Public Revolt in Wisconsin . . . Can Pennsylvania be far behind?

Governor Tom Corbett is faced with some tough decisions when he presents his first budget on March 8.  For the fiscal year starting July 1, Pennsylvania budget deficit is estimated at $4 – $5 billion!  How will he reduce the budget shortfalls?  Will public employees be safe from the chopping block?

Are their lessons for Harrisburg from Wisconsin? Cash-strapped states across the country watched the fireworks today in Madison, Wisconsin over Republican Governor Scott Walker’s proposed legislation to cut back on public employee costs and curb union power.  The bill passed Wisconsin’s Joint Finance Committee and was set for a vote today. However, 16 state senators (which included 14 Democrat senators) didn’t show up for the vote.  The vote on the legislation remains in limbo.  At least 15 school districts closed school for a second day in a row as thousands gathered in the state capital to protest the proposed limiting of union bargaining rights. Claiming that the governor is balancing the budget on the taxpayers back, the workers are refusing to return to work if the bill passes.

Specifically, Wisconsin’s proposed legislation would:

  1. Eliminate collective bargaining rights for most public workers.  The unions could still represent the workers but they would not be able to see pay increases above the Consumer Price Index, unless approved by a public referendum. 
  2. Unions also could not force employees to pay dues and would have to hold annual votes to stay organized. 
  3. The bill would permit local police, firefighters and state troopers to retain their union rights.
  4. Public workers would have to pay half the costs of their pensions and at least 12.6 percent of their health care coverage. That represents an average of 8 percent increase in state employees’ share of pension and health care costs. In exchange, public employees were promised no furloughs or layoffs.

Walker has threatened to lay off up to 10,000 state workers if the measure does not pass. The proposed legislation is expected to provide a savings of $30M by July 1 and $300M over the next 2 years.

Wisconsin’s budgetary pain is playing out across the country.  Health care, pension contributions, collective bargaining rights . . . are all under the microscope in the Corbett’s cost-cutting budget that is coming in a couple of weeks.  Will we see the events in Madison played out in Harrisburg?  The Commonwealth is looking at a $4 – $5 billion deficit.  Yes,  billions! 

With less than 60 days on the job, do you think that Corbett is prepared to take on Pennsylvania’s public workers?

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  1. I’m certainly no fan of the distortions, inequity and inflexibility that result from the contracts our governments and public sector unions have negotiated.

    However for the Republicans to use this as an excuse to place all the blame on the employees and undertake a concerted, organized attempt to take away workers’ rights is just unconscionable. It’s hardly coincidence that this strategy will also remove the only counterbalance to the unfettered corporate funding enjoyed by the Republicans.

    I’m not sure that there will ever be a way out of the country’s structural budget disaster until there is fundamental campaign finance reform.

    Or a solution to the education mess, either. Again, it’s no coincidence that the politicians that are driving the voucher effort are funded by charter school entrepreneurs.

    Or, while I’m on a roll, the abuse of our environment. Who is it funded trips to the Superbowl for the politicians advocating no taxes on Marcellus Shale gas extraction?

    The root of all evil?

    [Reply]

    Randell Reply:

    The pension contracts set up by Ridge were a disaster, one which he knew wouldn’t come due in his time, combined with gung-ho estimates of investment and economic performance made before Bush’s tax cuts and wars (and ironically his dramatic expansion of medicare, without any associated increase in funding). They did it in order to tempt unions into taking smaller increases, in return for much larger pensions, which they then didn’t adequately fund. In the short term, it solved the political problem of how to pay for state employees without raising taxes.

    Ironic that in Wisconsin the governor exempted a few unions that happened to support him.

    I won’t be at all surprised if Corbett tries something similar. I don’t love unions, but this is nothing more than thinly-veiled union-busting. Combine this with unlimited contributions to campaigns by corporations, and we’ve moved ourselves back to the days of the robber barons owning the politicians.

    [Reply]

    flyersfan Reply:

    yep from the unions owning the politicians to the robber barons of yesteryear. The pendulum shifts.

