Residents of one state continue to reap the benefits of a budget bill passed five years ago that has saved taxpayers over $5 billion, researchers say.
As a $3.6 billion deficit threatened to hit his state, Wisconsin Gov. Scott Walker, a Republican, championed the legislation in February 2011. Walker and the Republican-held legislature successfully balanced the budget, primarily through curbs on collective bargaining for government worker unions.
Since its implementation, Wisconsin Act 10 has saved state taxpayers $5.24 billion, according to a new report from MacIver Institute, a free-market think tank in the state.
Broken down, that means each household in Wisconsin during the past five years has saved roughly $2,290.
Brett Healy, president of MacIver Institute, told The Daily Signal that Walker was able to close a $3.6 billion deficit by pursuing collective bargaining reforms without raising taxes or cutting government services.
Those reforms, Healy said, included constraining the ability of public-sector labor unions to negotiate wages and terms of employment along with halting mandatory union membership for the state’s teachers and other public employees.
The law required government employees to contribute more money toward their pensions, which saved the state $3.36 billion. Those employees also were required to pay a larger portion of their health insurance, saving another $404.8 million.
Healy called the law “the taxpayer gift that will keep on giving forever.”
Not everyone in the state feels that way about it.
The restraints on collective bargaining stripped public unions of the authority to negotiate retirement savings, health care, and time off, leaving intact limited bargaining abilities for base pay.
This effectively weakened union power, leaving state employees with little incentive to pay member dues. Union membership across the state dropped sharply over the past five years.
The Wisconsin Education Association Council, the state’s largest teachers union, saw membership drop by more than half, from nearly 100,000 members in 2011 to under 40,000 in 2015.
Betsy Kippers, president of the union, said in a recent press release that Act 10 placed teachers “under attack.” She blamed the law for Wisconsin’s public school funding falling below the national average.
Union members unsuccessfully pushed to recall Walker, who survived that 2012 election and went on to win re-election in 2014. Healy said:
This sent a strong signal across the country to other conservatives, other civic-minded elected officials, that if you make the tough decision, but do what’s right for the taxpayer, you can not only survive the attack from big labor, but you can actually do better at the ballot box.
The MacIver study also found the law saved $2.2 billion for cities, towns, and school districts, Healy said, providing local officials with relief funds they could use for other services, such as additional teachers and more snow plows.
Act 10, he said, has “empowered” Wisconsin residents by giving them the choice of whether to join a union.
“Giving the individual the basic choice of whether or not they want to join an organization like a union is not draconian, it’s a basic fundamental principle of our country,” Healy said. “It’s amazing what happens when you give Wisconsinites a choice. They’re showing their displeasure with the union by walking away.”