* Maureen Martin is senior fellow for legal affairs at The Heartland Institute. A more complete bio appearson page 23.

1 Wisconsin Budget Project, “Biennial Budget,” undated (circa 2011).[http://www.wisconsinbudgetproject.org/primer_biennialbudget.html]

2 Wisconsin Department of Administration, “Wisconsin Budget in Brief,” January 31, 2011, p. 2.[http://www.doa.state.wi.us/debf/pdf_files/bib1113.pdf]

3 Ibid.; see also Scott Walker, “[Partial] Veto Message, 2011 Wisconsin Act 32,” June 14, 2011.[http://docs.legis.wisconsin.gov/2011/proposals/ab40]

4 2011 Wisconsin Act 10.

5 2011 Wisconsin Act 32.

6 The text of Act 10 is 45 pages long and contains numerous provisions, many accomplishing importantreforms. The text is available here: [http://docs.legis.wisconsin.gov/2011/related/acts/10.pdf]. Act 32 text isavailable here: [http://docs.legis.wisconsin.gov/2011/related/acts/32].

© 2012 The Heartland Institute. Nothing in this report should be construed as supporting or opposing anyproposed or pending legislation, or as necessarily reflecting the views of The Heartland Institute.

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May 2012

Wisconsin’s Act 10:A Partial Fix for the State Budget Deficit

By Maureen Martin*

Introduction

Early in 2011 the state of Wisconsin faced a $3.6 billion deficit for the biennial budget year1

from July 2011 through June 2013.2 In March 2011 the Wisconsin legislature passed two billslargely consistent with the recommendations of newly elected Gov. Scott Walker.3 One bill (Act10) enacted administrative changes to close the deficit.4 The second bill (Act 32) enacted abudget based on the Act 10 administrative changes.5 Walker signed both of them (jointly referredto here, unless otherwise indicated, as Act 10).6

7 PolitiFact/Wisconsin, “Gov. Scott Walker says he eliminated Wisconsin’s $3.6 billion deficit withoutraising taxes,” Milwaukee Journal Sentinel, January 29, 2012.[http://www.politifact.com/wisconsin/statements/2012/jan/29/scott-walker/gov-scott-walker-says-he-eliminated-wisconsins-36-/]

8 Matthew DeFour, “Governor’s office says school survey shows benefits of cuts,” Oshkosh Northwestern,April 6, 2012. [http://www.thenorthwestern.com/apps/pbcs.dll/article?AID=2012204070601]

9 Brady Dennis and Peter Walsten, “Obama joins Wisconsin’s budget battle, opposing Republicananti-union bill,” Washington Post, February 18, 2011.[http://www.washingtonpost.com/wp-dyn/content/article/2011/02/17/AR2011021705494.html]

10 Lachlan Markay, “Obama Touts Federal Worker Pay Freeze That Isn’t,” The Heritage Foundation, July6, 2011.

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Act 10 virtually eliminated the $3.6 billion deficit7 by reducing state spending, especially statefunding for local school district K-12 education, which was cut by about $749 million.8 To makeup the shortfall, Act 10 also provided school districts with measures previously unavailable tothem to accomplish spending reductions.

Most controversially, Act 10 largelyeliminated collective bargaining for generalpublic union members employed by the state,local government, and schools. As many as100,000 teachers and other union supportersinvaded the state capitol in Madison inFebruary to protest these measures, and 14state senators fled the state rather than allow a

vote in the senate to go forward. President Barack Obama weighed in, calling the collectivebargaining loss proposed in the bill “an assault on unions,”9 ignoring the fact collectivebargaining is banned for federal government workers. (He himself later froze federal pay.10)

The eyes of the nation were on Wisconsin. Opponents of the bill predicted the law would havedire consequences for educational quality: fewer teachers, larger class sizes, program cuts, andworse.

According to early results, however, in all but a handful of districts the dire predictions have notcome true. All evidence points to schools functioning normally. Many districts have balancedtheir budgets for the first time in years. Some even have surpluses and are hiring more teachersand reducing class size.

Certainly, it’s early in the game. But a review of Wisconsin spending in the recent pastestablishes beyond a doubt that deficits were mounting; in 2009, the state faced the largest deficitin its history. A one-time injection of federal funds provided a bailout for that biennial budget,along with a huge increase in taxes, but there was no prospect for another bailout. Something hadto be done.

Many districts have balanced theirbudgets for the first time in years.Some even have surpluses and arehiring more teachers and reducingclass size.

