Act 10: Ensuring that Wisconsin Taxpayers Get What They Pay For

Act 10 is continuing to prove beneficial to Wisconsinites by reining in out of control overtime costs on both the state and local level. Since the enactment of Act 10, Wisconsin state agencies have collectively saved almost $14 million in employee overtime charges. The effects of Act 10 are also being realized at the local level, with the City of Milwaukee reducing its overtime costs by almost 30 percent. Such reductions in spending are allowing for across the board savings and in turn the balancing of state and local budgets.

Act 10, which helped restore common sense to a state personnel system effectively under the control of powerful labor unions, was enacted in 2011 and was met with outrage by many pressure groups on the far left. However, Act 10 has proven to be a boon for Wisconsin taxpayers, who have realized some $2.7 billion in total savings thanks to the law, a number that is continuing to climb.

While Act 10 has garnered attention for its improvements to the Wisconsin educational system, less attention is given to the ongoing fiscal triumphs of reducing overtime expenses under Act 10. Much of the success is due to Act 10 structural reforms that allowed for better management and increased employee efficiency. The structural reforms saved taxpayers more than a billion dollars, including millions of dollars in state employee overtime.

Act 10 policies are allowing state agencies to reduce their overtime costs by millions each year. According to the Department of Administration (DOA), the state experienced a 22 percent reduction across all state agencies in overtime spending following Act 10 changes. The DOA reports that since 2011, state agencies have collectively reduced their overtime costs from $63.1 to $49.4 million.

Specifically, the reported findings on overtime reductions by state agencies indicated after the enactment of Act 10, the Department of Health Services’ overtime costs fell from $8.9 million in 2011 to $7.6 million, a reduction of 15 percent. The Department of Transportation’s overtime costs fell from $5.7 million in 2011 to $4.1 million, a reduction of 28 percent.

The Wisconsin state Department of Corrections (DOC) saw the greatest decline in overtime costs from $37.7 million in 2011 to $29.1 million following the enactment of Act 10. Under Act 10, DOC employees may no longer include compensated days off in the overtime formula, and must collect overtime only on “straight time” earned outside of the 40 hour work week. Additionally, pursuant to union contacts, DOC employees previously were being offered overtime relative to seniority. Now all DOC employees receive a more “equal shot” at overtime compensation.

Furthermore, as an article featured in the Wisconsin Reporter found, under Act 10, state agencies in Wisconsin have begun to fill agency vacancies when possible, as opposed to the norm under the previous administration. As reporter M.D. Kittle points out, they “left vacant positions to save money on staffing budgets, although the agencies ended up spending more in overtime.” Simple, logical changes like this under Act 10 have enabled state agencies to reduce unnecessary costs.

At the local level, the City of Milwaukee has been able to use Act 10 policies to successfully reduce the amount of overtime pay city employees received by almost 30 percent as compared to 2011. The most recent figures indicate that Milwaukee was able to use Act 10 to reduce its Department of Public Works (DPW) overtime expenses from $6.4 million to $2.2 million, a drop of 65 percent in just a few years. The city Police Department also saw a drop in overtime costs of 15 percent from $16.5 million to $14 million.

Additionally, the DPW’s Water Distribution Division saw their average overtime pay “fall from $8,957 per person in 2011 to $2,553 in 2012 – a 72% drop.” The city library even saw drops in employee overtime pay from an average of $225 per year in 2011 to $72 per year. City Budget Director Mark Nicolini stated that “Act 10 largely accounted for the drop in overtime pay for Water Distribution employees…as well as drops for library employees.”

It is clear the provisions of Act 10 have saved Wisconsin taxpayers billions since inception and are continuing to produce results. The policies of Act 10 have empowered officials at the state and local level to take back control of their budgets while working to ensure the most efficient use of taxpayer moneys. As evidenced by continued success in increasing savings at the state and local level, Act 10 is working – the numbers don’t lie.

Act 10 Saves Milwaukee Public Schools Over $100 Million Annually

Act 10 is still working – just ask Milwaukee public schools, which are saving well over $100 million a year and thousands of teaching jobs as a result of Act 10.

Act 10, which reined in collective bargaining in Wisconsin, has allowed Milwaukee public school officials to take the necessary action to ensure taxpayer money is used as efficiently as possible. Prior to the passage of Act 10, the Milwaukee public school (MPS) system was facing increasing employee retirement costs that would eventually become unsustainable, leading to cut backs in school budgets and staff.

In 2011, MPS’s annual retirement costs were at $1,860 per pupil and projected to almost double to $3,512 per pupil by 2020, an increase of $1,652 per pupil. Now, with Act 10 in place that cost is slated to rise to only $1,924 by 2020, totaling $1,588 in savings per pupil thanks to Act 10.

