With federal stimulus money drying up and accounting gimmicks exhausted, several cash-strapped states are setting their sights on taming the most voracious budget animals: public employee unions.
Notably, newly elected governors from the Rustbelt are stepping into the center ring. Armed with eight years as Milwaukee County executive where he successfully trimmed budgets and privatized government jobs, Governor Scott Walker (R-WI) is drawing one of the boldest lines against union overreach.
“We can no longer live in a society where the public employees are the haves and taxpayers who foot the bills are the have-nots,” Walker told supporters. “The bottom line is that we are going to look at every legal means we have to try to put that balance more on the side of taxpayers.” That includes challenging public employee unions to make concessions or risk losing their legal right to bargain collectively.
Ohio’s new Republican Governor John Kasich is issuing similar warnings. Exasperated by unions’ insatiable appetite for more benefits Kasich wants to ban public employees from striking. During his transition to the governor’s office Kasich said, “I really don’t favor the right to strike by any public employee. They’ve got good jobs, they’ve got high pay, they get good benefits, a great retirement. What are they striking for?” Driving his point home he declared, “If they want to strike they should be fired.”
What’s got stereotypically mild-mannered Midwesterners so wound up? The region’s economy has cratered over the last generation. Beset by the steady loss of manufacturing jobs over the last thirty years, the Midwest has lost population and wealth to sunnier economic climes.
The new crop of Midwestern governors wants to end that trend. Wisconsin’s Walker made “right-to-work” a campaign theme after hearing economic development experts complain about losing jobs and businesses to states with such a policy. In essence, right-to-work lets employees refuse to join a union without getting fired. Implementing the rule allows workers – and their employers – to resist union pressure, and get on with work.
During his campaign Ohio’s Kasich pointed to a 1983 state law requiring binding arbitration for all salary disputes between the state and public safety workers. Since arbitrators’ decisions almost always increase the amount offered by the state or local government, cities and counties are annually paying more money for the same amount of workers. For example, the Middletown Journal reports the City of Middletown (OH) is planning for a $2.5 million increase in safety personnel spending for 2011, despite adding no new positions.
Kasich argues that final arbitration awards requiring increases in spending amount to raising taxes without voter consent. Moreover, legal requirements to pay tie local budget writers’ hands, forcing them either to raise taxes, or borrow from the state to pay the award. Unsurprisingly, the latter option is more popular. Its application, however, causes deep budget deficits, the depths of which Kasich is trying to climb out of quickly.
Other reform-minded Republican governors include Pennsylvania’s Tom Corbett and Michigan’s Rick Snyder. Snyder’s job reducing the nation’s highest unemployment rate of any major state will test the former venture capitalist’s ability to implement the kinds of substantive changes needed to revive a moribund economy.
Helping all of these Midwestern governors is the presence in each state legislature of a healthy Republican majority. Voters in Wisconsin, Ohio, Pennsylvania and Michigan want solutions to their economic problems, and they are giving budget-cutting fiscal conservatives the political clout to deliver them. With the public open to systemic changes in how government operates, the time is now to finally tame the number one cost driver of runaway budgets: public employee unions.
In an age of reckless government spending and regulation that threaten the viability of American prosperity the most economically depressed region of the country is positioned for a comeback. All that’s standing in the way is a bullying lion that needs to be defanged.