For immediate release | March 28, 2011

[Madison, Wisc..] The push to settle local labor agreements before Wisconsin’s new collective bargaining law was implemented resulted in significant savings to taxpayers across the state, the MacIver Institute has learned.

“Clearly, the changes to the collective bargaining law have had a tremendous impact even before the law was enacted,” said Brett Healy, President of the John K. MacIver Institute. “Eighty percent of the nearly thirty school districts which entered into contracts for future years basically met Governor Walker’s standards for increasing contributions to health insurance and pensions.”

A review of media reports, public records and an examination of news tips show dozens of taxing authorities went to unprecedented efforts to beat the implementation clock for the new law.

Act 10 includes several changes in public employee compensation and bargaining powers. Under the new law, most school, state and local government employees would have to make a contribution to their pensions, 5.8% of pay for  most state employees, and approximately 12.6% of the total cost of their health care premiums. Also, many issues would no longer be subjects of collective bargaining and employee wages could not be raised by more than inflation each year, unless a referendum was passed. Government bodies would no longer collect union dues from employees and membership in public employee unions would no longer be mandatory for most state and local government workers in Wisconsin.

Union officials and legislative Democrats have gone to great lengths to delay publication of the bill, prompting a myriad legal challenges and efforts to block enforcement of the new law.

In the interim, some local boards and municipalities entered into accords with labor unions under the pre-existing law, and while the costs of those deals exceed those that will be reached as Act 10 is enacted, they still were better bargains than would have been expected had the legislation not been looming overhead.

The MacIver Institute’s analysis shows that 20 of the 29 School Districts met or exceeded the proposed requirement of a 5.8 percent employee contribution to pension costs and an employee contribution of at least 12 percent of health insurance premiums. Three more districts’ entered into contracts substantially similar to those benchmarks.

While a similar trend could not be found in the municipal and county government contract details MacIver analyzed, many local governments were able to squeeze significant concessions out of their unions as the threat of the new law loomed overhead.

“Local taxpayers would have been better off had these communities waited until Act 10 was published,” said Healy. “However it is undeniable that the mere passage of this law gave negotiators for school districts and municipalities the upper hand at the negotiating table for the first time in decades.”

Healy notes the City of Kenosha as an example where local government employee union leadership was willing to make monetary and work rule concessions in order to avoid, for a few years at least, the provisions of Act 10 regarding union dues collection and annual certification.

“In Kenosha they reined in some bonus payouts, modified overtime calculations, and restricted the number of sick and vacation days employees can bank,” said Healy. “In Chippewa Falls, we are finally seeing the end of longevity bonuses, a relic few in the private sector have ever heard of.”

Healy says this marks a new era in public sector compensation.

“The idea that a government worker is entitled to a salary bump just because they held onto that job for a certain length of time is antiquated,” said Healy. “As the research of The MacIver Institute as shown previously, very few government workers actually ever lose their job. So ending longevity payments and capping the number of days they can bank is a very positive trend for Wisconsin taxpayers.  Every taxpayer should be asking their local board if they too extend these type of side benefits to their government workers.”

Healy says regardless of how the drama surrounding the implementation of the new law plays out in the courts, one thing is certain: Taxpayers now have a stronger hand when negotiating with government employee unions.

“In the short term we are seeing the unions go to previously unheard of lengths to make concessions on wages, benefits and work rules just to keep the status quo regarding membership and union dues collection,” said Healy. “Things are only going to get better for the taxpayer in the long run when those items are off the table.”

The MacIver Institute’s data is available at their website www.MacIverInstitute.com.

Synopsis of recent contract agreements between government employee unions and…

School Districts

Counties

Cities

*** We are compiling the comprehensive list of labor contract developments. If you know of additional efforts or have information that can supplement the data, above, please let us know at mns@maciverinstiute.com