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Wisconsin Governor Walker takes spotlight at Milwaukee governors meeting

Wisconsin Governor Scott Walker speaks after witnessing a signing memorandum of understanding of the commercial deals between U.S. and China
Wisconsin Governor Scott Walker speaks after witnessing a signing memorandum of understanding of the commercial deals between U.S. and China

By Brendan O'Brien

MILWAUKEE (Reuters) - Wisconsin Governor Scott Walker will take center stage this week when he hosts the National Governors Association summer meeting in Milwaukee, giving him another high profile platform as speculation grows over whether he will run for the White House in 2016.

Republican Walker, whose 31 months in office have included controversial public sector reforms, is expected to lead his peers in discussions about economic and social issues, like pensions and payrolls, that have dogged states since the recession.

Walker may have telegraphed the tone for the governors' meeting at a speech on Monday.

Addressing the Governmental Research Association conference in Milwaukee, Walker said, "If Detroit were in Wisconsin, Detroit wouldn't be declaring bankruptcy right now.

"If (Mayor) Rahm Emmanuel had Chicago in Wisconsin, he would be able to do the sorts of reforms he's trying to do to make the schools work better," he said.

Referring to the reforms he spearheaded in Wisconsin, Walker told the group, "What we did may be bigger and bolder than what others have done, but it's not far removed from where other states and even other cities need to go if they are going to be sustainable."

Soon after taking office, Walker, 45, moved to dilute the power of public unions to collectively bargain, and to require public employees to make pension contributions and pay at least 12 percent of their health insurance premiums.

The reforms, known as Act 10, were accompanied by the 2011-13 state biennial budget, which cut state aid to municipalities and school districts while requiring them to cut local taxes.

Viewed by unions in Wisconsin and elsewhere in the United States as an assault on organized labor, the reforms triggered massive protests in the state's capitol, Madison, and in 2012 a recall of the governor. Walker survived it all while stepping into a national political spotlight.

The conference of governors, which started on Thursday and is due to run through Sunday, is being held in Wisconsin's largest city, Milwaukee. The city is struggling to balance its budget despite the reforms, which did not affect unions for state employees who are responsible for public safety.

"The absence of any real increased flexibility for police and fire cause(s) us financial challenges," said Mark Nicolini, the city's budget director.

"For a year, it was probably a pretty significant impact. But, as each year passes, the importance of the loss of state aid grows and the impact of the Act 10 changes remain more or less static."

Effects of the reforms have been seen in public sector union membership, which declined to 37 percent in 2012 from 50 percent in 2011, according to Unionstats.com, which tracks union membership in the United States.

Act 10 requires unions to hold annual recertification elections in which a majority of the total membership must have voted to recertify a union so it can exist.

Elections in 2011 and 2012 in which 207 school districts, 39 municipal and six state units participated ended with 32 units, or 13 percent, being decertified. The decertifications are on hold pending legal challenges to Act 10.

The Wisconsin Supreme Court is considering a lawsuit filed by the Madison Teachers Union and Public Employees Local 61, AFL-CIO, a city of Milwaukee employees union. The unions are challenging Act 10 and the 2011-2013 budget legislation, saying the measures violate equal protection, association and home rule rights.

On Monday, Walker compared himself to President Franklin Delano Roosevelt, a Democrat. "He felt that there wasn't a need in the public sector to have collective bargaining because the government is the people. We are the people," Walker said.

Walker has credited the reforms with taking Wisconsin to a $243 million rainy day fund from a $3.6 billion deficit in 2011.

The state's fiscal health led to ratings agency Moody's Investors Service giving Wisconsin an Aa2 general obligation bond rating in April because of an "improved liquidity position" and a fully funded pension system.

Economic improvements aside, Wisconsin is finding it difficult to create jobs. This could be a strike against Walker when he comes up for re-election in 2014.

When he campaigned in 2010, Walker promised to create 250,000 private-sector jobs during his first term, but only about 50,000 jobs have been created in Wisconsin so far during his administration, according to the U.S. Bureau of Labor Statistics.

Walker's soon-to-be-published book, "Unintimidated: A Governor's Story and a Nation's Challenge," and a trip he made to Iowa in May to attend two political fundraisers have increased speculation that he may be considering running for president in 2016.

In the short-term, however, Walker and his fellow governors will spend a few days talking about health care costs, economic development and commerce, cyber security and veterans affairs, but it will not be all business.

They will tour Milwaukee on Harley Davidsons (the motorcycle maker was founded there in 1903), have batting practice and pitching clinics at Miller Park (home of the Milwaukee Brewers baseball team) and attend a fireworks display and symphony on the banks of Lake Michigan.

(Reporting By Brendan O'Brien; Editing by Toni Reinhold)

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