Rep. Dennis Richardson: Wisconsin Turmoil – Lessons for Oregon

by Rep. Dennis Richardson

I am State Representative Dennis Richardson and this newsletter is for Oregonians interested in learning more about the economic issues that affect our state. Today’s newsletter begins with an overview on Oregon’s budget crisis, and then compares and contrasts Oregon with Wisconsin to see what we can learn from Wisconsin’s current turmoil.

Oregon’s Economic Crisis.

I would like to actually speak with you about Oregon’s Budget—what it is and what economic factors will influence most the preparation of the 2011-13 two year (“biennial”) budget.

Please turn up your computer’s volume, sit back and watch this week’s budget presentation on YouTube. I hope you find it informative. (Click here.)

Wisconsin & Oregon—Comparison & Contrast.

If you have been watching the action in Wisconsin, you know of the public employee outrage, orchestrated demonstrations and partisan controversy over their Governor’s response to Wisconsin’s budget crisis.

Are there lessons for Oregon to learn from what is transpiring in Wisconsin?

Consider the following facts:

–Wisconsin has a population of 5.7 million.

–Oregon has a population of 3.8 million.

–Wisconsin has a budget shortfall of at least $3.6 billion over the next two years.

–Oregon has a budget shortfall of at least $3.5 billion over the next two years.

–Wisconsin State workers currently pay 6% of their health benefit costs and are being asked to increase the employee’s portion and pay 12% of their health care premiums. (Kaiser Family Foundation states the national average contribution toward healthcare policies among government and private workers is nearly 30%.)

–Oregon State workers currently pay nothing (0%) toward their health benefits. (Oregon is the only state in the USA that pays 100% of its employee health benefit and PERS costs.)

–Wisconsin State workers currently pay 1% of their retirement plan costs and they are being asked to increase employee contributions to 5.8%. (The national average for government worker contributions toward retirement plans is 6.3%.)

–Oregon State workers currently pay nothing (0%) toward their retirement plan (PERS) costs. (Click here.)

–Wisconsin’s proposal includes prohibiting most government workers from (1.) collectively bargaining for anything other than their salaries, and (2.) demanding pay increases above theConsumer Price Index measure of inflation. To bypass the salary cap would require voter approval. Additionally, Wisconsin’s proposal would stop unions from requiring public employees to pay union dues.

–Oregon has no limitations on public employee unions or their ability to collectively bargain, and Oregon collects union dues from state employee paychecks. (Oregon’s public employee unions are free to continue negotiating for the State to pay 100% of both health and PERS retirement benefits for all State workers. [Wisconsin information source—Click here.]

How have Wisconsin’s citizens responded to the on-going partisan clash between its Governor and the public employee unions?

A just-released poll of Wisconsin citizens reveals the following:

• By 74-18, Wisconsin voters support making state employees pay more for their health insurance.

• By 79-16, Wisconsin voters support requiring state workers to contribute more toward their retirement/pension plan.

• By 54-34, Wisconsin voters support ending the automatic deduction of union dues from state workers’ paychecks, and support making unions collect dues from each member.

• By 66-30, Wisconsin voters support limiting state workers’ pay increases to the rate of inflation unless voters approve a higher raise by a public referendum.

• By 41-54, Wisconsin voters oppose limiting collective bargaining to wage and benefit issues.

• By 58-38, Wisconsin voters support limiting collective bargaining on matters relating to educational issues such as, (1.) giving schools flexibility to modify tenure, (2.) paying teachers based on merit, and (3.) discharging bad teachers and promoting good ones. (To see poll, Click here.)

Is Wisconsin’s turmoil a precursor for Oregon? You decide.


  • Steve Plunk

    It’s long been acknowledged Oregon’s system of compensating public employees was unsustainable. Some have seen this coming since the late 1970’s not long after collective bargaining began.

    For years the blame has been place on cheap taxpayers and businesses not paying “their fair share”. What utter nonsense. It’s the spending and the arrogance of government trying to become omnipotent in all matters.

    Kicking the can down the road is no longer an option. Good luck to Rep. Richardson with the monumental task ahead.

  • Ron Marquez

    …..”Is Wisconsin’s turmoil a precursor for Oregon?”…..

    Not with Kitzhaber in the driver’s seat. In my dreams….

    An open letter from John Kitzhaber to the leadership of AFSCME and SEIU…..

    “As we struggle to reconcile state spending with the current economic conditions, it is obvious public employee compensation must be brought into line with our available resources.

    I remain committed to the pledge I’ve made to all Oregon taxpayers not to raise any state tax for at least the next four years. Proposed fee increases, especially those that affect the individual taxpayer, will undergo close scrutiny. In total, the revenue stream projected for the next biennium is not going to increase.

