Politics

Five Years Later, Act 10 Saves Taxpayers $5 Billion

Capitol-Hill-Dome1from – WisconsinWatchdog.org – by M.D. Kittle

MADISON, Wis. – Five years ago, Gov. Scott Walker introduced a bill promising to reform public-sector collective bargaining in Wisconsin. The legislation would help fix the state’s massive budget shortfall while shifting the balance of power in public employee contract negotiations back to taxpayers, the Republican governor and the GOP-controlled Legislature pledged.

Within days, all hell would break loose at the state Capitol.

Not long after Walker introduced what would become Act 10 on Feb. 11, 2011, protesters took over the people’s house, Democrat senators fled across the border and holed up in Illinois, and Wisconsin became a spectacle on the nightly news.

Despite all the hysteria, Act 10 eventually passed, Walker signed it into law, and the law survived multiple court challenges.

Walker, too, survived an unprecedented recall campaign driven by big labor and their Democratic Party allies – the first governor in U.S. history to do so. A couple of Republican senators who cast crucial ballots for Act 10 were not so fortunate, but five years later, Walker remains in power and the state Legislature is dominated by Republicans.

And despite all the dire predictions, Act 10 has proved a smashing success for Wisconsin taxpayers, according to a newanalysis by the MacIver Institute.

The Madison-based free-market think tank’s report estimates taxpayers have saved $5.24 billion over the past five years, thanks to the law.

The analysis found that the state has saved $3.36 billion by requiring government employees to contribute to their government-backed pensions, and another $404.8 million by opening up employees’ health insurance to competitive bidding, among other cost controls. The savings have been widespread, across state and local governments.

Milwaukee Public Schools, for instance, saved a whopping $1.3 billion in long-term pension liabilities, according to the MacIver report. The University of Wisconsin System saved $527 million in retirement costs, the study found. And Medford School District recently realized an 11 percent decrease in the cost of its health insurance plan by opening it to competitive bidding.

The savings due to Act 10 breaks down to $2,291 for every household in Wisconsin, according to the analysis.

“When you take a step back and look at over $5 billion in savings for taxpayers, it cannot be argued that Act 10 has been a huge success,” Brett Healy, president of the MacIver Institute, told Wisconsin Watchdog on Thursday.

He noted the savings Act 10 delivered allowed Walker and the Republican-led Legislature to provide $2 billion in direct tax relief to taxpayers.

“I would argue that Act 10 is one of the most successful public policy ideas in recent memory and from a financial standpoint, the direct impact on taxpayers, it is by far the most important public policy change we’ve seen in Wisconsin in decades,” Healy said.

Plenty of public employees and the unions who have seen their ranks dwindle because of Act 10 have a different take. And mainstream media publications have fed the sky-has-fallen narrative in retrospectives on the collective-bargaining reform law.

Wisconsin State Journal reporter Matthew DeFour wrote some of the more teeth-clenching pieces in the newspaper’s series on Act 10. He argues the lost income public employees faced from having to pay more – or anything – for their benefits took a big bite out of spending in Wisconsin’s economy.

DeFour includes the story of UW-Madison economist Steven Deller, who said after the law’s implementation that he and his wife, also a university employee, took an $800 monthly hit in take-home pay. The university employees were forced to cancel their weekly cleaning and lawn care services, DeFour reports.

“Deller had projected that more than 21,000 jobs would be lost as a result of Act 10 due to reducing the spending power of public workers, but he hasn’t done a follow-up study,” the story notes.

Wisconsin Taxpayers Alliance president Todd Berry told the newspaper what others have pointed out along the way, that Wisconsin confronted a $3 billion budget shortfall when Walker took office. The budget fixes at the time helped save untold public-sector jobs and led to lower taxes, ultimately allowing many more taxpayers to keep and spend more of their hard-earned money.

Act 10’s most profound impacts, however, may be the courage it steeled in conservatives across the country to take on the once all-powerful public employee unions. The law also was a huge boost to individual liberty, giving employees the right to choose whether they wanted to be in a union and submit to compulsory dues.

Healy said Walker and the Republican legislators who stood up for Act 10 deserve a huge thank-you from Wisconsin taxpayers.

“Given the reaction of the far left and the professional protesters, the boorish behavior, the obnoxious protests, the fact that our legislators stood up to that behavior and despite all of the threats went ahead and did what was right for Wisconsin, it is a true profile in courage for those legislators,” he said.

“It put taxpayers back in control of our government,” Healy added. “I think it sends a signal across the country that you could do the fiscally responsible thing, you could make the prudent decision, and you could be reelected and rewarded by your constituents.”

