Madison Teachers, Inc. v. Walker

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Justia Opinion Summary

Madison Teachers, Inc. and Public Employees Local 61 sued Governor Walker and three commissioners of the Wisconsin Employment Relations Commission challenging several provisions of Act 10, a budget repair bill that significantly altered Wisconsin’s public employee labor laws. Plaintiffs (1) alleged that certain aspects of Act 10 violate the constitutional associational and equal protection rights of the employees they represent; and (2) challenged Wis. Stat. 62.623, a separate provision created by Act 10, as a violation of the home rule amendment to the Wisconsin Constitution, and argued, in the alternative, that section 62.623 violates the constitutionally protected right of parties to contract with each other. The circuit court invalidated several provisions of Act 10, including the collective bargaining limitations, annual recertification requirements, and the prohibitions of fair share agreements and on payroll deductions of labor organization dues. The Supreme Court reversed and upheld Act 10 in its entirety, holding (1) Plaintiffs’ associational rights argument is without merit; (2) Act 10 survives Plainiffs’ equal protection challenge under rational basis review; (3) Plaintiffs’ home rule amendment argument fails because section 62.623 primarily concerns a matter of statewide concern; and (4) Plaintiffs’ Contract Clause claim fails.

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2014 WI 99 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2012AP2067 Madison Teachers, Inc., Peggy Coyne, Public Employees Local 61, AFL-CIO and John Weigman, Plaintiffs-Respondents, v. Scott Walker, James R. Scott, Judith Neumann and Rodney G. Pasch, Defendants-Appellants. ON CERTIFICATION FROM THE COURT OF APPEALS OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: July 31, 2014 November 11, 2013 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Dane Juan B. Colas JUSTICES: CONCURRED: DISSENTED: CROOKS, J., concurs. (Opinion filed.) BRADLEY, J., ABRAHAMSON, C.J., dissent. (Opinion filed.) NOT PARTICIPATING: ATTORNEYS: For the defendants-appellants, there were briefs by J.B. Van Hollen, attorney general, and Kevin St. John, deputy attorney general, Steven P. Means, executive assistant attorney general, and Steven C. Kilpatrick, assistant attorney general. Oral argument by J.B. Van Hollen and Kevin St. John. For the plaintiff-respondents, there was a brief by Lester A. Pines, Lee Cullen, Tamara B. Packard, Susan M. Crawford, and Cullen Weston Pines & Bach LLP, Madison; and M. Nicol Padway, Aaron A. DeKosky, and Padway & Padway, Ltd., Milwaukee; and oral argument by Lester A. Pines, Tamara B. Packard, and M. Nicol Padway. An amicus curiae brief was filed by Michael P. May, city attorney, and John W. Strange, assistant city attorney, on behalf of the City of Madison. An amicus curiae brief was filed by Bruce F. Ehlke, Katy Lounsbury, and Ehlke, Bero-Lehmann & Lounsbury, S.C., Madison, on behalf of Laborers Local 236 and AFSCME Local 60. An amicus curiae brief was filed by Grant F. Langley, city attorney, Rudolph M. Konrad, deputy city attorney, Stuart S. Mukamal, assistant city attorney, and Donald L. Schriefer, assistant city attorney, on behalf of the City of Milwaukee. An amicus curiae brief was filed by Milton L. Chappell, Nathan J. McGrath, and Foundation, Inc., National Right to Work Legal Defense Springfield, VA; and Richard M. Esenberg, Thomas C. Kamenick, Brian McGrath, and Wisconsin Institute for Law & Liberty, University School Milwaukee; of Law, and Bruce Virginia N. Beach, Cameron, VA; on Regent behalf of Elijah Grajkowski, Kristi Lacroix, and Nathan Berish. An amicus curiae brief was filed by Timothy E. Hawks and Hawks Quindel, S.C., Milwaukee; and Marianne Goldstein Robbins and The Previant Law Firm S.C., Milwaukee; and Stephen Pieroni, Madison; and Peggy A. Lautenschlager and Bauer & Bach, LLC, Madison; and Aaron N. Halstead and Hawks Quindel, S.C., Madison; and Barbara Zack Quindel and Hawks Quindel, Milwaukee; and Jeffrey Sweetland and Hawks Quindel, S.C., Milwaukee; and Mark A. Sweet and Sweet and Associates, LLC, Milwaukee; on behalf of the Wisconsin Councils 24, Education Association 40, 48, and Council, AFT-Wisconsin, 2 AFSCME SEIU District Healthcare Wisconsin, Wisconsin Federation of Nurses and Health Professionals, and State of Wisconsin AFL-CIO. An amicus curiae brief was filed by Andrew T. Phillips, Daniel J. Borowski, Jacob J. Curtis, and Phillips Borowski S.C., Mequon, on behalf of Wisconsin County Mutual Corporation and Community Insurance Corporation. 3 Insurance 2014 WI 99 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2012AP2067 (L.C. No. 2011CV3774) STATE OF WISCONSIN : IN SUPREME COURT Madison Teachers, Inc., Peggy Coyne, Public Employees Local 61, AFL-CIO and John Weigman, Plaintiffs-Respondents, FILED v. Scott Walker, James R. Scott, Judith Neumann and Rodney G. Pasch, JUL 31, 2014 Diane M. Fremgen Clerk of Supreme Court Defendants-Appellants. APPEAL from a judgment and order of the Circuit Court for Dane County, Juan B. Colas, Judge. ¶1 MICHAEL J. GABLEMAN, J. Reversed. In March 2011, the Wisconsin Legislature passed Act 10,1 a budget repair bill proposed by Governor Scott Walker. 1 Act 10 significantly altered Wisconsin's Provisions of Act 10 were reenacted without amendment in 2011 Wisconsin Act 32 ("Act 32"), the 2011-13 state budget, which reestablished collective bargaining rights for some municipal transit employees. For ease of discussion, we refer to the Municipal Employment Relations Act, as amended by Acts 10 and 32, as "Act 10." No. public employee labor laws. 2012AP2067 Act 10 prohibits general employees from collectively bargaining on issues other than base wages, prohibits municipal employers from deducting labor organization dues from paychecks recertification of general requirements, employees, and imposes annual fair share prohibits agreements requiring non-represented general employees to make contributions to labor organizations. ¶2 In Employees August Local 61 2011, sued Madison Teachers, Governor Walker Inc. and Public and the three commissioners of the Wisconsin Employment Relations Commission challenging several provisions of Act 10. The plaintiffs alleged, among other things, that four aspects of Act 10 the collective bargaining limitations, the prohibition on payroll deductions of labor organization dues, the prohibition of fair share agreements, and the annual recertification requirements violate the constitutional associational and equal protection rights of the employees they represent. The plaintiffs also challenged Wis. Stat. § 62.623 (2011-12),2 a separate provision created by Act 10, which prohibits the City of Milwaukee from paying the employee share of contributions 2 to the City of All subsequent references to the Wisconsin Statutes are to the 2011-12 version unless otherwise noted. 2 No. 2012AP2067 Milwaukee Employes'3 Retirement System, alleging it violates the home rule amendment to the Wisconsin Constitution. The plaintiffs argued, in the alternative, that if Wis. Stat. § 62.623 does not violate the home rule amendment, it nevertheless violates the constitutionally protected right of parties to contract with each other. ¶3 The Dane County Circuit Court, Judge Juan B. Colas, presiding, invalidated several provisions of Act 10, including the provisions relating to collective bargaining limitations, union recertifications, and the prohibitions on fair share agreements and payroll deductions of labor organization dues. The court of appeals certified the case to this court, pursuant to Wis. Stat. § 809.61. I. ¶4 ("MTI"), We now uphold Act 10 in its entirety. BACKGROUND AND PROCEDURAL HISTORY Plaintiff-Respondents Public Employees are Local 61 Madison ("Local Teachers, 61"), and Inc. their 3 "Employes" is an alternate spelling for "Employees." Webster's Third New International Dictionary 743 (3d ed. 2002). "Employe" was once the common spelling in English. Bryan A. Garner, A Dictionary of Modern Legal Usage, 312 (2d ed. 2001) (citing Hull v. Philadelphia & R.R., 252 U.S. 475, 479 (1920) ("We need hardly repeat the statement . . . that in the Employers' Liability Act Congress used the words 'employé' and 'employed' in their natural sense, and intended to describe the conventional relation of employer and employé.")). In fact, H.W. Fowler, an ardent advocate of the " ee" suffix, notes in the first edition of A Dictionary of Modern English Language (1926) that in the late 19th century the Oxford English Dictionary "labelled employee 'rare exc. U.S.'""). We will use the more contemporary spelling, "employee," unless the alternative spelling, "employe" appears in quoted language or in a party's name. 3 No. 2012AP2067 respective representatives, Peggy Coyne and John Weigman. is a labor organization representing over 4,000 employees of the Madison Metropolitan School District. MTI municipal Local 61 is a labor organization representing approximately 300 City of Milwaukee employees.4 ¶5 three The Defendant-Appellants are Governor Walker and the commissioners of the Wisconsin Employment Relations Commission ("WERC"), James R. Scott, Judith Neumann, and Rodney G. Pasch (collectively, "the defendants"). Governor Walker and the commissioners of WERC are sued in their official capacities. Governor Walker has responsibility under Wisconsin law to implement and enforce state legislation through the agencies of the State's executive branch. The commissioners of WERC are responsible for administering Wisconsin's labor laws. ¶6 Wisconsin has two principal labor laws, the Municipal Employment Relations Act ("MERA"), Wis. Stat. § 111.70 et seq., and the State Employee Labor Relations Act ("SELRA"), Wis. Stat. 4 Act 10 creates two primary categories of public employees: "general employees" and "public safety employees." MTI and Local 61 represent "general employees," as defined under Act 10. Under Act 10, "general employees" is a catch-all term for public employees who are not "public safety employees." See, e.g., Wis. Stat. § 111.70(fm). Employees classified as "public safety employees" are not affected by Act 10's modifications to the Municipal Employment Relations Act and the State Employee Labor Relations Act. The United States Court of Appeals for the Seventh Circuit recently held, under a rational basis standard of review, that the public employee classifications created by Act 10 did not violate equal protection. See Wis. Educ. Ass'n Council v. Walker, 705 F.3d 640, 656 (7th Cir. 2013). The public employee classifications are not at issue in this appeal. 4 No. § 111.80 et collective seq., which bargaining govern for employment public 2012AP2067 relations employees and and labor enacted 2011 organizations. ¶7 In 2011, the Wisconsin Legislature Wisconsin Act 10, a budget repair bill proposed by Governor Walker. Act 10, among other things, modified MERA to prohibit general than employees "base annual from wages," prohibited recertification employers from collective bargaining fair share requirements, deducting labor and on issues agreements, prohibited organization other imposed municipal dues from the paychecks of general employees.5 ¶8 MTI and Local 61 (together with the individual plaintiffs, "the plaintiffs") filed the instant action in Dane County Circuit injunctive Court relief, in August alleging 2011 that seeking certain declaratory portions of and Act 10 violated the Wisconsin Constitution. ¶9 In November 2011, the plaintiffs sought summary judgment on the following claims: (1) that Act 10 violates the plaintiffs' right to free association guaranteed by Article I, Sections 3 combined and effect 4 of of the (a) Wisconsin prohibiting 5 Constitution general through employees the from The plaintiffs argue that specific provisions of MERA, as amended by Act 10, are unconstitutional. SELRA, which is the counterpart legislation affecting state employees, is not being challenged. However, as the court of appeals observed in its certification to this court, any decision on the provisions affecting municipal employees under MERA would appear to be dispositive with respect to state employees under SELRA as well. 5 No. 2012AP2067 collective bargaining on issues other than "base wages," and requiring any base wage increase exceeding a cost of living adjustment to be approved by a municipal voter referendum, (b) prohibiting municipal employers from deducting labor organization dues from the paychecks of general employees, (c) prohibiting fair share agreements,6 and (d) requiring mandatory recertification elections; (2) that Act 10 violates the plaintiffs' right to equal protection of the laws guaranteed by Article I, impermissibly Section 1 creating of the Wisconsin classifications Constitution that by disadvantage represented general employees based on the exercise of their rights to associate; (3) that certain provisions of Act 10 were enacted in a manner that violated Article VI, Section 11 of the Wisconsin Constitution, which governs special sessions of the legislature, by not being related to the stated purpose of the special session; (4) that Act 10 violates the home rule amendment to the Wisconsin Constitution by mandating that City of Milwaukee employees make certain contributions to the City of Milwaukee Employes' Retirement System ("Milwaukee ERS") and, in doing so, interfering with the City of Milwaukee's home-rule 6 Fair share agreements, also commonly referred to as "agency-shop agreements," are negotiated arrangements between governmental employers and certified labor organization representatives that require all public employees, including employees who do not wish to join or support a labor organization, to pay the proportional share of the cost of collective bargaining and contract administration. See, e.g., Ronald D. Rotunda & John E. Nowak, 5 Treatise on Constitutional Law, Substance and Procedure, § 20.41(p), at 439 (5th ed.). 6 No. 2012AP2067 authority; (5) that Act 10 violates the Contract Clauses of the United States and Wisconsin Constitutions by unconstitutionally impairing Local 61's vested contractual right to the City of Milwaukee funding the employee share of contributions to the Milwaukee ERS; and (6) that Act 10 violates due process by shifting the responsibility for pension contributions from the City of Milwaukee to members of Local 61, which is a deprivation of property without due process of law. ¶10 the In January 2012, the defendants moved for judgment on pleadings, arguing the circuit court should deny the plaintiffs' motion for summary judgment and dismiss the suit with prejudice. On September 14, 2012, the circuit court issued a decision and order that denied the defendants' motion for judgment on the pleadings and granted partial summary judgment to the plaintiffs. (1) the equal The circuit court held that Act 10 violated: plaintiffs' protection Constitutions; Constitution; Constitution. under (2) and rights the (3) of association, both the home rule the United States amendment Contract free Clause speech, and and Wisconsin to the Wisconsin of the Wisconsin Further, the circuit court held that Act 10 did not violate the special session limiting clause of the Wisconsin Constitution or the constitutional prohibition against taking a property interest without due process of law. 7 Accordingly, the No. 2012AP2067 circuit court concluded that those sections of Act 10 found to be unconstitutional are void and without effect.7 ¶11 On September 18, 2012, the defendants filed a notice of appeal. On April 25, 2013, the court of appeals certified the case to this court. ¶12 On June 14, 2013, this court accepted the certification. II. ¶13 The issue STANDARD OF REVIEW before this court is whether certain provisions of Act 10 violate the United States and Wisconsin Constitutions. The constitutionality of a statute is a question of law that we review de novo. 800, 824, 532 N.W.2d 94 State v. Randall, 192 Wis. 2d (1995). All legislative acts are presumed constitutional and we must indulge every presumption to sustain the law. Id. Any doubt that exists regarding the constitutionality of the statute must be resolved in favor of its constitutionality. State ex rel. Hammermill Paper Co. v. La Plante, 58 Wis. 2d 32, 47, 205 N.W.2d 784 (1973). it is insufficient for a party to Consequently, demonstrate "that the statute's constitutionality is doubtful or that the statute is probably unconstitutional." Wis. Med. Soc'y, Inc. v. Morgan, 2010 WI 94, ¶37, 328 Wis. 2d 469, 787 N.W.2d 22 (citing State v. 7 On October September 14, 2012 § 111.70(2) to unconstitutional. employee has the remaining a member 10, 2013, the circuit court amended the Order to add the third sentence of Wis. Stat. the statutes the court concluded were That sentence states: "A general municipal right to refrain from paying dues while of a collective bargaining unit." 8 No. Smith, Instead, 2010 the establishes WI 16, presumption the reasonable doubt. ¶14 ¶8, This interpretation, 323 can statute's 8 Wis. 2d 377, be overcome 780 only if unconstitutionality 2012AP2067 N.W.2d 90). the party beyond a Id. case also presents which this court questions reviews de of statutory novo. Covenant Healthcare Sys., Inc. v. City of Wauwatosa, 2011 WI 80, ¶21, 336 Wis. 2d 522, 800 N.W.2d 906. III. DISCUSSION ¶15 This appeal presents four issues: (1) whether Act 10 impermissibly infringes on the associational rights of general employees; (2) whether Act 10 impermissibly infringes on the equal protection rights of represented general employees when compared to non-represented general employees; (3) whether Act 10 violates the home rule amendment to the Wisconsin Constitution by prohibiting the City of Milwaukee from paying the employee share of pension contributions to the Milwaukee ERS; and (4) whether Act 10 violates the Contract Clause of the 8 As this court explained in Ferdon ex rel. Petrucelli v. Wisconsin Patients Comp. Fund, 2005 WI 125, ¶68 n.71, 284 Wis. 2d 573, 701 N.W.2d 440: The constitutionality of a statute is an issue of law, not fact. The "beyond the reasonable doubt burden of proof" language is, however, reminiscent of an evidentiary burden of proof in criminal cases. The beyond a reasonable doubt burden of proof in a constitutional challenge case means that a court gives great deference to the legislature, and a court's degree of certainty about the unconstitutionality results from the persuasive force of legal argument. 9 No. Wisconsin Constitution by significantly 2012AP2067 impairing the contractual rights of City of Milwaukee employees. ¶16 We address each issue in turn. However, because terminology is critical to interpreting the parties' arguments, it is important that we review certain relevant terms before beginning our analysis. A. Terminology ¶17 The heart of this appeal centers on unions, collective bargaining, and collectively engage in are always These issues turbulent times, the but right to protected associate First emotionally perhaps nowhere with others Amendment charged, are to activities. especially these in topics more controversial or sensitive than in the State of Wisconsin. The importance of these questions demands clarity on what precisely is before the court, which in turn requires specificity on our part in the terminology upon which we rely. ¶18 With respect to the term "collective bargaining," we agree with the court of appeals that the following discussion provided by an amicus effectively highlights an important definitional distinction: Historically, in the United States the term "collective bargaining" has been used to describe two legally different activities . . . . The first way in which the term has been used has been to describe an activity that is an element of the right of individual citizens to associate together for the purpose of advocating regarding matters of mutual interest or concern, including matters concerning wages and employment conditions. When used in this way the term "collective bargaining" is descriptive of a collective effort and refers to an activity where the party that 10 No. 2012AP2067 is the object of the advocacy, the employer, has no legal obligation to respond affirmatively to the advocacy, but may do so voluntarily. . . . . [This type of "collective bargaining"] is a fundamental right that constitutionally is protected. The second way in which the term "collective bargaining" has been used is to refer to a statutorily mandated relationship between an association of employees and their employer, by the terms of which an employer and its employees are obligated to negotiate, in "good faith," for the purpose of reaching an agreement regarding the employees' wages and conditions of employment. Such statutorily recognized "collective bargaining" is subject to legislative modification, for the purpose, at least heretofore, of protecting the employees' fundamental right to bargain with their employer. Brief for Laborer's Local 236 and AFSCME Local Curiae at 3, 6 7 (some citations omitted). 60 as Amici As the court of appeals did in its certification to this court, we use the term "collective bargaining" in the latter sense; that is, to refer to the statutorily established relationship between an bargaining" is association of public employees and their employer. ¶19 This consistent definition with the of language "collective of Act 10, which defines "collective bargaining" to mean "the performance of the mutual obligation of a municipal employer . . . and the representative of its municipal employees in a collective bargaining unit, to meet and confer at reasonable times, in good faith, with the intention of reaching an agreement, or to resolve questions arising under such an agreement," with respect to wages for general employees. Wis. Stat. § 111.70(1)(a). 11 A "collective No. 2012AP2067 bargaining unit" is a "unit consisting of municipal employees" that has been qualified for recognized the by purpose WERC, of pursuant collective to statute, bargaining. as Stat. § 111.70(1)(b). ¶20 Further, under Act 10, for the purpose of collective bargaining, a "representative" may be chosen "by a majority of the municipal employees voting in a collective bargaining unit [and] shall be the exclusive representative of all employees in the unit . . . . " Wis. Stat. § 111.70(4)(d)1. This "representative" could potentially be a "labor organization," which is defined as "any employee organization in which employees participate and which exists for the purpose, in whole or in part, of engaging in collective bargaining with municipal employers . . . ." ¶21 Wis. Stat. § 111.70(1)(h). Unlike the term "labor organization," "union" is not defined under Act 10, though as the court of appeals noted, the parties use the term in two distinct ways. First, the term "union" may refer to what the parties in this case agree is a constitutionally protected association that individuals have the right to form and employers have the right to disregard. However, the term "union" may also refer to the "representative" of a "collective bargaining unit" in the statutorily established relationship between their employer. an association of public employees and For this reason, we follow the practice of the court of appeals and generally avoid use of the term "union." Instead, when referring to the "exclusive certified bargaining agent" of a collective bargaining 12 unit, as that term is No. 2012AP2067 understood within the statutory framework established by Act 10, we use the term "certified representative." ¶22 chosen Finally, to statutory we refer participate framework in to a general collective established by Act employee bargaining 10 as a that has within the "represented general employee," and in contrast, the term "non-represented general employee" to refer to a general employee who has declined to participate. B. ¶23 Associational Claims The plaintiffs' central argument on appeal is that the following provisions of Act 10 violate the associational rights of general employees and their certified representatives that are guaranteed under Article I, Sections 3 and 4 of the Wisconsin Constitution:9 9 The plaintiffs submit that Article I, Sections 3 and 4 of the Wisconsin Constitution may be interpreted to provide greater protection than the First Amendment to the United States Constitution. We agree with the court of appeals, however, that the plaintiffs fail to present a developed argument to support their suggestion that Article I, Sections 3 and 4 of the Wisconsin Constitution should confer more expansive protection than its federal counterpart under the particular facts in this case. Accordingly, in our analysis of the plaintiffs' associational rights claims, we treat the rights protected under the Wisconsin and United States Constitutions to be coextensive. See Lawson v. Hous. Auth. of Milwaukee, 270 Wis. 269, 274, 70 N.W.2d 605, 608 (1955). (holding that Article I, Sections 3 and 4 of the Wisconsin Constitution "guarantee the same freedom of speech and right of assembly and petition as do the First and Fourteenth [A]mendments of the United States [C]onstitution."); see also Cnty. of Kenosha v. C & S Mgmt., Inc., 223 Wis. 2d 373, 388, 588 N.W.2d 236 (1999) ("Wisconsin courts consistently have held that Article I, § 3 of the Wisconsin Constitution guarantees the same freedom of speech rights as the First Amendment of the United States Constitution"). 13 No. 2012AP2067 1. The provision prohibiting collective bargaining between municipal employers and the certified representatives for municipal general employee bargaining units on all subjects except base wages. Wis. Stat. § 111.70(4)(mb)1. 2. The provisions limiting negotiated base wage increases to the increase in the Consumer Price Index, unless a higher increase is approved by a municipal voter referendum.10 Wis. Stat. §§ 66.0506, 111.70(4)(mb)2., and 118.245. 