WRN Newsletter

Home Breaking Repeal of Wisconsin’s Act 10 Would ‘Bankrupt Schools & Local Governments’

Repeal of Wisconsin’s Act 10 Would ‘Bankrupt Schools & Local Governments’

act 10
MacIver Institute chart on Act 10 savings

Top Republicans warned Thursday that the repeal of Act 10 in Wisconsin would “bankrupt schools and local governments.”

Act 10 “has saved Wisconsin taxpayers $16.8 BILLION since it was signed into law,” the Assembly GOP wrote on X, citing research by the MacIver Institute.

“The repeal of Act 10 would bankrupt schools and local governments right after we gave them a historic funding increase,” Assembly Speaker Robin Vos said. “This is another attempt by liberal special interest groups to undo the law to please their donors now that there’s been a shift in the court.”

“Act 10 has saved Wisconsin taxpayers $16.8 BILLION since it was signed into law,” state Sen. Duey Stroebel said. “Now, left-wing activists are engaging in more lawfare because they expect the new liberal-activist majority to legislate from the bench. Democrats are fighting to take our state backward.”

The comments from them and others came after the Associated Press reported that “seven unions representing teachers and other public workers in Wisconsin filed a lawsuit Thursday attempting to end the state’s near-total ban on collective bargaining for most public employees.”

Act 10 was Republican Gov. Scott Walker’s signature reform. Republicans have warned for months that a new liberal state Supreme Court would seek to invalidate a host of conservative reforms that have helped the state. Democrats risk overplaying their hands; the lawsuit comes as former Republican Attorney General Brad Schimel is poised to announce a bid for state Supreme Court against liberal Ann Walsh-Bradley. Pending lawsuits seeking to overturn the elections of all state legislators and to invalidate school choice are also pending before the liberal court, which includes a new member accused of prejudging issues before it.

“Act 10 saved YOU $16.8 billion as taxpayers since 2011. At the same time, Wisconsin can boast a fully funded public pension for our hardworking public sector employees. Since Justice Janet was elected, there are those who are determined to take Wisconsin back to a place where we would lose all of this. What a ruin this would be for our great state,” state Rep. Barbara Dittrich said.

Patrick McIlheran, a researcher at the Badger Institute, wrote, “Act 10 raised pay for high-quality teachers, increased the quality of teaching and improved student achievement. This is what was predicted at the time in the face of furious opposition, and now the reforms are vindicated by a Yale economist’s findings.”

According to state Sen. Julian Bradley, “This lawsuit seeks to overturn key parts of the budget repair bill known as Act 10 that put Wisconsin on the path to fiscal solvency and has saved taxpayers more than $16 billion. This would be a disaster for Wisconsin taxpayers.”

Will Flanders, researcher association with the Wisconsin Institute for Law and Liberty, wrote, “Wisconsin schools have more money now after adjusting for inflation than they did in the year 2000. The blame lies not with Republicans in the legislature, but with districts expanding bureaucracy rather than upping teacher pay.”

Meanwhile, liberal Democrats expressed glee over the lawsuit. “I fought hard against Act 10 when I was in the State Assembly in 2011. I’m glad to see the fight continues with this lawsuit!” US Rep. Mark Pocan wrote.

According to the MacIver Institute, “Back in 2010, the state was facing an immediate $127 million budget shortfall and a $3.6 billion structural deficit going into the next budget cycle. Gov. Scott Walker correctly identified bloated public sector union contracts as the main culprit. Despite the left waging what we would today call a weeks-long ‘insurrection,’ Walker and the Republican-led legislature passed a package of reforms that instantly turned around the state’s financial situation.”

MacIver Institute also wrote a lengthy summary of Act 10’s positive effects on the state. We reprint it with permission from MacIver below; you can read the full story here. In MacIver’s words:

Act 10 required government employees to pay 12.6% of their health insurance premiums (still less than half the usual contribution of private sector workers toward their health insurance) and half of the contributions made towards their own pensions. Previously, they paid nothing; state taxpayers picked up both the employer and employee match. For perspective, the average private sector worker pays 17% of their health insurance premiums for single coverage and 28% for family coverage, according to the Kaiser Family Foundation.

Act 10 also limited what public-sector unions could negotiate for. These changes were meant to give state and local governments more flexibility to identify potential savings and keep their budgets balanced. It had an immediate impact.

Act 10: Not Just One-Time Savings To Taxpayers

It’s been 12 years since Act 10 became law, and it continues to save state and local taxpayers billions of dollars. The latest analysis brings the total savings up to $16.8 billion since 2012.

Counting Contributions: How Much Taxpayers Have Saved, Year After Year

To calculate that figure, the MacIver Institute examines annual pension and health insurance contributions made by state and local public employees. The MacIver Institute included contribution amounts from employees in state agencies, the UW system, public authorities, municipalities, towns, counties, school districts, tech colleges and CESAs. We calculated the savings achieved from the pension and health insurance changes using the state Comprehensive Annual Financial Report and local sources.

Pension Savings – Government Employees Paying The Employee Match

The bulk of the $16.8 billion savings comes from the pension contributions. Starting in 2012, public employees have contributed a total of $11.3 billion towards their pensions. It’s an easy number to calculate. It’s simply half of all contributions to the pension funds.
Health Insurance Savings – Government Employee Contributing Toward Premiums

The rest of the calculated $16.8 billion savings comes from the flexibility state and local officials have in selecting health insurance plans, in addition to public employees now paying 12.6% of their premiums. That makes estimating the total savings more complex. The City of Milwaukee, Milwaukee County, K12 System, UW System, public authorities, counties, municipalities, towns, tech colleges, special districts, and CESAs all must be analyzed separately.
Milwaukee Publicizes Act 10 Savings

First, we look at the City of Milwaukee. It makes no secret about its savings. According to the latest budget, the city has saved an estimated $345.4 million in health insurance since 2012. Prior to Act 10, costs were increasing by 8% or 9% every year.

School Districts Are Legally Required to Report Savings

Next, we look at school districts. School districts are required to submit their detailed reports to the Department of Administration every year that includes employee contributions. Including data from the most recent report, total savings have reached $1.4 billion.
State and UW Savings

State agency and UW System health care savings were calculated using the Department of Administration’s six-year averages, which come out to $1.4 billion.

Local Government Health Insurance Savings

Tracking health insurance savings throughout the state is more complicated. There are thousands of local units of government and some Act 10 savings at the local level go unnoticed and unpublicized. Act 10 permanently changed the trajectory of those local healthcare costs. Local governments like the City and County of Milwaukee include that information in their annual budgets – and the savings continue to grow exponentially. Milwaukee County’s estimated total savings from health insurance is now at $366.5 million. All other local governments in Wisconsin combine for a total of $2.1 billion in health insurance savings since 2012.

The Supreme Court Race Factors Here, Too

Progressive Supreme Court Candidate Janet Protaziewicz told the New York Times in January that she believed the reforms in Act 10 were unconstitutional. There is no question that if the left takes control of the court there will be challenges to the law which has saved both state and local governments billions. If overturned, the price-tag state taxpayers would have to pick up for paying the employee’s share of pension contributions alone would top $2 billion in one budget cycle – that’s in addition to the $2 billion they already fund as the employer’s share.

Ultimately, Act 10 finally put the State of Wisconsin, local governments and school districts back on a solid financial footing. More importantly, Act 10 ultimately put Wisconsin taxpayers back in charge of our government and back in control of our future.

-Thank you to MacIver Institute for the contribution to this story.

Exit mobile version