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  News of the payouts caused widespread public outrage and demands that Ament face a recall. Instead, he announced his retirement, and a few months later I won a special election to replace him with 55 percent of the vote.

  When I took office in Milwaukee County, we inherited a fiscal mess. The cash payouts were only the beginning. Spiraling health care and pension costs had grown so out of control they were like a virus that was eating up more and more of our county budget. I had promised in my campaign not to raise property taxes, which were already astronomically high. And I did not want to have massive layoffs of county workers.

  One of the things I spent the most time praying about when I was county executive was layoffs. I realized how such decisions affected people’s lives. Collective bargaining rules protected workers with seniority, which meant those most likely to get a pink slip were the people who could least afford it—younger workers, just starting off, with low pay and families to support. When I sent out layoff notices, I knew they were often going to people trying to meet mortgage payments or feed and clothe their kids.

  Moreover, I knew that mass layoffs would decimate public services. That is because under collective bargaining rules, decisions about whom to layoff have to be made without regard to merit. In the private sector, when managers downsize they can assess their operations, decide where people are most needed, and choose to retain the best and brightest while letting the least productive workers go.

  Not in the public sector. The rules under collective bargaining are as simple as they are inane: If you’re the last to be hired, you’re the first to be fired. Period. That meant that if we were forced to hand out random pink slips, we would have to let go of some of our most productive workers. Meanwhile, many of the least productive would be able to hold on to their jobs only because of seniority. That is no way to run anything.

  I was determined to shrink the size of government, but I wanted to do it through attrition and reform, not random pink slips. So I did everything in my power to avoid massive layoffs.

  To get the county on sound fiscal ground, I decided that we would all have to tighten our belts—starting with me. Over the course of my eight-year tenure in Milwaukee County, I gave about $370,000 in salary back to Milwaukee County taxpayers. If I was going to ask other county workers to sacrifice, I had to be willing to sacrifice as well. Indeed, I took a bigger hit as a percentage of my salary than anything I asked of the rest of the county workforce.

  Next, I proposed a series of alternatives to public-worker layoffs. I asked for modest increases to employee pension and health care contributions, which were the biggest driver of our debt. I proposed moving seasonal workers (such as snowplow drivers) into other jobs (such as cutting grass) in the off-season to save money. I proposed going to a thirty-five-hour workweek, to spread the pain around in order to keep people working. At one point, I even proposed going to a thirty-five-hour workweek one week a month for four months.

  But thanks to collective bargaining, all the proposals I put forward required the unions to sign off. And the union bosses made clear to me under no uncertain terms that they were not giving up any of the lavish benefits they enjoyed in order to save somebody else’s job.

  I will never forget sitting at the conference table in my office across from Rich Abelson, the head of AFSCME Council 48, explaining to him that without some of these modest changes we would have to lay off hundreds of workers.

  He looked me in the eye and said: “Go ahead and do it!”

  I was stunned. I explained again how many jobs would be lost if he stood in the way of our reform. He told me he didn’t care how many workers I laid off, he wasn’t giving up any benefits.

  Perhaps Abelson and the other union leaders didn’t think I would go through with it and were calling my bluff. Or maybe they thought that I was a short-termer—a Republican elected in a heavily Democratic district in a special election, thanks only to a political scandal. Better to absorb the layoffs, protect their benefits, and wait until a new county executive beholden to the unions replaced me in the next election.

  If that was their logic, they certainly miscalculated. In 2004, two years after my special election, I was elected to a full term with 57 percent of the vote. Then in 2008, the year President Obama won Milwaukee County with 67.5 percent of the vote, I was reelected with nearly 60 percent of the vote—which meant there were at least some Obama-Walker voters. I won three elections in a row, with a larger percentage of the vote each time, proving that conservative reformers can prevail with a deep blue electorate if they make tough decisions on issues that are relevant to the voters. Americans reward politicians who keep their promises and get results. In times of crisis, we want leadership.

  Despite the fact that voters repeatedly backed me at the polls, the unions would not give an inch during my time as county executive. They were perfectly willing to see hundreds, even thousands, of union workers lose their jobs in order to keep the prerogatives they had amassed for themselves.

  So much for “solidarity.”

  With the unions unwilling to make changes under collective bargaining rules, I had no tools at my disposal to reduce spending and get our budget under control without layoffs. So we had no choice—we had to cut jobs.

  When layoff notices went out, I remember people streaming into my office, usually young workers in tears, pleading for their own job or that of a coworker. They would beg me to reconsider, to try the thirty-five-hour workweek or some of these other ideas instead. It was heartbreaking, but I’d have to tell them, “It’s not for me to reconsider—go talk to your union steward, go talk to your union leadership. They’re the ones who blocked the reforms.”

  Sometimes an employee who had not received a notice would come to me and say, “I’d be willing to give up some time so that this coworker of mine could keep working.” I’d have to tell them that collective bargaining rules would not allow it.