11 PolitiFact/Wisconsin, “Kathleen Falk says Gov. Scott Walker didn’t balance the budget and presidedover a larger deficit,” Milwaukee Journal Sentinel, March 18, 2012.[http://www.politifact.com/wisconsin/statements/2012/mar/18/kathleen-falk/kathleen-falk-says-gov-scott-walker-didnt-balance-/]

12 John McCormack, “Wisconsin’s Property Taxes Drop for First Time in 12 Years,” The Weekly Standard,April 16, 2012.[http://www.weeklystandard.com/blogs/wisconsins-property-taxes-drop-first-time-12-years_637099.html]

13 “Walker reports state budget surplus,” WTAQ radio, May 11, 2012[http://wtaq.com/news/articles/2012/may/11/walker-reports-state-budget-surplus/]

14 “State of Wisconsin Cash Flow Vastly Improved from Last Year,” MacIver News Service, January 25,2012. [http://maciverinstitute.com/2012/01/state-of-wisconsin-cash-flow-vastly-improved-from-last-year/]

15 Jason Stein, “Does Wisconsin Have a Budget Deficit?” Milwaukee Journal Sentinel, January 22, 2012.[http://www.jsonline.com/news/statepolitics/does-wisconsin-have-a-budget-deficit-4o3s9ro-137863973.html]

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Act 10 reduced spending,11 and taxes did not increase but rather fell slightly, for the first time in12 years. Had nothing been done, property taxes for the average homeowner would haveincreased by $700.12 In addition, Wisconsin’s Department of revenue predicts the state will havea $154 million budget surplus by the end of the budget period in 2013 and will place half of it inthe state’s Rainy Day Fund.13 In 2012, the state’s cash flow has been smoother than in previousyears, eliminating the need for temporary borrowing for the state’s general fund from other fundswith temporary surpluses. Such fund-shifting was the norm in prior years.14

Some Caveats

While Act 10 was clearly the right choice forWisconsin taxpayers, it is premature forunrestrained celebration of the measure’sbenefits.

The deficit has been eliminated only by useof a cash-basis accounting system, whichrecognizes income only after it actually arrives in the state’s coffers and recognizes expensesonly after the bills are actually paid. Most publicly held companies use an accrual basisaccounting system under Generally Accepted Accounting Principles (GAAP). Accrual-basedaccounting is forward-looking, recording both anticipated income and expenses incurred but notyet paid. When calculated under accrual-based accounting rules, the state has a $3 billion deficit.State officials recognize this and say Act 10 is only the first step; the remaining deficit is beingaddressed over time.15

A larger threat to Act 10’s already considerable success comes from constitutional challengesbrought by Wisconsin unions in the federal court in Madison. As discussed below, the judgethere in late March 2012 upheld most Act 10 limits on collective bargaining, rejecting theunions’ argument the act’s exemption of police and fire unions from these provisions wasunconstitutional. If that ruling is appealed and reversed—it’s too early to know—then Wisconsin

While Act 10 was clearly the rightchoice for Wisconsin taxpayers, it ispremature for unrestrained celebrationof the measure’s benefits.

16 Jason Stein, Patrick Marley, and Lee Bergquist, “Walker’s budget cuts would touch most Wisconsinites,”Milwaukee Journal Sentinel, March 1, 2011. [http://www.jsonline.com/news/statepolitics/117154428.html]

17 In 2001–02, revenue bonds were issued returning $681 million to the state general fund. In 2002, suchbonds returned $598.3 million to the state, which it used for shared revenue payments. The tobaccosettlement money, totaling $1.56 billion through 2017, was to have reimbursed the state for smokers’health costs, among other things. Wisconsin Legislative Fiscal Bureau, “Tobacco Settlement andSecuritization and Repurchase Transactions,” January 2011.[http://legis.wisconsin.gov/lfb/publications/Informational-Papers/Documents/2011/81_Tobacco%20Settlement%20and%20Securitization%20and%20Repurchase%20Transactions.pdf]

18 “Taxpayers Get Chance to Sound Off on Transportation Fund Raids,” MacIver News Service, July 30,2010. [http://maciverinstitute.com/2010/07/taxpayers-get-chance-to-sound-off-on-transpo-fund-raids/]

19 “Wisconsin Transportation Fund Advisory Referendum (2010), Ballotpedia.[http://ballotpedia.org/wiki/index.php/Wisconsin_Transportation_Fund_Advisory_Referendum_(2010)]

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government will have difficult decisions to make, all over again.

History of Budget Manipulation

Budget deficits have been an annual event in the past decade in Wisconsin. They were typicallyplugged with what one legislator called “funny money,”16 one-time fixes and illegal diversionsof cash from segregated funds supposedly restricted for specific purposes.

