By Badger Institute
A Dane County judge on Monday, Dec. 2, struck down dozens of sections of the 2011 labor reforms dubbed Act 10, 13 years after the law was passed by a Republican legislative majority and signed by then-Gov. Scott Walker.
(NOTE: Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu are vowing to appeal a Dane County judge’s ruling. Read about that here.)
The reforms limited most unions in Wisconsin’s state and local government sectors to bargaining over wages, taking work rules, the design of benefits plans and other topics off the table. The law also required public-sector unions to regularly seek recertification from workers they purported to bargain for, required them to collect dues rather than having the money taken from employees’ paychecks by government employers, and required public sector employees to contribute toward their health benefits as most private-sector workers do.
The law had several far-reaching consequences, as the Badger Institute has reported.
On employee benefits, the law led to the eventual demise of an insurer owned by the Wisconsin Education Association Council, the WEA Trust. Before Act 10, about two-thirds of Wisconsin school districts were buying group health coverage from WEA Trust. In the first year after, the insurer lost about a third of its business, and by 2022, the insurer left the health coverage market. Districts reported massive savings — Kenosha Unified in 2019 saved at least $13 million by switching to a more competitive insurer.
The law also permitted school districts to switch away from paying teachers strictly on their seniority and post-graduate degrees. Some districts took the opportunity to institute flexible pay, offering more money to better teachers. By 2023, a Yale labor economist found that the pay reforms enabled districts to attract and retain better teachers.
“Act 10 led some teachers to leave the public school system altogether,” wrote economist Barbara Biasi. “Teachers who left flexible-pay districts were far less effective than those who left seniority-pay districts,” meaning Act 10 let districts drop weak teachers and keep strong ones. What’s more, she found that in flexible-pay districts, “the effectiveness of teachers who did not move or leave also increased immediately after the reform … suggesting that teachers in flexible-pay districts increased their effort.”
Or, as Walker told the Badger Institute on the reform’s 10-year anniversary, Act 10 made teaching a meritocracy again: “They can put the best and the brightest in the classrooms and keep them there.”
By the best estimate, the Act 10 reforms saved Wisconsin taxpayers between $18 billion and $31 billion since 2012, according to the MacIver Institute, by requiring public sector employees to contribute half the cost of their pension contributions and by making some contribution for health insurance premiums, as private sector workers usually do. Previously, they contributed nothing. As it is now, their share is about half the average private-sector worker’s contribution toward health coverage.
The savings are visible in the just-released brief from the Wisconsin Policy Forum reporting that state and local taxes in Wisconsin consume 9.9% of personal income, a new milestone for frugality. The figure follows a long drop in the tax burden from the 11.2% taken in 2011. That figure, in turn, was almost unchanged from 2002.
More broadly, Act 10 opened new possibilities for reforming local government. “Act 10 was really the epitome of that reform thinking, getting government back in the hands of the people,” Washington County Executive Josh Schoemann told the Wisconsin Institute for Law & Liberty. “All of a sudden, there was this cultural shift and logical shift in how government was going to work moving forward.”
This article is reprinted with permission from Badger Institute.
(NOTE: Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu are vowing to appeal a Dane County judge’s ruling. Read about that here.)
Other news items of importance
Conservative Supreme Court Justice says he will recluse himself in a pending case about Act 10. He was the chief legal counsel for then-Gov. Scott Walker and he drafted the law.
Liberal Supreme Court Justice Janet Protasiewicz had stated she will not recluse herself despite voicing her opinions about the case in her 2023 campaign.
The Wisconsin Institute For Law & Liberty created an April 2024 report by Will Flaners, Ph.D., entitled “Back To The Past: The Fiscal Threat of Reversing Act 10 in Public Education.”
Among the key findings of this report:
• Student-teacher ratios have not been negatively affected by Act 10. The number of students per
teacher in Wisconsin has stayed relatively constant at about 13.2 students per teacher.
• The decrease of public sector unions has stabilized. While there was a substantial decline in the
number of unions in the immediate aftermath of the passage of the law, recent declines have been far
more moderate.
• Restoring collective bargaining for teacher salaries could cost districts and the state nearly
$650 million annually. This number is based on the difference in the rate of growth in teacher salaries
observed from 2001-2011 compared to 2011-2021.
• Eliminating employee contributions to retirement would cost districts and the state about $422
million annually. Based on inflation-adjusted comparison of retirement spending in 2009 versus 2022.
• Eliminating employee contributions to healthcare would cost districts and the state about
$560 million annually. Based on inflation-adjusted comparison of healthcare spending in 2009
versus 2022.
• Numbers are conservative estimates of the total cost. This study does not take into account the
costs to municipalities from repeal, nor the salary costs for non-teachers.
• An end to Act 10 would likely lead to tough decisions for districts. One Superintendent we
spoke with said that ending Act 10 would likely lead to a need for larger class sizes, cuts to popular
programs, and an inability to offer higher compensation for high-demand teaching positions.
