CHICAGO — Wisconsin Gov. Scott Walker survived a historic recall election Tuesday that was sparked last year by his move to curtail unions’ collective bargaining rights.
Also in the Midwest, voters in the St. Louis area approved a $945 million bond measure to help fund initial projects under a $4.7 billion consent decree with federal regulators and environmental groups for sewer system upgrades over the next two decades.
National stories played up Walker’s victory as one that has national electoral significance for other lawmakers who challenge union rights by gauging public sentiment for such action.
Walker, the only governor to survive a recall, highlighted the widespread attention placed on the race. Previous recalls successfully ousted Gray Davis in California and Lynn Frazier in North Dakota.
“Tonight we tell Wisconsin, we tell our country, and we tell people all across the globe that voters really do want leaders that stand up and make the tough decisions,” the Republican first-term governor said in an address late Tuesday after his Democratic rival, Milwaukee Mayor Tom Barrett, conceded defeat.
Walker said improving the state’s economy would remain his priority going forward, and he hoped to unify lawmakers with plans to meet with members of both parties over beer and brats. “Tomorrow is the day after the election, and tomorrow we are no longer opponents,” he said.
Such optimism could be misplaced on the legislative front given that Walker has enjoyed GOP control of the Senate and Assembly since he took office in early 2011. Democrats appear to have taken narrow control of the Senate due to the apparent loss of incumbent Sen. Van Wanggaard, one of four Republican senators who also faced a recall vote, to his Democratic challenger, former state Sen. John Lehman.
The race was too close to call Wednesday and a recount was possible. The impact also might not be felt for a while as lawmakers face a regular general election in the fall and the Legislature does not convene until January.
Attention in recent weeks was focused on the state of Wisconsin’s economy and Barrett’s claims that Walker was failing in his 2010 pledge to create 250,000 jobs.
But the recall was sparked by Walker’s move early in his tenure to push through a bill that increased employee pension payments and health care premiums and included controversial provisions stripping unions’ of most of their collective bargaining rights.
Democratic senators fled the state in an attempt to block a vote, but it was eventually taken, and the union rights’ measure passed in a partisan vote.
Wisconsin’s $7.5 billion of outstanding GOs carry mid-double-A ratings and a stable outlook.
Walker’s 2012-2013 budget sharply reduced the use of non-recurring revenues, though the two-year $66 billion budget did rely on $337 million of debt restructuring to help eliminate a $3 billion shortfall.
Walker primarily eliminated the red ink with cuts. Fitch Ratings said in a special commentary Wednesday it doesn’t expect changes to the state’s fiscal and budgetary direction following Walker’s victory. Fitch noted the progress towards structural balance and said its “focus will continue to be the ability and willingness of management to balance revenues and expenses without depending on one-time measures.”
The controversial legislation may have put the state on a more solid financial footing, though Barrett and other critics contend it has come at the expense of local governments, school districts and public employees.
Voters in the area served by Metropolitan St. Louis Sewer District overwhelmingly authorized $945 million of bonding authority and charter amendments. The system’s users face higher rates of 9% to 12% annually over the next few year with the bonding approval. MSD has warned that absent the new borrowing authority, those increases would have pushed rates up by 123%.
A federal judge earlier this year signed off on the consent decree, ending a five-year-old lawsuit against the district over violations of federal clean-water laws for allowing untreated sewage to seep into area waterways and the ground.
Standard & Poor’s late last year raised MSD’s rating to AAA from AA-plus. “The upgrade reflects the system’s maintenance of a strong financial position with timely rate increases while continuing to successfully manage capital needs in anticipation of a consent decree order that was approved in 2011,” said analyst Corey Friedman.
Fitch Ratings took a differing view, dropping the rating to AA-plus from AAA, citing MSD’s weakened financial position and rising debt.