    [Reply]

    flyersfan Reply:

    C’mon Ray, I expect more from you. Asking union members to contribute a bit more, still less than private sector folks do is not making excuses. It is facing reality. Don’t look back. Forward thinking is what is happening now. The people of Wisconsin elected a Republican Governor and Legislature. As Obama said, elections matter

    [Reply]

    Ray Clarke Reply:

    The problem is that economics is not the issue – the unions have accepted the need to restructure their compensation. I just don’t see why it is necessary to also eliminate collective bargaiining rights for all public unions except those that contributed to the Governor’s election bid.

    And I did also want to make the point that it takes two to tango – the unions didn’t get their contracts all by themselves, they had a complicit political class.

    [Reply]

    Toshiro Takashi Reply:

    There are 314 fire/police unions in the state of Wisconsin, 4 of them endorsed Walker, 310 endorsed his democratic opponent.

    Do you believe that a person has a right to not join a union? Why should someone be forced to join a union and pay dues for any particular job?

    give it a rest Reply:

    They had what we have — no one willing to take on the unions until they have no danger of losing the argument.

    In a non-election year last year, we gave raises to the administration “for morale”….and had a board member insult the union rep who talked about wanting to come to terms with the problem. THe complicit political class is nothing more than people who all use the same platitudes to get elected “I want to balance the district finances to provide the best education at an affordable cost to the taxpayers”….

    WHen ths primaries come this May, please be sure to ask the candidates their opinon on what are strike issues, if they understand how a strike works and how long it can last, and what contingencies they would support if school was closed.

    flyersfan Reply:

    ” I just don’t see why it is necessary to also eliminate collective bargaiining rights for all public unions except those that contributed to the Governor’s election bid.”

    Ray can you back this up or is it just a sound bite.

    tredyffrinparent Reply:

    I only have 1 question, why were the police and firemen omitted from this collective bargaining cap? If the argument that unions hurt budgets, why omit a certain union? It would seem to me that it would be better to cap them all. (If the argument is a fiscal one and not a union busting one.)

    Ray Clarke Reply:

    Here’s one reference from the New York Times of February 18th.

    http://www.nytimes.com/2011/02/19/us/politics/19states.html?_r=1

    “Police and fire unions, which have some of the most expensive benefits but who supported Mr. Walker’s campaign for governor, are exempted.”

    Ray Clarke Reply:

    I suppose I believe that if a majority of workers vote to be represented by a union, then that should indeed be binding on all since all stand to benefit from the activities of the union. Of course, there are arguments for and against right-to-work laws.

    It’s interesting that although PA is a right to work state, the requirement to join the teacher union and pay dues is in fact negotiable locally. According to stopteacherstrikes.org, teachers in ~75% of PA school districts are required to belong to the union under the terms of the contract.

    I just skimmed the TESD contract to find:
    “The Employer agrees, upon receipt of the names from the Bargaining Agent, to provide payroll deductions of the fair share fee from non-members, as allowed by law.”

    [Reply]

    flyersfan Reply:

    I am not sure I am comfortable with the law.

    flyersfan Reply:

    Unfortunately unions support political candidates with dues paid by workers who may not support that candidate.

    like the instance where a teacher whose husband was running for office was in the union and that union supported a candidate against her husband. This is unusual but it goes to the point that unions are more than just the good guy against the oppressed workers of America, they are a political action organization that does not give their members a choice.. what the bosses say….. this is as criminal as corporate greedmongers… “let them eat cake”

  2. Unless you sit at a bargaining table, ou cannot begin to fathom the complexity of the process. Was Reagan wrong to terminate the Air Traffic Controllers? This Wisconsin governor is making an obviously bold statement — he’d get little press for a small statement. His rejoinder yesterday — that these unions offering olive branches are only doing so since their pre-emptive efforts at new deals before he was sworn in– didn’t sound like a law. It sounded like politics and unions as usual. But campaign finance reform is over — the Supremes have changed the rules by pretending not to legislate…
    But it’s a fact that in PA, school strikes represent about 80% of school strikes in the US….and with a starting salary of 50K as the PSEA goal, and full health care paid, and 2.5% pension accruals, negotiating “working conditions” is insult to injury. So what’s the answer?