3. The provisions prohibiting fair share agreements that previously required all represented general employees to pay a proportionate share of the costs of collective bargaining and contract administration. Wis. Stat. § 111.70(1)(f) and the third sentence of Wis. Stat. § 111.70(2). 4. The provision prohibiting municipal employers from deducting labor organization dues from the paychecks of general employees. Wis. Stat. § 111.70(3g). 5. The provision requiring annual recertification elections of the representatives of all bargaining units, requiring 51% of the votes of the bargaining unit members (regardless of the number of members who vote), and requiring the commission to assess costs of such elections. Wis. Stat. § 111.70(4)(d)3. ¶24 Whether the plaintiffs' First Amendment challenge to these provisions has any merit is the lynchpin of this appeal. The core cognizable of our First review is Amendment determining interest, whether which there establishes is a the attendant level of scrutiny applied to the legislative judgment behind the requirement. If Act 10 does not infringe on the 10 Act 10 defines "consumer price index change" as "the average annual percentage change in the consumer price index for all urban consumers, U.S. city average, as determined by the federal department of labor, for the 12 months immediately preceding the current date." Wis. Stat. § 111.70(1)(cm). 14 No. 2012AP2067 plaintiffs' First Amendment rights, it will be upheld if any rational basis can be found for the contested provisions. See Ysursa v. Pocatello Educ. Ass'n, 555 U.S. 353, 359 (2009). i. Freedom of Association Doctrine ¶25 The analytically freedom of distinct association categories: doctrine "intrinsic" has two freedom of association, which protects certain intimate human relationships under the Substantive Due Process component of the Fourteenth Amendment, and "instrumental" freedom of association, which protects associations necessary to effectuate First Amendment rights. See Roberts (1984). The second freedom of infringed v. category association upon in U.S. right this Jaycees, 468 U.S. 609, of association is the plaintiffs assert case. Regarding the this 617-18 type has of been form of association, the United States Supreme Court has "recognized a right to associate for the purpose of engaging in those activities protected by the First Amendment speech, assembly, petition for the redress of grievances, and the exercise of religion. this kind individual The Constitution guarantees freedom of association of as an indispensable liberties." Roberts, means 468 of U.S. preserving at 618; see other also Merrifield v. Bd. of Cnty. Comm'rs, 654 F.3d 1073, 1080-81 (10th Cir. 2011); Weber v. City of Cedarburg, 129 Wis. 2d 57, 68, 384 N.W.2d 333 (1986) (noting that "[f]reedom of association is an implied incident of the first amendment guarantees"). ii. Overview of the Plaintiffs' Associational Arguments 15 No. ¶26 The plaintiffs' argument that Act 10 2012AP2067 violates the constitutional right of general employees and their certified representatives to freely associate is premised on a novel legal theory. Therefore, in order to properly address their arguments, we find it helpful to first outline their claims. ¶27 The plaintiffs begin by stressing that no contention is being made that public employees have a constitutional right to collectively bargain.11 while the State collectively may Instead, the plaintiffs argue that, statutorily bargain in good restrict faith, the the obligation State may to not constitutionally withhold benefits or penalize public employees for exercising their associational rights to self-organization or to select a certified representative for collective bargaining purposes. ¶28 In framing this argument, the plaintiffs rely heavily on Lawson v. Housing Authority of Milwaukee, 270 Wis. 269, 70 N.W.2d 605 (1955). In Lawson, this court held that a federal housing was tenants regulation to organizations relinquish designated unconstitutional their as right subversive 11 because to by it required associate the United with States The plaintiffs' emphasis on this point is prudent. It is well-established law that no constitutional right to collective bargaining exists. See, e.g., Smith v. Ark. State Highway Emp., Local 1315, 441 U.S. 463, 465 (1979) (holding "the First Amendment does not impose any affirmative obligation on the government to listen, to respond or, in this context, to recognize the association and bargain with it"). It is undisputed the State could eliminate collective bargaining entirely without violating the constitutional rights of the plaintiffs. 16 No. 2012AP2067 Attorney General in order to remain eligible to continue living in federally aided housing projects. This court concluded that a Lawson, 270 Wis. at 288. government agency could not condition the privilege of subsidized housing, which lies within the agency's relinquishment associate. ¶29 applies discretion of the to grant or constitutionally withhold, protected on the right to Id. at 275. Lawson is representative of a body of case law that the doctrine of unconstitutional conditions. This doctrine embodies the principle that freedom of speech would be rendered a hollow right if the government was permitted to place, as a condition on the receipt of a governmental benefit, any restrictions on speech it pleased. Justice Potter Stewart forcefully expressed the importance of this principle in Perry v. Sindermann: For at least a quarter-century, this Court has made clear that even though a person has no 'right' to a valuable governmental benefit and even though the government may deny him the benefit for any number of reasons, there are some reasons upon which the government may not rely. It may not deny a benefit to a person on a basis that infringes his constitutionally protected interests especially, his interest in freedom of speech. For if the government could deny a benefit to a person because of his constitutionally protected speech or associations, his exercise of those freedoms would in effect be penalized and inhibited. This would allow the government to 'produce a result which (it) could not command directly.' Speiser v. Randall, 357 U.S. 513, 526 . . . . Such interference with constitutional rights is impermissible. 17 No. 2012AP2067 408 U.S. 593, 597 (1972); see also United States v. Scott, 450 F.3d 863, conditions' 866 (9th Cir. 2006) doctrine . . . limits the ("The 'unconstitutional government's ability to exact waivers of rights as a condition of benefits, even when those benefits are fully discretionary."); Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 59 (2006) ("[T]he government may not deny a benefit to a person on a basis that infringes his constitutionally protected . . . freedom of speech even if he has no (internal citations omitted). prevent the government entitlement to that benefit.") The purpose of the doctrine is to from indirectly restricting a constitutional right that it may not otherwise directly impair. ¶30 The plaintiffs raise two related, but allegedly distinct, arguments that, under the unconstitutional conditions doctrine, Act 10 violates their constitutional rights to freedom of association. First, the plaintiffs argue that Act 10 violates the constitutional right to freedom of association by conditioning the receipt of a "benefit" here, the potential for a general employee or group of general employees to negotiate all issues with the municipal employer, including matters affecting wages and hours on the relinquishment of the general employees' ability to choose to have a certified representative act on their behalf. provisions of Act Second, the plaintiffs claim that several 10, through cumulative effect, impose organizational and financial penalties on general employees who choose the statutory "privilege" of participating in collective 18 No. 2012AP2067 bargaining for the purpose of requiring their municipal employer to bargain in good faith on base wages. ¶31 Regarding the second argument, the plaintiffs emphasize they are not asserting that each of the contested provisions rights. of Act 10, standing alone, violates associational Instead, the plaintiffs argue it is the impact of the contested provisions of Act 10, taken together, that creates a constitutional violation. iii. Limitations on Permissible Collective Bargaining Subjects ¶32 Before the enactment of Act 10, general employees were permitted under MERA to collectively bargain over a broad array of subjects, including wages, working conditions, work hours, and grievance procedures. Act 10 limits collective bargaining between municipal employers and the certified representatives of general employees to the single topic of "total base wages and excludes any other § 111.70(4)(mb)1. compensation Moreover, Act . . . . " 10 Wis. prohibits Stat. collective bargaining for base wage increases that exceed an increase in the Consumer Price Index unless approved in a municipal voter referendum. Wis. Stat. §§ 111.70(4)(mb)2., 66.0506, and 118.245. ¶33 employees The plaintiffs argue this limitation penalizes general who choose to be represented by a certified representative because Act 10 imposes no limitations whatsoever on the negotiate terms that with their non-represented municipal 19 general employers. employees Consequently, may the No. plaintiffs contend, associational Act rights of 10 unconstitutionally general employees 2012AP2067 burdens because they the must surrender their association with a certified representative in order to negotiate anything beyond base wages. ¶34 The plaintiffs' argument does not withstand scrutiny. As discussed above, the plaintiffs cite to this court's holding in Lawson, 270 Wis. 269, for the general proposition that the government may not condition the receipt of a discretionary benefit on the relinquishment of a constitutionally protected right. In essence, illustration conditions of the our doctrine. plaintiffs court Beyond rely applying Lawson, on the the Lawson as an unconstitutional plaintiffs cite to numerous cases that support the same doctrinal principle: it is impermissible for the government to condition the receipt of a tangible benefit protected right. on the relinquishment of a constitutionally See, e.g., Agency for Int'l Dev. v. Alliance for Open Soc'y Int'l Inc., 133 S. Ct. 2321, 2328 (2013). ¶35 We do not dispute the existence of the unconstitutional conditions doctrine or its robustness in our jurisprudence. The problem lies in the doctrine's inapplicability to this case, and consequently, the absence of support it provides the plaintiffs' argument. ¶36 Comparing Lawson to the facts of this case swiftly illustrates the problem. In Lawson, this court held that it was unconstitutional for the government to condition the receipt of a benefit (living in a federally aided housing project) on the relinquishment of a constitutionally protected right (the right 20 No. 2012AP2067 to associate with organizations that engage in constitutionally protected speech). unconstitutional Here, for the the plaintiffs government, argue through that Act it is 10, to condition the receipt of a benefit (to participate in collective bargaining on the lone topic of base wages) on the relinquishment of a constitutionally protected right (the right to associate with a certified representative in order to collectively bargain on any subject). ¶37 analogy The plaintiffs' between the logical respective Lawson and in this case. fallacy rights rests being in the false relinquished in Without question, in Lawson, the right being relinquished for a benefit the right to associate with organizations that engage in constitutionally protected speech is fundamental Amendment. in nature and protected under the First Here, however, the "right" the plaintiffs refer to the right to associate with a certified representative in order to collectively bargain on any subject is categorically not a constitutional right. ¶38 General employees have no constitutional right to negotiate with their municipal employer on the lone issue of base wages, let alone on any other subject. As the United States Supreme Court made clear: [While t]he public employee surely can associate and speak freely and petition openly, and he is protected by the First Amendment from retaliation for doing so. . . . [,] the First Amendment does not impose any affirmative obligation on the government to listen, to respond or, in this context, to recognize the association and bargain with it. 21 No. 2012AP2067 Smith v. Ark. State Highway Emps., Local 1315, 441 U.S. 463, 465 (1979) (citations omitted). ¶39 The litigation plaintiffs in this constitutional right evident, however, have case that exists that insisted to they at stage of are they every not arguing a collectively really are, bargain. for constitutional right, their challenge fails. without It is such a The plaintiffs' reliance on Lawson hinges on the defendants conditioning the receipt of a benefit on the relinquishment of a constitutional right, but as the plaintiffs acknowledge, collective bargaining no matter the specific statutory limitations at issue is not constitutionally protected. ¶40 Put differently, general employees are not being forced under Act 10 to choose between a tangible benefit and their constitutional right to associate. Instead, Act 10 provides a benefit to represented general employees by granting a statutory right to force their employer to negotiate over base wages, while non-represented general employees, who decline to collectively bargain, have no constitutional or statutory right whatsoever to force their employer to collectively bargain on any subject. For this reason, the plaintiffs' argument must be rejected. ¶41 This point is vital and bears repeating: the plaintiffs' associational rights are in no way implicated by Act 10's modifications framework. of an to Wisconsin's collective bargaining At issue in this case is the State's implementation exclusive representation 22 system for permitting public No. 2012AP2067 employers and public employees to negotiate certain employment terms in establish good faith. workplace consultation with selected the by It is policy only a in select affected prerogative a a non-public groups here, workforce of state process an to in organization itself and not others. Minn. State Bd. for Cmty. Colls. v. Knight, 465 U.S. 271, 286 (1984) ("[a]ppellees thus have no constitutional right as members of the public to a government audience for their policy views"). ¶42 Not at issue in this case is the plaintiffs' constitutional right to associate to engage in protected First Amendment activities. position, on any The plaintiffs remain free to advance any topic, either individually or through any channels that are open to the public. in concert, See City of Madison v. Wis. Emp't Relations Comm'n, 429 U.S. 167, 175 (1976) (represented municipal employees have First Amendment right to speak "[w]here the State has opened a forum for direct citizen involvement"). Represented municipal employees, non-represented municipal employees, and certified representatives lose no right or ability to associate to engage in constitutionally protected speech because their ability to do so outside the framework of statutory collective bargaining is not impaired. Act 10 merely provides general employees with a statutory mechanism to force their employer to collectively bargain; outside of this narrow context, to which the plaintiffs freely concede public employees have no constitutional right, every avenue for petitioning the government remains available. 23 No. ¶43 bargain 2012AP2067 General employees may feel inclined to collectively under negotiate on Act the unconstitutional 10 in issue order of inhibition to base on compel wages, their but employer this associational to creates no freedom. See, e.g., Knight, 465 U.S. at 289-90 ("Appellees may well feel some pressure to join the exclusive representation in order to give them . . . a voice . . . on particular issues. . . . Such pressure is inherent in our system of government; it does not create an freedom"). unconstitutional inhibition on associational The defendants are not barring the plaintiffs from joining any advocacy groups, limiting their ability to do so, or otherwise curtailing their ability to join other "like-minded individuals to associate for the purpose of expressing commonly held views . . . ." Knox v. Serv. Emps. Int'l Union, Local 1000, 132 S. Ct. 2277, 2288 (2012). ¶44 Lawson Thus, and misplaced. the we conclude that unconstitutional the plaintiffs' conditions reliance doctrine to on be The limitations on permissible collective bargaining subjects imposed by Act 10 do not force general employees to choose between their constitutional right to associate and the benefit of collective bargaining. Therefore, we hold that Stat. and §§ 111.70(4)(mb), 66.0506, 118.245 do not Wis. violate Plaintiffs' right to freedom of association. ¶45 The dissent plaintiffs' argument: suggests we mischaracterize the "Rather than addressing plaintiff's issue that Act 10 infringes on their constitutional right to organize into a collective bargaining unit, 24 the majority erroneously No. 2012AP2067 asserts that plaintiffs are claiming a right to bargain as a collective bargaining unit." dissent argues we Dissent, ¶194. "ignore over a In doing so, the century's worth of jurisprudence and undermine[] a right long held sacred in our state." Dissent, ¶199. ¶46 This sweeping allegation is disappointing, not only because it misconstrues our analysis, but also because it shows confusion over an important area of the law. ¶47 this The case rights of is dissent whether public contends Act 10 employees the actual infringes to organize, bargaining is a peripheral matter.12 12 on issue the as presented in associational if collective Having framed the "actual" It is unclear whether the dissent uses the term "collective bargaining unit" as it is defined under Act 10, or if the term is meant to encompass a broader meaning. We assume the dissent does not contend that there is always a constitutional right to organize as a "collective bargaining unit" in a statutory framework created by the state. This would mean the state is constitutionally obligated to create such a framework, which is clearly not true. See Smith, 441 U.S. at 464-65. It is more likely the dissent means that, if a statutory framework has been created by the state for collective bargaining purposes, state employees have a constitutional right to organize within that framework as a "collective bargaining unit." 25 No. issue, the dissent contends employees have a 2012AP2067 "constitutional right to organize as a collective bargaining unit." Dissent, ¶198. But for what purpose? ¶48 Without more information (ascertaining the purpose of the association), it is impossible to determine the argument's validity. The ethereal notion organize for right to that associate individuals organization's is be sake. not derived granted the Associational from some right rights to are rooted in the First Amendment's protection of freedoms of speech and assembly. NAACP v. Alabama, 357 U.S. 449, 460 (1958). Stated differently, the right to engage in activities protected by the First Amendment drives the corresponding right to associate with others in order to engage in those activities. Roberts, 468 U.S. at 622. employees have an Thus, the dissent's assertion that associational right to organize in a collective bargaining group is neither true nor false, because Even adopting this understanding, however, it is unclear how its reliance on NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937) is appropriate. In support of its proposition that "it has long been established there is a constitutional right to organize as a collective bargaining unit," id., the dissent quotes, with emphasis added, language from Jones & Laughlin: "the right of employees to self-organization and to select representatives of their own choosing for collective bargaining or other mutual protection without restraint or coercion by their employer . . . is a fundamental right." 301 U.S. at 33. Jones & Laughlin does not support the dissent's argument, however, because the case concerned private, as opposed to public, employers. Thus the "right" referred to by the Supreme Court could not have been constitutional. See Laborers Local 236 v. Walker, 2014 WL 1502249, at *8 (citing The Civil Rights Cases, 109 U.S. 3, 17-18 (1883)). 26 No. 2012AP2067 it is unclear whether, under the dissent's framing of the issue, the employees are associating for the purpose of engaging in a constitutionally protected activity. ¶49 to Needless to say, this ambiguity is purposeful, because complete the thought would necessarily erroneous statement of the law. Amendment does not grant reveal it is an The dissent knows the First state employees the constitutional right to collectively bargain with their state employer. Thus, in framing its argument, the dissent chooses to ignore that the right to associate is derived from the constitutionally protected activity the group of individuals wants to engage in. No one disputes that the plaintiffs have a constitutional right to organize with others in pursuit of a variety of political, educational, religious, or cultural ends. obviously not what the plaintiffs, or Id. the But this is dissent, seek to establish. ¶50 to The plaintiffs seek the right to organize with others pursue something far more specific: collective with their employer on a range of issues. belaboring the point, this is not a bargaining And at the risk of constitutional right. Smith, 441 U.S. at 464-65. ¶51 The dissent sidesteps this fact by asserting there is a constitutional right to organize in a collective bargaining unit, but associating activity leaves for accorded the unanswered purpose First whether of Amendment the engaging in protection. does not imbue the plaintiff's claim with merit. 27 employees an are expressive This approach No. ¶52 right to for the purpose of speaking to their employer on a range of issues. As organize we Of course together explained, employees for supra have expressive ¶¶42-43, a constitutional 2012AP2067 purposes, municipal including employees have the constitutional right to form groups, meet with others, organize as one, and speak on any topic. We have emphasized repeatedly that Act 10 does not prohibit any of these things. On the contrary, the State explicitly safeguards these activities.13 ¶53 It is undisputed constitutionally constitutional Smith, 441 maintains protected. obligation U.S. that that at Act Indeed, to has But so bargaining Wisconsin collectively 464-65. 10 collective the bargain dissent discouraged is is not under at no all. nevertheless participation in Wisconsin's statutory collective bargaining process that it is unconstitutional and accuses us 13 of dodging the question of See Wis. Stat. § 111.70(2) ("Municipal employees have the right of self-organization, and the right to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in lawful, concerted activities for the purpose of collective bargaining or other mutual aid or protection"). 28 No. 2012AP2067 whether Act 10 "impermissibly punish[es] the exercise of the right to associate."14 ¶54 The certainly Dissent, ¶207. dissent's presents accusation meaningful is misplaced. difficulties for Act 10 certified representatives, but these difficulties have no bearing on our analysis of the Act's constitutionality. The First Amendment does policies not require Wisconsin to "maintain certain associations to thrive." that allow Laborers Local 236 v. Walker, 749 F.3d 628, 639 (7th Cir. 2014). Likewise, "[a]n organization cannot come up with an associational purpose even a purpose that involves speech and then require support from the state in order to realize its goal." iv. Id. Fair Share Agreements, Certification Elections, and Payroll Deductions ¶55 As provisions noted of Act above, 10, the plaintiffs through 14 argue cumulative that several effect, impose Implicit in the dissent's accusation is the belief that statutory frameworks that are based on a model of exclusive representation are unconstitutional if any limits are placed on the subjects upon which employees may collectively bargain. At present, forty-one states have adopted the federal model of exclusive representation. See, e.g., Brief for the States of New York, Arkansas, et. al. as Amici Curiae in Support of Respondents, Harris v. Quinn, (2013) (No. 11-681) 2013 WL 6907713, at *8. Of these, a significant number have imposed limitations on the subjects of collective bargaining. See, e.g., Ind. Code 20 29 6 4.5; Mich. Comp. Laws § 380.1248; 115 Ill. Comp. Stat. 5/4.5; 2011 N.J. Laws ch. 78; see also Martin H. Malin, Does Public Employee Collective Bargaining Distort Democracy? A Perspective from the United States, 34 Comp. Lab. L. & Pol'y J. 277, 285-88 (2013). We note that adopting the dissent's constitutional argument would effectively repeal a vast amount of legislation in states across the nation. 