According to a study by the Fordham institute, the MPS’s total projected savings under Act 10 will reach upwards of $100 million in savings for Milwaukee public schools. The study also found Act 10 will save over 1,000 jobs in the MPS school system by 2020, almost 25 percent of MPS teaching positions.

Act 10 allowed the MPS to make two needed reforms to the MPS retirement benefits program.

First, Act 10 allowed some of the costs of MPS employee retirement benefits to be shifted from the MPS to the employees receiving such benefits. Previously, the MPS typically covered the entire cost of the state and city employee retirement plans. MPS employees now will actually pay for a portion of their state and city retirement plans. This shifted part of the burden of financing such costs from the MPS to its employees, freeing up millions of dollars of MPS resources.

Additionally, by removing benefits from collective bargaining, Act 10 allowed school districts to modify district-specific retiree benefits. For instance, Act 10 gave MPS the authority to control the skyrocketing costs of its supplemental pension plans for teachers who retire early. The MPS was able to close the supplemental pension plan for new hires and freeze the pension plan for existing teachers starting in fiscal year 2014 until the increasing costs of the plan become financially feasible.

The reforms to the Milwaukee public schools are not the only school district capitalizing on the benefits of Act 10. On a smaller scale, Stevens Point Area School District in Wisconsin has also experienced savings in the millions from Act 10.

Unlike the MPS system, which is the largest school district in the state with 20 high schools, Stevens Point in Portage County Wisconsin is home to only one high school, two junior highs and a handful of elementary schools. With a population of just over 70 thousand, Portage County has fewer inhabitants than the MPS system has students enrolled.

Despite its size the Stevens Point Area School District has experienced huge savings totaling $1.5 million as a result of Act 10. As pointed out by an article in the Stevens Point Journal, due to the district’s ability to partner with a new healthcare provider, “the Stevens Point Area Public School District will save almost $1.5 million in health insurance premiums and other costs for the 2013-14 school year.” According to the district’s Director of Human Resources Keith Williams, the district “was set for an increase of around 10 percent in its premiums.” The $1.5 million in savings would not have been possible without Act 10 because the district would have
been otherwise relegated to whatever the Wisconsin Education Association (WEA) thrust on them.

Before Act 10 was passed, Wisconsin public school districts were facing massive budget shortfalls that would have inevitably led to reductions in school resources and teaching positions. Now, just a few years later Milwaukee public school districts have been able to save hundreds of millions in costs and thousands of teaching jobs that otherwise would not have been possible without Act 10 reforms. The results are obvious – Act 10 is still working, and thanks to Act 10, Wisconsin will continue to see such benefits for years to come.

Join the It’s Working Tour in Green Bay, Stevens Point, and MORE!

Americans for Prosperity Foundation kicked off the “It’s Working” campaign in Oconomowoc last night to educate Wisconsinites on the great benefits of our budget reforms!

It was a tremendous success with activists from all across the state taking part and continuing to support the newfound fiscal freedoms we all enjoy.

Monica Crowley, nationally syndicated talk radio host and FOX News Contributor, spoke to our activists about the reforms, leadership, reducing taxes, and ensuring that we keep spending under control. Most importantly however, Monica spread the word to us and our neighbors that “It’s Working, Wisconsin!”

Tell your friends and family we’re planning many more great events like this one in a city near you!

Join us in:

Green Bay on Thursday, May 29th from 7:00 to 8:30 PM at the Comfort Suites (1951 Bond Street). REGISTER HERE FOR THE GREEN BAY EVENT! 

Eau Claire on Tuesday, June 3 from 7 PM – 8:30 PM at the Florian Gardens located at 2340 Lorch Avenue. REGISTER HERE FOR THE EAU CLAIRE EVENT!

Racine on Thursday, June 5th from 7 PM – 8:30 PM at the Marriot located at 7111 Washington Avenue.  REGISTER HERE FOR THE RACINE EVENT!

Stevens Point on Wednesday, June 11th from 7 PM – 8:30 PM at the Holiday Inn located at 1001 Amber Avenue. REGISTER HERE FOR THE STEVENS POINT EVENT!

UPDATE: Act 10 Savings Up to $2.7 Billion!

The Maclver Institute recently released an in-depth analysis of the effect that the legislature passed in 2011 called “Act 10” has had on local and state budgets.The report showed that since the law was passed, our Wisconsin taxpayers have saved $2.7 billion tax dollars!

Act 10, which limited collective bargaining for most state employees, was signed into law in February 2011 after a fierce debate with Big Labor and other factions on the left who claimed that the proverbial “sky would fall” if the act passed.

Thankfully, their fears did not become a reality, and Act 10 has been a massive success in the continuing fight to reform Wisconsin’s fiscal policy.