Act 10 did a number on public employee union strength in the Badger State. No longer can unions automatically deduct dues from employees’ paychecks, and the law requires public-sector labor groups to hold annual recertification votes.

As a result, the Wisconsin Education Association Council has seen its membership numbers drop 50 percent, from about 98,000 members in 2011 to around 40,000 in the most recent reports.

“What a novel concept here in America: we’d actually give people a choice as to whether or not they wanted to join an organization,” Healy said. “I do think in the long-term that was a major victory for liberty and personal freedom.”

 

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Van Hamlin
5 years ago

Something went wrong and I couldn’t finish my thought in one entry.

What I was going to add was that the removal of collective bargaining is a bad thing. Pubic employees don’t need to have the right to strike for collective bargaining to be successful. Wisconsin should have kept collective bargaining, added an unbiased labor relations board and then proceeded with a right to work law. Right now, teachers, law enforcement and state corrections have seen a reduction in their take home pay because lawmakers transferred some of the financial burden related to benefits on to the worker. In a job market where there is more labor than the demand for labor, the taxpayer reaps a benefit because the workers are lucky to have a job. However, over time, jobs are being filled with people with less desirable qualifications. Prior to becoming vested, many good teachers and cops move on to better paying jobs. Their replacements come from the ranks of those who will take the lower paying Wisconsin jobs. Many of these new workers are entry level employees with little to no experience. As the supply and demand curve changes to a labor demand marketplace, The once entry level staff that Wisconsin trained and nurtured will move on to better jobs, as well. The retention of good employees is an important element to any company, including governmental services. The loss of these blossoming employees increases the overhead involved. Wisconsin will eventually become a training ground for surrounding states and private enterprise. Once the cat is out of the bag and head hunters are farming Wisconsin for new hires, Mr. Walker or some other boy genius will have to increase wages and benefits to a competitive level with their competition. I would think that a shift to charter schools and privatization of the state corrections division might be better long term solutions.

Union busting is mainly associated with political paybacks rather than good management. A right to work law accompanied by fair wages and unbiased discipline is a much better long term solution.

Van Hamlin
5 years ago

I believe that right to work laws are the wave of the future. Unions need to actually provide services and get results. Most of the things that unions have fought for are now laws. Unions need to be more creative.
On the othterm hand,

jan
5 years ago

This appears to have many saving aspects for the whole state
Why not try it everywhere without the big wigs reaping results
We should put this USA back into the hands of the people and take out the big money grabbers!!!

John B
5 years ago

Scott is doing a fine job in Wisconsin. I followed him for his brief run and think he would be a fine President.
I agree with Brian that California should look to the future and not stumble along on the latest Gee Whiz project that comes along.
I hope AMAC finds more good public officials to write about as this country is not being run the right way now.

Brian
5 years ago

We need Act 10 here in California. There may be a ballot measure in 2018 that will strengthen the positions of the state and local governments. Even though pension reform may hurt me financially, it is certainly needed. I say this as I have been employed by a local government for the past 31 years and have benefited from our union-negotiated contracts.

Virgil Erickson
5 years ago

THANK YOU GOV WALKER AND ALL THE BRAVE LEGESLATURES. It saved me almost 200.00 in taxes

Steve
5 years ago

I think that’s called seeing the big picture and not just your own nose same hysteria was whipped up about concealed carry . Weeks on end about shoot-outs in the streets and our children will not be safe .So America no time to rest the nuts are still planning and hard at work to undermine , go around and wipe out any gains made to advance their agenda .

Michelle A.
5 years ago

Thank you to all who took the time to give detailed responses to my comments about unions. Perhaps I was looking back too far. It is clear that the worst side of human nature often ends up spoiling a really good thing in the end. I’m not sure exactly where that leaves us going forward. Workers have to earn enough to support their families and employers have to make enough profit to stay in business so that those same workers have a job. The balance doesn’t always stay in the middle but swings too far one way or the other. Not sure if that will ever truly be solved.

Kit
5 years ago
Reply to  Michelle A.

A free market provides the best balance, and channels even our corrupt human nature into efforts that are helpful to others.

Dan
5 years ago
Reply to  Michelle A.

It’s called personal responsibility. When one is hired to work they sign, in essence, a contract. It is that persons responsibility to learn and perform the tasks that the job entails. If one doesn’t like the job one has been hired to do, then quit. Don’t try to change everything by using a union to try to manipulate how a company is run. The union didn’t hire you to work there, the company did. This is a free country, one should have the ability to decide freely if they wish to join a union.