    As part of our collective bargaining process, I’ve proposed what I deem reasonable terms for bringing public employee compensation in line with revenue. Unfortunately, your proposals are clearly not grounded in economic reality and, if agreed to as proposed, would lead to a substantial reduction in the state work force. I cannot and will not allow our most critical state services to be decimated in order to maintain the current level of public employee compensation.

    While I would prefer to see the collective bargaining process conclude with an agreement fair to all, negotiations thus far lead me to believe this will not happen. Should further negotiations not produce an agreement supportable by our available resources, I will use my lawful authority as Governor of the State of Oregon to impose terms of public employee compensation that will maintain the state’s most critical services and be as fair as possible to employees and taxpayers alike.”

    Then I woke up.

  • The numbers show that the situation in Oregon is worse than Wisconsin, but with our state government controlled by Democrats I do not see them making any significant progress toward addressing the real causes of the problems. Their solution is always more revenue (taxes & fees).

  • Bill

    I think you have a few apples being compared to oranges here. And, other polls show strong support for unions so who is to be believed? My grief with this is the breaking of a contract. I believe in honoring contracts. For the state if it gets into a bad one it is the fault of those at the table and the ones that sent them.

    • Rupert in Springfield

      >For the state if it gets into a bad one it is the fault of those at the table and the ones that sent them.

      I don’t really know if thats true. Is it really the fault of the voters? I mean in what other situation is it ok for a politician to make a sweetheart deal with a contractor, in exchange for a kickback and we say no one is at fault but the voters?

      We all know what is going on here – politicians sell out the public by giving the unions absurd contracts and then the unions give the politicians back a portion of the money as a campaign contribution.

      Last time I checked we didn’t blame the people for electing the guy.

    • Steve Plunk

      I wonder about contracts made between government and taxpayers. Without changes my Social Security contract will be void as the government can’t pay the benefits. The social contract between the generation regarding public education will be violated if we don’t reform public sector pay and benefits. The implied contract that our elected representatives will act as responsible fiduciaries seems to have already been violated.

      The public employee unions exacted generous benefit plans knowing they were unsustainable. They bought favors from elected representatives who then negotiated or approved those contracts. It was a corrupt system and as it was corrupt I see no dishonor in renegotiating before it dooms the state.

      I believe in contracts as well. I do not believe in contracts attained through soft political corruption that all parties knew would blow up one day. That day is today.

      • Rupert in Springfield

        I guess I would rate it about the same as breaking a contract with a military contractor who was providing $500 hammers. Yeah you have a contract, but you got it through pay offs. Buh bye scammers,

  • Quixote-man

    As a retired PERS beneficiary (small municipality, not State), I find some of your statement inflamatory, even though they may be true specifically, although not for ALL PERS current and former employees.
    My former City co-workers were paying for part of our healthcare 6 years ago, and probably paying more now, yet you are still painting us with the same paint as State of Oregon employees. (Idle curiosity, how much of PERS is State of Oregon employees- and how much is counties, cities and special districts?)
    More idle curiosity: The State of Oregon (and following their lead; most counties, cities et al) picked up employee 6% retirement contributions in an inflationary year when the government CPI was 11 or 12%. And employees got the 6% pickup plus 3 to 5 % salary increase in a @ 12% inflationary year. If we are going to compare apples to apples and oranges to oranges, what did other states do in that or the following year. Because, in hindsight, because of the current hatred (not that I had any input), I wish we had gone for 5 or 4% more wages instead of the 6% pickup which had caused so much hatred.
    Now, if I read and interpret you right, you are suggesting that public servants (slaves) may (should) never get more than the CPI increase, even if they have gone 10 years accepting a tad less and have fallen behind on the pay scale? And, should their job responsibilities increase (most job requirements include the phrase: “and ‘other such duties as may be assigned…’.”, but you don’t want workers (doing the work) to be able to ask for a raise?

    I suggest we exclude the executive, legistlative and judical government branch froggies from PERS, or any retirement system, other than SS, so there is no conflict of interest and they may then have the integrity to do their job – i.e. govern and manage without any self interest. Nah, we don’t want to set them up on their own special retirement program – that’s Congress & all it’s abuses. Ain’t it kinda bogus that a peon looking for a job is a “servant” when a government person that spends more to get a job than what it pays is now entitled? Duh!

    • valley person

      Its class warfare Quixote. The haves are painting the have-somes as having too much so that they can sic the have-nothings on you so that the haves can have it all. Public unions and their members have to wake up and realize that this isn’t really about your wages and benefits, its about ALL wages and benefits. The same people going after you are also going after Social Security and Medicare. They want an Ayn Rand world. You don’t have to dig deep to figure this out. This is why the governor in Wisconsin won’t compromise. He has to bust the union. He can’t settle for a temporary give back.

