Skip to main content

Budget battles stretch across U.S.

By David Ariosto, CNN
STORY HIGHLIGHTS
  • Legislatures across the nation face deficits and target collective bargaining rights
  • Critics of the proposals call the pending legislation union-busting
  • Supporters say belt-tightening is needed to address fiscal issues
  • State representative in Wisconsin calls GOP Gov. Scott Walker "tyrannical"

(CNN) -- Legislatures from New Jersey to California are struggling to tackle yawning deficits, longstanding pension obligations and health benefits and some broader questions about how unionized labor will fit into America's evolving political landscape.

The proposed budget bills of state deficit hawks, whom their critics label union-busters, spawned a second week of demonstrations in at least three states over what protesters view as an attack on workers' rights.

"Governors all across the United States are talking about cutting billions of dollars," said Wisconsin Gov. Scott Walker, who defended his budget-repair bill that addresses a $137 million shortfall and increases contributions of public workers to their pensions and health insurance benefits.

"This is ultimately about the future of our state," Walker told reporters Wednesday. The governor's proposal also requires annual votes for unions to maintain certification, while eliminating unions' ability to deduct annual dues from workers' paychecks.

"For some of the workers in our state, (union dues) equates to $1,000 out of their paychecks," Walker said. "That's real money."

A war on teachers?
Emanuel takes aim at Wisconsin governor
Ohio governor: Pensions 'not negotiable'
Plan to curb bargaining rights blasted

Moments after the governor's address, state Rep. Brett Hulsey, a Democrat, delivered an impromptu speech in which he called the Republican governor "tyrannical" and described his proposal as "union-busting."

The opposing voices that sprung from Wisconsin's state capitol are perhaps the latest in a series of legislative challenges to the rights and benefits of unionized labor that linger amid broader questions over the fiscal health of state and local budgets.

"There are two things on the table," said economist Gary Burtless, a senior fellow at the Washington-based Brookings Institution.

The first, he described, is the size of the total compensation package provided to state and local workers. The second is the debate over whether governments will restrict workers' rights to negotiate through their unions.

"We have seen these debates in the past," Burtless said. "My mother was a nurse in New York during the 1970s and the state cut pension obligations because of financial crisis then," he said. "That didn't mean they took away the right to collectively bargain."

But some lawmakers argue that union influence has grown unwieldy in recent years, impeding fiscal reform at a time when the economy is still reeling from the financial crisis.

Unions, which have traditionally supported Democratic candidates, have argued that collective bargaining protects wages and health care, enforces workplace safety and serves to arbitrate employee grievances.

"By trying to remove from unions the right to collective bargaining, they are trying to change the rules to make unions weaker," Burtless said. "(Republican lawmakers) are essentially trying to defund the opposition."

The Wisconsin Retirement System has more than $80 billion invested, while pensions accounted for only 1.35% of the state's budget costs in 2008, according to Keith Brainard, research director for the National Association of State Retirement Administrators.

"Pensions are not the driver of Wisconsin's fiscal problems," Brainard said.

Still, the financial crisis and collapse of the housing market have lowered the return on investments in pension plans, Burtless argued.

Those new realities may have spawned a sense of urgency for fiscal reform and a desire to strip away what some lawmakers consider structural impediments to change, he said.

In statehouses across the country, the terms of collective bargaining -- a process of negotiations meant to regulate working conditions -- are again up for debate. Here is a rundown of developments across the United States:

-- In Wisconsin, 14 Democratic state senators essentially boycotted the legislature and fled to neighboring Illinois to prevent a quorum from passing a bill that would eliminate collective-bargaining rights for everything but wages. Walker warned that not passing the proposed bill would result in at least 1,500 government employees being laid off in the short term and could result in 6,000 worker layoffs in the following budget cycle.

-- In Ohio, a bill to limit the collective-bargaining power of some public-sector workers sparked protests, with crowds packing the state capitol in Columbus for a second week. The measure, known as Senate Bill 5, would eliminate tenure as a consideration when making layoff decisions, require workers to pay at least 20% of their health insurance premiums and institute merit-based pay for some public-sector workers.

-- In Indiana, lawmakers scrapped a "right-to-work" bill that would have prevented private-sector unions from requiring workers to pay dues for representation. House Democrats tore a page out of the Wisconsin book by walking out on the Republican-supported bill.

-- In Tennessee, a pending House bill would prevent teachers unions' ability to negotiate with local education boards concerning the terms or conditions of their service.

-- In Illinois, lawmakers introduced a bill that would exempt policy-making employees from the definition of a "public employee" and from the right to organize and bargain collectively. State lawmakers had earlier approved a massive tax hike, unveiling a $35.4 billion budget that depends on approving $8.7 billion in new borrowing.

-- In California, lawmakers introduced a bill that would do away with collective bargaining of pension benefits for the state's public employees. The state's governor, Democrat Jerry Brown, had earlier imposed a statewide hiring freeze across all government agencies.

-- In Michigan, lawmakers debated overturning legislation that requires an outside arbitrator to settle labor disputes involving firefighters and police officers.

-- In Alaskał Republican House lawmakers introduced a "right-to-work" bill that prohibits collective bargaining contracts requiring employees to join a labor or employee organization.

-- In Iowa, lawmakers are debating a bill that "prohibits employees of the state, any agency, authority, commission, or board of the state, or any state institution of higher education from collectively bargaining under (Iowa's) Public Employee Collective Bargaining Law."

-- In New Jersey, Republican Gov. Chris Christie, who gained a national reputation for his hard stance against public-sector employees, argued that organized labor should have "responsible" collective bargaining rights. Christie said he wants workers to pay more for their health care, raising their co-payments and premiums to save the state an estimated $323 million. By 2014, the governor would require them to pay for 30% of their medical benefits, up from 8% now.

CNN's Kevin Conlon contributed to this report