    [Reply]

    citizenone Reply:

    One only need to look locally at TESD to see why legislation is needed to reduce the power of unions. Starting in July TE will have the highest salaries in Chester County by a wide margin with no way to bring them back into line with other districts OR back in line with the private sector OR bring them back into line with the teacher marketplace. Let’s not forget about the $5M to $8M difference between revenues and expenditures.

    All that is needed to make the union rich and the taxpayers poor is 5 well meaning, but fiscally naive board members.

    [Reply]

    give it a rest Reply:

    Yep. Though the notion of fiscal naivety is giving credit where I’m not sure it’s due. Pretending to understand something because of ego is a more likely prompt. I have heard that there was a commitment to TESD having the highest salaries in Chester County.
    I think if you were part of the deliberations, you would find that the problems we have now are that of revenue, not expenditures. And the fact is that the loss of transfer tax revenue along with investments no longer earning what they used to, as well as the failure to plan for the PSERS spike going on all combined for a perfect storm.
    Just beware that we won’t get anything new if we don’t find people willing to participate ON THE BOARD. ALl this watching and reporting means nothing — and if you watched the exchange last yeaer between the Union and Mr. Mahoney when we had the hearings on budgets, you might guess that we can play tough, but it will not be a comfortable time for the next negotiation…and if we keep re-elected these people, we are the insane ones — doing the same thing over and over and expecting a different result.

    [Reply]

    Just a thought Reply:

    I don’t see how TESD teachers and their union can be held responsible for the district’s deficit – the school board negotiated with the union, agreed to and signed the contract.

    If taxpayers are unhappy with teacher pay and benefits, then they should vote for school board members who support their philosophy.

    Don’t begrudge union management for diligently representing its members in a negotiation – that is their job.

    [Reply]

    Ray Clarke Reply:

    Although it was obvious that the housing and financial bubble would have to burst at some point, it was the rare individual that could have predicted the timing and severity of the landing we experienced. I don’t think we can blame the School Board too much here; at least not as much as the higher level state politicians who depended on the union cash.

    The union, though, did have a chance to get out in front of this when the severity of TESD’s problem first became apparent a couple of years ago. My own suggestions (and I’m sure those of others with more influence) fell on deaf ears.

    The problem with unions is the rigidity that comes with the relationship. There is no way to look beyond the contract to the long run needs and capabilities of the system and indeed the interests of future members of the union.

    Now, instead of a smooth glide path to the new realities, we’ll be looking at a huge dislocation in which the union will be faced with a situation like New Jersey’s firefighters where Gov Christie has proposed “raising the retirement age, eliminating the COLA, increasing employee pension contributions and rolling back a 9% pay increase ‘approved by a Republican Governor and a Republican legislature’. ” (Quote from Peggy Noonan in this week-end’s WSJ)

    That (or it’s equivalent) is not going to sit too well with the TEEA.

    They’ll be like the firefighters who booed Christie, who I’ll quote again, because it’s true although not directly comparable here: “For 20 years, governors have come into this room and lied to you, promised you benefits they had no way of paying for, making promises they knew they could not keep, just hoping they would not be … left holding the bag. I understand why you feel angry and betrayed …. Here’s what i don’t understand. Why are you booing the first guy that came in here and told you the truth? ….. 15 years from now, when you have a pension to collect …. you’ll be looking for my address…[to] send me a thank you note.”

    kate Reply:

    Citizenone uses an eye-catching statement that TESD teacher salaries are the highest in Chester County.

    But everyone on this blog should do his/her own homework before joining him in his anti-union rhetoric.

    In 2010, the average salary in TESD was $74,522, with 37.5% of teachers making $80k or more.

    Unionville-Chadds Ford’s teachers made an average of $74,457, with 36.3% of teachers making more than $80k.

    Great Valley and Phoenixville were not far behind with similar averages and percentages making over $80k.

    That’s Chester County.

    But when one compares TESD salaries with those in Montgomery, Delaware and Bucks County, our district appears much more average for a wealthy school district. And we enjoy moderate property taxes by comparison.