29 No. 2012AP2067 organizational and financial penalties on general employees who choose the statutory "privilege" of collective bargaining for the purpose of requiring their employer to negotiate in good faith on base wages. Specifically, the plaintiffs contend the following of provisions Act 10, taken together, impose constitutionally impermissible burden on general employees: a (1) the prohibition of fair share agreements; (2) the requirement of mandatory annual prohibition on certification payroll elections; deductions of from the wages of general employees. features of associational Act 10 rights (3) the organization labor and dues The plaintiffs argue these unconstitutionally by burdening and interfere penalizing employees who elect to collectively bargain. claim that general employees will eventually with general The plaintiffs surrender the exercise of their associational rights rather than suffer the burdens placed upon them. ¶56 The plaintiffs cite to no authority supporting their contention manner; that i.e., constitutional, collectively constitutional that courts statutory amount analysis must consider provisions to a to functions several, determine constitutional in this otherwise if they infirmity. Nevertheless, we indulge the plaintiffs in this instance and separately consider the constitutionality "cumulative impact and effect." provision in isolation. of Act We first examine each contested After assessing each challenged part, we examine the contested provisions operating as a whole. a. 10's Fair Share Agreements 30 No. ¶57 Fair share agreements are negotiated 2012AP2067 arrangements between municipal employers and certified representatives that require all general employees, including non-represented general employees, to pay the collective bargaining proportional and contract prohibits these agreements. The plaintiffs argue share of the cost of Act 10 administration. See Wis. Stat. § 111.70(1)(f), (2). this creates a financial burden on certified representatives and represented general employees to bear the full cost of collective bargaining for the benefit of the entire bargaining unit, while allowing non-represented general employees in the bargaining unit to enjoy the benefits of representation representative as and "free its riders." members to For choose the certified the statutory "privilege" of collective bargaining, the plaintiffs argue they must accept the financial penalty as a condition of their associational choices to serve as the certified representative and be represented general employees. The plaintiffs contend these burdens will dissuade labor organizations from becoming certified representatives and general employees from becoming represented general employees, and are therefore unconstitutional. ¶58 The plaintiffs' argument is unconvincing. First, labor organizations "have no constitutional entitlement to the fees of nonmember-employees." 551 U.S. 177, 185 (2007). Court recently reaffirmed Davenport v. Wash. Educ. Ass'n, Further, as the United States Supreme in Harris v. Quinn, fair share agreements "unquestionably impose a heavy burden on the First 31 No. 2012AP2067 Amendment interests" of municipal employees who do not wish to participate in the collective bargaining process. Harris v. Quinn, 573 U.S. ___, 134 S. Ct. 2618, 2643 (2014); see also Knox, 132 S. Ct. at 2291 ("By authorizing a union to collect fees from nonmembers . . . our prior decisions approach, if they do not cross, the limit of what the First Amendment can tolerate").15 ¶59 Even setting aside the question of whether fair share agreements are constitutionally permissible,16 it is evident that 15 These observations are not unexpected, considering that the presence of a right to freedom of association "plainly presupposes a freedom not to associate." Roberts v. United States Jaycees, 468 U.S. 609, 623 (1984); see also Hudson v. Chicago Teachers Union Local No. 1, 743 F.2d 1187, 1193 (7th Cir. 1984), aff'd sub nom. Chicago Teachers Union, Local No. 1, AFT, AFL-CIO v. Hudson, 475 U.S. 292 (1986) ("The particular freedom of association we are speaking of the freedom that is ancillary to freedom of speech has a negative as well as a positive dimension"). To compel an individual to pay fees to support an organization that engages in political and economic activities, which the individual has no interest in supporting, raises self-apparent First Amendment concerns. 16 The dissent notes that the United States Supreme Court affirmed in Harris v. Quinn, 573 U.S. ___, 134 S. Ct. 2618, 2638 (2014), that fair share agreements for "full-fledged state employees" are constitutionally permissible. Dissent, ¶206 n.8. To say the least, the dissent puts a positive spin on Harris's impact on the constitutional legitimacy of fair share agreements. Harris concluded that the First Amendment prohibits the collection of fees from Illinois home-care personal assistants who do not want to join or support the labor organization representing them. It is true Harris is not directly applicable to this case because the employees at issue in Harris, while government-funded, were not "full-fledged state employees." 134 S. Ct. at 2638. Nevertheless, Harris clearly signals that fair share agreements are constitutionally suspect beyond the context of quasi-State employees. 32 No. 2012AP2067 the prohibition of fair share agreements does not infringe on the associational rights of general representatives in any respect. employees certified The First Amendment does not compel the government to subsidize speech. 357. or Ysursa, 555 U.S. at By logical extension, the First Amendment does not compel the government to compel its employees to subsidize speech. ¶60 The plaintiffs' argument that the financial cost involved in participating in collective bargaining acts as an unconstitutional "burden" on general employees and certified representatives is premised on a faulty assumption: if the State creates a benefit for which there is no constitutional right, it will nevertheless violate the First Amendment rights of those In Harris, the State of Illinois pointed to the Supreme Court's holding in Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977), to argue the fair share agreement at issue was permissible. In Abood, the Supreme Court upheld a fair share agreement requiring public school teachers in Detroit to pay dues to the labor organization representing them, even though they opposed public sector collective bargaining. 431 U.S. at 211. Harris illustrates that time has not been kind to Abood. Since it was decided in 1977, the Supreme Court's criticism of Abood's holding and underlying rationale has become increasingly pointed. Two years ago, in Knox v. Serv. Emps. Int'l Union, Local 1000, the Supreme Court noted that Abood was "something of an anomaly." Knox, 132 S. Ct. 2277, 2290 (2012). Harris goes further in expressing disapproval of Abood, explaining at length why its analysis "is questionable on several grounds." Harris, 134 S. Ct. at 2621. The holding of Abood may be alive in our jurisprudence, but it is not well. As Justice Alito broadly stated in concluding the majority's analysis in Harris, "if we accepted Illinois' argument, we would approve an unprecedented violation of the bedrock principle that, except perhaps in the rarest of circumstances, no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support." Id. at 2644. 33 No. who accept "burdens" that a benefit if accepting non-constitutionally that 2012AP2067 benefit protected somehow activity. A successful constitutional challenge cannot be rooted in such an unfounded premise. ¶61 We conclude that Wis. Stat. § 111.70(1)(f) and the third sentence of § 111.70(2), examined in isolation, do not violate the plaintiffs' right to freedom of association. b. Certification Elections ¶62 Prior to Act 10, general employees could petition WERC to hold an election to designate a labor organization as the general employees' certified representative. The voting requirement for certification was a simple majority of employees in the collective bargaining unit. Once a labor organization was certified, it would remain the general employees' certified representative until thirty percent of the employees requested a decertification election. ¶63 of a Act 10, however, requires the certified representative collective bargaining unit to undergo an annual certification election in which the representative must obtain the vote of an absolute majority of the general employees in the bargaining unit to retain status as the employees' certified representative. requires the certified representative Further, Act 10 pay the administering the related certification elections. Id. ¶64 that Wis. Stat. § 111.70(4)(d)3.b. cost of The plaintiffs allege that the certification election requirements imposed by Act 10 place "organizational penalties" 34 No. on certified representatives and general 2012AP2067 employees that will eventually dissuade participation in collective bargaining. ¶65 The bargaining plaintiffs' rights, which argument are again conflates statutorily collective guaranteed, with associational rights, which are constitutionally protected. Act 10's the certification election provisions merely specify statutory requirements a certified representative must satisfy in order to exclusively negotiate employees in its bargaining unit. on behalf of the general No plausible argument can be made that these provisions, or the "burdens" they impose on certified representatives, employees to freely infringe associate. on The the rights of certification general election provisions do not bar or obstruct general employees from joining other "like-minded individuals to associate for the purpose of expressing commonly held views." Knox, 132 S. Ct. at 2288. Instead, the provisions at issue outline the requirements and rights of certified representatives that wish to, on behalf of its bargaining unit employees, compel the government to participate in statutory collective bargaining. ¶66 Certification representatives have requirements existed in 35 Wisconsin's for labor certified laws since No. 1959.17 2012AP2067 The certification requirements imposed by Act 10 are certainly more stringent than under the prior laws, but it is impossible for these increased "organizational penalties" to violate the plaintiffs' associational rights, when there are no associational rights at stake. The certification requirements apply solely to collective bargaining, which is wholly distinct from an individual's constitutional right to associate. Therefore, we hold that Wis. Stat. § 111.70(4)(d)3.b., examined in isolation, does not infringe on the plaintiffs' constitutional right to associate. c. Payroll Deductions ¶67 Prior to Act 10, municipal employers could deduct labor organization dues from the paychecks of general employees at the employee's request. Wis. Stat. § 111.70(3g). hampers certified Act 10 prohibits this practice. The plaintiffs argue this prohibition representatives and general employees both organizationally and financially, creating an unconstitutional burden on their associational rights. ¶68 The United States Court of Appeals for the Seventh Circuit recently considered a separate legal challenge to Act 10 and, in so doing, examined the constitutionality of Act 10's 17 The Wisconsin State Employees Association was organized in 1932. In 1936, the association evolved into the American Federation of State, County and Municipal Employees ("AFSCME"). In 1959, the legislature enacted a law giving state municipal employees the statutory right to bargain collectively with their employers. This law Chapter 509, Laws of 1959, as amended over the years formed the basis of MERA, which is administered by WERC. 36 No. 2012AP2067 prohibition on payroll deductions for labor organizations. The court observed: The Bill of Rights enshrines negative liberties. It directs what government may not do to its citizens, rather than what it must do for them. While the First Amendment prohibits "plac[ing] obstacles in the path" of speech . . . nothing requires government to "assist others in funding the expression of particular ideas, including political ones," Ysursa, 555 U.S. at 358, 129 S.Ct. 1093. . . . Thus, even though "publicly administered payroll deductions for political purposes can enhance the unions' exercise of First Amendment rights, [states are] under no obligation to aid the unions in their political activities." Ysursa, 555 U.S. at 359, 129 S.Ct. 1093. In Ysursa, the Supreme Court squarely held that the use of a state payroll system to collect union dues from public sector employees is a state subsidy of speech. Id. As the Court explained, "the State's decision not to [allow payroll deduction of union dues] is not an abridgment of the unions' speech; they are free to engage in such speech as they see fit." . . . Like the statutes in these cases, Act 10 places no limitations on the speech of general employee unions, which may continue speaking on any topic or subject. Wis. Educ. Ass'n Council v. Walker, 705 F.3d 640, 645-46 (7th Cir. 2013). While the Seventh Circuit's analysis of Act 10 is not binding on this court, we find no reason to disagree with 37 No. its clear and rational articulation of the law.18 by the Seventh Circuit, the prohibition deduct labor authorization to paychecks of general employees employee's constitutional right prohibition does not on organization does to penalize not 2012AP2067 As explained an dues employer's from infringe associate. employees on the an Further, this because no constitutional right exists for the deduction of dues from a paycheck to support membership in a voluntary organization. See Bailey v. Callaghan, 715 F.3d 956, 958 (6th Cir. 2013) (noting the prohibition on payroll deductions "does not restrict the unions' speech at all: they remain free to speak about whatever 18 The dissent distinguishes Wis. Educ. Ass'n Council, 705 F.3d 640, from this case on the basis that it "examined whether Act 10 burdened the free speech rights of collective bargaining units" rather than "the right of individuals to organize in a collective bargaining unit." Dissent, ¶201, n.7. We are surprised the dissent finds this distinction meaningful, given that "[t]he particular freedom of association we are speaking of [is] the freedom that is ancillary to freedom of speech . . . ." Hudson v. Chicago Teachers Union Local No. 1, 743 F.2d 1187, 1193 (7th Cir. 1984), aff'd sub nom. Chicago Teachers Union, Local No. 1, AFT, AFL-CIO v. Hudson, 475 U.S. 292 (1986). In fact, as we explained supra ¶25, the reason the right to association is constitutionally protected is because it serves as a means of preserving other First Amendment activities, such as free speech. Roberts, 468 U.S. at 618; see also Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 68 (2006) (explaining that First Amendment protection extends to associational rights because "[t]he right to speak is often exercised most effectively by combining one's voice with the voices of others"). Regardless, though we view this as a distinction without a difference, we note that the Seventh Circuit recently held in Laborers Local 236, 749 F.3d at 639, that "none of Act 10's proscriptions individually or cumulatively infringe" the associational rights of labor organizations or its members. 38 No. they wish. 2012AP2067 Moreover, nothing in the First Amendment prevents a State from determining that its political subdivisions may not provide payroll deductions for union activities . . . .") (internal quotations omitted). ¶69 Accordingly, examined in we isolation, hold does that not Wis. Stat. infringe on § 111.70(3g), the plaintiffs' constitutional right to associate. d. Cumulative Burden ¶70 We have held that, examined in isolation, each of the contested provisions of Act 10 does not violate the plaintiffs' associational cumulative correct approach or together, rights. While we do advocated by the plaintiffs conclude that, necessary, the we contested constitutionally infirm. of Act 10 that the now provisions not of concede Act that the is either even viewed 10 are not As we discussed above, each provision plaintiffs contend infringes associational rights of certified representatives upon the and general employees does not, in fact, do so, because in each instance, there is no constitutional associational right implicated. ¶71 analysis. Viewing the provisions as a whole does not change our Each of the plaintiffs' arguments fails for largely the same reason: collective bargaining requires the municipal employer and the certified representative to meet and confer in good faith. Wis. Stat. § 111.70(1)(a). The Wisconsin Constitution does not. Indeed, it is uncontested that it would be the constitutional for State collective bargaining entirely. 39 of Wisconsin to eliminate No. ¶72 Thus, the plaintiffs' contention 2012AP2067 that several provisions of Act 10, which delineate the rights, obligations, and procedures of collective bargaining, infringe upon general employees' constitutional unfounded. No matter the limitations or "burdens" a legislative enactment places on right the to freedom collective of association bargaining is process, collective bargaining remains a creation of legislative grace and not constitutional obligation. The restrictions attached to the statutory scheme of collective bargaining are irrelevant in regards to freedom of association because no condition is being placed on the decision to participate. If a general employee participates in collective bargaining under Act 10's statutory framework, that general constitutional right. employee has not relinquished a They have only acquired a benefit to which they were never constitutionally entitled. ¶73 expand the protect. Wis. The First Amendment cannot be used as a vehicle to parameters of a benefit that it does not itself For the reasons articulated above, we conclude that Stat. §§ 111.70(4)(mb), 66.0506, 118.245, 111.70(1)(f), 111.70(3g), 111.70(4)(d)3 and the third sentence of § 111.70(2) do not violate the plaintiffs' associational rights. C. Equal Protection ¶74 Having concluded that Act 10 does not violate the right to freedom of association under the First Amendment, we next consider whether the Act 40 offends the equal protection No. 2012AP2067 provisions of the Wisconsin or United States Constitutions.19 The plaintiffs protection rights representatives employees also argue of that general through the choose to who Act 10 violates employees disparate associate the and certified treatment with of a representative and general employees who do not. equal general certified In considering this argument, we first note that public employees are not a protected class. We also recognize that this challenge implicates no fundamental rights because, as explained above, the right plaintiffs' to collectively constitutional bargain right is to not freedom the of same as the association. Accordingly, rational basis review governs in our examination of 19 Article provides: I, Section 1 of the Wisconsin Constitution All people are born equally free and independent, and have certain inherent rights; among these are life, liberty and the pursuit of happiness; to secure these rights, governments are instituted, deriving their just powers from the consent of the governed. In our analysis we treat the rights States Constitutions 2d at 393-94 (noting Constitution and the Constitution afford legislative power). of the plaintiffs' equal protection claims, protected under the Wisconsin and United as coextensive. See C & S Mgmt., 223 Wis. that Article I, Section 1 of the Wisconsin Fourteenth Amendment to the United States "substantially equivalent" limitations on 41 No. the plaintiffs' equal claims.20 protection 2012AP2067 We uphold a legislative act under that standard if it furthers a legitimate interest and if the challenged classification related to achieving the interest. is rationally See Smith, 323 Wis. 2d 377, ¶12 ("When neither a fundamental right has been interfered with nor a suspect class been classification, the unless patently it is disadvantaged legislative as enactment arbitrary and a result of the must be sustained bears no rational relationship to a legitimate government interest.") (internal quotation marks omitted). ¶75 As the court of appeals observed, and the plaintiffs concede, the merit of the plaintiffs' equal protection argument hinges on the merit of their associational rights claim. Having rejected the premise that Act 10 implicates a fundamental right, the plaintiffs' equal protection claim necessarily fails under rational basis review. ¶76 While courts express various iterations of the rational basis test, we have often quoted the United States Supreme Court's articulation in McGowan v. Maryland, 366 U.S. 420, 425-26 (1961): 20 Generally, when considering an equal protection challenge, this court will uphold the statute if we find that the legislative classification is supported by a rational basis. Wis. Prof'l Police Ass'n v. Lightbourn, 2001 WI 59, ¶221, 243 Wis. 2d 512, 627 N.W.2d 807. This court will employ strict scrutiny in our examination of an equal protection claim only if the legislative classification interferes with a fundamental right or "operates to the peculiar disadvantage of a suspect class." Castellani v. Bailey, 218 Wis. 2d 245, 261-62, 578 N.W.2d 166. 42 No. 2012AP2067 [The Equal Protection Clause] permits the States a wide scope of discretion in enacting laws which affect some groups of citizens differently than others. The constitutional safeguard is offended only if the classification rests on grounds wholly irrelevant to the achievement of the State's objective. State legislatures are presumed to have acted within their constitutional power despite the fact that, in practice, their laws result in some inequality. A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it. This court's presumption that all legislative acts are constitutional places a heavy burden on a party challenging the statute's constitutionality under rational basis review. See Ferdon ex rel. Petrucelli v. Wisconsin Patients Comp. Fund, 2005 WI 125, ¶¶67-68, 284 Wis. 2d 573, 701 N.W.2d 440. If any doubt exists it as to the statute's constitutionality, resolved in favor of constitutionality. Id. challenger is must establish beyond a reasonable doubt. ¶77 that the law must be To prevail, a unconstitutional Id. We will uphold a statute against an equal protection challenge if the classification bears a rational relationship to some legitimate government interest. ¶12. the Smith, 323 Wis. 2d 377, Notably, this requires no declaration by the State about law's rationality. purpose, The nor evidence actual motivations governmental body are irrelevant. 508 U.S. 307, 315 (1993). supporting of the the law's enacting FCC v. Beach Communications, Instead, "[i]n evaluating whether a legislative classification rationally advances the legislative objective, 'we are obligated to locate or, in the alternative, construct a rationale that might have influenced the legislative 43 No. determination.'" 2012AP2067 Ferdon, 284 Wis. 2d 573, ¶74 (citing Aicher ex rel. LaBarge v. Wisconsin Patients Comp. Fund, 2000 WI 98, ¶57, 237 Wis. 2d 99, N.W.2d 849). ¶78 The plaintiffs' equal protection argument focuses on two distinct ways in which employees are disparately treated: first, under Act 10, general employees who choose to associate with a certified representative are limited to negotiating on the sole issue of base wages. associate with limitations Second, on Act a certified what 10 they representative, may prohibits General employees who do not negotiate municipal however, with face no their employer. from deducting employers labor organization dues from the paychecks of general employees who choose to associate with a certified representative. General employees that belong to other organizations, however, face no similar prohibition in having membership dues from those organizations deducted from their paychecks. ¶79 We will address each challenged classification in turn. i. ¶80 The Collective Bargaining Limitations plaintiffs argue that Act 10 violates general employees' rights to equal protection under the law because the law limits wages, represented while general employees non-represented general to negotiating employees have base no limitations in what they may negotiate with their employer. ¶81 employees The fact that Act 10 creates two classes of public by representative whether for they collective elect to bargaining 44 have a purposes certified denies no No. employee equal protection under the law. 2012AP2067 As the defendants accurately point out, if the plaintiffs were correct in their argument, any public sector bargaining framework that resulted in different treatment for represented and general employees would be unconstitutional. plaintiffs' equal protection argument non-represented This means if the were correct, any collective bargaining scheme would be constitutionally infirm. ¶82 Legislative acts must be upheld when this court can conceive could be of any based. facts upon Aicher, which legislation Wis. 2d 99, 237 the ¶66. reasonably The Seventh Circuit determined, and we agree: Act 10's requirement that base wage increases above the cost of living require a municipal voter referendum for certified bargaining agents "promote flexibility in state and local government budgets by providing public employers more leverage in negotiations." Ass'n Council, 705 F.3d at 654. Wis. Educ. We conclude this classification scheme rationally advances the legislative purpose of improving Wisconsin's fiscal health through enhanced control over public expenditures. ii. Payroll Deduction Prohibitions ¶83 The plaintiffs also argue that Act 10 violates general employees' rights to equal protection under the law because the law prohibits employers from deducting labor organization dues from the paychecks of general employees, while permitting employers to deduct membership dues for other organizations. ¶84 As we noted above, because Act 10's payroll deduction prohibition does not implicate 45 the plaintiffs' associational No. 2012AP2067 rights, we examine this provision of Act 10 under rational basis review. ¶85 Act 10's prohibition on deducting labor organization dues could be founded on the defendants' rational belief that labor organizations are costly for the State. The State has a legitimate interest, especially in the current economic climate, in curtailing costs where possible. deductions affects furthers the this influence interest of labor The prohibition on paycheck by imposing a organizations burden over that general employees who are less enthusiastic about participating in the collective bargaining process. 