Legislative Proposals Squeeze Local Governments from Many Directions
In Wisconsin and across the country, most government bodies finance the cost of post-retirement health benefits for their former employees on a pay-as-you-go basis. A number of Republicans in the legislature want to change that and begin requiring local governments, including school districts, to pre-pay those benefits for any public employees hired after 2014.
Evidently, the proponents of the change decided that converting to up-front financing of those benefits is working so well for the U.S. Postal Service that it’s time to do much the same thing for local governments. Okay, that’s probably not their reasoning, and I have to confess that I’m not sure what their primary argument is. However, a good State Journal article by Steven Verburg about the debate over the proposed legislation says that the bill’s proponents contend their intent is to protect workers from being cheated out benefits they have been promised. Read more
Wisconsin has its leanest public sector in nearly 20 years, new according to new figures from the U.S. Census Bureau.
An analysis by the Wisconsin Budget Project of the recently-released Census Bureau data shows that Wisconsin had 5.4 percent fewer state and local government employees per capita in 2011 than the national average, ranking 40th among the states. State and local employees include a wide variety of workers, including teachers, highway workers, corrections guards, firefighters, and police officers.
Only 10 other states had a leaner public sector than Wisconsin in 2011. While that might surprise some state residents, Wisconsin has had fewer state and local employees per capita than the national average for most of the last two decades. Wisconsin had 49.6 state and local full-time equivalent positions (FTEs) per 1,000 residents in 2011, compared to a national average of 52.5 FTE, as shown in the chart below.
The difference between Wisconsin and other states has grown wider since the 1990s. Read more
Wisconsin has lost a higher percentage of its state government employees than any other state, according to quarterly figures newly released by the federal Bureau of Labor Statistics. Wisconsin had nearly 8,000 fewer workers in state government in June 2011 than in June 2010. There are currently about 225,000 unemployed people in Wisconsin searching for jobs.
Even before these job losses, Wisconsin had one of the leanest state governments in the nation. In 2010, Wisconsin ranked 42nd among the states in the number of state employees per capita, according to the most recent figures available. That means Wisconsin’s state government is nearly 10 percent smaller the national average, compared to our state’s population.
Over the past year, Wisconsin’s decline in state government has far surpassed the drop in any other state. Wisconsin lost 10 percent of its state government employees between June 2010 and June 2011. Louisiana, which lost the second largest amount of its state government workforce, shed only 6 percent of its state government workers. Read more
1. Compared to other states, Wisconsin has a lean public sector
In 2010, Wisconsin had 6 percent fewer state and local government employees relative to our population than the national average, according to an analysis of Census Bureau data. Wisconsin had a leaner public sector than all but 11 states in 2010, the most recent year for which there are figures.
The Wisconsin Budget Project has published an analysis of state and local government employment levels in Wisconsin and nationally, which can be found here.
2. Relative to our population, the number of public employees in Wisconsin has declined over the last decade
Between 2000 and 2010, the number of state and local government employees in Wisconsin relative to population declined by 4 percent. The chart below shows that there have year to year fluctuations, but the overall trend over the last decade has been downward in the size of our public sector relative to population. Read more
There would be no cost of living adjustments to state employee salaries for the next two years, under a plan Governor Walker’s administration has submitted to a legislative committee.
A letter outlining the pay plan, sent from the Director of Office of State Employment Relations (OSER) to the Joint Committee on Employment Relations, can be read here. The actual compensation plan is also posted on the Office of State Employment Relations website, but be warned the file is enormous and takes a long time to load.
According to OSER’s letter, the compensation plan retains progression adjustments, some reimbursements, and some of the various types of supplemental pay that appeared in collective bargaining agreements. Some types of supplemental pay were eliminated, and calculations for determining overtime pay were changed. Senator Jeff Fitzgerald said that the changes would reduce overtime payments at the Department of Corrections by $5 million per year.
This pay freeze comes in the wake of significant compensation cuts for public employees, in the form of increased contributions to fringe benefit costs. Read more
Wisconsin had a leaner public sector than all but 11 states in 2010, a new report by the Wisconsin Budget Project shows. Wisconsin has long had fewer state and local government employees than the national average, according to U.S. Census Bureau data.
State and local government employees – including those working as teachers, corrections guards, highway workers, police officers, and firefighters – make up about one out of every seven workers in Wisconsin.
Today, public sector workers in Wisconsin will receive their first paycheck reflecting reductions in their compensation mandated by the budget repair bill passed earlier this year.
Public employees with relatively low salaries or hourly wages stand to lose thousands of dollars a year, the equivalent of as much as six months of grocery costs. Some public workers at the lower end of the income spectrum could face as much as 15% in lost income and increased costs beginning this week.
This pay cut will hit low-wage public employees the hardest, and could potentially push many families that are barely scraping by into insolvency. Wisconsin Council on Children and Families highlighted these changes in a recent brief, showing how the cuts in compensation could affect low- and moderate-wage workers like janitors, beginning teachers, and public school kitchen workers.
The budget repair bill, which inspired massive protests across the state, requires public sector workers to pay a larger portion of their health insurance costs and contribute more to their retirement accounts. Read more
Governor Walker has proposed a number of initiatives to privatize government functions or to make it easier to do so. One of those proposals, privatization of much of the “income maintenance” system for handling BadgerCare and Food Share applications and renewals, has suffered a couple of significant setbacks in recent weeks — most recently in the June 2nd Audit Bureau report. However, those obstacles may only be small speed bumps in the Walker Administration’s efforts to downsize government by turning over more government functions to the private sector.
Since privatization is likely to be an ongoing topic of debate in Wisconsin in the next year or two, we thought it would be useful to share a list of 10 basic questions developed by In the Public Interest (ITPI) to help policymakers, the public and the media debate privatization proposals.
Wisconsin doesn’t have an especially large public sector. In fact, as a recently-updated Budget Project paper indicates, only seven other states have fewer public sector employees relative to the size of the state population. Read more
The task of balancing the biennial budget became slighlty less onerous a week or two ago when the Legislative Fiscal Bureau announced that state revenue collections in the current fiscal year and next biennium would be $636 million more than previously estimated. Unfortunately, the news this week isn’t nearly as upbeat; in fact, several developments are cutting into the balance created by the improved revenue forecast.
Three pieces of news chip away at that balance:
- The Fiscal Bureau estimated (in Budget Paper #340) that the state share of Medicaid related spending is likely to be about $63 million (GPR) higher than the Dept. of Health Services projected;
- GOP leaders released the summary of a new budget adjustment bill that, among other things, will reduce anticipated agency lapses to the General Fund by $54 million, presumably because agencies haven’t been able to find the full amount they were directed to lapse; and
- The new budget adjustment bill would also make it official that the state won’t realize the anticipated $29.8 million in savings in the current fiscal year from increase state employee contributions for health care and retirement benefits, since the bill requiring those changes is stalled in the courts.
Budget Project Updates Public Sector Employment Issue Brief and Tax Quiz