What’s in the bill?
Unless you’ve been on another planet for the past week, you have heard about the siege on Madison. Thousands of protesters and supporters of Senate and Assembly Bill 11 have filled the Capitol and its grounds. Scott Walker and the Republicans have been vilified, Democrats have fled the state and, for now, the debate between citizens has been impassioned but peaceful.
There are so many questions. Is Walker taking advantage of a crisis? Will these bills save the state money and make it easier to do business in Wisconsin? Or are they a bold power grab, an attempt to bust the public employee unions?
Actually, it’s a little bit of both.
Walker inherited a deficit for the remainder of the 2010-11 fiscal year (which ends on June 30). Union leaders and national liberal talkers have said it is a false budget crisis, that the state would actually have a $121 million surplus according to a report by the WI Legislative Fiscal Bureau released on Jan. 31, if not for the legislature giving away millions of dollars in tax credits and breaks to big business.
But a closer look at that report reveals the state owes has more than $258 million in unpaid bills through the end of the fiscal year, including $3.5 million to the State Public Defenders board, over $55 million in tax reciprocity payments to Minnesota and a $174 million shortfall in the Medicaid fund for payments to the needy. And that doesn’t even take into account the more than $200 million a judge has ordered the state to repay to the Patient Compensation Fund. A thorough analysis of this issue appeared in yesterday’s Milwaukee Journal-Sentinel Politifact® Wisconsin.
The budget repair bill, then, was ostensibly drafted to address the state’s very real financial need through June 30. And even though collective bargaining has grabbed most of the headlines, there’s plenty more buried in the bill’s pages that represent a serious departure from the way business in Wisconsin currently gets done.
Public employees: compensation and collective bargaining
Walker wants the public employee union members throughout the state (with the exception of police and fire unions) to contribute 5.8 percent towards their pensions and 12.6 percent towards their health insurance premiums. He says this will free up $30 million in the current fiscal year and 10 times that amount in future years.
Walker also wants to change the laws that govern collective bargaining rights, and which have been in place for state employees since 1959. His bill would allow the unions to bargain on base wages, but those wages would be tied to the consumer price index. There would be no bargaining of overtime, premium, merit or performance pay, supplemental compensation, pay schedules and automatic pay progressions. Work rules, overtime, vacations and all other civil service rights would remain in place for state employees, but those benefits could come off the negotiating table for municipal employees.
The bill would require any pay raise exceeding the CPI to be agreed upon by governmental resolution and a referendum of the public. In addition, each union would have to hold an annual authorizing vote of its membership and wouldn’t be able to collect dues or fees from non-union workers. Strikes by public employees, which are currently prohibited except in very limited circumstances, would be illegal in all cases.
It would prohibit Limited Term Employees (usually temporary employees who work less than 1,043 hours per year) from receiving state health and pension benefits. It would allow employees to be fired if they are absent without leave from work more than three days during a declared state of emergency or if they participate in any work slowdown or stoppage. It would remove collective bargaining rights from childcare and healthcare workers who are paid under the Medicaid program.
Walker has told the public that removing collective bargaining will give state and local governments and school district the flexibility to control costs in the face of deficits and falling tax revenues and avoid the layoffs of 1,500 employees this year.
Wisconsin is one of 30 states that currently allow public employee unions to collectively bargain.
Healthcare and Medical Assistance
The University of Wisconsin Hospitals and Clinics Board would be eliminated and its employees not allowed to collectively bargain. University of Wisconsin employees would also lose bargaining rights.
Since the recession began, the use of Medicaid programs such as Badgercare has increased – currently, about one in five Wisconsin citizens receive Medicaid benefits – leading to a current budget budget shortfall of $153 million. Walker’s bill would authorize the Department of Human Services, with just the consent of the Legislative Fiscal Bureau, to make program, eligibility and payment changes that would affect nursing homes, ICFs-MR, the State Centers for the Developmentally Disabled and the Wisconsin Veterans Homes. This means that changes can be made without any involvement by the legislative body.