705 F.3d at 656-57. See Wis. Educ. Ass'n Council, This provision of Act 10 does not prohibit general employees from paying labor organization dues; it merely requires that employees show the initiative to pay them on their own. ¶86 Accordingly, bargaining survive the we limitations plaintiffs' conclude and payroll equal rational basis review. 46 Act 10's deduction protection collective prohibitions challenge under No. 2012AP2067 D. Wisconsin Stat. § 62.623 and the Home Rule Amendment ¶87 The ERS21 Milwaukee requires that plan members contribute, or have contributed on their behalf, 5.5% of their earnable compensation.22 08-7. and Milwaukee, Wis. Charter Ordinance § 36- Prior to the enactment of Act 10, the City of Milwaukee participating contributions on city behalf of agencies each funded participating these member employee hired prior to January 1, 2010, while employees hired on or after January 1, 2010, had to contribute 5.5% of their earnable 21 The Milwaukee Employe Retirement System was established by ch. 396, Laws of 1937. In 1947, the legislature transferred the governance, funding, and administration of the retirement system to the City of Milwaukee. Subsequently, pursuant to Wis. Stat. § 66.0101, the City of Milwaukee enacted Chapter 36 of the Milwaukee Charter Ordinance, which has served as the governing law of the Milwaukee ERS. The Milwaukee ERS provides retirement and disability benefits, counseling and other services to approximately 27,000 members. The Milwaukee ERS is primarily responsible for administering retirement and disability benefits for employees of the City of Milwaukee, Milwaukee Metropolitan Sewerage District, the Wisconsin Center and the Milwaukee Housing and Redevelopment Authorities, non-certified staff of Milwaukee Public Schools and some employees of the Milwaukee Area Technical College. The ERS pension trust fund is a defined benefit pension plan that provides a monthly benefit to retirees after reaching a minimum retirement age depending upon employment history. 22 Earnable compensation is defined as essentially regular base salary. Milwaukee, Wis. Charter Ordinance § 36-02-12. The Milwaukee ERS also requires varying levels of contribution depending on the employee's specific occupation. For general employees, the required contribution is 5.5%, but for police officers, fire fighters, and elected officials, it is 7%. Id. § 36-08-7. However, because employees classified as "public safety employees" under Act 10 are unaffected by Wis. Stat. § 62.623, the plaintiffs' argument centers on those plan members of the Milwaukee ERS classified as "general employees." 47 No. compensation on their own behalf. See id. Stat. the § 62.623, which prohibits City 2012AP2067 Act 10 created Wis. of Milwaukee from paying on behalf of a general employee the employee share of required contributions to the Milwaukee ERS.23 23 Wisconsin Stat. § 62.623 provides, in part: Beginning on July 1, 2011, in any employee retirement system of a 1st class city, except as otherwise provided in a collective bargaining agreement entered into under subch. IV of ch. 111 and except as provided in sub. (2), employees shall pay all employee required contributions for funding benefits under the retirement system. The employer may not pay on behalf of an employee any of the employee's share of the required contributions. Every Wisconsin city is assigned to one of four classes. Wisconsin statutes divide cities into the four classes, based on population, as follows: - First class cities, with a population of 150,000 or over. - Second class cities, with 39,000, but less than 150,000. a population of at least - Third class cities, with a population of at least 10,000, but less than 39,000. - Fourth 10,000. class cities, with 48 a population of less than No. ¶88 The plaintiffs24 argue that Wis. Stat. 2012AP2067 § 62.623 violates the "home rule amendment," Wis. Const. art. XI, § 3(1). ¶89 Cities are creatures of the state legislature and have no inherent right of self-government beyond the powers expressly granted to them.25 See, e.g., Van Gilder v. City of Madison, 222 Wis. 58, 73, 268 N.W. 108 (1936) (citing City of Trenton v. New Wis. Stat. § 62.05(1). The classes are primarily meant to be population-based distinctions, but a city does not move to a higher class automatically if its population increases past a certain population threshold. In addition to having the necessary population, the city must make any requisite modifications in government and a proclamation must be issued by the mayor or city manager and publish this change according to law. Wis. Stat. § 62.05(2). For example, Madison has a sufficient population to meet the first-class city population requirement, but for purposes of statutes related to cities, Madison remains a city of the second class. Milwaukee is currently Wisconsin's only first-class city. Susan C. Paddock, The Changing World of Wisconsin Local Government, 1997-98 Wisconsin Blue Book 119. 24 Wisconsin Stat. § 62.623 applies to only first-class cities. Consequently, Local 61 is the sole challenger for the home rule and contract clause issues. However, for the sake of consistency, we will still refer to Local 61 as "the plaintiffs" in Sections 3 and 4 of this opinion. 25 As we explained in City of Trenton v. New Jersey, 262 U.S. 182, 187 (1923): In the absence of state constitutional provisions safeguarding it to them, municipalities have no inherent right of self-government which is beyond the legislative control of the state. A municipality is merely a department of the state, and the state may withhold, grant or withdraw powers and privileges as it sees fit. However great or small its sphere of action, it remains the creature of the state exercising and holding powers and privileges subject to the sovereign will. 49 No. Jersey, 262 U.S. 182, 187 (1923)). rule amendment with greater was intended autonomy over to Adopted in 1924, the home provide local 2012AP2067 cities affairs.27 and The villages26 home rule amendment, Wis. Const. art. XI, § 3(1) provides: Cities and villages organized pursuant to state law may determine their local affairs and government, subject only to this constitution and to such enactments of the legislature of statewide concern as with uniformity shall affect every city or every village. The method of such determination shall be prescribed by the legislature. 26 Wisconsin's cities and villages are sometimes referred to as "incorporated" municipalities or "municipal corporations." This reflects to some extent their legal status. Early in state history, villages and cities were incorporated by special acts of the legislature. In 1871 and 1892, constitutional amendments were adopted prohibiting the legislature from incorporating any city, village, or town by special act. See Wis. Const. art. IV, § 31. As a result, cities and villages are now incorporated according to general incorporation laws, and the basic outline of city and village government is set forth in statutes (sometimes referred to as "general charter" laws). Wis. Stat. chs. 61 (villages) and 62 (cities). The home rule amendment does not apply to counties in Wisconsin. However, counties have home rule protection pursuant to statute, though it is more limited than the protection afforded by constitutional municipal home rule. See Wis. Stat. § 59.03(1); Jackson Cnty. v. DNR, 2006 WI 96, ¶17, 293 Wis. 2d 497, 717 N.W.2d 713. 27 Generally, a city or village is statutorily required to enact a charter ordinance in order to override a state law as it relates to the local affairs and government of the city or village. See Wis. Stat. § 66.0101. It is uncontested in this case that the City of Milwaukee properly enacted a charter ordinance and, consequently, has properly exercised its home rule authority in governing, funding, and administrating the Milwaukee ERS. Accordingly, our discussion is limited to the question of whether the state legislature, by enacting Wis. Stat. § 62.623, has impermissibly infringed on the City of Milwaukee's home rule authority. 50 No. ¶90 2012AP2067 As the court of appeals noted in its certification to this court, the crux of this challenge lies in the parties' disagreement on the proper legal test to employ in determining whether a legislative enactment violates the home rule amendment. ¶91 The defendants argue that our case law holds, as a threshold matter, that if a legislative enactment applies uniformly statewide, it cannot violate the home rule amendment. In other whether words, a the defendants legislative enactment contend is the primarily determination a statewide of or local concern is irrelevant, so long as the legislation "with uniformity shall affect every city or village." Wis. Const. art. XI, § 3(1).28 ¶92 In stark contrast to the defendants' position, the plaintiffs contend that, in order to comply with the home rule amendment, a legislative enactment must (1) affect a matter of statewide concern, and must (2) apply with uniformity statewide. Further, the plaintiffs argue that if a home rule municipality has enacted a charter ordinance that relates to a matter of purely local concern, any conflicting state statute must be found unconstitutional. ¶93 In short, the parties dispute whether a uniformly applied state law may permissibly preempt the charter ordinance 28 The conditional phrase in the home rule amendment that state legislation "with uniformity shall affect every city or village" is frequently referred to in case law and secondary authorities as the "uniformity requirement." 51 No. 2012AP2067 of a home-rule city if the ordinance concerns a matter of purely local affairs. ¶94 rule Generally, challenges, under we our first analytical establish framework the for character home of the legislative enactment at issue, and only then consider whether the uniformity requirement is satisfied if the state law concerns a matter of primarily local affairs. However, this home heart of the application of the rule parties' challenge dispute is is atypical because not limited to the the relevant law to the facts presented; instead, it centers on the parties' wildly divergent positions on the applicable analytical framework. In their certification to this court, the court of appeals requested that we clarify the proper legal test to apply in constitutional home rule challenges. ¶95 In order to address the court of appeals' request for clarity and resolve the parties' arguments, we first outline the relevant analytical framework. under our controlling In so doing, we establish that, precedent, no merit exists in the plaintiffs' contention that the legislative enactment at issue in a home rule challenge must be a matter of statewide concern and uniformly applied statewide to withstand constitutional scrutiny. After clarifying the proper analytical framework, we apply it to the facts of this case and hold that Wis. Stat. § 62.623 primarily concerns a matter of statewide concern and does not violate Constitution. the home Accordingly, rule we 52 amendment need not to go the any Wisconsin further to No. 2012AP2067 conclude that Wis. Stat. § 62.623 survives the plaintiffs' home rule challenge. i. ¶96 Analytical Framework For the purposes of our home rule analysis, we have outlined three areas of legislative enactment: those that are (1) exclusively a statewide concern; (2) exclusively a local concern; or (3) a "mixed bag." See, e.g., Adams v. State Livestock Facilities Siting Review Bd., 2012 WI 85, ¶30, 342 Wis. 2d 444, 820 N.W.2d 404 (citing State ex rel. Michalek v. LeGrand, 77 Wis. 2d 520, 527, 253 N.W.2d 505 (1977)). ¶97 If the legislative enactment concerns a policy matter that is exclusively of statewide concern, we have held that the home rule amendment regulate the matter. grants no city or village authority to Van Gilder, 222 Wis. at 84 (holding that "[w]hen the Legislature deals with matters which are primarily matters of state-wide concern, it may deal with them free from any restriction contained in the home rule amendment").29 ¶98 Conversely, if the legislative enactment concerns a matter of purely local affairs, home rule municipalities may regulate those local matters and, under the home rule amendment, state legislation regulation that unlawful, would unless preempt uniformly 29 or make applied that municipal statewide, is However, the home rule amendment does not prohibit the legislature from delegating to municipalities the statutory authority to regulate particular areas that are primarily matters of statewide concern. See Wisconsin's Environmental Decade, Inc. v. Dept. of Natural Res., 85 Wis. 2d 518, 533, 271 N.W.2d 69 (1978). 53 No. prohibited. 2012AP2067 Michalek, 77 Wis. 2d at 529 (holding that "[a]s to an area solely or paramountly in the constitutionally protected area of 'local affairs and government,' the state legislature's . . . preemption or ban on local legislative action would be unconstitutional"). ¶99 the However, notwithstanding the plaintiffs' assertions to contrary, our case law has consistently held that the legislature may still enact legislation that is under the home rule authority of a city or village if "affect[s] every city or every village." § 3(1); that, it with uniformity Wis. Const. art. XI, see, e.g., Adams, 342 Wis. 2d 444, ¶¶29, 36 (noting while municipalities may adopt ordinances regulating issues of both statewide and local concern, the legislature has the authority to withdraw this power by creating uniform state standards that all political subdivisions must follow); City of West Allis v. Cnty. of Milwaukee, 39 Wis. 2d 356, 366, 159 N.W.2d 36 (1968) (explaining that when "the matter enacted by the legislature is primarily of local concern, a municipality can escape the strictures of the legislative enactment unless the enactment applies with uniformity to every city and village."); Van Gilder, 222 Wis. at 84 (stating that "when the Legislature deals with local affairs and government of a city, if its act is not to be subordinate to a charter ordinance, the act must be one which affects with uniformity every city"); State v. Baxter, 195 Wis. 437, 449, 219 N.W. 858 (1928) (explaining that "where legislation of a city enacted within the scope of its home rule powers 54 comes in conflict with state No. 2012AP2067 legislation, the legislation of the city prevails over the state legislation, unless the state every city of the state"). legislation affects uniformly If the state legislation concerning purely local affairs does not meet the uniformity requirement, cities and villages may exempt themselves adopting a charter ordinance to that effect. from the law by See West Allis, 39 Wis. 2d at 367-68. ¶100 Finally, touches on government an in issue interests cases that (a where the concerns "mixed legislative both bag"), enactment statewide the court and local must first determine whether the matter is primarily a matter of statewide or local concern. After making this determination, the court then applies the corresponding test. See, e.g., Michalek, 77 Wis. 2d at 528 (concluding the matter at issue was paramountly local in nature and, accordingly, treating it as being of local concern for purposes of home rule analysis); State ex rel. Brelsford v. Ret. Bd. of Policemen's Annuity & Benefit Fund of Milwaukee, 41 Wis. 2d 77, 86, 163 N.W.2d 153 (1968) (citation omitted) (reviewing the consistency of two home rule cases and noting "the court was confronted with a subject of legislation which partook both of the nature of a 'local affair' and also that of 'state-wide concern,' but in the former case it held that the matter was primarily a 'local affair,' while the latter decision held that the 'state-wide concern' feature was paramount."); City of Fond du Lac v. Town of Empire, 273 Wis. 333, 338-39, 77 N.W.2d 699 (1956) (explaining that "where a matter affects the interests of local residents as well as the 55 No. 2012AP2067 interests of the people in other areas of the state, the test to be applied in resolving the matter is that of paramount interest . . . ."). ¶101 In sum, our home rule case law instructs us that, when reviewing a legislative enactment under the home rule amendment, we apply a two-step analysis. court determines whether the First, as a threshold matter, the statute concerns primarily statewide or primarily local concern. a matter of If the statute concerns a matter of primarily statewide interest, the home rule amendment is not implicated and our analysis ends. If, however, the statute concerns a matter of primarily local affairs, the reviewing court then examines whether the statute satisfies the uniformity requirement. If the statute does not, it violates the home rule amendment. ii. ¶102 The The Plaintiffs' Local Affairs Argument plaintiffs, against the great weight of our precedent, broadly depict the home rule amendment as prohibiting the State charter from enacting ordinance of a any legislation home-rule city that when concerns a matter of exclusively local affairs. preempts the the ordinance To support this claim, the plaintiffs rely on this court's holdings in Michalek, 77 Wis. 2d 520, and Thompson v. Kenosha Cnty., 64 Wis. 2d 673, 221 N.W.2d 845 (1974).30 30 The plaintiffs also argue that matters of a "purely local concern" are accorded more protection under the home rule amendment than matters categorized as "primarily" local in nature. We are unconvinced. We find nothing in our case law to support this distinction and the plaintiffs failed to provide any additional persuasive authority. 56 No. ¶103 The plaintiffs interpret legislation purporting to concerns matter local a amendment. of preempt Michalek a that that the violates hold ordinance charter affairs to 2012AP2067 rule home In Michalek, this court upheld a City of Milwaukee rent-withholding charter ordinance, concluding the primarily concerned a matter of local affairs. Wis. 2d at 529, 536. ordinance Michalek, 77 In discussing the reach of the home rule amendment, the court stated that "[a]s to an area solely or paramountly in the constitutionally protected area of 'local affairs and government,' the state legislature's delegation of authority to legislate is unnecessary and its preemption or ban on local legislative action would be unconstitutional." Id. at 529. ¶104 Relying construe preempt purely on Michalek a to municipal local affairs, this isolated hold that charter passage, state ordinance regardless of the legislation regulating whether the plaintiffs can never issues of legislation applies uniformly statewide. ¶105 The plaintiffs' reading of Michalek ignores the fact, however, that the court held the charter ordinance and state legislation another.31 at issue did not Therefore, though actually Michalek 31 conflict with one determined the charter "They are not locomotives on a collision course. Rather each moves on its own track, parallel and not too far apart, traveling in the same direction. With the ordinance on track to further a local affairs concern and the statute on track to advance a matter of statewide concern, we see no constitutional reason to derail either." State ex rel. Michalek v. LeGrand, 77 Wis. 2d 520, 530, 253 N.W.2d 505 (1977). 57 No. 2012AP2067 ordinance concerned a matter of primarily local affairs, the court did not need to reach the question of whether the contested state legislation satisfied the uniformity requirement of the home rule amendment. In fact, the court in Michalek clarified this very point: With no conflict between ordinance and statute, and no potential for conflict, we do not give consideration to the undiscussed question whether the home rule amendment reference to "enactments of legislative and state-wide concern as shall with uniformity affect every city and every village," (Art. XI, sec. 3, Wis.Const.) includes or does not include a statute applying only to counties with over 100,000 population. Michalek, 77 Wis. 2d at 530 n.16. Put differently, Michalek makes plain that if the court had reached a different conclusion and found the legislation and charter ordinance did, in fact, conflict, the court would have proceeded by examining whether the statute applied uniformly statewide. Read in this context, Michalek does not hold that state legislation that conflicts with a charter ordinance concerning a matter of local affairs is per se Michalek unconstitutional. supports such a The plaintiffs' proposition is assertion entirely that misplaced. Michalek is in accord with this court's long-held rule that when the charter ordinance of a home rule city concerns a matter of local affairs, conflicting legislation must be uniformly applied statewide to satisfy the home rule amendment. ¶106 The plaintiffs' following language: reliance on Thompson hinges on the "Sec. 3, art. XI of the constitution places two limitations on the legislature's power to enact statutes 58 No. 2012AP2067 interfering with city and village affairs: (1) The subject of the statutes must be a matter of statewide concern; and (2) such statutes must uniformly affect Thompson, 64 Wis. 2d at 683. all cities and villages." The plaintiffs argue that this explicit statement that two limitations exist statewide concern and uniformity demonstrates that the uniformity of legislation, alone, does not satisfy the home rule amendment. ¶107 We acknowledge the language that the plaintiffs highlight in Thompson appears, at first blush, to conflict with this court's prior interpretations of the home rule amendment. However, a close reading reveals that the implied rule in Thompson cited to by the plaintiffs that, in matters concerning local affairs, the home rule amendment requires state legislation to concern a matter of statewide concern and be uniformly applied statewide is never employed by the Thompson court and is, in fact, internally inconsistent with the court's own analysis. ¶108 In statute system. the that Thompson, we permitted counties Id. at 676. statute impermissibly violated examined to a challenge create a to county a state assessor Specifically, the challengers argued that the superseded home the rule amendment assessment villages, and towns within such counties. powers because of Id. at 682-83. it cities, After setting out the language emphasized by the plaintiffs in this case, the Thompson court then considered whether the state law at issue violated the home rule amendment. First, the court determined that the subject matter of the legislation, which 59 No. 2012AP2067 dealt with property tax assessments, was primarily a statewide concern. Id. at 686. Subsequently, in considering the uniformity requirement, the Thompson court noted: th[e] uniformity limitation only applies if the subject of the statute concerns primarily local affairs. If the subject of the legislation is of statewide concern, the uniformity restriction is inapplicable. . . . Since we have concluded that the subject of [the state law at issue] was primarily a matter of statewide concern, the uniformity requirement of the home rule amendment is not applicable here. . . . Thus, even if [the state law at issue] concerns local affairs, and must therefore affect cities and villages uniformly, we hold that this uniformity requirement is not violated. Id. at 686-87 (emphasis added). Thus, Thompson held that, even had the court decided the state law at issue concerned a matter of local affairs rather than a statewide concern, the statute would still be upheld because it "applie[d] with equal force throughout the state." Id. at 688. We find it significant that the reasoning and holding in Thompson read as a whole, unlike the isolated passage relied upon by the plaintiffs, harmonizes with controlling precedent. ¶109 The reasoning and holdings of Thompson and Michalek are consistent with the entire body of our longstanding home rule jurisprudence and we find no conflict in our precedent to 60 No. be resolved.32 plaintiffs' conferred Instead, Consequently, broad to we we characterization municipalities reaffirm that, by while perceive of the the no merit in legislative home the 2012AP2067 home rule rule the power amendment. amendment authorizes municipal regulation over matters of local concern and protects that regulation against conflicting state law, state law will still preempt that municipal regulation if it "with uniformity . . . affect[s] every city or every village." Wis. Const. art. XI, § 3(1). 32 In fact, the plaintiffs' interpretation of our home rule jurisprudence appears to be as novel as it is mistaken. In surveying the ample scholarship on the topic of state constitutional home rule, we are unable to find a single interpretation of our home rule precedent that aligns with the plaintiffs' argument that no state law may preempt a charter ordinance that concerns a matter of purely local affairs. See, e.g., Kerry A. Burchill, Madison's Minimum-Wage Ordinance, Section 104.001, and the Future of Home Rule in Wisconsin, 2007 Wis. L. Rev. 151, 164-65 ("[Wisconsin's home rule] amendment does provide an exception which permits the legislature to regulate an area of local concern if the enactment uniformly applies to every city or village in the state."); Robert D. Zeinemann, Overlooked Linkages Between Municipal Incorporation and Annexation Laws: An in-Depth Look at Wisconsin's Experience, 39 Urb. Law. 257, 266 n.64 (2007) ("Constitutional home rule in Wisconsin provides only minimal autonomy to cities and villages because, even in matters of primarily local concern, the Wisconsin legislature may enact legislation controlling those issues if the act uniformly applies to every city or village in the state."); see also 1 Chester James Antieau, Mun. Corp. Law. § 3.20 (1995); Douglas A. Yanggen & Leslie L. Amrhein, Groundwater Quality Regulation: Existing Governmental Authority and Recommended Roles, 14 Colum. J. Envtl. L. 1, 18 (1989); Robert W. Hansen, Municipal Home Rule in Wisconsin, 21 Marq. L. Rev. 2, 82 (1937); Eugene McQuillin, 2 McQuillin Mun. Corp. § 4:82 (3d ed.). 