The governor of Wisconsin, Scott Walker, and the governor of Indiana, Mitch Daniels, were both in New York City earlier this week for a Manhattan Institute conference about a "new social contract" with public employees.
Mr. Walker spoke first. He said the changes enacted in Wisconsin that had opponents sitting in and sleeping over in the state capital in protest earlier this year had saved $1.44 billion for state and local governments combined. He said school districts had used the savings to hire more teachers to reduce class sizes and to offer merit pay.
Mr. Walker said voters are looking for "not Republican leadership, not Democrat leadership, they just want leadership."
Mr. Walker contrasted his approach with that of Governor Patrick Quinn, a Democrat, of Wisconsin's neighbor Illinois, who "laid off thousands" of state workers after "massive tax increases."
He said that Chief Executive magazine had moved Wisconsin up to no. 24 in the nation from no. 41 as a place to do business, in part because of his actions. He noted that federal employees do not have collective bargaining rights for wages and benefits, and he said the employee health insurance contribution for federal employees is twice what he was asking for from Wisconsin state employees.
Mr. Walker said he could yet face a recall election next year if his opponents collect 600,000 signatures in a 60-day period.
He said he could always tell when he saw a teacher who agreed with him, because they'd "look around first," then whisper, "keep it up, you're doing a good job." Usually, he said, the teacher was married to someone in the private sector.
Governor Daniels said that governors who eliminate collective bargaining for public employees can expect union opposition. He said that in 2008, the Service Employees International Union sent a $1 million check to his opponent, even though it had "no employees" and "no members" in the state of Indiana — "maybe a few in a casino up North."
Said Mr. Daniels, "They were trying to buy a governor. If they had, the ROI of that would have been immediate and very large." His opponent would have reinstated collective bargaining for the 36,000 employees of the state of Indiana and the union would have immediately begun collecting dues of 2% of every paycheck.
Mr. Daniels said he was on the fence about eliminating collective bargaining for public employees when he took over as governor. "I thought long and hard about not doing it, or postponing it. I did strike it down, pull up the covers, and hope for the best. What happened was nothing," he said.
He advised politicians to act early and decisively, quoting a line from what he said was a country song :"If I shot ya when I should have I'd be outta jail by now."
Said Mr. Daniels, "I'm awfully glad we pulled the trigger on that one."
He said Indiana now has the fewest state employees it has had since 1976 and has the fewest state employees per capita in the country.
Mr. Daniels, like Mr. Walker, disparaged Illinois' performance as compared to that of his state. "That's handy to have next door, that's all I can tell you," he said. "If things are tough enough long enough in Illinois, I think folk will look for something different."
Mr. Daniels has a new book out, Keeping The Republic: Saving America By Trusting Americans.
Between the speeches by the two governors, pollster Douglas Schoen presented results of a survey that showed, among other findings, that voters favored by a 69% to 17% margin moving public employees to defined contribution, 401K-style retirement plans rather than defined benefit pensions. The polls showed voters favored spending cuts to tax increases, but I asked Mr. Schoen what would happen if the poll asked about tax increases specifically on millionaires, billionaires, hedge fund managers and corporate jet owners. He said the survey results might be more favorable to that idea, but that as a practical matter, he didn't think it would work, noting that it had been rejected by New York's Democratic Governor Cuomo and independent Mayor Bloomberg. "People move elsewhere," he said.
James Hohman of the Mackinac Center for Public Policy said Michigan's Republican governor, John Engler, had saved the state $3.4 billion by closing that state's defined-benefit pension system 14 years ago and moving to a defined-contribution plan.
The director of the Manhattan Institute's Center for State and Local Leadership. Michael Allegretti, highlighted a candidate for mayor of San Francisco, Jeff Adachi. The San Francisco Bay Area is a left-leaning place, and Mr. Adachi is a Democrat who runs the Public Defender office. But Mr. Adachi is campaigning on pension reform with a Web site that says, "Last year, a police officer earned $516,000 right before retiring. This retired officer is now entitled to receive a pension package of $240,000 each year for the rest of this officer's life. This real-life example demonstrates most clearly the need for reform."
