Money, Policy Entangled in Wisconsin Labor Dispute

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Gov. Scott Walker’s sweeping proposal to scale back collective bargaining rights for most public employees in Wisconsin has sparked a rancorous standoff with teachers across the state—and fueled speculation about whether similar plans will gain traction in other parts of the country.

But as massive demonstrations played out in Madison—an estimated 70,000 protesters came to the state Capitol one day last week—local school leaders were questioning one of the arguments behind the governor’s proposal: that it will help cash-strapped districts financially in the years ahead.

And while some in district leadership have voiced support for modifying collective bargaining arrangements, they fear the governor’s plans could create lasting discord in school systems where relations between teachers and administrators have been relatively harmonious.

“We’ve never supported stripping all bargaining rights,” said Miles Turner, the executive director of the Wisconsin Association of School District Administrators, which represents superintendents across the state. “This goes way too far.”

Wisconsin has been at the center of a pitched political battle for nearly two weeks, since Gov. Walker, a Republican elected last fall, proposed far-reaching changes to public workers’ benefits and job protections. Those changes included raising educators’ required contributions to their pensions and health insurance—a proposal the state’s largest teachers’ union says it is willing to accept.

But more controversially, the governor and leaders of the GOP-controlled legislature have called for curtailing many bargaining rights for teachers and most other public employees, a plan that government workers have taken to the streets to oppose.

Teachers also have joined demonstrations in Ohio and Indiana over Republican proposals to curb unions’ collective bargaining power. Numerous other states have taken up similar measures, along with other proposals to require teachers to pay more for benefits, curb their tenure protections, and set limits on how unions can raise money. (“States Aim to Curb Collective Bargaining,” Feb. 9, 2011.)

Badger State Showdown

In Wisconsin, Gov. Walker’s proposal prompted demonstrations that drew teachers from across the state and forced school closures in a number of districts. It also produced political theater, as Democrats in the state Senate fled Wisconsin to prevent Republicans, who control both legislative chambers, from holding a vote on the governor’s measure.

Late last week, Republicans in the state’s other legislative chamber, the Assembly, approved the governor’s measure, over the strong objections of Democrats. But GOP lawmakers have yet to figure out how to break the impasse in the state Senate.

Wisconsin faces a budget shortfall of $137 million for the remainder of the current fiscal year, and a projected shortfall of $3.6 billion over the next two years. Gov. Walker has not yet released his biennial budget—it could happen this week—but school leaders say they’re bracing for major cuts in state aid based on the signals they have received from the governor and lawmakers.

In announcing his plan, the governor pledged to give local governments, including school districts, “the tools to offset what may be reductions in state aid,” including changes to collective bargaining rules. Gov. Walker predicted that without making changes to public workers’ pensions, health insurance, and negotiating rights, state and local governments would have to lay off thousands of workers, including teachers. (His proposed changes to collective bargaining would not apply to police and firefighters.)

“Some have questioned why we have to reform collective bargaining,” he said in a Feb. 22 speech. “The answer is simple. The system is broken. It costs taxpayers serious money, particularly at the local level.”

A number of officials representing school boards and districts agree that while their pension and health-care costs would likely decrease under the governor’s plan, overall savings are difficult to predict—particularly those stemming from curbs to collective bargaining—and that the cumulative amount would almost certainly be insufficient to make up for anticipated cuts in state funding.

“We don’t know how deep the state-aid cuts will be, but we think they’ll be deeper than we can make up” through the proposal, said Dan Rossmiller, the director of government relations for the Wisconsin Association of School Boards.

Mr. Turner, of the district administrators’ group, agreed, saying that overcoming potential losses in state funding “is going to be nearly impossible ... without layoffs.”

Plan’s Details

The governor says his plan would drive down costs for school districts by requiring teachers to pay 5.8 percent of salary toward their pensions—most of the state’s 63,000 educators pay nothing now—and 12.6 percent of the average cost of health-insurance premiums, if they belong to the state health plan.

But the vast majority of the state’s districts enroll employees in their local health-care plans, not the state plan, according to the school boards association. Because the governor’s plan would limit collective bargaining to wages, unions in those districts would not be allowed to bargain on health care, essentially leaving decisions about which plans to choose in the hands of district administrators, by the interpretation of both the school boards group and the Wisconsin Education Association Council, or WEAC, a 98,000-member teachers’ union.

The plan would also prohibit teacher salaries from rising by more each year than the Consumer Price Index, without a local voter referendum. Future contracts would be limited to one year, and wages would frozen until new contracts were settled.

WEAC, an affiliate of the National Education Association, has said it would accept the governor’s plan for higher pension and health-care contributions, but not his collective bargaining proposal.

“Taking away the rights of workers does nothing to balance our budget,” WEAC President Mary Bell said in a statement.