For example, to fix deficits in the 2001–02budget, the state securitized about $1.5 billionin tobacco litigation settlement paymentsscheduled to come in through 2017, in returnfor a lump sum payment of about $1.2 billion.In those two years, all of the tobaccosettlement money went into the general fund,where it was used for general purposes and

for shared state revenue payments to counties and municipalities.17 Sixteen years’ worth oftobacco money thus vanished into the black hole of the general fund.

Since 2003, almost $1.3 billion has been shifted—some would say stolen—by the legislaturefrom the transportation fund and used to support general state spending. This fund, whichconsists of proceeds from gasoline taxes and vehicle registration fees, is supposed to be usedonly for road repairs and other transportation projects.18 In 2010, voters in 52 Wisconsin countiesapproved an advisory referendum to halt such transfers by a vote of 70.5 percent to 28.6percent.19

For the 2007–09 budget year, Gov. Jim Doyle (D) and the legislature transferred $200 millionfrom the Injured Patients and Families Compensation Fund to offset deficit spending. That fundwas established in 1975 to pay medical malpractice judgments against health care professionalsin excess of their malpractice insurance coverage. Created by annual fees paid by theseprofessionals, the fund was denominated as irrevocable by the legislature. The WisconsinSupreme Court in 2010 held the transfer was unconstitutional because the professionals had a

Budget deficits were typically pluggedwith one-time fixes and illegaldiversions of cash from segregatedfunds supposedly restricted forspecific purposes.

20 Wisconsin Medical Society, Inc. v. Morgan, 2010 WI 94, 328 Wis. 2d 469 (2010).[http://www.wicourts.gov/sc/opinion/DisplayDocument.pdf?content=pdf&seqNo=52424]

21 Jason Stein, “State to repay Malpractice Fund Wednesday,” Milwaukee Journal Sentinel, August 2,2011. [http://www.jsonline.com/news/statepolitics/126583773.html]

22 Signe Brewster, “Doyle Signs State Budget by Deadline,” Badger Herald, July 3, 2009.[http://badgerherald.com/news/2009/07/03/doyle_signs_state_bu.php]

23 Steven Walters and Stacy Forster, “Stimulus package to mean $3.5 billion for Wisconsin, Doyle says,”Milwaukee Journal Sentinel, February 12, 2009.[http://www.jsonline.com/news/statepolitics/39509997.html]

24 Patrick Marley, Steve Schultze, and Steven Walters, “Doyle signs budget, vetoes proposed county salestax increase,” Milwaukee Journal Sentinel, June 29, 2009.[http://www.jsonline.com/news/statepolitics/49434702.html]

25 Wisconsin Department of Administration, supra note 2, p. 6.

26 Legislative Fiscal Bureau, “Summary of Provisions of 2011 Act 10,” 2011, undated, p. 857.[http://legis.wisconsin.gov/lfb/publications/budget/2011-13 Budget/documents/act32/act%2010.pdf]

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property interest in the fund.20 (Walker’s 2011–12 budget restores these funds.21)

By 2009 the budget deficit had reached$6.6 billion, the largest in state history.22 Inthat year the Wisconsin legislature partiallycancelled out the deficit by using about$2 billion in one-time-only federal stimulusfunds.23 That budget also increased taxes a total of $1.4 billion, including higher taxes ontelephone lines, cigarettes, income, and capital gains.24

None of those measures was enough to wipe out the deficit, though, and, by late 2010 itamounted to about $3.6 billion. “Wisconsin’s budget is broken due to an overreliance onone-time fixes, illegal transfers, unsustainable federal funding, and economic weakness due tohigh taxes and job-killing regulations,” Walker said, vowing to repair the problem. He proposedAct 10.25

Act 10 Enactment

Legislative History

Act 10 (the administrative bill) was introduced in both houses as identical companionbills—Senate Bill 11 and House Bill 11—in mid-February 2011. On February 15, 2011, the JointCommittee on Finance held a public hearing and recommended, by a vote of 12 to 4, passage ofboth bills as amended.26

The senate adopted the joint committee version on February 17, 2011—a day after 14

By 2009 the budget deficit had reached$6.6 billion, the largest in state history.