61 No. 2012AP2067 ¶110 Having reaffirmed our established analytical framework for home rule amendment challenges, we now apply that framework to the legislative enactment at issue, Wis. Stat. § 62.623. iii. Statewide or Local Concern ¶111 We first address whether Wis. Stat. § 62.623 concerns a matter of exclusively statewide concern, exclusively local affairs, or a mix of both statewide and local interests. The defendants argue that Wis. Stat. § 62.623 addresses a matter of statewide concern. Specifically, the defendants contend that the legislature, in enacting Act 10, clearly believed that the entire State of Wisconsin including its municipalities was in a financial crisis. In order to effectively respond to this crisis, the legislature deemed it essential to lower the costs associated with defendants cite other state aid public to employees the State's provided to statewide. "shared counties 62 revenue" and Further, the program and municipalities to No. bolster the argument that local spending is an 2012AP2067 issue of statewide concern.33 ¶112 The plaintiffs, on the other hand, argue that Wis. Stat. § 62.623, by prohibiting the City of Milwaukee and participating city agencies from paying the employee share of contributions to the Milwaukee ERS, unconstitutionally infringes on a matter of purely local concern. Both the plaintiffs and the dissent34 cite to Van Gilder for the proposition that issues tied to a municipality's local spending powers here, the City of Milwaukee's administration of its own retirement system is quintessentially a local affair. 222 Wis. at 81-82 (quoting J. Cardozo in Adler v. Deegan, 167 N.E. 705, 713 (1929)) ("There are some affairs intimately connected with the exercise by the city of its corporate functions, 33 which are city affairs State-generated revenues are distributed to local governments pursuant to the State's "shared revenue" program. See, e.g., Wis. Stat. ch. 79. In 2011, the legislature allocated $824,825,715 for distribution to counties and municipalities in fiscal year 2011 and $748,075,715 for distribution "in 2012, and each year thereafter." Wis. Stat. § 79.01(2). The plaintiffs vehemently disagree with the defendants' depiction of the State's shared revenue program, noting that under the program a municipality is unable to increase expenditures in order to receive more funding from the State. The plaintiffs are correct that nothing in the record supports the defendants' implication that the shared revenue program contributes to, or is affected by, the administration of the Milwaukee ERS. Accordingly, the defendants' reference to the shared revenue program merely provides us with an illustration of the uncontested fact that there are intergovernmental transfers between the state and its municipalities. 34 Dissent, ¶223. 63 No. 2012AP2067 only . . . . Most important of all perhaps is the control of the locality over payments from the local purse"). ¶113 This court has long recognized that the terms "local affairs" and "statewide concern" in the home rule amendment are problematically vague. (observing concern" "local that are the See, e.g., Van Gilder, 222 Wis. at 73 phrases "practically affairs" and oversimplifying "local indefinable"). "statewide reality: affairs" the "statewide Further, concern" "functions and carry of the the state terms risk and of local governments necessarily overlap," Van Gilder, 222 Wis. at 64, and, moreover, the nature of governmental functions can change over time.35 Consequently, home rule challenges are, by necessity, fact-specific inquiries, and determinations are made on an ad hoc basis. See, e.g., California Fed. Sav. & Loan Ass'n. v. City of Los Angeles, 812 P.2d 916, 925 (Cal. 1991) (noting that a "municipal affair" and "statewide concern" represent "legal conclusions rather than factual descriptions"). ¶114 Here, the public policy matter at issue unquestionably touches on matters of both statewide and local concern. entirely The administration self-reliant in of both a its city's retirement management and system, funding, certainly concerns a matter of local affairs. As the plaintiffs correctly observe, the regulation of local budgetary policy and 35 See, e.g., Helmer v. Superior Court of Sacramento Cnty., 191 P. 1001, 1001 (Cal. 1920) (noting that "[t]he term 'municipal affairs' is not a fixed quantity, but fluctuates with every change in the conditions upon which it is to operate"). 64 No. spending have long been concern. See, e.g., Van considered Gilder, matters 222 Wis. of 58. 2012AP2067 purely local Further, the enactment of Act 10 negatively impacts the City of Milwaukee's sensible interest in offering greater employee benefits in order to attract personnel. In fact, the initial legislative purpose in authorizing the establishment of the Milwaukee ERS was to "strengthen the public service in cities of the first class by establishing the security of such retirement benefits." § 31(1), ch. 441, Laws of 1947. ¶115 Conversely, the statewide regulation of public sector employee expenditures during a period of economic recession unquestionably involves a matter of statewide importance. terms of the public employer-employee relationship The have long been the subject of statewide legislation in Wisconsin. In fact, Wisconsin was the first state in the nation to establish a framework for bargaining.36 public employees to engage in collective Since that time, the state legislature has enacted numerous statutes dealing with a broad range of issues relating to the public employer-employee relationship. See, e.g., Wis. Stat. § 111.01 (governing standards regarding employment peace); Wis. Stat. discrimination); collective § 111.321-325 Wis. bargaining Stat. (prohibiting § 111.70 framework); 36 (governing Wis. Stat. employment statewide ch. 230 See, Todd C. Dvorak, Heeding "The Best of Prophets": Historical Perspective and Potential Reform of Public Sector Collective Bargaining in Indiana, 85 Ind. L.J. 701, 707-08 (2010). 65 No. 2012AP2067 (establishing civil service protections for state employees). Further, health statewide of the legislation state budget aimed is at improving indisputably a the fiscal general state concern. ¶116 § 62.623 Having and statewide and legislative primarily government' the Milwaukee the paramountcy." interests, concluded Charter local As we or concerns, explained enactment must determine the home a we ¶100, both matter Wis. the when the amendment concern' under the exception thereto . . . ." or of of challenged and legislation 'local both "test a statewide of Stat. implicates apply whether rule between Ordinance supra impacts paramountly under conflict affairs local "is and 'state-wide Michalek, 77 Wis. 2d at 528. ¶117 Our home rule jurisprudence instructs this court, in confronting the "heavy burden of developing the lines" between matters of statewide and local concern, to consider whether the conflict between the charter ordinance and the statute at issue more greatly concerns the people of the entire state or the 66 No. people in the municipality.37 2012AP2067 See, e.g., Michalek, 77 Wis. 2d at 527 (noting "that many matters while of 'state-wide concern,' 'affecting the people and state at large somewhat remotely and indirectly, yet at the same time affect the individual municipalities directly and intimately, can consistently be, and are, 'local affairs'. . . .'") (quoting State ex rel. Ekern v. City of Milwaukee, 190 Wis. 633, 640, 290 N.W. 860 (1926)); Brelsford, ordinance 41 Wis. 2d at regarding the 86-87 (reasoning regulation of that pension a charter benefits for Milwaukee police officers who teach upon retirement is of more interest to Milwaukee than the state at large); Fond du Lac, 273 Wis. at 338-39 (explaining that "where a matter affects the interests of local residents as well as the interests of the people in other areas of the state, the test to be applied in resolving the matter is that of paramount interest . . . ."). 37 This is a rational approach considering that, in weighing conflicts between state and local regulation, the policy matter at issue in a local ordinance will not always equate to the policy matter at issue in the state legislation. Though this is unavoidable, it is also decidedly problematic, given that the label affixed to the matter at issue often governs whether there is a constitutional violation. The considerable significance this analytical approach ascribes to the box a policy matter is placed in exacerbates the risk of a cavalier, mechanistic jurisprudence. Accordingly, given that the policy matters of conflicting state and local regulations often diverge in scope and purpose, and their categorization is of substantial consequence, we conclude that our established approach of categorizing the policy matters of conflicting regulations by examining whether the concern arising from the conflict is greatest within the municipality or the state to be sensible. 67 No. ¶118 Under this approach, while we recognize 2012AP2067 that the impact of Act 10 on both the Milwaukee ERS and the City of Milwaukee is significant and unquestionably touches on a matter of local affairs, we conclude the Act primarily implicates a matter of statewide concern. The State has a substantial interest in maintaining uniform regulations on public pension plans in order to reduce the fiscal strain caused by state and local expenditures for public employee compensation. Further, the State is obligated to maintain a functioning civil service system. Public employees work in areas of fundamental importance, ranging from education and public health, to housing and sanitation. Without question, the State has an interest in seeking to safeguard the vitality of these essential services in times of economic uncertainty and duress.38 ¶119 We do not suggest that the City of Milwaukee mismanaged its retirement system or that Governor Walker and state legislature effective in enacted fulfilling a law its that has purported been or will objectives. Such political inquiries are beyond the purview of this court. legislature has broad latitude 38 to experiment with be The economic The dissent suggests that our conclusion rests primarily on the fiscal concerns underlying and leading up to the enactment of Act 10. Dissent, ¶219. Wisconsin's considerable financial interest in alleviating a massive budget shortfall is certainly a meaningful factor in our analysis. But, as discussed supra ¶¶115, 118, we also take into account several other factors, including the scope of the legislation, the State's interest in maintaining essential public services, and its historic role in regulating matters affecting the employeremployee relationship. 68 No. 2012AP2067 problems and we do not presume to second-guess its wisdom. See Ferguson v. Skrupa, 372 U.S. 726 (1963). Instead, our review is limited to determining between the conflicting whether state the and policy local matter at regulation issue is best described as involving a local affair or a statewide concern. ¶120 Here, the state legislation at issue, Act 10, was enacted by the legislature during a period of intense fiscal uncertainty.39 noted that The National Association of State Budget Officers 2010 "presented the most difficult challenge for states' financial management since the Great Depression. . . . " Nat'l Governors Ass'n & Nat'l Ass'n of State Budget Officers, The Fiscal Survey of States vii (June 2010). was enacted, the Department of 39 At the time Act 10 Administration was predicting The dissent takes issue with our review of the policy concerns underlying Act 10 as a whole, rather than "the specific statute at issue, Wis. Stat. § 62.623(1)." Dissent, ¶¶226, 231. The dissent's position illustrates the importance of how one frames the policy matter at issue. The dissent defines the issue by looking solely at the local ordinance. This technique demonstrates what happens when one adopts a results-driven approach. As we explained supra note 37, we conclude the more sensible approach is to balance the interests of both the state legislation and the charter ordinance at issue. The inquiry is not simply whether there is an interest of local affairs. Indeed, we acknowledge repeatedly that the interests of the City of Milwaukee are heavily implicated here. Rather, we hold the appropriate inquiry is whether the concern arising from the conflicting regulation is greatest within the municipality or the state. 69 No. Wisconsin was facing a $3.6 billion dollar 2012AP2067 budget deficit.40 Nationwide, analysts projected that states would face close to $300 billion in budget shortfalls between fiscal years 2009 and 2012. ¶121 Enacted during an emergency legislative session, and referred to broadly as the Budget Repair Bill, the scope of Act 10 is extraordinary. It addresses a broad range of subjects, including health insurance premiums, collective bargaining of state employees, retirement contributions for public employees statewide, and modifications to the earned income tax credit. ¶122 state. It Act is 10 significant is not that Act 10 impacts the narrow and particularized entire in its application; rather, it is a broad and comprehensive law that applies, not just to City of Milwaukee employees, but to every general employee in the State of Wisconsin. the legislature determined that, Governor Walker and considering the challenges presented by the grim economic climate, it was imperative to make drastic public policy changes, in several areas of the law, spanning the entire state. ¶123 We find that, given the facts presented in this case, the conflicting state and local regulations are of more paramount concern within the state as a whole than in the City 40 Wisconsin Department of Administration, State of Wisconsin 2011-13 Executive Budget in Brief, http://www.doa.state.wi.us/Documents/DEBF/Budget/Biennial%20Budg et/Biennial%20Budget%20Archives/201113%20Biennial%20Budget/2011-13_BIB.pdf, (last visited June 19, 2014). 70 No. of Milwaukee. and related 2012AP2067 Accordingly, we conclude that Wis. Stat. § 62.623 statutes are primarily a matter of statewide concern. ¶124 We note the plaintiffs insist this conclusion cannot be reached without ignoring the deference owed to a statement of intent included in a 1947 legislative amendment pertaining to the Milwaukee ERS.41 We find this argument unpersuasive. The statement of intent referenced by the plaintiffs provides: For the purpose of giving to cities of the first class the largest measure of self-government with respect to pension annuity and retirement systems compatible with the constitution and general law, it is hereby declared to be the legislative policy that all future amendments and alterations to this act are matters of local affair and government and shall not be construed as an enactment of state-wide concern. § 31(1), ch. 441, Laws of 1947. The plaintiffs argue that this statement of intent preserved the City of Milwaukee's autonomy in managing the Milwaukee ERS and precluded future state legislative enactments that infringe on that autonomy. ¶125 The plaintiffs overstate their case. To be sure, this court has held that legislative determinations regarding whether a policy matter constitutes a "statewide concern" or a matter of "local affairs," legislative acts. (noting that is entitled great weight when categorizing See, e.g., Van Gilder, 222 Wis. at 73-74 "[e]ven though the 41 determination made by [the In 1937, the legislature enacted a law that authorized the City of Milwaukee to create the Milwaukee ERS. See ch. 396, Laws of 1937. In 1947, the legislature amended that act and included the statement of intent referenced above. § 31, ch. 441, Laws of 1947. 71 No. 2012AP2067 legislature] should be held not to be absolutely controlling, nevertheless it is entitled to great weight because matters of public policy are primarily for the legislature"). ¶126 However, we reject the plaintiffs' contention that the legislature's declaration in 1947 that the Milwaukee ERS is a matter of local concern is an immutable determination. the legislature in 1947 may have intended to block While future legislatures from regulating public sector pension funds in the City of Milwaukee, it unquestionably lacked that power through direct legislative action, let alone through a general statement of legislative intent. "[o]ne legislature Wisconsin case law has long held that may not bind a flexibility to address changing needs. future legislature's Thus, one legislature may not enact a statute which has implications of control over the final deliberations or actions of future legislatures." Flynn v. Dep't of Admin., 216 Wis. 2d 521, 543, 576 N.W.2d 245 (1998) (internal quotation marks omitted). ¶127 Further, the nature of public policy matters is not static,42 and as functions can change a result, over the time. 42 character Plainly, of governmental the legislature's See, e.g., Kenneth E. Vanlandingham, Municipal Home Rule in the United States, 10 Wm. & Mary L. Rev. 2, 291 (1968); Robert W. Hansen, Municipal Home Rule in Wisconsin, 21 Marq. L. Rev. 2, 77 (1937) ("What is quite local in character today may not be so tomorrow. In the 'horse-and-buggy' days of an earlier era it is quite conceivable that maintenance of village streets could be placed in the category of local affairs. Today when trucks and busses drive from city to city, village to village is it still so?"). 72 No. 2012AP2067 determination in 1947 that pension and retirement plans are a local concern does not mean it is an accurate portrayal of how pension and Wisconsin retirement in 2014. plans See, impact e.g., the 1 fiscal Chester realities James of Antieau, Municipal Corporation Law § 3.40, at 3-108 (1995) ("The danger[] to be avoided [is] . . . a temptation to consider something 'state' or 'local' because it was so denominated fifty years ago").43 ¶128 The ultimate determination whether a legislative enactment is primarily a matter of local or statewide concern rests with this court and not the legislature. Wis. 58. 1947 Van Gilder, 222 Thus, while we give deference to the legislature's proclamation, it is not conclusive in our home rule analysis of Wis. Stat. § 62.623. ¶129 Therefore, for the reasons explained above, we hold that Wis. Stat. statewide concern. § 62.623 concerns a matter of primarily Accordingly, we need not go any further to conclude that Wis. Stat. § 62.623 survives the plaintiffs' home rule challenge. 43 Act 10 did not provide an express legislative declaration that the apportionment of contributions to the Milwaukee ERS is a matter of statewide concern. The defendants argue, however, that Act 10 contained an implicit determination that it was a matter of statewide concern because of the restrictions Wis. Stat. § 62.623 imposed. The plaintiffs counter that no case law supports the notion that implicit legislative determinations are relevant in home rule analysis. Because we decide the parties' statewide concern arguments on other grounds, we do not need to address the issue of whether arguably implicit legislative determinations should be accorded weight. 73 No. 2012AP2067 E. Wisconsin Stat. § 62.623 and the Contract Clause ¶130 Having determined that Wis. Stat. § 62.623 does not violate the home rule amendment, we turn to whether the statute violates the constitutionally protected right of parties to contract with each other. ¶131 As we explained supra ¶87, the Milwaukee ERS44 requires that plan behalf, members 5.5% of contribute, their or earnable have contributed compensation. on Prior their to the enactment of Act 10, the City of Milwaukee funded the member contributions of each municipal employee hired prior to January 1, 2010. Wisconsin Stat. § 62.623, created by Act 10, prohibits the City of Milwaukee from making these contributions to the Milwaukee ERS on the plan member's behalf. ¶132 Chapter 36 of the Milwaukee Charter Ordinance ("Chapter 36") establishes the framework of the Milwaukee ERS. The plaintiffs argue these provisions contractually guarantee that the City of Milwaukee will fund the member contributions to the Milwaukee ERS on behalf of each participating employee hired prior to January 1, 2010, and that, consequently, Wis. Stat. § 62.623 constitutes contractual obligations. an unconstitutional impairment of The defendants counter that Wis. Stat. 44 The Milwaukee ERS is a defined benefit plan. Defined benefit plans consist of a general pool of assets, rather than individual dedicated accounts, and provide plan members, upon retirement, a fixed periodic payment. See, e.g., Comm'r v. Keystone Consol. Indus., Inc., 508 U.S. 152, 154 (1993). Generally, the asset pools of defined benefit plans may be funded by employee contributions, employer contributions, or a combination of both. Id. 74 No. § 62.623 impairs no contractual Milwaukee and its employees. rights between 2012AP2067 the City of In the alternative, the State argues that even if an impairment of contractual rights exists, a significant and legitimate public purpose justifies the impairment and the legislation is narrowly tailored to serve that purpose. i. General Contract Clause Principles ¶133 The Wisconsin Constitution prohibits the State from impairing Park, its Inc. N.W.2d 408. contractual v. Doyle, 2006 obligations. WI 107, Dairyland ¶51, 295 Greyhound Wis. 2d 1, 719 The Contract Clause of the Wisconsin Constitution provides: "[n]o bill of attainder, ex post facto law, nor any law impairing the passed. . . . " ¶134 In Clause, we obligation of contracts, shall ever be Wis. Const. art. I, § 12.45 evaluating first a claim consider legislation has "operated contractual relationship." as brought whether a under the substantial Allied Spannaus, 438 U.S. 234, 244 (1978). the Contract contested state impairment of Structural Steel Co. a v. This inquiry has three components: (1) whether there is a contractual relationship, (2) 45 Similarly, the Contract Clause of the United States Constitution provides, in relevant part: "No State shall . . . pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts . . . ." U.S. Const. art. I, § 10, cl. 1. Although our interpretation of the Contract Clause of the Wisconsin Constitution need not parallel federal interpretations of the Contract Clause of the United States Constitution, our prior decisions have relied upon the decisions of the United States Supreme Court for guidance. Chappy v. LIRC, 136 Wis. 2d 172, 186, 401 N.W.2d 568 (1987). 75 No. 2012AP2067 whether a change in law impairs that contractual relationship, and (3) whether the impairment is substantial. Dairyland, 295 Wis. 2d 1, ¶261 (Prosser, J., concurring in part/dissenting in part). ¶135 The inquiry does not end when the reviewing court finds a contractual relationship exists and that the change in law constitutes a substantial impairment of that contractual relationship. If the legislative act constitutes a substantial impairment a to contractual relationship, it will still be upheld if a significant and legitimate public purpose for the legislation exists. Id., ¶56. "Although the public purpose need no longer address an emergency or temporary situation, it should be directed towards remedying a broad and general social or economic problem" as opposed to benefiting a narrow special interest. Chappy v. LIRC, 136 Wis. 2d 172, 188, 401 N.W.2d 568 (1987); see also Energy Reserves Grp., Inc. v. Kansas Power & Light Co., 459 U.S. 400, 412 (1983). ¶136 Finally, exists whether for the the if a significant challenged and legislation, legislature's legitimate "the impairment of purpose question the becomes contract is reasonable and necessary to serve an important public purpose." Wis. Prof'l Police Ass'n v. Lightbourn, 2001 WI 59, ¶149, 243 Wis. 2d 512, 627 N.W.2d 807. ¶137 As the certification, under court the of appeals established explained framework for in its Contract Clause analysis, the plaintiffs' challenge presents two issues: (1) whether Chapter 36 of the 76 Milwaukee Charter Ordinance No. 2012AP2067 contains a contractual guarantee that the City of Milwaukee will fund the member contributions on behalf of each participating employee hired contractual prior right to January exists, 1, whether 2010, and there has (2) if been a an impermissible impairment of the contract.46 ii. ¶138 A Contractual Rights Under Milwaukee ERS legislative enactment is presumed not to create "contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise." Nat'l R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 466 (1985) (internal quotation marks omitted); see also U.S. Trust Co. v. New Jersey, 431 U.S. 1, 17 n.14 (1977) (a statute is circumstances "treated evince as a a contract legislative 46 when intent the to language create and private The defendants raise a separate argument that municipalities are not empowered to enter into contracts that are not subject to subsequent amendments by the legislature. The defendants misconstrue our case law by inaccurately framing the point of law they are actually contesting. The question presented is whether a municipality is empowered to enter into contracts with third parties that create a vested contractual relationship that is protected by the constitution. Our case law is clear on this point. Municipalities may "lawfully enter[] into contracts with third persons which . . . will be protected by the constitution . . . ." Douglas Cnty. v. Indus. Comm'n, 275 Wis. 309, 315, 81 N.W.2d 807 (1957) (quoting Town of Holland v. Village of Cedar Grove, 230 Wis. 177, 189, 282 N.W. 111 (1938); see also Superior Water, Light & Power Co. v. City of Superior, 263 U.S. 125, 135-37 (1923) (in interpreting Wisconsin law, holding that municipalities may enter into contracts where rights are acquired or liabilities incurred and the state legislation impairing those rights is unconstitutional); State ex rel. O'Neil v. Blied, 188 Wis. 442, 447, 206 N.W. 213 (1925). The defendants' assertion to the contrary is unfounded. 