Governor’s Budget Repair Bill Stalled by Judge’s Temporary Order

April 7, 2011

On March 11, 2011, Governor Scott Walker signed into law a budget repair bill that stands to significantly change the landscape of public-sector employment in Wisconsin. The substance of the bill has drawn national attention and been the subject of much political debate.

Status of Bill
The law was scheduled for publication on March 25. However, on March 18, Dane County Circuit Court Judge Maryann Sumi issued a temporary restraining order delaying its publication based on a legal challenge by Dane County District Attorney Ismael Ozanne. Ozanne, a Democrat who was appointed by former Democratic Governor James Doyle, alleges that a legislative committee violated Wisconsin’s “open meetings” law in passing the bill. It is unknown when the court will decide the merits of Ozanne’s complaint.

This is the second high-profile case involving the budget bill in which Judge Sumi has been involved. On February 18, she declined to order Madison teachers back to work. The Madison School District asked her to declare the teachers’ unauthorized work stoppage, which resulted in school closings, an illegal strike. In denying the school district’s request, Judge Sumi indicated there was insufficient evidence to show that the work stoppage was a strike under state law.

Significant Changes
The budget bill contains key provisions affecting public employment. With the exception of some public-safety workers, most public employees will be affected if the bill is ultimately published.

Collective bargaining 
The bill requires an initial certification election in April to determine whether a majority of bargaining unit employees still want to be represented by an existing union. If a union receives less than 51 percent of the votes, it will be decertified at the expiration of the current collective bargaining agreement. Following decertification, elections for organized public-sector employers would be held on an annual basis.

Additionally, the bill:

  • Limits collective bargaining to the subject of base wages only;
  • Limits base wage increases to a percentage no greater than the percentage change in the consumer price index unless a larger increase is authorized through a local referendum;
  • Prohibits collective bargaining on matters not permitted under the Wisconsin Municipal Employment Relations Act;
  • Limits union contracts to one year;
  • Eliminates interest arbitration;
  • Allows employees to stay in a union without paying union dues; and
  • Prohibits covered employers from collecting union dues through salary deductions and requires that the union collect its dues (a union would have to collect its dues directly from employees)

Retirement and group insurance 
The bill requires participating employees to contribute one-half of all actuarially required retirement contributions as determined by the Employee Trust Funds Board and prohibits covered employers from paying any employee-required contribution. Additionally, after 2011, covered employers would be prohibited from paying more than 88 percent of the average premium cost of plans offered in the tier with the lowest employee premium cost.

Strikes and work stoppages
The bill authorizes covered employers to discharge any state employee who fails to report to work as scheduled for any three unexcused working days during a state of emergency. Covered employers may also terminate an employee who participates in a strike, work stoppage, sit-in, stay-in, slowdown, or any other concerted activity (including a mass resignation or sick call) to interrupt the operations or services of state government.

According to Governor Walker, the budget repair changes are necessary to avoid massive public-sector layoffs. After signing the bill, he directed the Department of Administration and Office of State Employment Relations to rescind layoff notices sent to 1,500 state employees. In doing so, the governor stated:

The Legislature helped us save 1,500 middle-class jobs by moving forward this week with the budget repair. The state will now be able to realize $30 million in savings to balance the budget. . . . The reforms contained in this legislation, which require modest health care and pension contributions from all public employees, will help put Wisconsin on a path to fiscal sustainability.

Bottom line 
The impact of the budget repair bill has already been significant. New collective bargaining agreements have been signed, some with substantial concessions in terms of pension and health contributions. There will likely be some new twists and turns as these complex budget issues make their way through the appellate courts and the legislature and as the public responds to the big picture in light of Governor Walker’s overall agenda for cutting government spending. We will continue to keep you advised on the status of the bill. The full text of the law can be found at www.legis.wisconsin.gov/11Act010.pdf.

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For more information about "Governor’s Budget Repair Bill Stalled by Judge’s Temporary Order," contact Troy D. Thompson at tthompson@axley.com or 608.283.6746.