27 Bill Glauber, Jason Stein, and Patrick Marley, “Democrats flee state to avoid vote on budget bill,”Milwaukee Journal Sentinel, February 17, 2011.[http://www.jsonline.com/news/statepolitics/116381289.html] They returned to Wisconsin on March 10,2011. Bill Glauber and Tom Held, “Democratic senators return to Madison to tell crowd fight isn’t over,”Milwaukee Journal Sentinel, March 12, 2011. [http://www.jsonline.com/news/statepolitics/117862214.html]

28 The Wisconsin Constitution requires a quorum for passage of any legislation “which imposes, continues,or renews a tax, or creates a debt or charge, or makes, continues or renews an appropriation of public ortrust money, or releases, discharges or commutes a claim or demand of the state. …” WIS. CONST.article 8, §8.

29 Legislative Fiscal Bureau, supra note 26, p. 857.

30 Ibid., p. 858.

31 Ibid.

32 Ozanne v. Fitzgerald, Case No. 11CV1244 (Dane County Circuit Court March 18, 2011) (grantingpreliminary injunction). [http://www.wispolitics.com/1006/110318Sumi_decision.pdf]

33 Ozanne v. Fitzgerald, Case No. 11CV1244 (Dane County Circuit Court May 26, 2011) (grantingpermanent injunction). [http://graphics8.nytimes.com/packages/pdf/national/052611-ruling-sumi.pdf]

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Democratic senators had left the state for Illinois.27 Because a quorum28 was not present,however, a final vote could not be taken. On February 25, 2011, the assembly passed AB 11 by avote of 51 to 17 and sent it to the senate.29

On March 9, 2011, the senate asked for appointment of a conference committee, and theassembly agreed. The committee adopted a new version of AB 11, removing funding provisionsrequiring a quorum. On the same day, the senate approved the bill by a vote of 18 to 1. Theassembly concurred on March 9, by a vote of 53 to 42. Walker signed the bill, by then known as2011 Act 10, on March 11.30

The Litigation

Five days later, on March 16, 2011, DaneCounty (Madison) District Attorney IsmaelR. Ozanne filed suit, on several grounds, inDane County Circuit Court seeking atemporary restraining order and a permanentinjunction against publication of Act 10, thelast step in the legislative process enacting

that administrative bill. Most importantly, the suit alleged that the senate violated the state’sopen meetings act in passing it. Ozanne sought a judgment declaring Act 10 void.31

He got everything he wanted. On March 18, 2011, Dane County Circuit Court Judge MaryannSumi granted the preliminary injunction,32 and on May 26, 2011, she granted a permanentinjunction voiding the law and enjoining its publication.33 She summarily dismissed a statutory

The Dane County district attorneysought a temporary restraining orderand permanent injunction againstpublication of Act 10.

34 Ibid., p. 10. See Wis. Stat. §19.87.2.

35 Ibid., pp. 14–15.

36 Ozanne v. Fitzgerald, Case No. 11CV1244 (Dane County Circuit Court May 26, 2011) (findings of fact)at ¶18. [http://host.madison.com/pdf_f292a1d2-87a6-11e0-b655-001cc4c03286.html]

37 Ed Treleven and Mary Spicuzza, “Judge bars further implementation of collective bargaining law,threatens sanctions,” Wisconsin State Journal, March 30, 2011.[http://host.madison.com/wsj/news/local/govt-and-politics/article_9bb38eb8-5a14-11e0-a6ee-001cc4c03286.html#ixzz1rVWglSiG]

38 Ozanne v.. Fitzgerald, Case No. 2011 WI 43 (June 14, 2011), ¶15.[http://wicourts.gov/sc/opinion/DisplayDocument.pdf?content=pdf&seqNo=66078]

39 Ibid., ¶18.

40 Ibid., ¶46.

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exception to the open meetings act, stating the act did not apply to conflicting legislative rules.34

She also dismissed, in cursory fashion, a 28-year-old state supreme court ruling holding thecourts have no power under the state constitution to determine whether the legislature followedits own rules.35

Sumi further found Act 10 void under theopen meetings act because the committeemeeting room had insufficient seatingcapacity for the public and inadequate noticewas given.36

She also sternly warned state officials: “I must state that those who act in open and willfuldefiance of the court order place not only themselves at peril of sanctions, they also jeopardizethe financial and the governmental stability of the state of Wisconsin.”37

Subsequent appellate proceedings were dismissed or denied by the state supreme court. On June14, 2011, the court declared Sumi’s decision “void ab initio” in a 4 to 3 ruling. It also affirmedthe validity of Act 10.38

Supreme Court Justice David Prosser began his concurring opinion by noting:

This case is an offshoot of the turbulent political times that presently consumeWisconsin. In turbulent times, courts are expected to act with fairness and objectivity.They should serve as the impartial arbiters of legitimate legal issues. They should notinsert themselves into controversies or exacerbate existing tensions. …39

Prosser stated the judiciary lacks the power to interfere with the legislative process, and thatpublication is an inherent part of that process. He chided Sumi for interfering and for ignoringlong-settled law: “This is not a close question,” he wrote.40

As for the open meetings act, Prosser noted the meeting at issue was hardly secret. The room was

On June 14, 2011, the state supremecourt affirmed the validity of Act 10.