77 No. 2012AP2067 rights of a contractual nature enforceable against the State"). Thus, courts employ a "very strong" presumption that "legislative enactments do not create contractual rights." Dunn v. Milwaukee Cnty., 2005 WI App 27, ¶8, 279 Wis. 2d 370, 693 N.W.2d 82. ¶139 The contracts threshold has doctrine." been requirement referred to to as recognize the public "unmistakability Parker v. Wakelin, 123 F.3d 1, 5 (1st Cir. 1997). The unmistakability doctrine is a canon of construction rooted in the belief legislatures absence of that from the "legislatures employing clearest of their intent should not sovereign to powers create protected under the Contract Clause . . . ." bind vested future in the rights Id. ("'[N]either the right of taxation, nor any other power of sovereignty, will be held . . . to have been surrendered, unless such surrender has been expressed in terms too plain to be mistaken.'" Id. (quoting United States v. Winstar Corp., 518 U.S. 839, 874-75 (1996)). "The requirement that 'the government's obligation unmistakably appear thus served the dual purposes of limiting contractual incursions on a State's sovereign powers and of avoiding difficult constitutional questions about the extent of State authority to limit the subsequent exercise of legislative power.'" Id. (quoting Winstar, 518 U.S. at 875). ¶140 Hence, in this case, we must consider whether Chapter 36 of the Milwaukee Charter Ordinance evinces a clear intent by 78 No. the City create of Milwaukee contractual Common Council rights Council")47 ("Common against the 2012AP2067 to modification of contribution payments to the Milwaukee ERS. ¶141 Wisconsin precedent has held that public pension plans may create constitutionally protected contractual rights between the State and public employees that are protected by the Wisconsin Constitution. See State ex rel. Cannon v. Moran, 111 Wis. N.W.2d 2d 544, 554, 331 369 (1983) (holding that the plaintiffs, as plan members of the Milwaukee County Employees' Retirement System, had a constitutionally protected contract). ¶142 As whether a this court legislative relationship, it is has noted, enactment imperative to however, when creates a examining contractual determine whether the legislature intended to "create private contractual or vested rights" or "merely to declare[] a policy to be pursued . . . ." Morrison v. Bd. of Educ. of City of West Allis, 237 Wis. 483, 487, 297 N.W. 383 (1941). For a legislative enactment to be considered a contract, "the language and circumstances [must] evince a legislative intent to create private rights contractual nature enforceable against the State." of a Lightbourn, 243 Wis. 2d 512, ¶145 n.188 (quoting U.S. Trust, 431 U.S. at 17 n.14). This requires us, when 47 reviewing a particular The Common Council exercises all policymaking and legislative powers for the City of Milwaukee, including the adoption of ordinances and resolutions and the approval of the city's annual budget. See City of Milwaukee, Common Council Members, http://city.milwaukee.gov/CommonCouncil/Council-MemberWeb-Pages.htm#.U8xI3M0_1kg (last visited July 20, 2014). 79 No. legislative enactment, to suspend judgment 2012AP2067 and "'proceed cautiously both in identifying a contract within the language of a regulatory contractual statute and obligation.'" in defining Parker, 123 the F.3d contours at 7-8 of any (quoting Atchison, 470 U.S. at 466). ¶143 We begin with the Milwaukee Charter Ordinance.48 language of Chapter 36 of the The parties' arguments rely on the following ordinance subsections from Chapter 36: § 36 08 7 a 1: [T]he city shall contribute on behalf of general city employes 5.5% of such member's earnable compensation. § 36 13 2 a: Every such member . . . shall thereby have a benefit contract in . . . . all . . . benefits in the amounts and upon the terms and conditions and in all other respects as provided under this [ordinance] . . . and each member and beneficiary having such a benefit contract shall have a vested right to such . . . benefits and they shall not be diminished or impaired by subsequent legislation or by any other means without his consent. § 36 13 2 c: Every person who shall become a member of this retirement system . . . shall have a similar benefit contract and vested right in . . . all . . . benefits in the amounts and on the terms and conditions and in all other respects as . . . in 48 "The rules for the construction of statutes and municipal ordinances are the same." Cnty. of Columbia v. Bylewski, 94 Wis. 2d 153, 169 n.7, 288 N.W.2d 129 (1980). Therefore, if the "plain meaning of the [ordinance] is clear, a court . . . should simply apply the clear meaning of the [ordinance] to the facts before it." Bruno v. Milwaukee Cnty., 2003 WI 28, ¶7, 260 Wis. 2d 633, 660 N.W.2d 656 (quoting UFE Inc. v. LIRC, 201 Wis. 2d 274, 281-82, 548 N.W.2d 57 (1996)). 80 No. effect at the membership. date of the commencement of 2012AP2067 his § 36 13 2 d: Contributions which are made to this fund . . . by the city . . . as contributions for members of this system shall not in any manner whatsoever affect, alter or impair any member's rights, benefits, or allowances, to which such member under this [ordinance] is or may be entitled. . . . § 36 13 2 g: Every member, retired member, survivor and beneficiary who participates in the combined fund shall have a vested and contractual right to the benefits in the amount and on the terms and conditions as provided in the law on the date the combined fund is created. ¶144 Turning to the language of Chapter 36, we find it unquestionably benefits of creates Milwaukee contractual ERS plan rights members.49 in Two the pension subsections of Chapter 36 are particularly germane in reaching this conclusion. First, § 36 13 2 g provides: Every member, retired member, survivor and beneficiary who participates in the combined fund shall have a vested and contractual right to the benefits in the amount and on the terms and conditions as provided in the law on the date the combined fund is created. (Emphasis added.) Further, § 36 13 2 a provides, in relevant part: Every such member . . . shall thereby have a benefit contract in . . . all . . . benefits in the amounts and upon the terms and conditions and in all other respects as provided under this [ordinance] . . . and each member and beneficiary having such a benefit contract shall have a vested right to such . . . benefits and they shall not be diminished or impaired 49 The question of when or to what extent pension benefits vest for plan members under the Milwaukee ERS is not before us and, accordingly, we do not address the issue. 81 No. by subsequent legislation without his consent. or by any other 2012AP2067 means (Emphasis added.) ¶145 Sections 36-13-2-g and 36-13-2-a unmistakably evince the clear intention of the Common Council to create a "vested and contractual right to the [pension] benefits in the amount and on the terms and conditions" as provided in Chapter 36. § 36-13-2-g. ¶146 However, this still leaves unresolved the central issue before us: whether "contributions" to the Milwaukee ERS fit within the "benefits" for which plan members have a "vested and contractual right." § 36-13-2-g. ¶147 The plaintiffs defendants cite as contend creating a that § 36-13-2-g, "contractual which right" to the the contributions paid by the City of Milwaukee, can create no such contractual obligation because the explicitly to "contributions."50 subsection does not refer Further, the defendants argue § 36-13-2-d demonstrates that, as the terms are used in Chapter 36, contributions to the Milwaukee ERS are not "benefits" or "terms and conditions." ¶148 The plaintiffs disagree with the defendants' reading of Chapter 36 and note that the title of § 36-13-2 is "Contracts to Assure Benefits," and that the subsection guarantees that 50 The defendants also reference a different ordinance subsection (§ 16-32-2-c) with nearly identical language as § 3213-2-g in its briefing, but as the court of appeals observes in its certification, neither party suggests an independent analysis of the other subsection would affect the outcome in this case. 82 No. 2012AP2067 every member shall have a benefit contract and vested right concerning amounts respects "[t]he and upon as annuities and the terms and provided under all this other conditions act benefits and in [which] in all shall the other not be diminished or impaired by any subsequent legislation or by any other means." § 36 13 2 a. The plaintiffs contend that the words "upon the terms and conditions and in all other respects as provided under this act," incorporate § 36-08-7a-1, which provides that the City of Milwaukee will contribute 5.5% of its employees' earnable compensation to the Milwaukee ERS. ¶149 The parties agree that Chapter 36 unambiguously requires plan members of the Milwaukee ERS to "contribute or have contributed on their behalf, 5.5% of the member's earnable compensation." § 36-08-7a-1. Since 1970, and until the enactment of Act 10, the City of Milwaukee, pursuant to § 36-087-a-1, has paid the employees' contribution share: Members who are not firemen, policemen or elected officials shall contribute or have contributed on their behalf, 5.5% of the member's earnable compensation. Except as provided in subds. 2 and 3, subsequent to and commencing with the first pay period of 1970, the city shall contribute on behalf of general city employes 5.5% of such member's earnable compensation. Members employed by city agencies participating in the system shall contribute 5.5% of their earnable compensation less any contribution made on their behalf as determined by the governing bodies of such agencies. The plaintiffs argue that the contributions referred to in this subsection are a "benefit," and accordingly, pursuant to § 3613-2-g and § 36-13-2-a, plan members have a contractually vested 83 No. 2012AP2067 right in the contributions paid by the City of Milwaukee on behalf of all participating plan members. ¶150 Upon a close reading of the language of Chapter 36, however, we find nothing to suggest that the City of Milwaukee intended to classify protected "benefit." contribution rates as a contractually Consequently, there is no indication the Common Council, and by extension the State, bound itself to never modifying the contribution rates that fund the Milwaukee ERS. ¶151 Two sources in particular inform our analysis. § 36-13-2-d, an "contributions" "benefits" evident distinction used to fund the conferred to plan members. is drawn Milwaukee ERS Section In between and the 36-13-2-d provides, in part: Contributions which are made to [the Milwaukee ERS] . . . by the city . . . as contributions for members of this system shall not in any manner whatsoever affect, alter or impair any member's rights, benefits, or allowances, to which such member under this [ordinance] is or may be entitled . . . . (Emphasis added). This subsection unquestionably distinguishes between the "contributions" paid by the City of Milwaukee and the contractually protected "benefits" of the plan members. Our rules "be of interpretation dictate that Chapter 36 must construed in a manner that no word is rendered surplusage and every word is given effect." Cnty. of Adams v. Romeo, 191 Wis. 2d 379, 387, 528 N.W.2d 418 (1995). Under § 36-13-2-d, it is impossible for contributions to be construed as a benefit. The plaintiffs' argument is premised on the notion that the 84 No. 2012AP2067 contributions paid by the City of Milwaukee impact the benefits of plan members. Section 36-13-2-d unequivocally refutes that contention. ¶152 Section 36-05 further belies the plaintiffs' argument that "contributions" are a "benefit" under Chapter 36. Section 36-05, titled "Benefits," defines the pension, disability, and death benefits offered under the Milwaukee ERS.51 This section outlines in detail the scope of the word "benefits" as it is used in the Charter, listing every benefit of the plan and the terms and conditions related to those benefits. 51 The City of Section 36-05 addresses a wide range of benefits and allowances. As an illustration of the breadth of § 36-05, the benefits and allowances covered in this section include: service retirement (§ 36-05-1), ordinary disability retirement (§ 36-052), duty disability retirement (§ 36-05-3), accidental death benefits (§ 36-05-5), separation benefits (§ 36-05-6), optional benefits (§ 36-05-7), survivorship benefits (§ 36-05-8), ordinary death benefits (§ 36-05-10), and a lump sum bonus provision (§ 36-05-11). Each of these enumerated benefits and allowances contains specific information as to the nature of the benefit, the eligibility requirements, how the benefit is calculated, whether the benefit may be transferred or assigned and to whom it may be transferred or assigned, how the benefit is affected by cost of living adjustments, and numerous other terms and conditions. 85 No. 2012AP2067 Milwaukee's self-imposed obligation to pay the employee share of contributions is conspicuously absent from this section.52 ¶153 In sum, no unmistakable indicia exists in Chapter 36 that contributions paid by the city are a defined "benefit" that is forever impervious to alteration. ¶154 As a defined benefit plan, the Milwaukee ERS calculates benefits based on years of service multiplied by a fixed percentage of base salary. Ordinance ch. 36. The See Milwaukee, Wis. Charter plaintiffs argue that Wis. Stat. § 62.623, by requiring plan members to contribute 5.5% of their earnable without compensation, providing a diminishes commensurate the gain. value So, of the the benefit plaintiffs contend, the defendants' position that contributions are not a "term and condition" effectively excludes the cost of the plan to the employee as a "term and condition" under Chapter 36, which is an absurd result. 52 The dissent takes issue with our interpretation of the term "benefit" under the Milwaukee Charter Ordinance. Specifically, the dissent points to three subsections of § 36-05 that incorporate § 36-08-7 and argues that, based on these statutory cross-references and how "fringe benefits" have been described in select judicial opinions, "contributions" must be a contractually-vested "benefit" under the Milwaukee ERS. The dissent's argument is confused by the reach of our holding and fails to point to any flaw in our analysis. This case does not require us to address whether accumulated contributions are contractually-vested "benefits" under the Milwaukee Charter Ordinance. Instead, our review is limited to determining whether the term "contributions" that is, the requirement to contribute a certain percentage of earnable compensation into the Milwaukee ERS constitute a "benefit" under the Ordinance Charter. 86 No. ¶155 The plaintiffs' argument conflates the 2012AP2067 accrued benefits of plan members, which Wis. Stat. § 62.623 does not affect, and the funding provisions of Chapter 36, which are not considered a "benefit" under the Charter. Nothing in Act 10 purports to reduce, impair, or affect in any way benefits that have already accrued to plan members. Wisconsin Stat. § 62.623 modifies only the method by which the Milwaukee ERS is funded; the pension, disability, and death benefits that accrue to plan members, pursuant to the terms and conditions in § 36-05, remain unaffected. ¶156 The plaintiffs' contention that Wis. Stat. § 62.623 diminishes accrued "benefits" because it is more costly for plan members misses the point. It is certainly true that the Milwaukee ERS calculates the benefits for a plan member based on years of service multiplied by a fixed percentage of their base salary. To be clear, however, Wis. Stat. § 62.623 does not modify this benefit. It does not modify the base salary of the plan member, the amount of benefits received under the plan, or the plan's overall cost. Rather, Wis. Stat. § 62.623 changes only the allocation of those costs that is, the contribution requirements member. the shared by the City of Milwaukee and the plan We are not overlooking nor are we unsympathetic to fact that Wis. Stat. § 62.623 increases the cost participating in the Milwaukee ERS for general employees. of This increased cost, however, does not constitute a Contract Clause violation. The plaintiffs may have to contribute more to receive the same benefit, but "the fact that a state makes a 87 No. 2012AP2067 contract more costly to one of the parties does not establish a [Contract Clause] violation." Chrysler Corp. v. Kolosso Auto Sales, Inc., 148 F.3d 892, 894 (7th Cir. 1998). ¶157 Our decision is dictated by the plain language in the Milwaukee Charter Ordinance. that the legislature Nothing in the Charter evidences unmistakably intended to create binding contract rights in the contribution rates established in § 3608-7-a-1. Further, legislature even intended if it were "contributions" unclear to be a whether the contractually vested "benefit," the very strong presumption employed against state laws creating contractual rights would still defeat the plaintiffs' claim. ¶158 We need not reach the question of impairment or substantiality because the plaintiffs have failed to demonstrate that the allocation of contribution rates in the Milwaukee ERS is a contractual "benefit" protected by the Contract Clause. conclude that the City of Milwaukee was not We contractually obligated to pay the employee share of contributions into the Milwaukee ERS. Therefore, we hold that the plaintiffs failed to establish beyond a reasonable doubt that Wis. Stat. § 62.623 violates the Contract Clause of the Wisconsin Constitution. IV. CONCLUSION ¶159 We hold the following: ¶160 First, we hold that the rights argument is without merit. plaintiffs' associational We reject the plaintiffs' argument that several provisions of Act 10, which delineate the rights, obligations, and procedures of collective bargaining, 88 No. 2012AP2067 somehow infringe upon general employees' constitutional right to freedom of association. a legislative No matter the limitations or "burdens" enactment places on the collective bargaining process, collective bargaining remains a creation of legislative grace and not constitutional obligation. cannot be benefit conclude used that as it that a vehicle does Wis. not Stat. to expand itself §§ The First Amendment the parameters protect. 111.70(4)(mb), of Accordingly, 66.0506, a we 118.245, 111.70(1)(f), 111.70(3g), 111.70(4)(d)3 and the third sentence of § 111.70(2) do not violate the plaintiffs' associational rights. ¶161 Second, we reject the plaintiffs' equal protection claim under rational a rational basis review basis to standard the of review. argument plaintiffs' We apply that the collective bargaining framework established by Act 10 violates the constitutional rights of general employees through disparate treatment of those who choose to collectively bargain and those who do not. unconvincing, Finding we hold the Act 10 plaintiffs' survives the argument to plaintiffs' be equal protection challenge under rational basis review. ¶162 Third, we hold the plaintiffs' home rule amendment argument fails because Wis. Stat. § 62.623 primarily concerns a matter of statewide concern. Accordingly, we hold that Wis. Stat. § 62.623 does not violate the home rule amendment. ¶163 Finally, we hold that the plaintiffs' Contract Clause claim fails. The City of Milwaukee was not contractually obligated to pay the employee share of contributions 89 to the No. Milwaukee ERS. 2012AP2067 Further, even if the contributions paid by the City were a contractual right, we hold the contract was not substantially impaired by Wis. Stat. § 62.623. Therefore, we hold that the plaintiffs failed to establish beyond a reasonable doubt that Wis. Stat. § 62.623 violates the Contract Clause of the Wisconsin Constitution. ¶164 Therefore, we uphold Act 10 in its entirety. By the Court. The decision and order of the circuit court is reversed. 90 No. 2012AP2067.npc ¶165 N. PATRICK CROOKS, J. (concurring). As a justice of the Supreme Court of Wisconsin, I join the majority of this Court in voting to uphold the constitutionality of Act 10. In answering the legal questions put to us as we must, we affirm a legislative act that appears to have gone further than needed. For many public workers, Act 10 effectively ended meaningful union representation carried out through statutory bargaining. collective This type of statutory collective bargaining has long been part of Wisconsin's progressive heritage. ¶166 It is my firm belief that individuals should have the right to organize and bargain collectively regarding their wages and the terms of their employment. As thoughtful people from across the political spectrum and around the world have long recognized, collective and society itself. bargaining workers, employers Although Act 10 does not violate either the United States Constitution erodes longstanding public employers. benefits or benefits the both Wisconsin to public Constitution, workers and it to I write separately to make clear what my vote in this case means and to emphasize the importance of policies that give rights to workers to organize and bargain collectively. I. THE LEGAL FRAMEWORK ¶167 The legal questions in this case can be answered in no other way than the majority answers them. Because the affected workers retain "a right to associate for the purpose of engaging 1 No. 2012AP2067.npc in those activities protected by the First Amendment,"1 Act 10 violates neither their constitutional right of association nor their right to equal protection.2 The collective bargaining rights at issue here are statutory, not constitutional rights. ¶168 As I stated in League of Women Voters v. Walker, another case in which plaintiffs made a purely facial challenge to the constitutionality of a statute, the limited question presented and the legal framework prescribed for answering it demand significant restraint on the part of this court: With this type of facial challenge, the odds are against the plaintiffs at every turn. A court is bound to recognize the presumption that the statute is constitutional. Here, the plaintiffs must prove otherwise beyond a reasonable doubt. In considering such a challenge, a court must resolve any doubt about the constitutionality of a statute in favor of upholding the statute. In short, the question before us in this case is not whether the [challenged statute] is good policy, not whether it accomplishes what it sets out to do, and not whether it is unfair under some circumstances to some individuals. The question before us in this case is solely this: starting with a presumption of constitutionality in its favor, are we persuaded beyond a reasonable doubt that the statute violates the Wisconsin Constitution in every circumstance? . . . 1 Roberts (1984). v. United States 2 Jaycees, 468 U.S. 609, 618 Majority op., ¶75 (recognizing that the equal protection argument hinges on the merit of the associational rights claim); see also majority op., ¶24 ("Whether the plaintiffs' First Amendment challenge to these provisions has any merit is the lynchpin of this appeal."). 2 No. 2012AP2067.npc The question here is not whether the [statute] is good policy, but whether the plaintiffs have proved beyond a reasonable doubt that the [statute] violates the Wisconsin Constitution on any of the grounds claimed by these plaintiffs. Given the framework within which the question must be answered, I agree with the holding of the majority that the plaintiffs have not shown beyond a reasonable doubt that the statute is unconstitutional, and I join that holding and the mandate. I can reach no other conclusion than to uphold [the statute] based on the purely facial challenge here. I therefore respectfully concur. League of Women Voters v. Walker, 2014 WI 97, ¶¶62-63, 68, ___ Wis. 2d ___, ___ N.W.2d ___ (Crooks, J., concurring) (internal citations and quotations omitted). ¶169 As was true in that case, the analysis required here is straightforward. Under the proper application of the correct legal standard and the relevant precedent, this is not a close call. Therefore the plaintiffs' challenge must fail. II. HISTORICAL RECOGNITION OF COLLECTIVE BARGAINING AND ITS VALUE TO SOCIETY ¶170 The value and necessity of collective bargaining and the fair treatment thoughtful people. of workers have been recognized by many As we considered this case, I recalled the eloquence of Rerum Novarum, the 1891 encyclical of Pope Leo XIII that seriously discussed the questions of resolving conflicts between employers and employees fairly and justly. Though more than 120 years have passed since his writing, the encyclical retains a remarkable relevance with its thoughtful comments about workers, employers, unions and "free agreements" reached about wages, hours and conditions of employment. 