      Arguing over facts, like which 5% or 6% when is not really relevant to these people. They don’t care about facts. They care about cutting your wages and your benefits and your political influence, using you to stir up the rest and divert attention from who has the money and power in society. Its the 1920s.

      Wake up workers of the US and unite. Either that or its Chinese wages and benefits for all of us.

      • Steve Plunk

        No one has mentioned Rand or Libertarian ideas here, don’t build that straw man. We are talking fiscal responsibility and real facts.

        Wake up workers of the US and unite? The 1960’s called and want their slogans back. You can see how well the workers utopias fared. Russian girls look to prostitution as a reasonable career. The Chinese have ditched their ideas for ours. Everyone in between is moving toward market reforms and less welfare. It’s not so much we’ll move toward Chinese wages but that they will move toward ours.

        It is class warfare, I’ll give you that. It’s the productive class versus the regulatory and parasitic class. No longer will the host tolerate being bled dry and then insulted to boot. Measures 66 & 67 showed us what the liberals thought of productive Oregonians and represented a clear attack.

        Man the ramparts valley p! Put on that Che t-shirt! Chant hey hey ho ho tax ’em more and don’t let go! The only solution to our fiscal problems are to tax an already tapped out productive or make some cuts. That’s the reality dreamers like you are still fighting against.

        • valley person

          No one has mentioned these ideas? You are joking. Catalyst is a self described libertarian project. Steve B has promoted Rand on many occasions. Rupertism is Raynd on a stick. Fiscal responsibility? Sorry Steve, that doesn’t play with me. Your party had its chance on multiple occasions and created the giant budget deficit you are now using to cut the programs you don’t like. The Republican party just advocated for and voted for hundreds of billions in tax breaks and cuts and is now all upset over the deficit? Please. No more phony outrage. We are all adults.

          The 1960s (and 30s) slogans may be poised for a comeback if your side insists on going back to the 1920s. But as a history lesson. my phrase was a play on “Workers of the World Unite, which was an 1860s slogan, not 1960s. You were off by a century.

          The worker utopias did not work, we agree on that much. But nor did the unregulated capitalist utopia of the late 19th and early 20th centuries. The modern argument ought to be about the right balance between socialism and capitalism, and unions, what little we have left, are part of that balance. including public unions.

          The Chinese have indeed embraced low wage, non union, top-down capitalism. Its a big part of what is driving US and European wages down. Free trade and all that. A race to the bottom.

          Who is the “productive class” Steve? Define it for me. If it is people who actually produce things, that is workers, and some number of them are still unionized. Since only about 15% of American workers produce physical goods, that is a pretty small number for you to rally around. If you mean all private sector workers, then you are saying a Wallmart greeter is producing something…or Wallmart in general for that matter. And if you leave out public sector workers are producers, adn public sector workers are not, then you have to convince yourself that a teacher is not part of the production of educated people, a policeman is not producing safety, and a fireman is not producing life and property protection. And you have to explain what exactly a private sector insurance agent is producing. Can’t we just buy on line?

          As a matter of fact Steve, I am manning the ramparts in my own small way. As your side increases its efforts to dismantle my side, I expect I will have more company in the weeks and months ahead.

    • Steve Plunk

      Talking facts may seem inflamatory but it’s time to. Failure to look realistically in the past is what got us here.

      The lower pay argument is no longer holding water. Public employees took lower pay in return for job security and benefits. We can still give some job security but the benefits are being cut everywhere so the public should not be exempt.

      The retirement benefits are much the same. They are too generous and everyone knew it long ago yet continued to kick the can of responsibility down the road. Concessions will be necessary and if the public sector refuses can you blame the taxpayers for harboring ill feelings?

      • valley person

        Job security already existed. It is called the civil service system. When they accepted lower pay, it was traded for higher pensions, not more job security. Get your facts right if you are going to argue facts.

        Concessions on benefits are a forgone conclusion. The issue is union busting. That is what is happening in Wisconsin, where the workers already agreed to all the pay and benefit concessions their monster of a governor wanted.

        • conseratively speaking

          Valley Person’s ruminations reflect a state of Marxist Socialist Canoodlism beyond commoner $ense.

      • valley person

        Job security already existed. It is called the civil service system. When they accepted lower pay, it was traded for higher pensions, not more job security. Get your facts right if you are going to argue facts.

        Concessions on benefits are a forgone conclusion. The issue is union busting. That is what is happening in Wisconsin, where the workers already agreed to all the pay and benefit concessions their monster of a governor wanted.

  • Unionboy

    I worked hard for what I have and will not give it up. Period.

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