41 Ibid., ¶61.

42 Ibid., ¶72.

43 Assembly Bill 40, Wisconsin Legislative Documents, 2011-12 Wisconsin Legislature.[https://docs.legis.wisconsin.gov/2011/proposals/ab40]

44 The text of Act 10 is 45 pages long and contains numerous provisions, many accomplishing importantreforms. The text is available here: [http://docs.legis.wisconsin.gov/2011/related/acts/10.pdf].

45 Wisconsin Department of Administration, supra note 2, p. 3.

46 Matt Patterson, “The Battle for Wisconsin: Scott Walker vs. Public Employee Unions,” Capital ResearchCenter, May 2011, p. 2. [https://www.capitalresearch.org/pubs/pdf/v1304359513.pdf]

47 Wisconsin Department of Administration, supra note 2, p. 21.

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“packed with reporters and television cameras,” the entire proceedings were televised across thestate, and thousands of demonstrators were present outside the building at the time of themeeting. He attached to the opinion a photo taken in the meeting room, lest there be any doubt.41

He concluded: “Only a clear constitutional violation would justify voiding 2011 Wisconsin Act10—and then only after the Act was published. There is no constitutional violation in thiscase.”42

Act 10 was published on June 28 and became law the next day.

The Budget Bill

Meanwhile, the budget bill (AB 40) was proceeding through the legislature. On June 14, 2011, itwas approved by the assembly by a vote of 60 to 38. On June 16, 2011, it was approved by thesenate by a vote of 19 to 14. It was signed by Walker on June 27, 2011.43

Summary of Act 10 Provisions and Current Status

Act 1044 reduces state spending over the biennial budget by $4.2 billion, a 6.7 percent decreasefrom the prior biennial budget. It caps local property taxes unless growth in the tax base occurs.45

As noted above, spending reductions include a decrease in state aid to K-12 education of about$749 million.

To enable schools to make up for losses in state aid, the bill includes four important provisions.46

# First, teachers and other public employees are required under Act 10 to contribute 5.8 percentof their salaries toward the cost of their pensions. Employees are also now required to pay12.6 percent of their health insurance premiums.47 These Act 10 changes alone are expectedto save school districts—there are 426 districts in the state, serving 881,886 students—a total

48 “Wisconsin Schools Already In Line to Save Hundreds of Millions of Dollars Through Newly NegotiatedTeacher Contracts,” MacIver Institute, July 13, 2011[http://maciverinstitute.com/2011/07/wisconsin-schools-already-in-line-to-save-hundreds-of-millions-of-dollars-through-newly-negotiated-teacher-contracts/]

49 Local and state police and local firefighters are exempt, as discussed below.

50 Legislative Fiscal Bureau, supra note 26, p. 896.

51 “Escaping the financial shackles of WEA Trust insurance,” Education Action Group, with support fromthe MacIver Institute, Fall 2010, pp. 4–6.[http://www.publicschoolspending.com/wp-content/uploads/2010/11/WEATrustfinalreport1.pdf]

52 Christian D’Andrea, M.P.P., “How Wisconsin School Districts are [sic capitalization] Saving Money as aResult of 2011’s Act 10 Legislation,” John K. MacIver Institute for Public Policy, September 2011, p. 4.[http://maciverinstitute.com/2011/09/mi-report-chronicles-success-of-wisconsin-budget-reforms/]

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of $451 million.48

# Second, collective bargaining is now limited for general employee unions, though not forpublic safety employee unions such as local and state police and firemen.49 Collectivebargaining remains available for “wages,” but excludes items such as overtime, merit pay,performance pay, pay schedules, and automatic pay progression. Increases in base pay arelimited to the increase in the consumer price index.50

# Third, Act 10 prohibits local government from collecting union dues, any employee can optnot to pay them, and union representation is to be recertified annually in a secret ballot.

# Fourth, school district administrators are now free to purchase health insurance throughcompetitive bidding, thus breaking the stranglehold of health insurer WEA Trust, founded bythe dominant teachers union in the state, the Wisconsin Education Association Council(“WEAC”). This aspect of Act 10 alone offers the potential for enormous savings.

