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.