Savings have continued to increase over the last 12 months and now total just under $3 billion. Better news still, is that the data suggests savings will continue to increase over the foreseeable future.
Much of the new savings has come from state employees who now contribute half of their pension fund and a minimum of 12.6 percent of their health insurance premiums.
This method of pension and healthcare alleviates the burden that Wisconsin taxpayers handled by previously being required to pay for the vast majority of these two funds.

These minor changes for state employees have helped Wisconsin not only balance its budget, but allowed cuts for income taxes of nearly $650 million and property taxes of $100 million over the next two years.

School districts around the state also saw some of the biggest savings under Act 10. A report from the Fordham Institute found that Milwaukee Public Schools (MPS) should save $101 million from previous projections in the year 2020 thanks to the 2011 reforms. In total, MPS is on track to save $1.37 billion in long-term retiree health and life insurance benefit liabilities.

The Eau Claire Area School District is also expected to save $2.3 million by switching health care providers. The Stevens Point School District is projected to save $1.5 million by soliciting more competitive bids for health insurance, as well.

In addition to this, the state saw major savings from a drop in overtime pay. In 2011, overtime cost the state $63.1 million, but now that has dropped to $49.4 million, a savings of 22 percent.

Even the City of Milwaukee saved on overtime, though Mayor Tom Barrett refuses to admit any of the city’s savings were from Act 10. Milwaukee saved about $7.3 million on overtime in 2012 and restructured its pension plan to increase the saving to $93 million

Act 10 not only saved the state, schools, and local governments billions of dollars, it also opened the door for new innovations.

In the Hartland-Lakeside School District, a new merit pay system for teachers has been implemeneted that would have never been possible prior to Act 10. Instead of automatically increasing a teacher’s pay just because they have been in the district for one more year, Hartland-Lakeside transformed their system to pay teachers based on performance.

This type of success based private sector model would have immediately been stonewalled by the teachers’ union in years past. Now however, parents and students will know that the best teachers are being rewarded, while failing teachers will likely be replaced.

Public workers have also been given a choice when it comes to joining a union. All across Wisconsin, public unions are now required to take an annual recertification vote to continue representing members and taking monthly dues from their paychecks.

The Kenosha Education Association (KEA) has been the largest teachers’ union to decertify since Act 10 passed. It was reported at the time that only 37 percent of members voted to recertify, however the union claims to have never scheduled a vote. Either way, teachers in Kenosha will no longer have to contribute an automatic deduction for dues and can choose for themselves if they want to contribute to the union.

This will continue to be the case as long as the KEA decides to follow the law. They may, however, try to recertify without a vote based on a recent court ruling.

That ruling came from Dane County Judge Juan Colas as he continued his assault on Act 10. Colas found the law to be unconstitutional last year and has now deemed the Commissioners at the Wisconsin Employment Relations Commission to be in contempt for requiring public unions to take a vote to recertify.

Judge Colas’ original case is expected to go to the Wisconsin Supreme Court this November, with a decision expected sometime next spring. Until then, Big Labor groups will continue to try to skirt Act 10 claiming that the biased rulings from Colas allow them to.

Regardless of this, Act 10 continue to help counties, local school districts, municipalities, and the state. Savings will continue to grow for years to come and taxpayers should be proud of the 2011 reforms that have reshaped the Wisconsin fiscal structure entirely.

School Districts, Local Government Save Money Thanks to Act 10

The New York Times recently highlighted Wisconsin’s Act 10 and effects the law has had in the state. As other states consider standing up to public unions, Wisconsin serves as a working success story. Limiting collective bargaining in the state has saved taxpayers billions of dollars, but labor bosses continue to call it “devastating.”

Marty Beil, executive director of the Wisconsin State Employees’ Union, has had a lot of things to say about the law in the last three years. Beil told the New York Times that membership has plummeted 60 percent in his union, with others facing similar declines around state. He also said the union might have to sell its Madison headquarters.

“It’s had a devastating effect on our union,” Mr. Beil, its executive director, said of Act 10. He was sitting in his Madison office, inside the headquarters that his union, hard up for cash, may be forced to sell. The building is underused anyway, as staff reductions have left many offices empty.

While the goal of the article may be to make readers feel sorry for Big Labor, it cannot help but bring up the variety of success stories from Wisconsin.

Ted Neitzke, school superintendent in West Bend, a city of 31,000 people north of Milwaukee, said that before Act 10 his budget-squeezed district had to cut course offerings and increase class sizes. Now, the district has raised the retirement age for teachers and revamped its health plan, saving $250,000 a year. “We couldn’t negotiate or maneuver around that when there was bargaining,” Mr. Neitzke said. “We’ve been able to shift money out of the health plan back into the classroom. We’ve increased programming.”

