State Budget Showdowns

Wisconsin Gov. Walker, New York Gov. Cuomo and New Jersey Gov. Christie try to bring public sector pay and benefits under control

Wisconsin. Ohio. Michigan. New Jersey. New York. Budget-battle showdowns are coming soon to a statehouse near you.

Thousands of angry school teachers, union members, and their sympathizers have descended on capitals to fight against reducing pay and benefits for public employees. The protesters are up against a new crop of governors who are hell-bent on spending cuts to deal with deficits that may rise to combined $125 billion in the next fiscal year.

Gov. Andrew Cuomo (D-N.Y.) is looking for public employees to pay $500 million towards benefits they’re currently receiving for free.

New Jersey's Chris Christie is proposing public employees pick up 30 percent of their health care premiums. Wisconsin's Scott Walker wants public employees to pay at least 13 percent of their health care premiums. And he wants state workers to start contributing to their retirements for the first time.

This newfound fiscal discipline comes after a virtually unchecked binge over the past 10 years during which state expenditures exploded by more than  80 percent in inflation-adjusted dollars, including big bumps in overall worker compensation.

The most controversial aspect of the budget battles deals with public-sector unions and collective bargaining. Wisconsin's Walker and others argue that the current process is inherently stacked against taxpayers because the government isn’t spending its own money like companies in the private sector do. What’s more, taxpayers have no way of opting out of any agreement that’s reached. In the private sector, consumers can always take their business elsewhere. That’s the basic reason why progressives such as Franklin Roosevelt and labor legend George Meany were against unions for government workers. 

In a world of super-tight budgets, it's a foregone conclusion that public-sector workers are going to have to give back compensation. Public school teachers make up the bulk of government employees in every state in the country and they already make 35 percent more in straight salary than their private-school counterparts. There's also a growing gap between what they get toward retirement and what private-sector professionals receive.

Teacher union leaders in Wisconsin and elsewhere now say that educators are willing to accept less compensation - just as long as nobody cuts the union out of the deal-making. Whatever the fate of public employee unions in this, the winter of our discontent, there's no question that teachers and other state workers are going to have to get used to making less.

That's not a total fix, much less a revolution, but it counts as real progress in a country where every state government has spent itself to the brink of bankruptcy.

"Budget Battle Showdowns" is a joint production of Heritage Foundation and Reason.tv. Written and produced by Jim Epstein and Nick Gillespie, who also narrates. Footage and other assistance from Dan Hayes and Clay Broga of FreeThink Media.




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