    In Delaware County,

    Radnor’s average salary was $79,766 in 2010, and 51% make over $80k.- with Ridley and Swarthmore-Wallingford not far behind.

    In Montgomery County,

    nine out of twenty-one school districts pay their teachers an average of more than TESD’s $74,522 . Thirteen of them pay a significantly higher proportion of their teachers $80,000 or more per year. Jenkintown, Lower Moreland, Springfield, Upper Moreland,Upper Perkiomen and Pottsgrove SD’s ALL pay more than 75% of their teachers over $80,000 a year ( compared to 37.5%in T/E.)

    In Bucks County, nine ot of twelve school districts pay their teachers more than $74,522. – with Council Rock paying an average of $89,513 per year. with Centennial, Pennsbury, New Hope-Solebury School Districts not far behind.. All twelve districts have MORE teachers making over $80,000 per year than TESD.

    Go through the numbers. See how T/E’s teachers really compare to others in the Philadelphia suburbs. Then check out the millage rates for property taxes.

    Tredyffrin and Easttown taxpayers are very fortunate to have had prudent fiscal management by their school board. The facts tell the story.

    Citizenone suggests it only takes five naive SB members to give in to the unfettered power of unions.

    Puleeze.

    He’s demagoguing. Each district has a different make-up of teachers on the salary matrix. Right now, TESD has a mix of young and experienced teachers – the vast majority of whom have served this community very well.

    Nothing has changed on that account – except the anti-union wallet brigadem that has become emboldened by a misreading of the November elections.

    The quality of our schools remains the highets priority to most residents of T/E.

    We need to remind ourselves that the 2008 teachers’ contract was negotiated in a vastly different economic climate. The 2012 contract negotiatiosn will take this into consideratiom. And to suggest that the most informed, hardest working UNPAID members of our community are naive enough to give away the store next year is just fear- mongering by an ideologically influenced peanut gallery.

    Citizenone, why don’t you identify yourself and run for School Board, You seem to know so much.

    Andrea, why don’t you run again? You seem to have followed every minute of school board activity since 2002 when you left .

    Fiscal conservatives, why don’t you try to fill the shoes of heavyweight, Kevin Mahoney, with YOUR financial expertise.

    I think the peanut gallery should acknowledge the tremendous time and energy our committed SB members have made to balance the school budgets during the last few years, and give them credit for doing what’s best for our district’s students.

    [Reply]

    Andrea Reply:

    Thanks for this information Kate. I’m going to presume you are right, because it is incredibly tedious to get that data.

    The “average” salary of any district will always reflect the experience level of the teachers. PA had several early retirement incentives that generated a younger teaching average — which is why the PSEA can claim that salaries have not gone up….it’s that old “figures lie, liars figure.”

    And sadly, I did not follow every minute since I left. Phil Hooper was still acting as an adviser to facilities and I was working full time.

    I didn’t get back into any of it until some major reshuffling of administrators that went to the central office (prior to the timeline that we had contemplated when we signed Dr. Waters). Likewise, with my own background in Real Estate/Construction, I pretty much went ballistic when they moved the offices to the WV site. Still consider that a very poor decision — but I did not participate or engage in the process of making that decision, so I made my point and they live with it.

    By the way — since driving by Easttown isn’t what people necessarily do every day — the ESC is gone. Chain link fence surrounding the property with a backhoe working to separate the “junk” from the soil. I cannot attend facilities meetings and appreciate CHV and others who report on them to us here.

    And to be candid — while I’m wondering if your suggestion that I run was any kind of serious, the process has become so politicized that you need to be prepared to accept hits from people like John P as part of the process — and for what? The owner of the Nursery adjacent to Conestoga told me he had people willing to kill me….which was kind of my final straw given that I didn’t want his property and didn’t think acquiring it at any price was in our best interests since the township wanted us to own it to have more parking (and keep those damn kids off township roads….)