Act 10 asked public employees to contribute more to their health insurance and pension costs, and the Times highlights the fact that “criticisms of pensions have been reinforced by the turmoil in Detroit, where the often-generous and sometimes scandal-ridden pension system played a substantial role in the city’s bankruptcy.”

To read the complete story from the New York Times, click here.

Merit Raises Mark a Change for Wisconsin Public Employees

[Green Bay, Wisc…] Since Maria Lasecki’s start at the Brown County Child Support Agency in northeast Wisconsin 23 years ago, people had only received raises based on seniority, but that trend is starting to change. Merit pay–wage increases based on performance–may be commonplace in the private sector, but mark a new era for Wisconsin’s public sector.

This new shift towards merit pay in the public sector is due mostly in part to collective bargaining restrictions put in place by Act 10. The number of state workers that have received these pay hikes has doubled from 2012 (the first year it was offered) to 2013 alone, with this year’s percentage totaling to around 14%, according to the Gannet Wisconsin Media Investigative Team.

Lasecki spoke in support of merit raises saying, “We need to reward the people who help take us from ‘good’ to ‘great.'” Brown County and the city of Appleton will be offering these options to workers who aren’t part of bargaining units. Many workers will receive raises automatically, but merit pay can be offered in addition to that rate.

Read more about this story from Post Crescent here.

 

Municipalities and School Districts Working Towards Cost-Effective Health Care

[Wausau, Wisc…] Local municipalities and school districts in Marathon County are working together to cut the costs of health care for employees, while still saving money for the taxpayers. The two groups are working on a plan to unite under one health care insurance company for all public employees.

Mary Jim Tipple of Wausau is quoted saying, “We need to have the highest services for the lowest possible cost. As revenues go down, and expenses go up, healthcare is a big expense for the city of Wausau.”

With an expected taxpayer bill of $5 million for the 2014 budget, the group has significant buying power. In joining together, they are hoping to find the best plan for the best price starting by January 2015.

Read the full article on wsaw.com here.

Onalaska Holmen Courier-Life: School Board Eyes Insurance Recommendations

[Holmen, Wisc…] With the help of Holmen’s recently formed 12-person Health Insurance Review Committee, healthier employees and fewer claims mean reduced premium costs for everyone. District employees now pay 20 percent or more of the premium costs, allowing for more breathing room in the district’s overall budget. But the higher individual and family insurance plan costs for employees have lead to new wellness initiatives to help drive premium costs down.

A number of uncontrollable factors drive premium costs, such as age, gender, and inflation. However, plan utilization is one thing that can be controlled. New wellness initiatives aimed at weight loss programs and chronic disease education programs, allow for reimbursement as well as fewer claims, leading to lower premium costs for all. Holmen School District is therefore able to benefit from overall budget savings thanks to higher employee contributions as a result of Act 10, while still helping individuals reduce their health care costs as well.

Read the full article in the Onalaska Holmen Courier-Life here.

Wausau Daily Herald: Wausau District to Change How Teachers are Paid

[Wausau, Wisc…] The Wausau School District is looking to make changes to the pay structure for teachers. They have formed a committee of teachers, administrators, and school board members to find a better, more effective way to pay teachers. Thanks to the reforms that Act 10 put in place, the school district is able to switch the pay structure to a performance based one and not solely on seniority. The district hopes to have the new pay plan in place by the 2014-2015 school year.

The article below originally appeared in the Wausau Daily Herald.

Leaders want to pay for performance, not seniority

A committee of Wausau School District teachers, administrators and School Board members have begun an effort to find new, more effective ways to pay teachers for their work.

Last week, about 30 people met for two working days at the district’s Longfellow Administration Center to forge out a process that has the potential to dramatically change the way educators’ salaries are determined.

The salary structure for generations of teachers in Wausau schools and those across the country has been simple and predictable. Using years of experience and levels of education, union contracts spelled out specifically the pay bumps teachers could expect for each year they spent in the classroom and for taking advanced college credits. The rationale was that the more educated and experienced a teacher was, the more effective he or she was and the more he or she should be paid.

Critics have long contended that those two factors don’t reflect the complex skills and strategies successful teachers employ. That disconnect meant the salary system didn’t do enough to encourage teachers to improve their skills or reward those doing a great job, critics said. Wisconsin’s Act 10, which suspended most collective bargaining powers of public unions, gives school districts the ability to make salary changes without having to go through a bargaining process.

“The old model was probably archaic,” said Jeff Berkley, the president of the Wausau Education Association, the local teachers union, and one of several teachers who is participating in the process. “This gives us an opportunity to be part of something very cutting edge.”

Continue reading here.