3 No. 2012AP2067.npc ¶171 This lengthy document acknowledges the delicate task it undertakes, specifically takes rejects care to avoid as socialism extremist solution a concerns of unjust working conditions. language to and legitimate Instead, it adopts a respectful tone, recognizing the necessity of free enterprise to society, the value of work and the contributions of workers to their societies: Now, for the provision of such commodities, the labor of the working class the exercise of their skill, and the employment of their strength, in the cultivation of the land, and in the workshops of trade is especially responsible and quite indispensable. . . . Justice, therefore, demands that the interests of the working classes should be carefully watched over by the administration, so that they who contribute so largely to the advantage of the community may themselves share in the benefits which they create . . . . It follows that whatever shall appear to prove conducive to the well-being of those who work should obtain favorable consideration.3 ¶172 From such philosophical foundations, the writing turns to practical considerations: Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages . . . . In these and similar questions however such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had 3 Leo XIII, Rerum Novarum: Encyclical of Pope Leo XIII on Capital and Labor (1891), in Leo XIII, Rerum Novarum, at ¶34 (Catholic Truth Soc'y 2002), available at http://www.vatican.va/holy_father/leo_xiii/encyclicals/documents /hf_l-xiii_enc_15051891_rerum-novarum_en.html. 4 No. 2012AP2067.npc to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection. . . . The most important of all [such associations designed to aid workers] are workingmen's unions, for these virtually include all the rest. History attests what excellent results were brought about by the artificers' guilds of olden times. . . . Such unions should be suited to the requirements of this our age an age of wider education, of different habits, and of far more numerous requirements in daily life. . . . [T]o enter into a "society" of this kind is the natural right of man; and the State has for its office to protect natural rights, not to destroy them; and, if it forbids its citizens to form associations, it contradicts the very principle of its own existence, for both they and it exist in virtue of the like principle, namely, the natural tendency of man to dwell in society.4 ¶173 After respectful setting out relationships this between template employer and for mutually worker, and explicitly endorsing the value of protective organizations such as "workingmen's unions," Pope Leo XIII goes on to state, "[E]very precaution should be taken not to violate the rights of individuals and not to impose unreasonable regulations pretense of public benefit."5 ¶174 The encyclical concludes, We may lay it down as a general and lasting law that working men's associations should be so organized and governed as to furnish the best and most suitable means for attaining what is aimed at, that is to say, 4 Id. at ¶¶45, 49 and 51. 5 Id. at ¶52. 5 under No. 2012AP2067.npc for helping each individual member to better his condition to the utmost in body, soul and property.6 ¶175 This recognition of the critical importance of a worker's right to collective bargaining was also central to the political philosophy of one of the most influential public figures in Wisconsin history, United States Senator Robert M. La Follette. Identifying the forces arrayed against the working person in the early twentieth century, La Follette stated at the outset of the 1912 presidential primaries, in which he was a candidate, "I demand protection of wage-earners and farmers in their right to organize and to defend themselves by means of unions. All other issues are subordinate to this great issue."7 ¶176 Interestingly, Ronald Reagan, a United States President some would consider to be from the other end of the political spectrum, expressed similar convictions. In 1980, the year he was elected, Reagan gave an impassioned Labor Day speech in which he pledged that "American workers will once again be heeded" and promised to "consult with representatives of organized labor on those matters concerning the welfare of the working people of this nation."8 6 Id. at ¶57. 7 Robert M. La Follette, The Republican Party Faces a Crisis (1912), reprinted in The Political Philosophy of Robert M. La Follette As Revealed in His Speeches and Writings 408 (Ellen Torelle, ed., 1920). 8 Ronald Reagan, Labor Day Speech at Liberty State Park, Jersey City, New Jersey (Sept. 1, 1980), available at www.reagan.utexas.edu/archives/reference/9.1.80.html (last visited May 29, 2014). 6 No. 2012AP2067.npc ¶177 He noted his own union affiliation and experiences: I happen to be the only president of a union ever to be a candidate for President of the United States. As president of my union the Screen Actors Guild I spent many hours with the late George Meany,9 whose love of country and whose belief in a strong defense against all totalitarians is one of labor's greatest legacies. One year ago today on Labor Day George Meany told the American people: As American workers and their families return from their summer vacations they face growing unemployment and inflation, a climate of economic anxiety and uncertainty. Well I pledge the American Washington and of will no families.10 ¶178 Reagan to you in his memory that the voice of worker will once again be heeded in that the climate of fear that he spoke longer threaten workers and their went on to focus on the role of unions in bringing about a dramatic transformation of communist Poland: These are the values inspiring those brave workers in Poland. The values that have inspired other dissidents under Communist domination. They remind us that where free unions and collective bargaining are forbidden, freedom is lost. . . . Today the workers in Poland are showing a new generation not how high is the price of freedom but how much it is worth that price.11 9 George Meany was president of the AFL-CIO from 1955 to 1979. See Owen Ullman, George Meany, Labor's "Giant" Is Dead at 85, Nashua Telegraph, January 11, 1980, at 6. 10 Ronald Reagan, Labor Day Speech at Liberty State Park, Jersey City, New Jersey (Sept. 1, 1980), available at www.reagan.utexas.edu/archives/reference/9.1.80.html (last visited May 29, 2014). 11 Id. 7 No. 2012AP2067.npc III. CONCLUSION ¶179 It is my view that the Wisconsin Legislature and Governor could have chosen a different way to accomplish a goal of cost savings that would have left intact meaningful union representation carried out through collective bargaining for public employees. statutory It is also my view that the damage to public employee unions due to Act 10 was unnecessary. It is a departure from Wisconsin's strong tradition. ¶180 Act 10 embodies policy determinations, and such questions are not properly addressed to the members of the Supreme Court of Wisconsin. Such policy questions are for the Wisconsin Legislature and Governor, and their judgment on such policy matters is for the people of Wisconsin to evaluate. I respect the boundaries the judicial branch must observe and recognize that we cannot substitute our judgment on questions of policy for that of the Wisconsin Legislature and Governor.12 Accordingly, I respectfully concur. 12 "Our duty . . . requires that we uphold the separation of powers by not substituting judicial policy views for the views of the legislature or rule making authority." State ex rel. Griffin v. Smith, 2004 WI 36, ¶19, 270 Wis. 2d 235, 677 N.W.2d 259. 8 No. ¶181 ANN WALSH BRADLEY, J. (dissenting). 2012AP2067.awb In reflecting on the importance of an independent judiciary as a separate branch of government, former United States Supreme Court Chief Justice William Rehnquist called the authority to declare unconstitutional a law passed by legislature "probably the most significant single contribution the United States has made to the art of government." I believe that the creation of an independent constitutional court, with the authority to declare unconstitutional laws passed by the state or federal legislatures, is probably the most significant single contribution the United States has made to the art of government.1 ¶182 He emphasized the important role that courts serve in protecting the rights guaranteed under the Constitution. Courts serve as guardians of the constitutional rights of all people. Our challenge as a court is to duly respect the prerogatives of the legislature as reflected in its legislative acts, while at the same time honoring our significant role. We must constantly guard against proper judicial restraint being transformed into improper judicial acquiescence. ¶183 In challenges this to Act case 10. we are The presented majority 1 with aptly constitutional sets forth its Chief Justice William Rehnquist, Remarks at the Symposium on Judicial Independence, University of Richmond T. C. Williams School of Law (Mar. 21, 2003) (on file with the Public Information Office, U.S. Supreme Court), available at www.supremecourt.gov/publicinfo/speeches/viewspeeches.aspx?Filen ame=sp_03-21-03.html. 1 No. results. 2012AP2067.awb However, it is difficult to find in the majority's lengthy opinion a discussion of the actual arguments and issues presented by the parties. ¶184 An actual issue presented by Madison Teachers is: Does Act 10 infringe on the associational rights of public employees to organize?2 ¶185 Yet the majority reframes the issue to determine whether there is a constitutional right to collective bargaining and whether the State has an obligation to promote First Amendment rights. ¶186 An actual issue presented by the parties is: Does the provision in Act 10 prohibiting Milwaukee from making contributions to its employees' pension plans violate the Home Rule Amendment? ¶187 Rather than focusing on the provision at issue, the majority shifts the focus to the purpose behind Act 10 as a whole. It determines that because Act 10 deals generally with financial matters, the prohibition on Milwaukee's pension contributions is a matter of statewide concern. ¶188 An actual issue presented by the parties is: Does the prohibition on pension contributions violate the Contract Clause given that benefits are guaranteed by the Milwaukee Charter Ordinance? 2 For purposes of this dissent I use "Madison Teachers" to refer to the plaintiffs collectively. 2 No. ¶189 By pension twisting the contributions, definition the of majority 2012AP2067.awb benefits thereby to exclude avoids any substantive analysis of the Contract Clause. ¶190 The result of the majority's dodge is the needless diminution of multiple constitutional rights: ï · The right of freedom of association to organize is diluted as the majority has opened the door for the State to withhold benefits and punish individuals based on their membership in disfavored groups. ï · Municipalities' right to self-govern as granted by the Home Rule Amendment determines that rings when hollow the as State the majority has budgetary difficulties, matters dealing with local finances are now matters of statewide concern, even absent any showing of an impact on the State budget. ï · And the majority right to contract demonstrates its is undermined willingness to as the creatively interpret a contract in a manner permitting the State to disregard it. ¶191 I determine that the majority's failure to address the actual issues presented allows it to substitute analyses resulting in conclusions that countenance the violation rather than the protection of constitutional 3 rights. Because I No. 2012AP2067.awb determine that Act 10 unconstitutionally infringes on protected rights, I respectfully dissent. ¶192 There are three main issues raised by the parties: (I) the Right To Associate; (II) the Home Rule Amendment; and (III) the Contract Clause. I address each in turn. I. The Right To Associate ¶193 Madison Teachers asserts that Act 10 violates the First Amendment right of freedom of association by infringing on its right to organize.3 the challenged Given that the State has conceded that provisions in Act 10 cannot survive such a constitutional challenge if a strict scrutiny review is applied, the majority result.4 has to avoid strict How does it do that? scrutiny to arrive at its It jettisons the focus of its analysis. ¶194 Rather than addressing plaintiff's issue that Act 10 infringes collective 3 The provides: on its constitutional bargaining First unit, Amendment the of right majority the United to organize erroneously States into a asserts Constitution Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. 4 Under a strict scrutiny review, State action infringing on First Amendment rights will be upheld only if it is narrowly tailored to meet a compelling government interest. Gard v. State Elections Bd., 156 Wis. 2d 28, 44, 456 N.W.2d 809 (1990). 4 No. 2012AP2067.awb that plaintiff is claiming a right to bargain as a collective bargaining unit.5 It then determines that no such right exists. ¶195 In rejecting Madison Teachers' purported claims, the majority stresses constitutional employer." that right Majority "[g]eneral to employees negotiate op., with ¶38. It have their further no municipal states that "collective bargaining . . . is not constitutionally protected." Id., ¶39. Accordingly, associational rights it are determines in no way that "the implicated plaintiffs' by Act 10's modifications to Wisconsin's collective bargaining framework." Id., ¶41. ¶196 In one instance, the majority appears to acknowledge the plaintiff's actual claim but then distorts it. The majority begins the sentence by correctly referencing "the 'right' the plaintiffs refer to the right to associate with a certified representative." Id., ¶37. So far, so good. However, it then ends the sentence with a distortion of the claim, describing the right being asserted as a right "to collectively bargain on any subject." Id. ¶197 The never majority asserted that is well it has 5 aware a that the plaintiff constitutional right has to The majority spends an inordinate amount of ink attacking the dissent rather than attacking the actual associational issue. Normally the role of the majority opinion is to expound on the arguments of the parties and the law, giving only brief attention to the comments of the written dissent. It is unclear if the majority does this in an attempt to deflect attention from its failure to address the associational right to organize. Or, if it is because the majority recognizes that the arguments of the dissent cannot go unaddressed. 5 No. 2012AP2067.awb collectively bargain, let alone bargain on any subject. In fact, elsewhere in its opinion, the majority acknowledges that the plaintiff is not arguing a constitutional right to bargain: "The plaintiffs have insisted at every stage of litigation in this case that they are not arguing exists to collectively bargain." a constitutional Id., ¶39. right Yet the majority persists in focusing its analysis on the right to bargain. ¶198 The plaintiff's actual argument is based on the wellestablished premise that there is a constitutional organize as a collective bargaining unit. right to In fact, the United States Supreme Court has declared it to be a fundamental right: "the right of employees to self-organization and to select representatives of their own choosing for collective bargaining or other mutual protection without restraint their employer . . . is a fundamental right." or coercion by NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 33 (1937) (emphasis added). Likewise, the Court has stated that the First Amendment most assuredly protects the right of workers to organize: "It cannot be seriously doubted that the First Amendment[] guarantees . . . the right [of workers] to gather together for the lawful purpose of Brotherhood of Trainmen R.R. helping and v. advising Virginia, one 377 another." U.S. 1, 5-6 Court has (1964). ¶199 As early as 1902, the Wisconsin Supreme similarly stressed the "sacredness" of the right of employees to organize. 541, 90 State ex rel. Zillmer v. Kreutzberg, 114 Wis. 530, N.W. 1098 (1902). Against 6 this background, the No. 2012AP2067.awb majority's failure to squarely address the plaintiff's argument is remarkable. In reaching its result the majority appears to ignore over a century's worth of jurisprudence and undermines a right long held sacred in our State.6 ¶200 Madison associational Teachers' rights is argument twofold. that First, Act it 10 violates focuses on the provisions in Act 10 requiring collective bargaining units to hold annual recertification elections, eliminating fair share agreements, and prohibiting municipalities from withholding dues from employees' wages. It contends that these provisions violate its associational rights because they infringe on those rights unit. by punishing Second, it association argues with that the a collective provision bargaining in Act 10 prohibiting municipalities from bargaining over anything other than an increase in base wages up to the amount of inflation is an unconstitutional condition. ¶201 Rather than considering whether Act 10 discourages the exercise of the associational right to organize, the majority 6 The majority denies stating that employees do not have a constitutional right to organize. Majority op., ¶46. However, its analysis belies this assertion. Madison Teachers argues that Act 10 unconstitutionally interferes with associational rights by burdening and penalizing general employees who elect to organize in a collective bargaining unit. Although the majority acknowledges that at least one of the provisions burdens labor organizations, id. ¶80, it determines that the challenged provisions of Act 10 do not burden associational rights "because in each instance, there is no constitutional associational right implicated." Id., ¶70. Indeed, it stresses this point, stating it "is vital and bears repeating: the plaintiffs' associational rights are in no way implicated by Act 10's modification to Wisconsin's collective bargaining framework." Id., ¶41. 7 No. pivots to a different analyzes that issue. to subsidize issue advanced by the 2012AP2067.awb State and then It advances that the State is not required speech, and ultimately concludes that the challenged provisions regarding fair share agreements, paycheck dues deductions, and annual recertification do not burden the exercise of associational rights. Majority op., ¶¶54, 59, 61.7 ¶202 By pivoting to the issue of whether the constitution requires the State to subsidize speech, the majority avoids the actual argument advanced before this court: whether Act 10 infringes on the associational right to organize by discouraging membership in a collective bargaining unit. Given the void in the majority's analysis, I turn to address the actual issue. ¶203 The First Amendment protects not just against State prohibition of association, but also against State punishment or penalty for the exercise of associational rights. See Smith v. Arkansas State Highway Emps., Local 1315, 441 U.S. 463, 464 (1979) ("The government [First Amendment] is guarantees prohibited from either a by infringing general upon prohibition against certain forms of advocacy, or by imposing sanctions for 7 The majority relies heavily on Wis. Educ. Ass'n Council v. Walker, 705 F.3d 640 (7th Cir. 2013), for its position. Majority op., ¶68. However, that case is distinguishable because it considered a different issue than is presented here. Wis. Edu. Ass'n Council examined whether Act 10 burdened the free speech rights of collective bargaining units. 705 F.3d at 645-53. The petitioners asserted that the prohibition on dues deductions constituted viewpoint discrimination because it was imposed only on those collective bargaining units that did not endorse Governor Walker in the prior election. The court did not consider whether Act 10 burdened the right of individuals to organize in a collective bargaining unit. 8 No. 2012AP2067.awb the expression of particular views it opposes."); Baird v. State Bar of Ariz., protection 401 of punishing [a U.S. 1, 6 association person] (1971) ("The prohibits solely a because he First Amendment's State is from member a . . . of a particular political organization or because he holds certain beliefs."). In other words, the State cannot "tak[e] steps to prohibit or discourage union membership or association." Smith, 441 U.S. at 466 (emphasis added). ¶204 The United States Supreme Court illustrated this principle in NAACP v. Alabama ex rel. Patterson, 357 U.S. 449 (1958). Patterson involved reveal its membership list. a State requirement that NAACP The court determined that the State action was "likely to affect adversely the ability of petitioner and its members to pursue their collective effort[s] [by] . . . induc[ing] members to withdraw from dissuad[ing] others from joining it." the Association Id. at 462-63. and Thus, because the requirement that NAACP reveal its membership list was not supported by a compelling government interest, the court determined that it was unconstitutional. ¶205 Similarly, the provisions Id. at 466. in Act 10 discourage organizing as a collective bargaining unit by increasing its cost. Wisconsin Stat. § 111.70(4)(d) requires collective bargaining units to hold recertification elections annually in which 51% of all recertification. eligible employees must vote in favor of In addition to the costs involved in educating employees about the election and convincing employees to vote, 9 No. 2012AP2067.awb collective bargaining units must pay a certification fee. Wis. Stat. § 111.70(4)(d)3.b. ¶206 Further, although collective bargaining units must provide benefits to all members, Act 10 eliminates fair share agreements requiring members to pay their proportionate share of the cost of providing § 111.70(1)(f), (2). also diminished municipalities those services.8 Wis. Stat. Collective bargaining units' finances are by Wis. from Stat. § withholding 111.70(3g) union dues which from prohibits employees' wages.9 ¶207 By making membership unduly expensive, these Act 10 provisions collectively infringe on the associational right to organize. There is discourage membership. no doubt that these provisions act to The majority's narrow focus on whether the State is required to facilitate free speech shifts the focus from this issue. addressing the In doing so, the majority avoids directly question of whether these provisions impermissibly punish the exercise of the right to associate. 8 Although the majority questions the constitutionality of fair share agreements, majority op., ¶58, the United States Supreme Court recently affirmed that fair share agreements for "full-fledged state employees" are constitutionally permissible. Harris v. Quinn, 573 U.S. __, *29 (June 30, 2014). Harris dealt with a challenge to fair share agreements brought by personal assistants. The court determined that because personal assistants were not full-fledged public employees they could not be compelled to make fair share payments. 9 It is notable that the burden in its discussion of Majority op., ¶78. majority recognizes this as a the equal protection claims. 10 No. ¶208 The majority similarly avoids 2012AP2067.awb addressing Madison Teachers' second argument, that Act 10 creates unconstitutional conditions. Again, it simply reshapes the argument. ¶209 The employees is majority not reasons that constitutionally because negotiating required, it cannot with be a constitutional violation to withhold such benefits from members of collective bargaining units. added). of The focus of its analysis is deceptive as the doctrine unconstitutional benefit Majority op., ¶37-38 (emphasis is required, conditions required. the does Regardless doctrine focuses not of on look whether whether at whether the the is individual an benefit is required to give up a constitutionally protected right in order to obtain the benefit. ¶210 The doctrine of unconstitutional conditions provides that "the government may not deny a benefit to a person because he exercises a constitutional right." Koontz v. St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586, 2594 (2013). This doctrine reflects the idea that "the Constitution's protection is not limited to direct interference with fundamental rights." Healy v. James, 408 U.S. 169, 183 (1972). Freedoms, such as the right to only associate, frontal attack, "are but protected also governmental interference." not from being against stifled by heavy-handed more subtle Bates v. City of Little Rock, 361 U.S. 516, 523 (1960). ¶211 Even though there may be no constitutional right to a benefit, the State cannot premise receipt of that benefit upon a person foregoing a constitutionally protected right. 11 Bd. of No. 2012AP2067.awb Cnty. Comm'rs v. Umbehr, 518 U.S. 668, 674 (1996). condition effectively constitutional punishes liberties, the free accomplishing State cannot command directly. Such a exercise indirectly of what the Sherbert v. Verner, 374 U.S. 398, 406 (1963). ¶212 The seminal Wisconsin case applying this doctrine is Lawson v. Housing Auth. of Milwaukee, 270 Wis. 269, 70 N.W.2d 605 (1955). In Lawson, the court held that it was impermissible for a federal statute to condition federal low-income housing on tenants not being members of "subversive organizations." 