the reforms contained in Act 10,” Walker said. “Hopefully local units of government in Wisconsin will not have to take on unnecessary debt obligation costs, which would likely fall on the next generation.”

Walker also talked about the decision in his weekly radio address.

“Since enacting the reforms contained in Act 10, taxpayers have saved more than $1 billion dollars, property taxes on a median value home have decreased for the first time in 12 years, we balanced a $3.6-billion budget deficit at the state level without increasing taxes, and government services have improved,” Walker said in the address.

Walker said independent legal experts and political leaders from both parties have said the ruling is fundamentally flawed and that seeking a stay is the reasonable course of action, given the confusion caused by the ruling.

“While we are confident the law will be upheld, if the current ruling on Act 10 stands, it would result in public employee layoffs, increased debt for local units of government and school districts, and it could return us to a system where a handful of special interests control huge portions of our government budgets,” the governor said. “This ruling strips power from local elected and school board officials and reduces their ability to effectively manage their budgets.”

Walker said the state’s voters had already dealt with the issue.

“Voters spoke more than two years ago about the need to reform government, reduce spending, and balance our budget,” he said. “The voters reaffirmed their decision on June 5th of this year.”  

Richard Moore may be reached at richardmoore.gov@gmail.com

Reader Comments

Posted: Thursday, September 27, 2012
Article comment by: Craig Strid

Walker testified in Washington that his union negotiation restriction bills had nothing to do with the state budget deficit.
When you tighten down the hatches to recover from a deficit in one year and leave no meat on the carcass and you don't anticipate or allow room for emergencies. Now it's Doomsday and the unions and the judge are at fault and anyone showing favor will suffer the consequences, but he did say the unions had nothing to do with the recovery of the state budget. He's cut the fat, the quick and now everybodies trying to survive on the marrow from the bones to satisfy this balanced budget..

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