Slightest signs of compromise emerge in Wisconsin labor fight

The standoff in Wisconsin over the power of public employee unions is showing signs of budging as feuding state lawmakers, including Gov. Scott Walker (R), hint that some element of compromise is the only thing that will prevent the stalemate from entering its fourth week. Opinion polls released this week suggest that Wisconsin voters are becoming restless as the protracted battle drags on.

Wisconsin’s 14 Senate Democrats fled to Illinois three weeks ago to prevent the Republican majority from voting on a bill that would limit collective bargaining for many public employees and would increase workers' pension and health benefit obligations. While union supporters say the bill is a political play to erode union membership, Governor Walker says such moves are needed to close the state’s estimated $3.6 billion budget gap over the next two years.

From the start, Walker made it clear he would not waver. After some failed attempts to lure at least a few Senate Democrats back to Madison, the state capital, Walker issued a final ultimatum Thursday, saying he will lay off 1,500 state workers by the end of Friday unless the Democrats return. On Friday, Senate Republicans voted 19-0 for a resolution that finds Democrats in contempt of the Senate and authorizes state troopers to arrests any senators discovered in Wisconsin borders.

At press time, Walker had not announced the layoffs and no Senate Democrats have been arrested.

Speaking to the Milwaukee Journal-Sentinel Friday, Senate majority leader Scott Fitzgerald described his Democratic colleagues as creating a “constitutional crisis.” "They’re insulting the very fabric of our representative democracy,” he added.

However, some Republicans, choosing their words carefully, may be signaling that they are willing to bend. Democratic senators would need three Republicans to defeat the bill. Sen. Dale Schultz (R), speaking to a local radio show in Monroe, Wis., this week, said his fellow Republican senators are “wasting valuable time about collective bargaining, which I don’t ever remember being a part of the last election whatsoever. But most of all … this just looks like the classic overreach we see every two years.”

As for the Democrats, Sen. Bob Jauch told the Journal-Sentinel this week that staying out of Wisconsin in hopes of winning Republican votes was “not practical” and that his side needs to look outside the bill for ways to protect union rights.

Even Walker is hinting he may be willing to deal on some parts of his bill, such as the measure that requires unions to hold an election each year to ratify their status, which he acknowledges would not save Wisconsin money.

The standoff is testing Walker’s approval ratings. According to a poll conducted March 2 by Rasmussen Reports and released Friday, the governor’s job approval rating is 43 percent, with 57 percent disapproving of his performance. Walker was elected governor in November with 52 percent of the vote.

In a separate Rasmussen Reports poll conducted March 2 and released Thursday, 39 percent of Wisconsin voters say they favor weakening collective bargaining rights, while 52 percent are opposed.

Earlier this week, Walker acknowledged that Senate Democrats managed to create a generous time window for public scrutiny of his bill. He had originally hoped would pass the same week it was introduced, with Republicans holding majorities in both houses of the legislature.

Compared with other states' budget crises, Wisconsin’s may not be as severe as once thought. The forecast of a $3.6 billion shortfall represents 12.8 percent of the state’s current year budget, which puts Wisconsin ahead of 45 other states. The average state budget shortfall is 20 percent of the current year's average budget.

In addition to the measures to extract concessions from unions, Walker proposes to close the deficit using what he calls a “reform budget”: $1 billion in statewide cuts in education, Medicaid, and local governments, alongside $82 million in corporate tax breaks.

“It’s 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,” he said Tuesday, the day he unveiled his budget plan.

Tackling the budget problem primarily through spending cuts is an unbalanced approach and will slow Wisconsin’s economic recovery, says Mike Leachman, assistant director of the state fiscal project at the Center on Budget and Policy Priorities, a nonprofit and nonpartisan policy organization in Washington.

Corporate tax breaks often benefit out-of-state shareholders and correspond with less spending for public services, Mr. Leachman says. Tax breaks might even pose immediate harm, he says. By eliminating the state’s earned income tax credit for working families with children, the budget will raise $41 million, half of the shortfall generated from the corporate tax breaks.

“Some [spending] cuts are absolutely necessary, but a more balanced approach would be a wiser path,” he says.

Walker’s budget is similar to many state budgets released recently. Of the 43 released so far, only one-fifth propose alternative measures such as tax increases and tapping reserves to coincide with large spending cuts, Leachman says. The rest, like Walker's budget, tilt heavily toward cuts in services and programs.