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WI: What happens to Act 10 savings under renewed collective bargaining?

By   /   September 19, 2012  /   2 Comments

By M.D. Kittle | Wisconsin Reporter

MADISON — While there is plenty of disagreement over the legal merits of Wisconsin’s Act 10, there’s no denying the cost savings many local governments have realized through the curtailing of collective bargaining for public employees.

A Dane County judge’s ruling declaring many of the law’s provisions “null and void” — at least at the local government level — has sparked confusion and questions about how the return of key elements of collective bargaining would impact municipal, county and school district budgets. The decision, subject to appeal and stay, comes just as local governments around the state are putting together their budgets.

NOW WHAT?: Act 10 ruling could bargain away Act 10 savings for local governments.

For administrators like Sue Schnorr, director of business services for the Fond du Lac School District, it’s a game of wait-and-see.

“I don’t see anything we can do at this point. We’re just following the news and holding out to see what happens,” she said.

Schnorr is working on the next budget without a clear indication on whether the district needs to head back to the bargaining table soon, and if so, what would a new negotiated contract look like.

The Fond du Lac School District, like many others in the state, is living under the new —  or is that old — reality of Act 10, which curbed collective bargaining for most public-sector unions in the state. Last week’s ruling struck down, among other core points, the law’s prohibition  on collective bargaining on anything except total base wages up to the cost of living, and the requirement of a referendum for wage increases beyond the rate of inflation.

Schnorr estimates Act 10 resulted in savings of about $3.5 million for Fond du Lac’s public schools, because the district was able to hold the line on wages and increase the amount employees paid for their health insurance and pensions. The district expects to save another $300,000 on another labor agreement with custodial employees.

While local governments have dealt with deep cuts in state aid, much of the revenue gap has been filled through Act 10 savings —  savings, unions argue, that have been unconstitutionally borne on the backs of public employees.

Several districts and municipalities have reported significant savings.

The law, in whole, has saved taxpayers more than $1 billion, according to The Economic Impacts of the Wisconsin Budget Repair Act, released in May by Beacon Hill Institute, a prominent free market think tank.

But what happens now that the law has been judged null and void?

There’s still a good deal of dispute over that question.

“I think it’s all going to depend on what point it puts us back to,” Schnorr said. “If it put us back to the collective bargaining deal we had in place before Act 10, our district would have to find $4 million.”

Steve Johnson, executive director of Winnebagoland UniServe , a Fond du Lac-based group of local teachers unions in southeastern Wisconsin, said the organization’s position is to operate under the contracts that predated Act 10.

“We would argue that the contract is still in effect,” he said.

Fond du Lac’s previous contract expired, opening up the implementation of the new law.

Johnson said Winnebagoland, one of 30 UniServ organizations statewide affiliated with the Wisconsin Education Association Council, the state’s largest teachers union, hasn’t demanded to the district head to the bargaining table.

“We’re waiting on WEAC legal for more advice,” he said. “We don’t want to be reactionary. It’s important for us to wait.”

Most teachers unions, it appears, are taking a wait-and-see approach.

Madison Teachers Inc., which brought the suit in Dane County, isn’t wasting any time.

The union on Tuesday sent a letter to James Howard, president of the Madison Metropolitan School District board seeking to restart negotiations.

District interim superintendent, Jane Belmore, told The Associated Press that she doesn’t want to take any action with so many uncertainties surrounding the case.

Howard last week told Wisconsin Reporter that the board hasn’t come to a final decision on what to do with nearly $12 million in increased state aid, a surprise 25 percent boost thanks to the district’s blossoming 4K program.

Before word came down of the increase, district officials decried the state budget, pushed by Gov. Scott Walker and the Republican majority in the Legislature, as inflicting devastating cuts to the district’s budget. Taxpayers face a significant tax increase under the current proposed budget, up for revision.

Howard said the board isn’t considering any new program initiatives with the aid increase, but that it would like to lift the tax burden  off of local taxpayers as much as possible.

“One of our main objectives is we realize the public is hurting and how incomes have fallen,” he said, noting the district would like to bolster its reserve fund, too.

A new collective-bargaining deal could raise employee compensation, shifting some of Madison school district’s increased state aid to pay for wages and benefits.

Schnorr said if Fond du Lac administrators have to go back to the bargaining table, they will do so. She and Johnson said labor and management have had a good working relationship in the past, and they intend to keep it that way.

But there are no guarantees that renewing contract negotiations will maintain the status quo on employee compensation.

“The state is not going to give us any more money,” Schnorr said. “We have to continue to hold the line on” expenses.

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M.D. Kittle is national First Amendment reporter at Watchdog.org. Contact him at mkittle@watchdog.org.

  • http://pulse.yahoo.com/_JN2JHDP2W7YFK26G6W23FYQJ6Q Dawn

    Public unions need to be banned altogether. They have ruined entire countries such as Greece, and have cities all over the country declaring bankruptcy. Enough already!

  • http://www.facebook.com/michael.schwister Michael Schwister

    So only you are entitled to Constitutional Rights?

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