The changes implemented by DHS could include requiring medical assistance recipients to make cost share payments up to the federal maximum; allow providers to deny care to those who can’t share the costs; revise provider reimbursements for certain groups of recipients; mandate all recipients enroll in managed care; impose restrictions on Medical Assistance access to non-U.S. citizens; set standards for establishing and verifying eligibility for assistance and reduce income levels for purposes of eligibility. Currently, families with income levels up to 200% of FPL (Federal Poverty Level) can enroll in Badgercare; Walker’s bill would potentially lower the ceiling to 133%. In 2011, FPL for a family of three is $18,530.
All of these changes would have to comply with the maximums and minimums eligibility and care levels set by the federal law for medical assistance, something that Wisconsin has often exceeded in the past.
The bill also shifts cash from some programs to other programs experiencing shortfalls – $22 million redirected to the Department of Corrections to cover increased health care and overtime costs, $3 million moved from the Aging and Disabilities Resource Centers (which oversees the intake and assessment to the FamilyCare Program) to the Medicaid program, and shifting $37 million from the Temporary Aid to Needy Families fund to increase the Earned Income Tax Credit program.
Walker is proposing to refinance general obligation bond debt incurred by the state, similar to when you move credit card debt to another, lower interest card. It is estimated to save the state $165 million in debt service costs, which Walker wants to use to pay one-time costs to comply with the Injured Patients and Families Compensation Fund state Supreme Court decision and to pay the tax bill owed to Minnesota.
Updated: The sale of public buildings and energy utilities
While we initially missed this, Mother Jones first brought to light this section of the bill, which allows the Department of Administration, without any of the approvals currently mandated by law, to sell public utilities with or without bids and strips approval of any sale, as well as allowing the DoA to “petition” the Public Service Commission, who currently governs utilities, to “regulate as a public utility any person who purchases or contracts for the operation of any plant under the bill.”
Here is the section, from page 6 of the Senate version of the bill, under the heading “Other State Government:”
Currently, this state owns and operates numerous heating, cooling, and power
plants that were constructed by the state to provide heating, cooling, and power to
state facilities. The Department of Administration (DOA) determines the method of
operation of these plants and may delegate this authority to any other state agency
that has managing authority for a plant. This bill permits DOA to sell or contract
for the operation of any such plant. The bill exempts such sales and contracts from
the requirement for approval of the Public Service Commission (PSC) that may
otherwise apply under current law. The bill provides that the net proceeds of any
sale, after retirement of any outstanding state debt and any necessary repayment of
federal financial assistance, is deposited in the budget stabilization fund. The bill
also allows DOA, at any time, to petition the PSC to regulate as a public utility any
person who purchases or contracts for the operation of any plant under the bill.
Under current law, the PSC has regulatory authority over public utilities, including
the authority to set rates for utility service.
Finally, the bill would change the practice of carrying unused general revenue funds from the Medicaid program into the next biennial budget. Instead these surplus funds would move to the state’s general fund to be used for any programming.
So while the focus on this bill has been the rights of state employees and their contributions to their benefits, there is more than that. There are proposed changes that could alter how our poorest and neediest citizens receive medical care; it will push principle payments on outstanding debts into another fiscal year and it will shift money from certain departments to cover increasing health care costs and provide relief in the form of earned income tax credits.
The Senate version of this bill is ready for a vote. Last Thursday, the Democrats missed their opportunity to offer amendments to the bill when they fled the state. Senate Republicans have 19-members in the 33-member senate and Majority Leader Scott Fitzgerald said he has the 17 votes to pass the bill. However, since this is a fiscal bill, Senate rules state that there must be 20 Senators on the floor to vote. The Senate is currently under a “Call to House,” awaiting the return of the Wisconsin 14.
The Assembly will return to the floor Tuesday at 10 a.m., and they intend to vote, and pass Assembly Bill 11. They have been in recess since Friday afternoon, when the Republicans almost passed their version of the bill in a session opened before the scheduled time. Democratic Minority Leader Peter Barca gave an impassioned plea to reverse the actions of the improper session, which was granted after t Majority Leader Jeff Fitzgerald admitted he “didn’t think they (Democrats) were coming.”