APNewsBreak: Email shows Walker considered pay cut for public workers

MADISON -- Gov. Scott Walker considered cutting the pay of all public workers at the same time he was crafting his budget proposal that forced them to contribute more for their pension and health care benefits, an email obtained by The Associated...

MADISON -- Gov. Scott Walker considered cutting the pay of all public workers at the same time he was crafting his budget proposal that forced them to contribute more for their pension and health care benefits, an email obtained by The Associated Press under the state's open records law shows.

The email, sent Dec. 8 by policy director Ryan Murray, also asks the budget director how much could be saved through the maximum allowable eligibility and benefit cuts to Medicaid.

Ultimately, Walker didn't call for a pay cut as part of his budget that required public workers to pay 12.4 percent of their health care benefits and 5.8 percent of their pensions. In fact, when rolling out his plan, Walker attempted to sell it by noting that he wasn't cutting salaries, imposing any furlough days or calling for layoffs.

Public workers were still furious with the proposal, which also took away nearly all of their collective bargaining rights, and they staged massive protests in an ultimately unsuccessful attempt to block passage of the law.

During the fight, in an attempt to hold on to their bargaining rights, the workers conceded to the higher pension and benefit payments but Walker still pursued the other changes, which the Republican-controlled Legislature passed.


The pay cut to public workers was never discussed with lawmakers, said Republican Rep. Robin Vos, co-chairman of the budget committee that considered Walker's plan.

When asked why the governor did not propose it, his spokesman Cullen Werwie said Walker decided to take another approach.

"Making structural reforms to health care and pension costs provided a better long term solution to the state's massive budget deficit than making salary adjustments, continuing furloughs, or enacting other short-term fixes," Werwie said.

In the email, Walker's policy director also asks then-budget director Dave Schmiedicke how much it would cost the state to repeal a variety of tax increases, including one that raised cigarette taxes by 75 cents a pack in 2009 and an income tax hike on the state's highest earners.

The email came just a month after Walker won the election during the transition before he took office in January.

During the campaign Walker pledged to cut taxes and not propose any increases. He made a specific vow to repeal a number of increases passed by the Democratic controlled Legislature in 2009, but was unable to follow through on that. Walker was faced with a $3.6 billion budget shortfall he had to balance in his first two-year budget.

"Ultimately, what was included in the budget reflected the governor's goal of balancing the budget without increasing taxes," Werwie said.

One of those Democratic-passed increases was an upper-income tax bracket for individuals making more than $250,000 a year and couples earning more than $300,000.


The email showed that Walker asked how much it would cost to repeal that and other increases, but they did not make it into his budget.

Asking for cost estimates about a range of proposals is not unusual for a governor-elect as they are putting together their budget, said Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance who previously worked as assistant secretary of the state Revenue Department in the late 1970s and early 1980s.

What's more surprising is that after Walker campaigned so strongly on repealing the 2009 tax increases he didn't get rid of any of them, Berry said.

Walker did partially reverse a capital-gains tax credit that Doyle had reduced. Walker also made some changes, but did not outright repeal, to a new requirement that multistate corporations based in Wisconsin file a combined tax return.

Werwie wouldn't say whether Walker would pursue repealing any of the tax increases in future budgets.

"Specific repeals would have to be considered given the fiscal situation of the state budget at any point of time," Werwie said. "Ultimately Gov. Walker believes that lowering taxes and putting more money back in the hands of the people will help grow our economy and create jobs."

Vos, the budget committee co-chairman, said given the size of the budget shortfall it was clear early on that many of the taxes would not be repealed.

"Most of us quickly realized we need to right the ship before we started repealing tax increases," Vos said.


Other tax increases Walker's aide asked about repealing included the combined reporting tax, the decrease in capital gains exclusions, the hospital tax imposed to capture more federal Medicare reimbursements and a sales tax on computer software.

The email also asks for how much state money that goes to the University of Wisconsin System, broken out by campus. Walker ultimately proposed, and the Legislature approved, a $250 million cut for the system.

On Medicaid, Walker's budget as passed by the Legislature calls for $500 million in cuts but doesn't say specifically where they should come from. Those cuts were to be decided on by Walker's Department of Health Services and are subject to approval by the Legislature's budget committee.

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