But Gov. Walker has said he will not drop the provision to curb collective bargaining, and GOP state lawmakers appear to be backing him up. The governor said his experience as a local government official—he formerly served as Milwaukee County executive—convinced him that the state’s current collective bargaining laws bring higher costs, in preventing administrators from trying budget-saving measures such as privatization of services, and flexible scheduling of workers.

Savings or Burden?

Mr. Turner, of the district administrators’ group, said his organization expects cuts of $900 million in state aid to K-12 schools over the next two years. The total for state school aid in fiscal 2011 is $4.7 billion.

This week, the governor’s office predicted that his plan would save the state’s school districts at least $976 million over the next two years. But officials from the school boards and administrators associations were not as optimistic about the financial picture. They note that savings on health care and collective bargaining would probably vary district by district, depending on what agreements are in place now and the kinds of cost-saving cuts districts were willing to make to plans and future contracts.

The state constitution prevents existing contracts between districts and employees from being broken, they point out, and so some potential savings would come only after those arrangements had expired. In addition, cuts in state aid could disproportionately affect districts with the lowest property wealth per pupil, Mr. Rossmiller said.

The school boards’ and district administrators’ groups both note that they have lobbied in the past to give the officials they represent more power in bargaining with unions. But they voiced strong reservations about the governor’s plan.

“We have to work with these teachers and with other employees, and that’s going to be difficult because of this,” said Barry Forbes, the co-director of employment and labor-law services at the school boards association.

Mr. Turner said that many superintendents have amicable, “established bargaining relationships” with teachers’ unions, in which they regularly reach accords on issues such as workload that are agreeable to both sides. If districts and unions could bargain only on wages, it would take districts into “uncharted territory,” he said, and create a “very problematic work environment.”

Daniel A. Nerad, the superintendent of the Madison school district, also questioned the financial savings projected in the governor’s plan. “It assumes things we just aren’t comfortable assuming at this point,” he said.

Mr. Nerad’s 25,000-student district was forced to call off four days of classes last month after numerous teachers and other employees did not report for work, presumably to protest the governor’s plan. The superintendent wrote Gov. Walker a letter urging him to negotiate with educators.

“While there are problems and changes that need to be made in current collective bargaining laws,” he wrote, “this does not mean that these laws cannot continue to be useful to balance what needs to happen in our communities in order to ensure that children are well educated. The upset for our entire staff that has been created through your proposal does not portend well for our community.”

Widespread Protests

In states across the country, teachers’ unions have complained that they are being targeted by efforts to diminish their power, specifically by reducing collective bargaining power, job protections, and fundraising ability.

Teachers’ unions traditionally have been major contributors to Democratic candidates at the state level. But Republicans gained control of a majority of governors’ offices and a historic number of state legislative seats last fall. Wisconsin was part of that trend: Mr. Walker replaced a Democrat, Gov. James E. Doyle, who chose not to seek re-election, and both state legislative chambers switched from Democratic to GOP control.

Union anger over legislative proposals affecting teachers has erupted in recent weeks in Indiana, where Democratic legislators also staged a walkout to protest Republican-sponsored bills on collective bargaining, school vouchers, and others issues.

Similar tensions were on display in Ohio, where teachers have repeatedly come to the Capitol in Columbus to protest a Republican proposal that would limit collective bargaining. First-year Gov. John Kasich, a Republican, supports the measure and believes changes in collective bargaining in school districts are necessary, a spokesman said, as “a tool to help them control their costs and address their budget issues.”

The Ohio proposal would forbid collective bargaining for teachers in areas such as their school assignments and class size, and require that pay for teachers be set on the basis of merit, rather than on salary schedules. Districts also would be barred from making teacher-layoff decisions solely on the basis of seniority. In addition, the measure would require teachers and other public employees to make certain minimum contributions to their pensions and health insurance, presumably relieving districts’ costs.

But with the battle in Wisconsin drawing most of the national attention, organizations on both sides of that debate agree the outcome there is likely to shape the direction of legislative proposals in other states—and shape public opinion of unions.

Greg W. Mourad, the director of legislation for the National Right to Work Committee, a Springfield, Va.-based organization that supports Gov. Walker’s proposal, said taxpayer frustration over government spending would continue to put pressure on state officials to curb collective bargaining rights.

“People understand that during these tough economic times, the public purse can’t be as generous as it has in the past,” Mr. Mourad said. At the same time, he said, even if such legislation in Wisconsin and other states is approved, unions will still wield considerable power, particularly in political campaigns.

“All the other things they do now, they will still be able to do,” he said.

John I. Wilson, the executive director of the National Education Association, said the Wisconsin furor had galvanized members of his organization and unified labor groups more broadly.

“Our members are absolutely furious,” he said. “They see this as a suppression of their voice.”

And he predicted that the public would be sympathetic to the unions’ stance, in Wisconsin and elsewhere.

The public, he said, rejects the idea of “taking away the rights of people.”