Madison - Gov. Scott Walker said Friday that thousands of state workers would be laid off if the Legislature does not adopt his budget fix that cuts public worker benefits and takes away almost all union bargaining rights from public workers.

A Walker aide confirmed that the benefit reductions would cost the average state worker thousands of dollars a year, or roughly 8% of his or her salary.

Walker also signaled that in a larger budget plan coming later this month he would trim aid to municipalities and let local officials deal with those cuts at least in part through savings on public employee costs.

First, Walker wants the Legislature - which is controlled by his fellow Republicans - to act quickly on the 144-page budget repair plan and approve it by Feb. 25. It could move even faster than that, with a hearing in the budget committee and floor votes being tentatively lined up by Republicans for next week.

Speaking at a Capitol news conference, the governor also said the National Guard is ready to take control of state prisons if correctional officers illegally strike or obstruct work. Union officials said they had no such plans.

Walker called government workers "good and decent public servants" and said he wanted to end the practice of forcing them to take eight unpaid furlough days a year. But he said the state had no money or time to bargain with unions over the benefits changes.

"I don't have anything to negotiate," Walker said. "We are broke in this state. We have been broke for years. People have ignored that for years, and it's about time somebody stood up and told the truth. The truth is: We don't have money to offer. We don't have finances to offer. This is what we have to offer."

Walker says the changes will help balance a $137 million budget shortfall in the fiscal year ending June 30 and a $3.6 billion shortfall for the 2011-'13 budget. The overall repair bill would leave the state with $107 million in reserves for this fiscal year.

The benefits changes would save the state $30 million in this fiscal year and about $300 million over the following two years, according to the governor's office. No estimate was available on the savings for local governments and schools.

State unions have been without formal contracts since July 1, 2009, and Democratic lawmakers failed in December to pass new contracts that would have run through June 30. Unions have been continuing under the terms of the previous contracts, but on Friday the Walker administration gave the unions a required notice that it would terminate those agreements in the required 30 days.

Joe Wineke, a Democratic former state labor negotiator running for Dane County executive, said the average state worker has 17 years of experience and makes about $49,500 a year. For a worker making that wage and taking family health insurance, the benefits cuts would lower their pay by just over $4,000.

But many of the other changes to bargaining - such as prohibiting government employers from collecting membership dues for unions - would save the government little or nothing, he said.

"That's a clear attempt to bust the unions," Wineke said "That's shameful."

Union need questioned

In a teleconference with Journal Sentinel reporters and editors, Walker said the state's strong civil service laws eliminated much of the need for public unions at all.

"I get why unions make sense in the private sector . . . but at the public level, it's the government, it's the people, who are the ones who are the employers," Walker said. "Whether someone is in the union or not . . . we protect sick leave, vacation time. We protect work rules."

Walker said his bill needs to be passed by Feb. 25 because of a looming state bond deal that he wants to restructure to help pay for two large bills the state owes.

Assembly Majority Leader Scott Suder (R-Abbotsford) said he supported the proposal and believed a repair bill could pass his house, while Senate Majority Leader Scott Fitzgerald (R-Juneau) said it was too early to comment.

The bill would:

• Require state employees to pay half of their pension contributions - an estimated 5.8% of their salary - and at least 12.6% of their health insurance premiums. The bill would generally make similar benefit cuts for local workers and teachers, with Milwaukee city and county workers also having to pay half of their pension contributions.

Currently, most City of Milwaukee employees don't contribute to their pensions, although new employees outside of the police and fire departments began in late 2008 to pay 5.5% of their salaries toward their pensions - about half of the cost, city labor negotiator Troy Hamblin said.

As for health care, Hamblin said that starting in 2009, employees contributed $20 to $40 a month toward their health insurance if they fully participated in a health and wellness program. That's less than state workers already pay before Walker's proposed changes.

In Milwaukee County, most employees don't contribute to their pensions. About 800 county employees who are nonunion and elected officials have started making pension contributions for the first time this year. Those employees now contribute 2% of their pay. That amount goes up to 4% later in the year, said Steve Cady, a budget analyst with the County Board.

• Increase the pension contributions for elected officials and political appointees in the state to ensure they pay as much as all other workers.

• Allow state officials to fire workers for striking or for missing work for three unexcused days if Walker declares a state of emergency.

• Repeal all bargaining rights approved by Democrats in the 2009-'11 budget for home health care workers and University of Wisconsin System faculty and academic staff, including for newly formed faculty unions at UW-Superior and UW-Eau Claire. The bill also repeals bargaining rights for employees of University of Wisconsin Hospitals and Clinics.

Walker said that without what he called modest changes, the state would have to lay off from 5,500 to 6,000 state employees and local governments might have to make a similar number of layoffs.

But Democrats and union officials rejected that notion, saying that most public workers already make less than similar workers in the private sector in total compensation. They criticized Walker for adding to the upcoming two-year budget shortfall with $117 million in recent tax cuts.

Daniel Meehan, president of the union local that represents officers at Waupun Correctional Institution, said Walker's mention of the National Guard was "baiting" guards to strike when his union had no plans to do it.

"This is not modest. This is a draconian attack on middle-class workers," Meehan said of the plan.

Milwaukee County Supervisor Patricia Jursik said Walker's proposed union bargaining changes would "be a game changer." The county could shore up its budget if it could require pension contributions without having to bargain with unions, she said.

"Right now our hands are tied" with state law, she said.

Walker wants to rewrite state law governing state workers, teachers and local employees so they can bargain only over their salaries and not on benefits or any work rules.

Walker's bill also would allow public employees to avoid making payments to unions if they don't join those unions. Now, workers can choose not to join unions, but they must make "fair share" payments similar to dues - a requirement that unions say is needed because all workers benefit from their work at the bargaining table.

The measure would exempt from the bargaining changes local police, firefighters and state troopers - groups that in some cases supported Walker in the November election. But the proposals do apply to state Capitol Police, university police officers and prison guards. That's in part because Walker said he had the plans and personnel needed to deal with those state workers not showing up but didn't have that for local public safety workers.

Sen. Alberta Darling (R-River Hills), co-chairwoman of the Legislature's Joint Finance Committee, said she supported the exemption. She said it didn't have to be extended to prison guards because they aren't responsible for public safety outside their institutions.

Ryan Zukowski, executive director of the Wisconsin Troopers' Association, agreed, praising Walker for "being consistent in distinguishing police and fire services."

But Brian Cunningham, vice president of a union local that represents correctional officers, said his members also keep the public safe.

"Every time a police officer does a traffic stop, he's not doing a traffic stop on a felon," Cunningham said. "Every time a correctional officer goes to his job, he's doing it with a convicted felon."

In Milwaukee, exempting police and firefighters hurts city finances "tremendously," said Hamblin, the city official. That's because police and fire represent about 70% of the budget in the city's main account, he said.

Lee Bergquist and Steve Schultze of the Journal Sentinel staff in Milwaukee contributed to this article.