Act 10 Saves School District $18.4 Million in Benefit Costs

The controversial state law that eliminated most collective bargaining rights for school employees reduced benefit costs for the Racine Unified School District by $18.4 million last school year, according to a report released Monday.

The bulk of the savings came from reductions in the district's share of employee retirement costs, the report by the Wisconsin Taxpayers Alliance said. In the 2010-11 school year, Racine Unified paid $7.99 million toward pension costs for workers; in 2011-12, that dropped to about $25,378, the report said.

The district also saved more than $10.4 million in health insurance costs, according to the report, which was based on data that public school districts provide to the state Department of Public Instruction. In 2010-11, Racine Unified spent $46.99 million on health care costs; that fell to $36.57 million last school year.

$366 million saved statewide

School districts across the state reduced benefit costs by $366 million this year, according to the report, which the organization says is the first in-depth look at the effect of Act 10 and the 2011-13 state budget on Wisconsin schools.

Most of the statewide savings come from districts no longer paying the employee share of retirement, the group said.

Of $366.3 million in reduced benefit costs, $240.7 million — or 66 percent — was from retirement contribution savings. Before passage of the 2011-13 state budget, most school districts and other governmental entities paid both the employee and employer share of retirement costs. Now public workers are required to pay the employee portion of retirement.

Because employees can no longer bargain over benefits under Act 10, many school districts increased health insurance co-payments, required higher cost sharing by employees or changed health insurance providers to reduce costs.

In 2012, public school health insurance costs fell $90.7 million, or 24.8%, from 2011 levels, the group said.

Other highlights of the report:

• Total school district spending dropped $584 million in 2011-12, with 63 percent of that coming from benefit savings.
• Lower salary costs saved districts $124.9 million, while other cost-cutting totaled $93.1 million.
• Reduced salary costs were due to a combination of staff retirements and layoffs. In 2011-12, school districts employed 2,312 fewer staff than in 2010-11, a 2.3 percent reduction.

Report called GOP 'propaganda'

The report was not without some controversy, however.

Soon after it was released Monday, a group called One Wisconsin Now blasted it as "propaganda" to help Gov. Scott Walker as he "prepares to put Wisconsin’s children and public schools further in the hole by shifting resources to planned tax cuts to benefit the rich and corporations."

“Predictably, as Scott Walker begins making the case to hand out huge tax breaks to the rich and corporations, the corporate front group WISTAX tosses out propaganda to support his case,” said Scot Ross, executive director of One Wisconsin Now. “The Wisconsin Taxpayers Alliance is even more Republican than Wisconsin Manufacturers and Commerce, so this is hardly a surprise and their 'findings' should be taken with a grain of salt as big as Scott Walker's campaign finance report."

One Wisconsin Now said its review of campaign contributions made by board members of the Wisconsin Taxpayers Alliance showed that 92 percent of the $1.4 million in  donations went to Republicans.