    How about you? This contract is going to be VERY hard. I posted some Neshaminy links earlier. It’s a different time, but the PSEA (not necessarily the TEEA) just doesn’t get it. The AFT president has been on the talk show circuit and her talking points are good ones, carefully scripted. It’s all a bit childish…. this notion of “contributing more” to their benefits and pensions just misses the point. Employers no longer provide benefits — they provide access to them and keep costs affordable. The ONLY reason GM is pulling out is that the previous CEO restructured their benefit and pension programs. At one point, he said GM was not making cars — they were a pension/health care company. I don’t buy into renegging on promises or union busting, but it’s just ALL so different.

    I think all this debate is useful — but we have to soften our scrutiny. Poor Mike Heaberg was demonized by the implication that it was a done deal…and he had nothing to do with it. HOW do we expect to encourage people to participate when the peanut gallery is filled with angry observers?

  3. Where did you get your information on TE being the highest salary? I would like to see this for myself.

    [Reply]

    Ray Clarke Reply:

    I don’t know about Chester County comparables, but I did run a comparison with the Radnor salary matrix, which is maybe one of the better benchmarks.

    The two don’t line up exactly, but with reasonable assumptions, the 2011/12 TESD matrix will be 12% higher than the Radnor one, assuming that Radnor goes into next year with no new contract. That’s a straight average of all positions on the matrix. In the middle of the matrix, where most of the teachers reside, TESD will be 20-30% higher.

    [Reply]

    citizenone Reply:

    One can find top teacher salaries for all Phila area schools at

    http://www.philly.com/philly/education/report_card/

    [Reply]

  4. Unions are bankrupting states just like the autoworkers bankrupted Detroit.

    Look how that turned out.

    [Reply]

    mainlinetaxpayer Reply:

    Wall Street is bankrupting America. Look how that turned out.

    [Reply]

    Dave Reply:

    And the government kowtowing to both seems to be killing the rest of us.

    [Reply]

  5. I have seen the future, and it suggests that your (grand)children apply to military academies:

    1. Despite losing union support, Obama wins backing from corporate interests who keep him in power for another term, while the Republicans get organized. The Rs dominate public dialog, election funding, electoral district gerrymandering and all branches of government thereafter.
    2. The budget is balanced by cutting social security, Medicare and education and inflating away debt. Unemployment stabilizes at 20%, inflation at 15%. Gold rises to $10,000 per ounce
    3. Income disparities continue to worsen: real incomes for the top 5% increase, the bottom 75% decrease. The rich buy supplemental services to meet basic needs; insurance companies, for-profit schools, security companies, etc. flourish.
    4. All houses now contain arsenals with all types of automatic weapon; most people afraid to leave home.
    5. The populace is kept busy and entertained by checking Facebook and Reddit, and playing computer games on $25 laptops and game machines made in China.
    6. However, as the social services cuts start to phase in, the masses remember what social media can facilitate and take to the DC streets, no longer able to be controlled by the Government propaganda machine
    7. Government supporters dressed as Wild Bill Hickock ride horses down the National Mall, temporarily scattering the crowd. Male reporters from Al-Jazeera and China News, documenting the popular revolution, are assaulted by closeted cowboys with broomsticks.
    8. China, India, Germany and Canada want to help their 30 year ally, since they depend on the US for food supplies, but publicly they support the people’s revolution.
    9. After 18 days of escalating crowd protests in front of the White House, President Palin (Bristol) and her handlers flee to Monaco. The Swiss freeze $2 trillion of gold held by Goldman Sachs on behalf of government ministers.
    10. With so many weapons freely available, there are inevitable massacres, but eventually the military (for which funding has been unlimited) gains control.
    11. The End

    [Reply]

    Pattye Benson Reply:

    Say it ain’t so! Unfortunately some of these points may be closer to ‘our future’ than any of us would want to believe.

    [Reply]

    Constitutional Reply:

    Both the original Nostradamus and this bogus pretender are full of bull-dookey.

    [Reply]

    flyersfan Reply:

    very good, except for the military funding!

