Op-Ed: The Meaning of Wisconsin for Nonprofits

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altWisconsin Governor Scott Walker’s power play is bad news for the nonprofit sector, not just unions and the middle class.

That’s because more than anything else it is a power play. Walker’s rhetoric is that it’s all about balancing a budget, but that’s a ploy. To understand the impact on Wisconsin’s nonprofit community, one has to look longer term at the consequences of the governor’s power move.

Some background: Walker launched the revolt by trying to rush through the state legislature a budget repair bill which would, among other things, effectively eliminate collective bargaining for public employees at all levels of state and local government.

Public sector unions would be left only with the power to bargain over wages so long as they did not demand more than the consumer price index. Some public sector unions wouldn’t even be able to bargain for that. Contracts would be restricted to one year; dues could not be mandated and would not be taken out of paychecks. Increased payments toward health and pension benefits would have cut the average public worker pay by about 8 percent.

Walker’s alleged reason for all this was the need to close an expected budget gap in the current state fiscal year, which ends June 30. But as the Legislative Fiscal Bureau – the state’s independent auditor – reported last week, less than $28 million would be saved in the current fiscal year by the moves, while $165 million would be saved by the restructuring of state bonds Walker also proposed.

Meanwhile, in recent weeks Walker has enacted about $117 million in tax cuts for businesses (to take effect next fiscal year). He is expected to propose much deeper tax cuts in his upcoming proposal for the 2011-2013 budget, including additional tax exemptions for capital gains profits and for multinational corporations. So much for his concerns about budget deficits.

Clearly, this was extreme fiscal overkill on Walker’s part. Fundamentally, his goal is to destroy the ability of public sector unions to represent public employees and – more importantly – to play a meaningful role in politics.

And since public sector unions are now the dominant sector in the union movement, Walker would in effect have destroyed the single largest institutional base of power that could challenge his ideological drive toward minimal government, maximum privatization, and extreme reliance on the profit sector to satisfy basic social needs.

To some in the nonprofit sector this might even seem like good news. Privatization could mean lots more business for some nonprofits, which would take over contracts from public employees. Union weakness would mean less likelihood of strong union efforts at large nonprofits.

But the long-term consequences would be calamitous for civil society. At its root, this is a battle between two very different views of public institutions. Some – who support the unions in this –understand that public structures are essential to a healthy, prosperous economy. They understand the basic truths, that a UPS truck can’t even make deliveries to a private company or that one firm cannot trust a signed contract with another firm without a vast network of public roads, public rules, public adjudicators, public structures, public nets, public assurances, and public confidence.

On the other side are those who see public institutions as inherently destructive, as something to be avoided at all costs, as an impediment to a society where people are to go through life with little to guide them except their own personal initiative and moral beliefs.

This is not – emphatically not – a Republican versus Democrat issue. It goes deeper than that, though it can surface in the form of such partisan wrangling.

In a world of Walker’s making, the nonprofit community would be deluged with demands from the millions who would be shut out from public institutions. In Walker’s world, the nonprofit community would be the primary safety net for all those who stumbled in the profit society. In Walker’s vision, nonprofit workers, whose compensation always trails that in the public and for-profit sectors, would see impaired work conditions even as workloads increase. In Walker’s paradise, cynicism would be enshrined as the right moral stance toward those who stumble in the profit world.

In this ideological war, there should be no doubt which side the nonprofit sector is on.

Jack Norman is Research Director at the Institute for Wisconsin’s Future, a 501(c)3 policy and organizing nonprofit based in Milwaukee.

  • rick cohen

    Readers should look at today’s USA Today (http://www.usatoday.com/news/nation/2011-02-22-poll-public-unions-wisconsin_N.htm) for reputable poll results indicating Americans favor protecting and retaining workers’ collective bargaining rights by a margin of roughly two to one. That doesn’t mean that in this budget climate, there won’t be give-backs on pension issues. But the Wisconsin public sector unions have already conceded some important fiscal issues that don’t need to happen at the cost of collective bargaining rights.

  • Bill Bro

    An op-ed by Jonah Goldberg in yesterday’s LA Times offers an opposing view: http://tinyurl.com/4snnwd9.

    The reality is that no matter the area in which spending cuts are contemplated, some will be unhappy 🙁

  • Bill Bro

    [quote name=”rick cohen”]Readers should look at today’s USA Today…

    Jonah Goldberg offers the opposing view in yesterday’s LA Times op-ed. Regardless where spending cuts begin (and, surely, they’re necessary), someone will always be unhappy.

  • Jim Lewis

    I do not agree with your op-ed. I fully agree with Johnah Goldberg’s op-ed in the LA Times that public-sector unions are a mistake. I also feel that your position is contrary to the basic philosophy of nonprofits. Of course, now-a-days most nonprofits around the table at our local nonprofit coalition meetings are supported to a large degree by taxes — which I feel is wrong. If a nonprofit can’t survive without tax funding, then it should dissolve and leave the work to the true nonprofits. Goldberg is right on in his op-ed, as the public sector workforce has little to no history of what the private sector workforce has historically dealt with . . . now that we have strict labor and safety laws there is no purpose for any unions, save to drive prices up, force manufacturing out of the country, and provide slush funds to politicians. I hope Gov. Walker pulls a Reagan and creates a host of job openings for those who truly want to work.

  • Dee

    I disagree with most of Jim’s comments, but want to respond to this:

    “If a nonprofit can’t survive without tax funding, then it should dissolve and leave the work to the true nonprofits.”

    I work with nonprofits and have never seen an ‘untrue’ one. Nonprofits do work that is a service to society, for example, homes caring for adults with disabilities. Immediate families support these institutions but it is hard to attract donors who lack a personal connection. As many clients require significant medical attention, private support is insufficient to cover costs.

    Nonprofits do this work at a dramatic savings for society than for-profit institutions or hospitals can, but without state support they cannot do the work at all – or must cut back – resulting in a dramatic increase in state-backed medical care costs, or people will be harmed from the lack of services.

    Arts institutions turn grant dollars into community revitalization and creative economy projects that increase quality of life, draw business (who wants to relocate to a dull area?), and increase economic development opportunities. This is well documented.

    It is time to step back, look at the big picture, and work together to create an economic climate where a rising tide lifts ALL boats, not just the top 2%.

    [quote name=”Jim Lewis”]

  • David Cearley

    Recognize that public sector unions see your organizations as competition. The more volunteer labor used, the less the uninstall can collect in dues to sway the political process. You may see yourselves in solidarity pursuing the same values, butbthey are much more interested in displacing you with dues paying workers, even if that means fewer people delivering necessary services.