Act 10, five years and $5 billion later

The Wisconsin Institute for Law and Liberty contributes to the Wall Street Journal:

Five years ago this summer, Wisconsin’s budget-repair law, better known as Act 10, went into effect. The legislation, which significantly curtailed collective-bargaining rights for public employees, was a signature part of Gov. Scott Walker’s effort to close the state’s $3.6 billion budget deficit. It sparked chaos in Madison: Tens of thousands of protesters occupied the capital. Fourteen Democratic state senators fled across state lines in an effort to stop the bill from passing. When it became law anyway, opposition culminated in a failed effort to recall Gov. Walker in 2012.

Looking at the law’s results half a decade later, it is safe to say that it was worth the trouble. Wisconsin’s example ought to embolden reformers everywhere: It’s possible to reform spending on public employees without damaging the quality of services.

Act 10 has saved taxpayers $5 billion since June 2011, according to the John K. MacIver Institute, a free-market think tank in Madison. Local school districts, government agencies and municipalities have acquired more affordable health-care plans, allowing them to put money into classrooms and critical services. Even Milwaukee Mayor Tom Barrett, Gov. Walker’s opponent in the 2012 recall election, used Act 10 to save his city nearly $20 million.

Because the law’s financial benefits have always been indisputable, Democratic lawmakers and teachers unions instead claim that Act 10 has led to increased class sizes and teacher shortages. A 2011 attack ad from a union-funded group claimed, without evidence, that the law was “so devastating that students are without chairs and a government survey found 47 kids in a classroom.” This earned a “false” rating from an independent fact-checker, but similar arguments too often go unchallenged. The top Democrat in the state senate, Minority Leader Jennifer Shilling, claimed only days ago that the “sun is setting on public education.”

A new study from our organization, the Wisconsin Institute for Law and Liberty, disputes that conventional wisdom. The Institute’s Will Flanders, along with Marty Lueken of the Friedman Foundation, conducted a comprehensive survey of Act 10’s effect on teachers’ age, experience, salary and benefits, as well as classroom size. Using data from the Wisconsin Department of Public Instruction and the U.S. Education Department, the authors found that dire claims about Act 10 are greatly exaggerated.

For instance, the report shows that the number of students per teacher in Wisconsin has kept pace with surrounding states. Between 2009 and 2013, the ratio in Wisconsin increased by only 0.4 students per teacher, compared with 0.6 in Michigan and Iowa. The average age of Wisconsin teachers dropped 1.7 years between 2011 and 2014, and their average experience declined by three-quarters of one year. Hardly a radical undermining of the Badger State’s public schools.

The average teacher’s base salary did decline by $2,095, or 3.8%, between 2009 and 2014. But Wisconsin teachers’ pay remains above the U.S. average. Besides, thanks to Act 10 school districts have plenty of tools beyond base salary to attract, retain and reward good teachers: signing and retention bonuses, performance-based stipends, and tuition reimbursement for master’s degrees or advanced certifications. When this other compensation is included, Act 10 had no discernible effect on pay when compared to surrounding states.

Opponents of Act 10 have been quick to assert that the law led to a decline in the number of teachers in the state. But Wisconsin was already losing teachers before it was implemented. Between 2008 and 2011, the number of fully licensed teachers in the state shrank by 2.2%. Since 2012 the figure has dropped only 0.1%. Over the years the decline in teachers has roughly tracked the decline in student enrollment caused by an aging population with fewer children.

Public unions will continue to use anecdotes to suggest that Act 10 represented a death knell for Wisconsin schools. But the evidence tells another story. The law’s critics, who blame it for every negative trend in Wisconsin education over the past five years, will have to explain why many of the same changes occurred in Michigan, Illinois, Minnesota and Iowa—neighboring states without similar laws.

The results validate Gov. Scott Walker, his allies in the legislature and the millions of conservatives who rallied to support their cause. Wisconsin’s story should encourage other governors who face increasing budget pressure to reform ballooning pensions and benefits for public employees. Many may have looked to the backlash in Wisconsin and decided the fight wasn’t worth it. But as time passes, it becomes more clear than ever that it was.

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One thought on “Act 10, five years and $5 billion later

  1. The savings that you outline came from the take home pay of public employees and unfortunately left the economy, both local economies and the state economy over the past 5 years. This downsized demand and the Wisconsin economy stalled and the well paying jobs that were promised didn’t develop and the new norm for employment in Wisconsin has become low pay/ low or no benefit jobs such as big box retail and service industry which bodes poorly for an economic comeback in Wisconsin. The public employees didn’t take a one time hit. In each of the 5 years you present their take home pay remained reduced and consequently their role as a consumer in the Wisconsin economy remains in the cellar. Cuts in state funding of public schools didn’t allow the savings to be used locally further damaging the local and state economy and forcing referendums which are passing in records numbers resulting in increased borrowing and further hitting the pocket books of citizens statewide and leaving even less money for Wisconsin’s populace to use for consumption. The end result is diminishing demand that only results in companies cutting back on production and jobs that pay less and offer fewer benefits. Currently we are in a self-fulling downward economic spiral that only lengthens the gaps between those at the top and the remaining 90%. Unless this is turned around there will be no consumer base to support even the 10% at the top. Greed and politics that put party before country and political gamesmanship before people is bleeding this state of any hope of economic recovery nor economic well being for most of our citizens

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