274. This was true despite the fact that there Id. at was no constitutional right to federal low-income housing. ¶213 The court explained that if the government could defend a statute "on the ground that the plaintiff is being deprived thereby only of a privilege, and not of a vested right, there is extreme danger that the liberties of any minority group in our population, large or small, might be swept away." 275. Id. at In other words, once the government has decided to grant a benefit, it cannot condition that benefit on relinquishment of a constitutionally protected right. ¶214 The majority pays lip service to this doctrine, but then fails to actually apply it. focus on suggestion whether that the the benefit majority Majority op., ¶¶29, 38. itself is is required following the Its belies any precedent on unconstitutional conditions. ¶215 Act 10 is clear: if you have exercised your associational right to organize as a collective bargaining unit 12 No. 2012AP2067.awb you lose your ability to negotiate over anything other than an increase in base wages up to the amount of inflation. Stat. §§ 111.70(4)(mb), 66.0506, 118.245. Wis. This is the textbook definition of an unconstitutional condition. By permitting such a dilutes statute to stand, the majority greatly the First Amendment protection on the right to freedom of association. ¶216 Because Act 10 infringes on associational rights to organize by discouraging and punishing membership in collective bargaining units, it can survive strict scrutiny only if it is narrowly tailored to meet a compelling government interest. The State has made no argument that Act 10 is narrowly tailored to meet a compelling government interest and has conceded that it cannot meet this standard. Accordingly, I conclude that the challenged provisions of Act 10 violate the constitutional right of public employees to organize in a collective bargaining unit.10 10 Madison Teachers alleges that Act 10 also violates the equal protection clause. It points to the fact that Wis. Stat. §§ 111.70(4)(mb), 66.0506, and 118.245 prevent collective bargaining units from negotiating anything other than base wage increases up to the amount of inflation. Non-members of collective bargaining units are not subject to this restriction. Further, Wis. Stat. § 111.70(3)(g) prohibits municipalities from withholding dues for collective bargaining units. There is no similar restriction preventing municipalities from withholding dues for other types of organizations. As discussed above, the right to organize in a collective bargaining unit is encompassed in the fundamental right to associate protected by the First Amendment. See supra, ¶¶18-19. The challenged provisions of Act 10 implicate those associational rights because they treat employees that are members of a collective bargaining unit differently than employees that are not members of collective bargaining units. As these provisions of Act 10 implicate the fundamental right to 13 No. 2012AP2067.awb II. Home Rule ¶217 Next, Madison Teachers challenges the provision in Act 10 which prohibits the City of Milwaukee from making pension contributions on behalf of its employees, Wis. Stat. § 62.623(1).11 It alleges that this provision violates the Home Rule Amendment.12 ¶218 The majority responds by shifting the focus to whether Act 10 as a whole implicates a matter of statewide concern. It determines that because the purpose of Act 10 is to alleviate "fiscal matter strain," of the statewide challenged legislation concern. Based is primarily primarily on a fiscal concerns, the majority concludes that Act 10 does not violate associate, strict scrutiny, rather than rational basis review, should be applied to evaluate whether Act 10 violates the equal protection clause. 11 Wisconsin Stat. § 62.623(1) provides: Beginning on July 1, 2011, in any employee retirement system of a 1st class city . . . employees shall pay all employee required contributions for funding benefits under the retirement system. The employer may not pay on behalf of an employee any of the employee's share of the required contributions. 12 The Home Rule Amendment provides: Cities and villages organized pursuant to state law may determine their local affairs and government, subject only to this constitution and to such enactments of the legislature of statewide concern as with uniformity shall affect every city or every village. Wis. Const. art. XI, § 3, cl. 1. 14 No. the Home Rule Amendment.13 again the majority Id., ¶¶109, 111-15. emphasizes that 2012AP2067.awb Over and over legislation implicating fiscal issues is a matter of statewide concern: ï · "[S]tatewide legislation aimed at improving the fiscal health of the State budget is indisputably a general state concern." Id., ¶115. ï · "[T]he legislature's determination in 1947 that pension and retirement plans are a local concern does not mean it is an accurate portrayal of how pension and retirement plans impact the fiscal realities of Wisconsin in 2014." Id., ¶127. ï · "The legislature has broad latitude to experiment with economic problems and we do not presume to second-guess its wisdom." Id., ¶119. See also id., ¶¶111, 118, 120, 122. State has budgetary issues local In other words, when the finances are matters of statewide concerns, even absent any showing of impact on the State budget. ¶219 This determination is stunning, not just because of its breadth, but also because it runs counter to the history of 13 I acknowledge that the majority references other justifications for why Wis. Stat. § 62.623 affects a matter of primarily statewide concern. However, the discussion that the majority devotes to these other justifications is minor to that compared with the repeated and much discussed primary justification, i.e., the fiscal strain makes this a matter primarily of statewide interest. In a single paragraph the majority mentions the State's historic role in matters affecting the employer-employee relationship. Majority op., ¶115. In another single paragraph it touches upon the State's obligation to maintain a functioning civil service system. Id., ¶118. Finally, it takes two short paragraphs to mention the scope of Act 10 as justification. Id., ¶¶121-22. 15 No. 2012AP2067.awb the Home Rule Amendment and Milwaukee's pension system, ignores our precedent, result and is substantially unsupported strips by fact. municipalities The of majority's their right to self-govern as granted by the Home Rule Amendment because much of what municipalities do involves "fiscal matters." ¶220 The Home Rule Amendment grants cities and towns the authority to determine their own local affairs, subject only to "enactments of the legislature of statewide concern as uniformity shall affect every city or every village." Const. art. demonstrates decrease the XI, § that it role 3, of cl. was the 1. A enacted in state review of response legislature in its to with Wis. history calls "to establishing municipal governments and to provide cities and villages with greater authority to determine their own affairs." Kerry A. Burchill, Madison's Minimum-Wage Ordinance, Section 104.001, and the Future of Home Rule in Wisconsin, 2007 Wis. L. Rev. 151, 161-62; Robert W. Hansen, Municipal Home Rule in Wisconsin, 21 Marq. L. Rev. 74, 76 (1937).14 14 Prior to its enactment, the Home Rule Amendment was touted by multiple newspapers which emphasized the necessity of local control of local affairs. One journal explained: "the legislature of Wisconsin is gradually but surely taking away the rights of municipalities to govern themselves. The matter has reached the point today where democracy is in danger of being replaced by imperialism." Gas Tax Wanted Home Rule Too, Stevens Point Daily Journal, June 14, 1924, at 6. 16 No. 2012AP2067.awb ¶221 Under the Home Rule framework, the funding of a city's pension plan has historically been viewed as primarily local in nature. The Milwaukee to legislature establish System (MERS). recognized its own this Milwaukee when it authorized Employee Retirement § 31(1), ch. 41, Laws of 1947. It expressly declared Milwaukee's pension system to be "a local affair" that should not be construed as a matter of statewide concern: For purpose of giving to cities of the first class the largest measure of self-government with respect to pension annuity and retirement systems compatible with the constitution and general law, it is hereby declared to be the legislative policy that all future amendments and alterations to this act are matters of local affair and government shall not be construed as an enactment of state-wide concern. § 31(1), ch. 441, Laws of 1947. Similar sentiments were expressed in other newspapers. See, e.g., Joseph P. Harris, Questions and Answers, Madison Capital Times, Jan. 19, 1924, Saturday Afternoon Ed., at 9 ("Home rule secures to cities and villages a larger share in the control over matters of purely local concern. It frees the city or village from a considerable amount of state interference and regulation."); Home Rule, Wisconsin Rapids Daily Tribune, Oct. 29, 1924, at 4 ("The meaning of the amendment is briefly stated by the legislative committee of the Milwaukee common council, which is working for its adoption, as follows: The home rule amendment if passed will give villages and cities in Wisconsin broader self-governing powers and leave local affairs to the local governing bodies, without first seeking the authority from the legislature."). Public statements intended to persuade voters during the ratification process inform the interpretation of a constitutional amendment. Appling v. Walker, 2014 WI 96, ¶¶2837, ___ Wis. 2d ___, ___ N.W.2d ___; see also Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶19, 295 Wis. 2d 1, 719 N.W.2d 408. 17 No. ¶222 The majority's determination that 2012AP2067.awb the funding of Milwaukee's pension system is primarily a matter of statewide concern also ignores precedent. In State ex rel. Brelsford v. Ret. Bd. of the Policemen's Annuity & Benefit Fund, 41 Wis. 2d 77, 163 brought N.W.2d against 153 a (1968), Milwaukee a constitutional charter amendment challenge that was permitted retired police officers to receive pensions while working as school teachers. The court determined that pension funds for Milwaukee police officers "seem[] overwhelmingly to be a matter of predominate local concern." Id. at 87. ¶223 The court explained that "the state would have little interest in whether a retired policeman Milwaukee or in some other municipality. unique interest to Milwaukee." Id. taught school in This is a matter of Similarly, the court has described "the control of the locality over payments from the local purse" functions. as one of a municipality's "most important" Van Gilder v. City of Madison, 222 Wis. 58, 81-82, 267 N.W. 25 (1936).15 ¶224 As discussed in State ex rel Ekern v. City of Milwaukee, 190 Wis. 633, 641, 209 N.W. 860 (1926), a "local affair" is one "which much more intimately and directly concerns 15 Van Gilder created an exception to this general rule for the salaries of police officers, noting that "the preservation of order, the enforcement of law, the protection of life and property, and the suppression of crime are matters of state-wide concern." Van Gilder v. City of Madison, 222 Wis. 58, 76, 267 N.W. 25 (1936). As discussed above, this exception did not extend to police pension funds. State ex rel. Brelsford v. Ret. Bd. of the Policemen's Annuity & Benefit Fund, 41 Wis. 2d 77, 87, 163 N.W.2d 153 (1968). 18 No. 2012AP2067.awb the inhabitants of that community than the casual visitor or the other parts of the state." The funding of Milwaukee's pension fund for its city employees fits within this description. The fund and is "entirely funding." self-reliant Majority op., ¶114. in both its management Accordingly, its funding has no demonstrable impact on other parts of the State. ¶225 Our jurisprudence is consistent with that of other states that have determined that compensating city employees is primarily a matter of local concern. See, e.g., Bruckshaw v. Paolino, 557 A.2d 1221, 1224 (R.I. 1989) ("the regulation of city employee pensions is of local concern"); N. Ohio Patrolmen's Benevolent Ass'n v. Parma, 402 N.E.2d 519, 525 (Ohio 1980) ("the ability to determine the salaries paid to city employees is a fundamental power of local self-government."); City of Colorado Springs v. State, 626 P.2d 1122, 1127 (Colo. 1980) ("Although the establishment of firemen's pension plans is of statewide concern, the extent to which a home rule city must provide financial intimately support involving city for such budgeting a and plan the is a question assessment and collection of taxes for municipal purposes. These are local and municipal matters."); Sonoma Cnty. Org. of Public Emps. v. Cnty. of Sonoma, 591 P.2d 1, 13 (Cal. 1979) ("the wages paid to employees of charter cities as well as charter counties is a matter of local rather than statewide concern."); Crawford v. City of Chicago, 710 N.E.2d 91, 98 (Ill. App. Ct. 1999) ("The power to extend to its employees both compensation and benefits 19 No. 2012AP2067.awb is ineluctably essential to the operation of local governmental units such as the City in the present case.").16 ¶226 Further undermining its analysis, the majority relies on the broad purpose behind Act 10, rather than the purpose behind the specific statute at issue, Wis. Stat. § 62.623(1). It does so absent any facts in the record showing that Wis. Stat. § 62.623(1) does anything to achieve Act 10's purpose or is in any way related to the State budget. Majority op., ¶¶118- 23. ¶227 The State presented no credible evidence showing that Milwaukee pension expenditures have any impact on the State budget. Although the State pointed to its "shared revenue" program, the amounts provided by the State to a municipality under that program are not based on the municipality's budget or expenditures. See Wis. Stat. §§ 79.02, 79.035. ¶228 The shared revenue program does not show a relationship between city contributions to city employee pension plans and the State budget. Indeed, even the majority recognizes that the administration of a city's retirement system is "entirely self-reliant in both its management and funding." Majority op., ¶114. There are no facts in the record to determine that Milwaukee's funding of employee pensions has any 16 See also Rebecca Hanner White, Robert E. Kaplan, & Michael W. Hawkins, Ohio's Public Employee Bargaining Law: Can it Withstand Constitutional Challenge?, 53 U. Cin. L. Rev. 1, 31 (1984) ("The establishment of wages, hours, and other terms and conditions of employment and decisions pertaining to hiring, promotion, retention, discipline and dismissal of employees are fundamental aspects of local government."). 20 No. effect on statewide majority's financial determination that concerns. Wis. 2012AP2067.awb Accordingly, Stat. § 62.623 Stat. § the concerns primarily a statewide matter is unsupported. ¶229 Having determined that Wis. 62.623 is primarily a statewide matter, the majority declines to analyze what it describes as the second step of a Home Rule challenge: uniformity. Id., ¶94. After devoting several paragraphs to expound on uniformity, id., ¶¶91-95, 98-99, 102-09, the majority makes no attempt to apply its uniformity analysis to the facts of this case. Without analysis simply ends. any discussion or explanation the This presents a significant void in the majority's analysis. ¶230 The issues of when and whether a statute applying to a specific set or class of cities is uniform requires a nuanced analysis. State ex rel. Michalek v. LeGrand, 77 Wis. 2d 520, 530 253 n.16, N.W.2d 505 (1977). The concern of targeting individual cities is echoed throughout case law as the court has grappled with the problem of uniformity in the home rule context. See, e.g., id.; State ex rel. Sleeman v. Baxter, 195 Wis. 437, 448, 219 N.W. 858 (1928); Ekern, 190 Wis. at 642. majority opinion cannot simply wave away these concerns The by abruptly ending its analysis. The hole left in the majority's application on this issue further renders its conclusion infirm. ¶231 By determining that Wis. Stat. § 62.623(1) primarily concerns a statewide matter because it deals with finances, the majority ignores the history of the Home Rule and the Milwaukee pension system, as well as relevant case law, and has greatly 21 No. narrowed the scope of the Home Rule Amendment. 2012AP2067.awb Further, its focus on the purpose behind a broad act, absent any evidence that the specific legislation is actually aimed at affecting that purpose, gives the legislature more leeway to legislate on local issues than was intended by the Home Rule Amendment. ¶232 Under the majority's holding it is hard to imagine what is left for municipalities to govern autonomously. Accordingly, for the reasons discussed above, I conclude that the majority has not saved Wis. Stat. § 62.623(1) from its constitutional challenge. III. Contract Clause ¶233 Madison Teachers also asserts that the provision in Act 10 prohibiting Milwaukee from making pension contributions on behalf of its employees violates the Contract Clause of the Wisconsin Constitution.17 It argues that the Milwaukee Charter Ordinance contract benefits. constitutes a guaranteeing its right to Because Act 10 prohibits the benefit of employer funded pension contributions, it contends that Act 10 interferes with its contract rights. ¶234 By twisting the definition of the word "benefit," the majority determines that employer pension contributions are not really benefits at all. As a consequence it is able to exclude the employer contributions, determining that they are not part 17 The Contract Clause provides: "[n]o bill of attainder, ex post facto law, nor any law impairing the obligation of contracts, shall ever be passed." Wis. Const. art. I, § 12. 22 No. 2012AP2067.awb of the benefit contract as provided in the Milwaukee Charter Ordinance. Accordingly, it concludes that the provision in Act 10 prohibiting Milwaukee from making pension contributions does not violate the Contract Clause. ¶235 This analysis is problematic in two respects: (1) it overlooks the language of the Milwaukee Ordinance and (2) it is contrary to the ordinary meaning of the term "benefit." By overlooking language in the ordinance and by demonstrating its willingness finding a to creatively violation of interpret the contract Contract terms Clause, the to avoid majority undermines the right to contract. ¶236 Under the Contract Clause, "[n]o . . . law impairing the obligation of contracts, shall ever be passed." art. I, § 12. Wis. Const. Although the Milwaukee Charter Ordinance provided that the city will make pension contributions to MERS on behalf of its employees, the legislature included in Act 10 provisions prohibiting Milwaukee Stat. § 62.623. from making those contributions. Wis. Madison Teachers asserts this statute violates the Contract Clause. ¶237 Milwaukee's Charter Ordinance provides that Milwaukee will fund member pension contributions to MERS on behalf of its employees. Specifically, it states that "the city shall contribute on behalf of general city employees 5.5% of such member's earnable compensation." Mil. Ch. Ord. § 36-08-7-a-1. ¶238 Next, the ordinance states that employees shall have a benefit contract as provided by the ordinance that shall not be impaired by future legislation: 23 No. 2012AP2067.awb Every such member . . . shall thereby have a benefit contract in . . . all . . . benefits in the amounts and upon the terms and conditions and in all other respects as provided under this [ordinance] . . . and each member and beneficiary having such a benefit contract shall have a vested right to such . . . benefits and they shall not be diminished or impaired by subsequent legislation or by any other means without his consent. Mil. Ch. Ord. § 36-13-2-a. ¶239 Then, the ordinance states that employees have a vested contract right to their benefits: Every member, retired member, survivor and beneficiary who participates in the combined fund shall have a vested and contractual right to the benefits in the amount and on the terms and conditions as provided in the law on the date the combined fund is created. Mil. Ch. Ord. § 36-13-2-g. ¶240 The majority acknowledges that those provisions create a contract right to pensions, but determines that they do not create a contract right to pension contributions. ¶¶144-45, 156-57. Majority op., It notes that "[f]or a legislative enactment to be considered a contract, 'the language and circumstances [must] evince a legislative intent to create private rights of a contractual nature enforceable against the State.'" Id., ¶142 (quoting Wisconsin Prof'l Police Ass'n, Inc. v. Lightbourn, 2001 WI 59, ¶145 n.188, 243 Wis. 2d 512). Reasoning that there is no indication that the city council intended to classify pension contributions as benefits, the majority determines that there is no contractual obligation for Milwaukee to make those payments. Id., ¶¶150, 153, 158. ¶241 The majority supports its strained interpretation of the term "benefit" with a cursory reading of Milwaukee's Charter 24 No. Ordinance. 2012AP2067.awb It suggests that the term "benefits" as used in the ordinance, cannot mean pension contributions because Milwaukee's obligation absent from to pay [the employee section contributions the of "is Charter Milwaukee titled "Benefits," Mil. Ch. Ord. § 36-05]." ¶242 In reaching its result, the conspicuously Ordinance Id., ¶152. majority overlooks the very first section in the benefits chapter of the Milwaukee Charter Ordinance. specifically Milwaukee incorporates Charter Mil. Ch. Ordinance Ord. § § 36-05-1-d 36-08-7, which requires the city to fund the 5.5% member contributions of its employees. It states: The member shall be guaranteed that if the total benefit in the form of a monthly retirement allowance . . . does not equal the amount of the member's contributions as provided for in s. 36-08-7 [requiring the city to fund those 5.5% member contributions], . . . then the balance of the member's contributions with interest shall be payable in lump sum amount to a designated beneficiary or to an estate entitled thereto. Mil. Ch. Ord. § 36-05-1-d (emphasis added).18 18 The majority appears to either dismiss or overlook additional sections of the Ordinance: "Separation Benefits," Mil. Ch. Ord. § 36-05-6-6, and "Ordinary Death Benefit," Mil. Ch. Ord. § 36-05-6-10. Both likewise reference Milwaukee's contributions to the pension funds. Both reference "accumulated contributions," which is a defined term that incorporates the 5.5% city funded member contributions as set forth in Mil. Ch. Ord. § 36-08-7. 25 No. ¶243 Indeed, the majority's assertion 2012AP2067.awb that pension contributions are not benefits is contrary to the common use of the term "benefits." See, e.g., State ex rel. City of Manitowoc v. Police Pension Bd., 56 Wis. 2d 602, 612A, 203 N.W.2d 74 (1973) ("[I]n view of modern day employment inducements, fringe benefits such as insurance premiums, pension fund contributions and perhaps others are to be included in the formula for calculating pension benefits for police and firemen."); Titan Tire Corp. of Freeport, Inc. v. United Steel, Paper, & Forestry, Rubber, Mfg., 734 F.3d 708, 731 (7th Cir. 2013) ("They were also receiving an array of fringe benefits, including health care and pension contributions."); City of Ft. Wayne v. Ramsey, The Separation Benefits provision states: "Should a member cease to be an employee . . . he or she shall be paid his or her accumulated contributions as they were at date of separation from service." Mil. Ch. Ord. § 36-05-6-6 (emphasis added). Similarly, the Ordinary Death Benefit provision states: "Upon receipt of proper proofs of death . . . his or her accumulated contributions shall be paid to such person, or such trustee, if any, as he or she has nominated." Mil. Ch. Ord. § 36-05-06-10 (emphasis added). "Accumulated contributions" is a defined term in the ordinance, referring to "the sum of the contributions in the member's account, as provided for in s. 36-08-7-i." Mil. Ch. Ord. § 36-02-1. Section 36-08-7-i of Milwaukee's Charter Ordinance states in relevant part that "[t]he member's account shall consist of those member contributions deposited in accordance with pars. . . b." Again, paragraph b requires Milwaukee to make contributions on behalf of its employees into their pension account. Mil. Ch. Ord. § 36-08-7-b. Thus, the majority's reliance on the absence of employer contributions from the benefits chapter of the Milwaukee Charter Ordinance appears misplaced. 26 No. 2012AP2067.awb 578 N.E.2d 725, 728 (Ind. Ct. App. 1991) ("employer-paid pension contributions are in the nature of a fringe benefit"). ¶244 Not only is the majority's assertion contrary to the common use of the term, it is contrary to the majority's common experience. Every year the State of Wisconsin sends to its employees a "Statement of Annual Benefits."19 contributions employer pension listed. For executive branch employees, pension contributions = benefits. For contributions = judicial branch is legislative benefits. employees, As among branch the pension the The benefit of several benefits employees, majority well contributions pension knows, = for benefits. Every State of Wisconsin paycheck stub lists an employer paid pension contribution as a benefit. ¶245 Nevertheless, the majority persists in twisting the definition of benefit allowing it to creatively interpret contract in a manner permitting the State to disregard it. a The majority rests its conclusion that there is no violation of the Contract Clause on the analytically unsupportable premise that for Milwaukee, an employer pension contribution is not a benefit. ¶246 The majority's strained reading of the term "benefit," excluding employer pension contributions from its definition, is contrary to the use of the term "benefit" in Charter Ordinance and the common use of the term. its analysis of whether the 19 prohibition the Milwaukee Accordingly, on employer Dep't of Employee Trust Funds, WI Retirement System, Form No. ET-7365. 27 No. contributions Clause does in not Wis. Stat. withstand § 62.623 scrutiny. violates Allowing 2012AP2067.awb the Contract Wis. Stat. § 62.623 to stand undermines the protections of the Contract Clause. IV. ¶247 In sum, the majority's failure to address the actual issues presented in this case allows it to reach results that countenance the needless diminution of multiple constitutional rights. The right to freedom of association is diluted as the majority has opened the door for the State to withhold benefits and punish individuals based on their membership in disfavored groups. Municipalities' right to self-govern as granted by the Home Rule Amendment now rings hollow as the majority determines that when the State has budgetary concerns, anything dealing with local finances is a statewide matter. And the right to contract demonstrates is willingness undermined to creatively as the majority interpret a contract in a its manner permitting the State to disregard it. ¶248 For the reasons set forth above, I determine that Act 10 unconstitutionally infringes on protected rights. Accordingly, I respectfully dissent. ¶249 I am authorized to state that Chief Justice SHIRLEY S. ABRAHAMSON joins this dissent. 28 No. 29 2012AP2067.awb No. 1 2012AP2067.awb