  Other times, a supervisor would come to me and say, “Scott, I know you have to lay people off, but so-and-so is doing such a great job. I can give you ten other people who are not producing and ought to go before her.” They knew that if productive workers were let go, the burden would fall on their backs to pick up the slack for the unproductive workers who stayed on. I had to explain that under collective bargaining, we could not take into account merit or effort in deciding who got laid off. The only thing that mattered was seniority.

  We could not move seasonal workers from one job to another in the off-season, because people’s job duties were locked in by union contract—and the union refused to change them. Heck, we could hardly move a clerical worker from one office to another within the same agency without union sign-off. There was no flexibility. None.

  So we had to let people go.

  Laying off good workers was an agonizing experience, and it taught me an important lesson: Reforming collective bargaining was not just about saving money. It was not just about saving jobs. It was about making government work better for the people.

  I believe that smaller government is better government. I am sometimes asked if I hate government. I don’t. I hate government that is too big and government that does not work. I believe that government at the federal, state, and local levels should be smaller. But in the areas where government has an appropriate role to play—be it local education or national defense—taxpayers not only deserve but should also expect and demand that government carry out its functions exceptionally well.

  As conservatives, we believe that as many decisions as possible should be pushed down to the local level. This is not only a matter of efficiency, it is fundamental to our freedoms. As Milton Friedman explains in Capitalism and Freedom, “If government is to exercise power, better in the county than in the state, better in the state than in Washington. If I do not like what my local community does, be it in sewage disposal, or zoning, or schools, I can move to another local community. .
. . If I do not like what my state does, I can move to another. If I do not like what Washington imposes, I have few alternatives in this world of jealous nations.”

  If we believe in local government, then the last thing we want to do is decimate the ability of local officials to effectively serve their citizens. We want local communities to keep our streets clean, keep our citizens safe, and give our children the best possible education.

  Collective bargaining makes those legitimate tasks much harder. Government can’t work when unions siphon off taxpayer dollars meant for public works and public schools into excessive and unsustainable benefit packages. Government can’t work when local officials are denied the tools their private sector counterparts enjoy to reward good employees and fire bad ones. Government can’t work when managers have little or no authority to consolidate agencies, streamline functions, set performance standards, or change people’s duties without the permission of a union. And government can’t work when 10 percent of the public workforce is suddenly eliminated in random layoffs—and when managers are forced to get rid of some of the most productive workers while retaining some of the least productive.

  Giving local officials tools to be more efficient and effective is a fundamentally conservative idea. And freeing them from the grip of collective bargaining rules is the only way to let them do that.

  For years, Americans have been presented with a false choice between raising taxes and cutting government services. If you own a business, you don’t double the price of your product or cut its quality in half—at least not if you want to stay in business. You find ways to run your business more efficiently, and deliver a better product than your competitor at lower cost. I tried to do that as county executive, but it was next to impossible because I was tied down by the Lilliputian threads of collective bargaining.

  Collective bargaining is the enemy of good government. Its supporters call it a “right,” but the fact is it is not a right enshrined in the U.S. or Wisconsin constitution. For most of American history, collective bargaining did not exist for government employees. Until 1959, when Wisconsin became the first state to allow collective bargaining for government workers, the pay, benefits, and working conditions of public employees were determined by the legislatures overseeing them as part of the regular budget process.

  Even labor advocates like President Franklin Delano Roosevelt and AFL-CIO president George Meany were suspicious of collective bargaining for government employees. And as our experience in Milwaukee County showed, their suspicions were well founded. Rather than a right, collective bargaining has turned out to be an expensive entitlement. It allows union bosses to dictate spending decisions to state and local governments, and collect compulsory union dues to perpetuate their political power. But collective bargaining denies hardworking taxpayers their “right” to the efficient delivery of public services. It denies children their “right” to a decent education. And it denies citizens their “right” to a government that lives within its means.

  During my eight years as county executive, we cut the number of county workers by 20 percent, and turned a $3.5 million county deficit into a surplus. On one hand, that is an achievement because the county government needed to be smaller. But because of collective bargaining, we couldn’t do it the best way. Being forced to get rid of productive workers while retaining slackers, and having my hands tied by union intransigence and collective bargaining rules, was a searing experience. That experience was the ultimate source of the reforms I enacted as governor.

  I knew how many jobs I could have saved in Milwaukee County, how much more money I could have saved the taxpayers, how much more efficiently I could have run the county government if I had the tools we eventually enacted in Act 10. During my tenure, I can remember sharing that frustration often with Jim Villa, Linda Seemeyer, Bill Domina, and other key advisers. They understood that we easily could have avoided layoffs, balanced our budget, kept taxes low, and delivered better services. But those tools were not at my disposal.