Of Wisconsin’s 426 school districts, 64 percent purchase health insurance from WEA Trustbecause WEAC locals formerly required, in their collectively bargained contracts, thatschool districts purchase health insurance from the WEAC captive insurer, regardless of howmuch the insurance cost. Estimates are that competitive bidding for health insurance willsave schools between $68 million and $143 million per year.51

These estimates are probably too low. The John K. MacIver Institute for Public Policy(MacIver) reported last fall schools using competitive bidding to purchase health insurancesaved $211 per year per pupil. If every district in the state saved that amount per pupil, thetotal savings per year would be more than $176 million.52

A Short History of Teachers Unions in Wisconsin

The uproar in Madison during consideration of Act 10 is attributable in part to Wisconsin’s longhistory of unionization. Wisconsin is the birthplace of public-sector unionism. In 1932, a smallgroup of state employees formed the Wisconsin State Employees Union/Council 24. A few years

53 Matt Patterson, supra note 46, p. 1 [https://www.capitalresearch.org/pubs/pdf/v1304359513.pdf]

54 WEAC History Book, Chapter 1. [http://www.weac.org/about_weac/history/history_book_chp1-1.aspx]

55 Ibid.

56 “Scrip” is the general term for a currency substitute issued by cash-strapped municipalities during theGreat Depression. “What is [sic capitalization] Depression Scrip?” 2005.[http://www.depressionscrip.com/what.html]

57 WEAC History Book, supra note 54.

58 WEAC History Book, Chapter 2. [http://www.weac.org/about_weac/history/history_book_chp2-1.aspx]

59 WEAC History Book, Chapter 6. [http://www.weac.org/about_weac/history/history_book_chp6-1.aspx]

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later, it was chartered as the American Federation of State, County, and Municipal Employees(AFSCME) and was chartered in 1936 by the American Federation of Labor.53

According to the official WEAC history,WEAC’s predecessor, the WisconsinTeachers Association, began in 1853 witheight teachers in Madison. By 1903, it hadgrown to 1,200 members.54 In 1935, thegroup was renamed the Wisconsin EducationAssociation; in 1972, it became WEAC.55

WEAC openly admits its self-interest and insensitivity in hard economic times, such as thecurrent ones, are longstanding. “During the Great Depression the association lobbied to have theminimum [annual pay] increased to $65 [from $40], and demanded that teachers be paid in cashrather than scrip56,” the history says.57

In 1959, the Wisconsin Collective Bargaining Law was passed, the first such law in the UnitedStates to allow public employee collective bargaining and the first law enabling teachers toorganize into unions. In 1964, the Milwaukee Teachers’ Education Association (MTEA) wasofficially recognized as bargaining agent for teachers in that district. In 1971, state law wasamended to require school districts to negotiate with teachers unions rather than merely allowingthem to do so.58

The 1971 law prohibited teacher strikes, but nevertheless there was a bitter one in Hortonville in1972–73. After that, legislation was introduced requiring mandatory arbitration. When thatlegislation failed to pass, WEAC determined to become politically active.59 “The WEAC PACand the statewide grassroots effort targeted anti-teacher, anti-education, anti-binding arbitrationincumbents and candidates for defeat” in the 1976 election:

In November 1976, WEAC-backed candidates won 85 percent of their races, many ofthem against long-term anti-education incumbents. This solidified teachers’ standing as amajor force in state politics, and sent a message to all elected officials that it was a

The uproar in Madison duringconsideration of Act 10 is attributablein part to Wisconsin’s long history ofunionization. Wisconsin is thebirthplace of public-sector unionism.

60 Ibid.

61 Ibid.

62 WEAC History Book, Chapter 7. [http://www.weac.org/about_weac/history/history_book_chp7-1.aspx]

63 Ibid.

64 “Bad Old Days of Collective Bargaining,” Education Action Group, Spring 2012, pp. 5–6.[http://educationactiongroup.org/wp-content/uploads/2012/03/Wisconsin-Act-10-Report.pdf]

65 Dave Umhoefer, “Actions via Act 10 went ever further,” PolitiFact/Milwaukee Journal Sentinel, February1, 2012.[http://www.politifact.com/wisconsin/promises/walk-o-meter/promise/575/restore-qualified-economic-offer-system-for-school/]

66 Kyle Olson, "Do Layoffs Mean that WEAC Is on the Financial Ropes," [no question mark] Townhall.com,August 20, 2011.[http://townhall.com/columnists/kyleolson/2011/08/20/do_layoffs_mean_that_weac_is_on_the_financial_ropes/page/full/]

67 Victor [no last name listed], “Union politicking in Wisconsin shifts focus,” PublicSchoolSpending.com,February 29, 2012.[http://www.publicschoolspending.com/daily-updates/union-politicking-in-wisconsin-shifts-focus/].