Michael Gray
5 years ago

It’s nice to see actual results from a candidates platform. All too often we elect people to an office based on their running platform only to find out that it was all just empty promises.
Unions were a great thing when they were first formed, however since that time there have been put into place many protections on the Federal level and in many states that would make it impossible to go back to that state, besides the fact that the unions are still there and can still be useful. However, I have seen the bad side of unions in two different plants, where the union leadership, outside of the company, sold the employees on proposals that ultimately led to the companies shutting the plants down.

Michelle A.
5 years ago

Has everyone forgotten why unions started in the first place? Too many people working inhumanly long hours for very low wages, often in unsafe conditions with no benefits. A single voice crying out wouldn’t have made much of a dent in this problem but a large, collective voice did. Unions helped a lot more workers to be able to afford the goods and services that were previously out of reach, thereby helping the whole country to prosper. This would never have happened if the status quo had prevailed with human nature always wanting more for less. The downside of unions can be corruption and the protection of workers who refuse to produce their fair share of the work which they have been hired to do. However, overall, even non union workers benefitted from unions in that companies had to compete for good employees. Unions raised expectations for everyone. I fear that if unions disappear, there will be a slow slide back to “the good old days” where sweat shop workers were not the exception to the rule. I base my comments on the good living my dad made as a 39 year, unionized, railroad employee who supported his family on his wages and also had a good pension in his old age. This would not likely have been the same story before the days of unions. I vote Republican but I am pro union due to history. I just don’t want to see a rerun in the workplace of those days of yore.

CRH
5 years ago
Reply to  Michelle A.

I agree with what you are saying but I think this whole thing has restored a better balance between union and non-union. Don’t forget that government jobs are a support function and do not create wealth in our country. The real wealth creators are moving out of the country because of high costs. If we cannot compete globally then the cost to make stuff needs to be lowered and cutting labor costs is just one of the many ways to do so.

PaulE
5 years ago
Reply to  CRH

Correct!

WHS
5 years ago
Reply to  Michelle A.

I am somewhat pro-union for the reasons Michelle states, but I think there has to be a bit of common sense. History has demonstrated that, left to themselves, American management is predatory and WILL take advantage of workers if allowed to do so. Unions should have a voice in addressing TRULY unfair or unhealthy labor practices and seeking to ensure that their members are rewarded a JUST salary for their work.

But:

– when unions go to the point of compelling non-union members to pay dues,
– when unions hold companies hostage to insane pension plan or benefits packages,
– when unions can actually drive companies out of business (Bethlehem Steel) because of the above
– when union employees can bump non-union employees (or union employees with less tenure) out of their jobs during layoffs,
– when they create political action committees that serve the union’s own interests instead of their employees,
– when they create groups that block non-union construction projects (like the THUG gang in Philadelphia with the Iron Workers union that actually went out and set fires and did damage to non-union projects),

that’s too much – that’s where I draw the line – that’s when the unions have stepped outside their mission and become a problem rather than a benefit. I can’t honestly condone such activities. As I said at the beginning, I am somewhat pro-union, but not in the form they exist today.

Lincoln Sorensen
5 years ago
Reply to  WHS

WHS, we now have the minimum wage, the labor laws overseeing the ages and conditions under which employers can hire and fire, so the unions are an unnecessary burdens on industry and employers. Unions are simply a money source for the corrupt in higher places and could care less about the employees. If they really cared about employees, we would have all our factories within our borders operational instead of empty rusting memoirs of the “good ol’ days”.

Lincoln Sorensen
5 years ago
Reply to  Michelle A.

Michelle, the history is correct as you relate it and no one disputes that. The present is also as you have stated. The politicians prior to unions were lax in their jobs by not passing laws to prevent the factories and other business owners from taking advantage of their employees. Now that there are minimum wage laws and there are welfare benefits available to prevent starvation without a job, the workers will never have to fear the return of the sweatshops. Unions have outlived their usefulness and do nothing but impede production, dilute product quality and create a workplace attitude of divisiveness and “us against them” which eliminates pride in one’s work.

PaulE
5 years ago

Very good explanation of why unions have outlived their intended purpose. Today’s unions serve only one real purpose: To direct the collection of their dues to the various political entities that ensure the unions’ leadership can survive and thrive in an environment where the need for such unions no longer exists. In a way, you could look at it as a sort of protection racket where the unions payoff politicians, via campaign contributions, to prevent “right to work” legislation from becoming the workplace standard in a respective state. The “collateral damage” from the continued existence of such unions is of course lost jobs, frequently lower quality of product produced, business flight to more business friendly and cost effective environments, and of course the continuation of the old “us versus them” mentality that undermines a business’ competitive structure in a global economic environment.

Lincoln Sorensen
5 years ago
Reply to  PaulE

PaulE.. We are in total agreement regarding unions and their effect on America.

Bruster
5 years ago

Returning power to the people.

Gary T
5 years ago

I wish that Scott Walker were running for President of this country!

