Magazine

For Governors, Public Sector Unions Are the Enemy


They're being targeted for pay cuts, benefit cuts, salary cuts, and loss of collective bargaining rights

The loudest noise over budget deficits and cuts in public employee compensation is coming out of Wisconsin. While other governors have red-ink problems and are similarly targeting state employee pay and benefit packages, they are not all following the template of Wisconsin's Republican governor. Here's how some of the governors are trying to wring concessions from workers.

SCOTT WALKER

WISCONSIN

Revolution in Madison: Week Three of the Wisconsin standoff arrived on Mar. 1, with Walker proposing deep cuts in spending for education and local governments. He would also eliminate 1,200 state jobs to close a projected two-year deficit of $3.5 billion. The standoff over Walker's plan to strip public employees of most collective bargaining rights continued as Senate Democrats kept hiding out in Illinois, preventing a vote on the plan by the full Senate. Almost lost in the shouting: Union leaders have said they would agree to contribute more in pension and health-care payments.

JOHN KASICH

OHIO

See What Walker Did? Republican Governor Kasich established a reputation as a budget hardliner during his 18 years in Congress and burnished his conservative credentials as a talk show host on Fox News (NWS). Kasich, who was elected in November and will present his budget on Mar. 15, is the governor most closely following Walker's playbook. He wants to limit collective bargaining rights for public sector unions—and require them to take pay cuts and kick in more for pensions and health care. The changes in labor rules—the state Senate approved a measure Mar. 2, and the House is expected to follow suit—are necessary to shore up Ohio's struggling economy and help close a two-year budget deficit estimated at $8 billion, Kasich says.

CHRIS CHRISTIE

NEW JERSEY

Holding Homeowners Hostage: Christie is no stranger to clashes with organized labor, having picked a fight with the state teachers' union over wages and benefits soon after taking office in January 2010. In his quest to cut costs, New Jersey's governor, a Republican, has effectively pitted neighbor against neighbor. His Feb. 23 budget calls for state workers to shoulder 30 percent of health-care premiums by 2014, compared with 8 percent now. If Democrats in the state's legislature don't approve the measure, the governor says he will hold up $190 million in scheduled homeowner tax credits. Public sector workers are getting the message that it is time to punch out—for good: More than 20,000 filed for retirement in 2010, a 60 percent jump from the previous year.

JERRY BROWN

CALIFORNIA

Staring into the Biggest Hole: Brown, who served as California's governor during the boom years of 1975 to 1983, has returned—and faces a deficit that's projected at $25 billion over the next 16 months, the largest budget gap in the nation. The Democrat wants taxpayers to approve a five-year extension in higher income and sales taxes and motor vehicle fees in a special June election. Even if voters sanction the extension, which would raise $10 billion annually, state employees will not be spared. As part of $12 billion in proposed spending cuts, the governor is calling for a 10 percent reduction in compensation for public sector workers not covered under collective bargaining agreements.

MITCH DANIELS

INDIANA

Trailblazer: Daniels, a former budget director under President George W. Bush and a frequent critic of public sector unions, is the exemplar for governors bent on conquering public employee unions; at last month's National Governors Assn. meeting, he said unions have a "death grip" on governments in many states. One of Daniels's first acts upon taking the governor's office in 2005 was to use his executive power to eliminate collective bargaining rights for state employees. Now Republicans in the Indiana Senate are pushing right-to-work legislation, which would enable private sector employees to decide not to join or pay dues to a union, even if their colleagues agree to do so. Indiana does not face the budget troubles of many other states, but the fight over the right-to-work measure symbolizes what could be next for organized labor if it loses collective bargaining rights in other states.

ANDREW CUOMO

NEW YORK

Even Liberals Do It: As many as 9,800 state workers could be axed under Cuomo's budget proposal, presented on Feb. 1—that is, unless they agree to $450 million in yet-to-be-defined concessions. Most union contracts expire on Mar. 31, and Cuomo, a Democrat, has said he wants a wage freeze. His spending plan, the first New York budget in 17 years to shrink, projects a $10 billion deficit. It proposes to cut local school aid by 7.3 percent and to reduce Medicaid spending by almost $3 billion.

The bottom line: Governors of both parties are zeroing in on public sector health and pension benefits as they seek ways to balance budgets.

Jones is a reporter for Bloomberg News.

Steve Ballmer, Power Forward
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