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politically bad idea to mess with teachers, public schools and WEAC.60

Thereafter, WEAC members negotiated double-digit pay raises and increased benefitspackages.61

In the 1980s, WEAC describes itself as fending off attacks from conservatives “[w]hom manybelieve” wanted to replace public schools with for-profit ones. Vouchers particularly troubledWEAC:

Milwaukee’s private school voucher program would become a national model foranti-public education and anti-teacher forces everywhere, with Wisconsin’s largest cityserving as a testing ground for school privatization schemes cooked up in right-wingthink tanks in Washington, D.C., and elsewhere.62

State laws passed in the 1990s limiting teacher pay raises and capping revenues raised by localproperty taxes were even worse, according to WEAC, which called these measures “two of themost destructive anti-education laws in Wisconsin history” and “a cancer on public schools andeducation funding ...”63

While pay raises were capped, there were no such limits on benefits. In 1998 the averageteacher’s salary was $37,897; in 2011 it was $50,627, a 33.6 percent increase. During the sametime period, the value of benefits more than doubled, from $13,412 in 1998 to $27,053 in 2011.64

The limits on pay raises were abolished by Gov. Jim Doyle in 2009.65

By 2009–10, WEAC was spending more than any other group lobbying legislators in Madison.66

In 2011, WEAC spent $2.5 million in lobbying legislators against Act 10.67

68 Thomas Linzey and Mari Margil, “Collective bargaining as a constitutional right?” Milwaukee JournalSentinel, March 7, 2011. [http://www.jsonline.com/news/opinion/117552243.html]

69 WEAC v. Walker, Case No. 11 CV 428 (D.W.D. WI March 30, 2012) available at[http://host.madison.com/wsj/news/local/govt-and-politics/read-the-federal-court-ruling-striking-down-parts-of-walker/html_9533b546-7aa1-11e1-8a55-0019bb2963f4.html]

70 Judge Diana Sykes is a former member of the Wisconsin Supreme Court. The Seventh Circuit (whichincludes Wisconsin) will hear the appeal of the WEAC case if there is one.

71 Wisconsin Right to Life State Political Action Committee v. Barland, 664 F.3d 139, 145 (7th Cir. 2011).Internal footnotes omitted.

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The “Right” to Collective Bargaining

Given Wisconsin’s history of union activism,it’s not surprising to hear many people in thestate repeatedly refer to a “right” to collectivebargaining. But collective bargaining is not aconstitutional right anywhere in the UnitedStates, as an op-ed in the Milwaukee Journal

Sentinel correctly noted. It went on to urge it should be, using Wisconsin as an example:

Why make collective bargaining a constitutional right? The fury in Wisconsin shows howeasily workplace regulations, including collective bargaining, can be taken away. If wedon't begin to shift our organizing to recognize legal rights of workers, we will always beat the mercy of those like Walker.68

Even federal Judge William M. Conley, who ruled in March there isn’t such a right, neverthelessreferred to such a right in his opinion approximately 13 times.69

So it was not surprising to see the uproar in Madison occasioned by the introduction of Act 10.As described by Judge Diana Sykes of the United States Court of Appeals for the SeventhCircuit in an unrelated case:70

The November 2010 elections dramatically changed the political landscape in Wisconsin.Republicans won the governor’s office and both houses of the state legislature, andpicked up a U.S. Senate seat and two in Congress. When the new governor and his alliesin the state legislature began to make use of their electoral advantage in early 2011,Wisconsin found itself at the center of a political storm. The flashpoint was thegovernor’s budget-repair bill, which included measures curbing public-employeecollective-bargaining rights. Democrats in the State Senate fled the state to thwart a voteon the bill and remained in hiding in Illinois for weeks. Mass protests were staged on thegrounds of the State Capitol, and protesters encamped in the Capitol rotunda.71

Interestingly, the uproar that ensued over passage of Act 10 led the United States District Courtfor the Western District of Wisconsin to uphold in late March the constitutionality of most of thebill’s collective bargaining provisions. At issue in the case was Act 10’s exemption of public

Collective bargaining is not aconstitutional right anywhere in theUnited States.

72 WEAC v. Walker, supra note 69, pp. 18-19.

73 Sandy Cullen, “Capitol security costs for protests expected to top $8 million,” Wisconsin State Journal,August 11, 2011.[http://host.madison.com/wsj/news/local/crime_and_courts/article_b596c2d0-c3b6-11e0-b68c-001cc4c002e0.html#ixzz1rbFvJJhH]

74 Kyle Olson, supra note 66.

75 Ibid.

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safety officer unions from the collective bargaining limits.