PaulE
5 years ago
Reply to  Gary T

He actually was Gary. The campaign consultants he was assigned by the GOP establishment leadership torpedoed his campaign in no time flat by destroying his message, getting him to “moderate his views” to the point of incoherence on the campaign trail and generally buried his accomplishments under a pile of political double-speak. I’m sure he learned a valuable lesson about dealing with the GOP leadership and following their recommendations.

Lincoln Sorensen
5 years ago
Reply to  PaulE

The establishment of both parties and the media feed at the trough of greed and wealth provided by the unions and special interests so they will stifle any candidate who advocates the power returning to “we the people”. Look what has happened to Dr. Ben Carson as soon as it was determined by the “establishment” that his message of “we the people” and speak up against political correctness was resonating with we the people and he was at one brief time leading in the polls. He got hammered and a large percentage of his supporters dropped out because the american mentality is to root for the perceived winner. That’s all it takes to keep the sheep crowded in the corner of the pasture , milling in circles so the shearer can pick them off and pluck them clean. As long as whoever we elect does not ban special interests and their lobbyists our elected employees will never vote for the benefit of we the people nor for what’s in the best interest of america. If a politician is running for a political seat he/she should not get a single vote. They obviously have been politicians and have been bribed and have voted as per the paid demands of special interests. I, in the future will only vote for an outsider regardless of the party affiliation. This presidential election I will vote first for Carson, and if that choice has been quelled I will vote for Trump, since Fiorina has dropped out. If there are no outsiders left, I will vote for the Republican candidate nominated because we do not need a criminal (Hillary) who has a trail of more than 20 “suicides ” in her wake, nor do we need a socialist to run this country. We have had a terrorist in command for the las two terms, now so it is time for common sense.

PaulE
5 years ago

Hi Lincoln,

You do know that the GOP establishment has done the exact same thing to Carson’s campaign as they did to Walker’s campaign right? The GOP supplied “campaign consultants” that were brought on board to “help Dr. Carson navigate the political process” forced out and replaced all of Carson’s long-time financial backers and campaign supporters, spent all his campaign funds on vague and ineffective TV and radio ads by the end of last October, which the GOP consultants get ten percent of by the way, and took him w-a-y off his original message and focus. Now his campaign is running on fumes and he’s in either 5th or 6th place in every national poll. Just an FYI, if you weren’t aware.

As for Trump, could you please explain why you find him a compelling choice? I’m serious. Please provide as much detail on the issues as you would like. I would really like to understand what exactly draws people to support him as a GOP candidate for President. I’ve followed Trump since the 1970’s when he started making deals with Abe Beame, then Mayor of NYC. So I know quite a bit about Trump and what he has actually done and what he stands for on a number of issues,

Lincoln Sorensen
5 years ago
Reply to  PaulE

PaulE… Yes. I am aware of the GOP establishment sabotaging Dr. Carson’s campaign. That is why in my first sentence a stated: ” The establishment of BOTH parties and the media, feed at the trough of greed and wealth provided by unions and special interests so they will stifle any candidate who advocates the return of power to “we the people”.
As for Trump. I have only one reason for casting my vote for a blowhard, such as he is. That being, as I stated, if he is the last of the outsiders still standing and he is the GOP nominee. I do not vote along party lines. I believe any American citizen who is so brainwashed as to consistently vots according to one party, regardless of stance on issues is grossly unpatriotic. I clearly stated I would vote for Dr. Carson as long as he is on the ballot as my first choice and trump as my next choice, because Fiorina has dropped out. That can hardly be construed as my “compelling choice. I went on to state that I do not vote according to party lines, but in this presidential election I WOULD vote REPUBLICAN no matter who the GOP nominee was, because any republican would be better than a socialist or a person with a trail of “suicides” in her wake all the way back to Arkansas.I will NOT be a non-voter because a non-vote is actually a vote for the Democratic nominee, and this election is way too critical to the survival to america as we knew it to not cast a vote for a Republican.

PaulE
5 years ago

Thanks for the response. I understand your criteria better now.

Gary T
5 years ago

I wish that Scott Walker were running for president of the U.S.A.

Jim
5 years ago

Wouldn’t it be great to see that on a national level?

Carol Demann
5 years ago

I think it is great, I live in Tax Kingdom California and would love to see this state become a Right to work state no one should have to pay a union for their Job and should not be forced to be in the union and state and Federal workers should need to contribute to their 401k If I had not been born and raised in California I would leave it but I raised my Girls here and have Grand Children also I keep hoping by the Grace of God this state could be saved but to many Democraps have settled in !

lisa
5 years ago

Good job Scott Walker…..this is how it works folks!

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