  Later, when I took the oath of office as governor in January 2011, I promised the people of Wisconsin in my inaugural address that, as we tackle our $3.6 billion deficit, “we will not abandon our fundamental responsibilities to protect our families and our property, provide for a high-quality education for our children, ensure care for the most vulnerable among us, and enhance the quality of life for our citizens.

  “Our government will not only be smaller. It will be better. More responsive, more efficient, more effective,” I declared.

  That was a promise I intended to keep.

  CHAPTER 3

  “See What You’ve Gotten Yourself Into?”

  The day after my election as governor, Mike Huebsch took me to the capitol for a briefing on the budget mess with the Legislative Fiscal Bureau to see just what kind of a fiscal disaster we had inherited.

  Mike is a former speaker of the assembly who would soon become my secretary of the Department of Administration. He’s been my friend since we served together in the state assembly in the 1990s. He understood the budget process inside out.

  We knew going in that there were some real budget problems, but the crisis was far worse than we had first thought.

  During Governor Jim Doyle’s eight-year tenure, he borrowed vast sums of money and avoided making tough budget decisions while expanding government programs. In the three biennial budgets since he took office, new state bonding had exceeded new tax-revenue collections by $2.1 billion. Doyle had been borrowing money to underwrite expansions of health care, education, and environmental programs.

  The fiscal bureau staff walked us through the accounting gimmicks the Doyle administration had been using to balance the budget on paper while digging Wisconsin into a deeper and deeper hole with each passing year. Doyle had raided $1.3 billion from the state’s transportation fund.1 He had also raided $200 million from the Patients Compensation Fund, a state fund set up for victims of medical malpractice. But the Wisconsin supreme court had ruled that the raid was unlawful and ordered the state to repay the money immediately, along with interest that was accumulating daily, eventually costing Wisconsin taxpayers an additional $35 million. The state also owed another $60 million or so to the state of Minnesota in unpaid IOUs under a tax reciprocity agreement—and Minnesota was tired of waiting for its money.

  By 2009, Doyle had run out of accounting tricks and segregated funds to raid. Then, just as he was about to face the consequences of his fiscal irresponsibility, President Obama was elected and passed his stimulus spending bill. The federal stimulus funds were like manna from heaven for profligate politicians like Doyle, allowing them to put off tough decisions and go on spending—and even taking on new obligations—leading to even larger deficits down the road.

  Like a gambler with a new line of credit, Doyle used the one-time stimulus money to cover the ongoing costs of Medicaid and education. Now, as he prepared to leave office, the one-time money had run out, and we were left with no way to cover these ongoing costs in the next budget.

  As I looked at the numbers, I realized why Doyle had chosen not to run for reelection. If he had somehow managed to win, he would have had to clean up the fiscal mess that he had helped to create.

  We were faced with two impending budget crises: In the short term, we had to close an immediate budget deficit of $137 million2 before the end of the fiscal year on June 30, 2011. That meant we had to start cutting spending right away. And that was the easy part. The deficit for the biennial budget that started on July 1, 2011, was a whopping $3.6 billion—one of the largest per capita deficits in the country.3

  We had just a few months to figure out how to close it.

  After leaving the budget briefing, Mike turned to me and said with a smile, “See what you’ve gotten yourself into?”

  “I’ve seen worse,” I told him. “You’ve got to remember, I come from Milwaukee County.”

  T
hat was a bit of bravado. Truth be told, the situation was far worse than anything I’d seen in Milwaukee County. And the more I learned, the more resolved I became to fix this once and for all.

  As we began crunching the numbers, it became clear that the plan I had campaigned on to have state workers contribute 5.8 percent of their salaries to pensions and 12.6 percent of their health insurance premiums would not be enough to close the gap. Even when we expanded this policy to county and local public workers, the numbers still did not add up. It was a drop in the bucket.

  We had to find the money somewhere. There were only a few limited options:

  I could raise taxes, as the governor across the border in Illinois ended up doing. But I had promised on the campaign trail not to raise taxes. I knew that doing so would harm economic growth, reduce state revenues in the long run, and hurt job creation when I had pledged to jump-start it. So tax increases were off the table.

  I could lay off thousands of public workers, as governors ended up doing in California, New York, and Connecticut. But that would devastate middle-class jobs in the midst of the worst economy in a generation. I had promised to protect them.

  I could cut Medicaid, as other governors ended up doing. But absent fundamental Medicaid reform in Washington, that would hurt needy families, children, and seniors—the poorest and most vulnerable of our citizens. I was not going to do that.

  That left cuts in aid to schools and local governments, which make up more than half of the state budget. But as a former local official, I knew that the kinds of cuts necessary to balance the budget, if not accompanied by structural reforms, would devastate public education and cripple public services.

  We were in a bind and there seemed to be no way out.

  This much I knew for certain: I was going to balance the budget. I was going to do it without relying on budget gimmicks and temporary fixes. I was going to keep my campaign promises. I was not going to lay off tens of thousands of workers. And I was not going to decimate public schools and local governments.