Politics

Wisconsin labor unions flip-flop on deficit

Matthew Boyle Investigative Reporter

The current union boss-sponsored story line in Wisconsin’s budget battle is that newly-elected Republican Gov. Scott Walker is exaggerating the state’s budget deficit – or creating the deficit himself through tax cuts – as a pretext to eliminate collective bargaining rights for the state’s public sector workers. But, that’s not the song labor unions were singing last year when Democrats were in charge of the state.

In mid-February, Jack Norman, the research director at the Institute for Wisconsin’s Future, a left-wing think tank, wrote that the “state of Wisconsin has not reached the point at which austerity measures are needed.”

“Walker was not forced into a budget repair bill by circumstances beyond he [sic] control,” Norman is quoted as saying on left-wing blog Talking Points Memo. “He wanted a budget repair bill and forced it by pushing through tax cuts… so he could rush through these other changes.”

But, last August, Norman accused then-Gov. Jim Doyle, a Democrat, of either being incompetent or refusing to be tough on tax cheats, a problem that he said was contributing to the deficit. That was the conclusion he drew after discovering that Wisconsin’s Department of Revenue (DOR), the state-level version of the Congressional Budget Office, was trying to cover up Wisconsin’s budget deficit.

“I would guess that the driving force against releasing the report is simply the terror on the part of politicians of mentioning the T word [tax] in public. Unless you’re on the campaign trail screaming about cutting taxes,” said Norman. “Politicians don’t want to be associated with being tough on taxes, even if it means cracking down on tax cheats.”

Norman told The Daily Caller that what the union was referring to last August was the “tax gap,” or the “difference between taxes legally owed and taxes collected,” not the deficit. The way it’s tied into Wisconsin’s budget deficit, he said, is that if the state would take measures to close the “tax gap,” it would “make up some revenue to fix the deficit.” Norman also contends that the Wisconsin budget deficit is currently projected at $3.6 billion over two years, not $2.5 billion over one, like the pro-labor group said in August.

Unions have also said they didn’t know this fight was coming and that they want more time to discuss it. For example, when the state budget battle was just beginning, Bryan Kennedy, the president of Wisconsin’s American Federation of Teachers chapter, told the Appleton, Wisc., Post Crescent that Walker’s budget plan and deficit claims were a “shocking development” that came out of nowhere.

“It ends collective bargaining for public employees in our state, after 50 years of management and workers solving problems together,” Kennedy said.

But Kennedy’s chapter of AFT published an article in March 2010 about how conservatives were upset over public employee benefit plans and pensions. In the article, entitled titled “Holding the line: rightwing think tank attacks public employee pensions,” Kennedy’s group defended public-sector employees getting better benefit packages than comparable employees in the private sector. The article seems to demonstrate that Kennedy and his organization were well aware of state deficit claims that concerned conservatives well before Walker announced his budget plan.

While railing on the DOR in late August 2010, the Wisconsin South Central Federation of Labor, a local union group associated with the national American Federation of State, County & Municipal Employees (AFSCME), argued, “Wisconsin’s $2.5 billion a year state budget deficit is expected to grow by another 8 percent this year.” The South Central Federation of Labor, though, seems to have forgotten about the deficit it once fretted about in “talking points” it prepared for union workers protesting Walker’s budget plan. It doesn’t use the word deficit at all, and accuses Walker of playing politics.

Another meme the labor unions have used to prop up their cause is to argue that Walker’s $140 million in tax cuts for business in late January are responsible for the current $137 million state budget shortfall. However, Walker’s $140 million in tax breaks won’t take effect until July 1 and therefore will have no effect on the current $137 million budget deficit.

Even Norman admits that. “They don’t go into effect until July 1, so they’re not relevant to the current fiscal year finances,” he told TheDC.