Labor Unions Are 'Bankrupting States': Sen. Johnson

The collective bargaining process with public sector unions needs to be restructured to keep labor unions from “bankrupting states,” Sen. Ron Johnson, (R-Wisc.), told CNBC Wednesday.

“It’s got to change,” said Johnson, who serves on the Appropriations Committee and the Budget Committee in the Senate. “It’s just not fair to push all this down to localities but then handcuff the localities.”

Johnson added that in a typical school district, 75 percent of its budget is dedicated to wages and benefits. “They have no option in terms of balancing their budget because they have no flexibility there other than to raise property taxes or lay teachers off,” said Johnson. “Those are awful options. We need to bring another option, a fairer option, to the table.”

In Johnson’s own state, Democrats kept the Wisconsin Assembly up overnight Tuesday with a filibuster, in another attempt to block the Republican governor Scott Walker’s plan to strip public sector workers of nearly all of their bargaining rights, reported the AP.

The bill in the Wisconsin legislature would require most public sector workers to contribute more to their pensions and health insurance and also would strip them of their right to collectively bargain anything except salaries, according to the AP. Walker has said the plan is crucial to solving a $137 million deficit in the state's current budget and a $3.6 billion shortfall in the 2011-13 budget.

Johnson disagreed that the governor’s plan would take away all the collective bargaining rights of the labor unions, but characterized Walker's actions as “rebalancing the equation.”

“In terms of electoral politics, the largest interest group was public-sector labor unions,” added Johnson. “They [the unions] spent $200 million, so the problem in these labor negotiations is that the taxpayer isn’t represented.”