    [Reply]

  6. All hypotheticals aside, being a public sector employee is the only career that has a guaranteed pension, over the top health care benefits, and holidays whenever (did anyone notice that President’s Day tends to be a holiday for people who are paid by taxpayers?) I don’t know anyone who didn’t work that isn’t either a teacher or a state/federal employee except the banks….and we know they are linked to the government…
    Watch John Stewart from last night (it’s on at 7:00 pm today)….he had an awesome take on unions and corporations…..though the conclusion was kind of painful to consider)

    [Reply]

    Just a thought Reply:

    I disagree – I know of many private sector professions/companies (such as engineering, information technology, law, pharma, finance & banking) that offer pensions AND 401K contributions, excellent health care benefits, great holiday & sick pay, tuition reimbursement, stock purchase plans and stock options, etc.

    I think that many people believe that if a profession is supported by tax dollars – such as public education – that somehow the people who work in those fields should not be “better off” than they are. I don’t think we can discount the fact that there is a fair amount of simple jealousy and resentment at play.

    [Reply]

    School Observer Reply:

    I have family and friends in most of those industries, and that simply is no longer the case. Even the US Government dramatically pared back their pension plan for this generation.
    But given that there are companies that still do offer cadillac plans, those workers are subject to termination,layoff, and salary cuts. Teachers get 2.5% of their final 3 average salaries for each year they teach. So, start at 22 and retire at 62 with 100% pension, tax free in PA. And many locals still try to negotiate health care after retirement — to me, the PSEA is there to find affordable plans their members can buy after retirement. Let them negotiate how to spend money instead of how to earn it.

    [Reply]

  7. Another thought– the system creates this animosity, because you believe that people not in teaching think teachers don’t deserve to be “better off.” I don’t believe anyone would deny a great teacher the moon — but this system that is based on grading students to the tenth of a percent has no ability to identify poor performers economically.
    The industries you identify have bottom lines — they are able to compensate based on performance and productivity of not only the company but the employee. Meanwhile, schools bargain starting salaries that are ever increasing and the lines of people wanting the jobs continue to grow. That’s certainly not economically sound.

    [Reply]

  8. so the unions take dues, buy off politicians who give the public union members benefits and pay

    Public union workers worry about their “rights” while the public at large is going broke to support these “rights”

    What a world.

    [Reply]

  9. Andrea and J.P.,

    I agree with much of what each of you has written. There is no question that going forward, teachers need to be willing to compromise on their contributions to healthcare benefits and/or the level of benefits theyreceive. The District should not be expected to absorb all of the increased cost from year to year, and this will no doubt be part of contract negotiations in 2012.

    Last year the SB voted to self-insure to exert more control over h.c. costs, but the fact remains that teachers receive benefits very few in the private sectory could ever hope to get. And this sticks in the craw of taxpayers.

    John, I don’t know whart you mean when you accuse the SB of not preparing for the situation you saw coming and “toting” (sic) a certain political line. Are you suggesting that property taxes should have been raised, or that an EIT should have been clearly presented and promoted? But that for political reasons, no one would stand up and say so?

    I think the SB accurately read the community’s feelings on tax increases and believed (before Act 1) they could be deferred until absolutely necessary.

    With a $28 million fund balance, I understand the SB’s Janury vote to apply for the option to increase taxes beyond the Act 1 limit is being questioned by some in the community. And it is clear that many do not favor any new tax (EIT) without some guarantee that property taxes will be substantially reduced.

    But assuming a majority of residents value preserving the programs and services that make our school district one of the best in the state, that fund balance needs to be preserved for use when neessary. As it stands, after collecting all additional revenue allowed through Act 1 , the SB has proposed a 2011-12 budget that will still require taking a healthy amount from the FB – far in excess of last year’s $1.5 million. Taking more would be unwise, and I believe most informed community members agree.

    Having studied their options ad nauseum, SB members have been very open with the public, and in my opinion, acted in T/E students’ best interests. Personally, I trust their decisions were carefully made based on all of the facts.

    Until and unless transfer taxes flow into school board coffers again, revenue options are very limited and exacerbated by a decline in state funding.. Thus a combination of budget cuts and modest tax increases are prudent and necessary.

    Politics should not play a role in this process.

    [Reply]

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