According to a recent report by the MacIver Institute, Wisconsin’s landmark collective bargaining reform bill, Act 10, has saved taxpayers over $15 billion dollars since it was enacted 11 years ago.
Passed in 2011, Act 10 limited union negotiations to salary, giving local governments more flexibility for finding potential savings and keeping their budgets balanced. To increase salaries above the rate of inflation, Act 10 required a public referendum to approve them. In addition, Act 10 required government employees to contribute something to their own pensions and health benefits, instead of leaving them solely for taxpayers to pay.
According to the MacIver Institute, requiring public employees to contribute to their own pension has saved taxpayers over $10 million. Meanwhile, thanks to the requirement that public employees pay 12.6% of their own health benefits, “local governments have saved $2.22 billion, the state and university system have saved $1.57 billion, and school districts have saved $1.39 billion over the past eleven years on health insurance.”
As for the public employees, the MacIver Institute report points out that “a state employee in Wisconsin pays $2,952 a year for the regular family plan with dental. According to the Kaiser Family Foundation, the average annual worker premium contribution is $6,015 a year. State employees pay roughly half of what the average taxpayer pays for health insurance and the state employee is receiving platinum coverage for that reasonable amount.” In other words, public workers may have to contribute more now than they used to, but they are still getting a great deal compared to their counterparts in the private sector.
Since Act 10’s passage, government health expenditures, which had been rising at an unsustainable rate, have plateaued. Per the MacIver report, “just last year, after switching health insurance plans thanks to the management freedom from Act 10 to make such decisions, the Baraboo School District reported that it saved $1 million in just one year. When the school district decided to make the switch back in 2019, it was hoping to save approximately $430,000 a year. The switch in health care plans saved the district an astonishing 20%.”
Act 10 has saved Wisconsin taxpayers billions through entitlement reform. Wisconsin lawmakers, in turn, have used those savings to enact billions in tax relief. Since Act 10 was implemented, Wisconsin legislators have approved multiple rounds of income tax relief that has allowed Wisconsin residents to keep billions more of their own income that would’ve otherwise gone to state government. “Collective bargaining is not a right,” former Governor Scott Walker said, adding that “it is an expensive entitlement.” Thanks to Act 10, that entitlement is now much less costly to Wisconsin taxpayers. Despite the hysterics at the time of its passage, more than a decade later Act 10 remains an enduring reform that continues to pay dividends for Wisconsin taxpayers.