The case was brought against Walker andother state officials by three unions: WEAC,AFSCME, and SEIU. The unions argued itwas unconstitutional to exempt public safetyworkers such as police and firefighters fromthe Act 10 collective bargaining limitations.But the court found there was a rational basisto exempt them because they might be neededin the future in light of “the significantcontroversy surrounding the passage of Act 10.” They perform a core government function,needed if general employee unions were to go on strike.72 The court’s ruling was ironic, ofcourse, in that the three unions that brought the suit were the primary instigators of the veryunrest that doomed their legal challenge.

Indeed, security concerns on the part of state officials are far from speculative. In the months ofprotests in Madison concerning Act 10, the state called in law enforcement officers from nearly200 municipalities and seven state agencies, because there were as many as 100,000 protestors atthe state capitol. The state will be reimbursing these municipalities and agencies, at a cost ofmore than $8 million.73

But as noted earlier, although the federal court ruling validated most of Act 10, it invalidated twokey parts of it: the ban on automatic payroll deduction of union dues and the requirement forannual recertification of union representation.

The first one, in particular, avoids a blow to union revenues. In August 2011, about two weeksafter Act 10 went into effect, WEAC sent layoff notices to about 40 percent of its employees,reportedly due to the loss of automatic deduction of union dues and the required annualrecertification votes. WEAC attributed the layoffs to Walker’s “union-busting legislation.”74

The impending layoffs were viewed as:

[A] sign that teachers are not very eager to voluntarily pay dues, and the union treasurymay be running a bit dry. With only a percentage of its former revenue coming in, it’sdifficult to picture WEAC spending big money on future lobbying efforts. Suddenly thebig spending political bully seems like a toothless shadow of its former self.75

In the months of protests in Madisonconcerning Act 10, the state called inlaw enforcement officers from nearly200 municipalities and seven stateagencies. There were as many as100,000 protestors at the state capitol.

76 Education Action Group, “Federal Judge: Public Sector Union Collective Bargaining Is Not a Right,”Breitbart.com/Big Government, April 4, 2012.[http://www.breitbart.com/Big-Government/2012/04/04/federal-judge-public-sector-union-collective-bargaining-is-not-a-right]

77 Erin Richards, “WEAC issues layoff notices to 40% of staff,” Milwaukee Journal Sentinel, August 15,2011. [http://www.jsonline.com/blogs/news/127751463.html]

78 “Wisconsin Schools,” supra note 48.

79 Michael Louis Vinson, “Kaukauna schools project $1.5M surplus after bargaining changes,” PostCrescent (Appleton), June 30, 2011.[http://www.postcrescent.com/article/20110630/APC0101/106300455/Story-%C2%AD%E2%80%90documents-%C2%AD%E2%80%90Kaukauna-%C2%AD%E2%80%90schools-%C2%AD%E2%80%90project-%C2%AD%E2%80%901-%C2%AD%E2%80%905M-%C2%AD%E2%80%90surplus?odyssey=nav%7Chead]

80 Wisconsin Department of Public Instruction, “Enrollment—All Students; Kaukauna Area,” 2011–12.[http://data.dpi.state.wi.us/Data/GroupEnroll.aspx?OrgLevel=di&GraphFile=GROUPS&S4orALL=1&SRegion=1&SCounty=47&SAthleticConf=45&SCESA=05&Qquad=demographics.aspx&FULLKEY=062758040050&SN=Dr+H+B+Tanner+El&DN=Kaukauna+Area]

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But the federal court’s ruling “will no doubt result in a financial windfall for the WisconsinEducation Association Council and other unions that have suffered from a significant decline inrevenue since Act 10 took effect.”76 As noted above, the state is appealing part of the ruling. It isnot known whether the unions plan to appeal.

Act 10 Success Stories

The court’s invalidation of automatic duesdeduction and recertification won’t depriveschool districts of other Act 10 provisionsmore directly related to education spending.

It has been less than a year since Act 10 wentinto effect, but already there is substantialevidence of its success in helping school

districts balance their budgets. And 35 percent of the 426 districts in the state are not yet able toimplement the act’s provisions because they are subject to collective bargaining agreements setin place before Act 10 was enacted. When those agreements expire in the next few years, evenmore districts will be able to take advantage of its provisions.77 MacIver estimates total savingscould amount to more than $450 million.78

Following are several success stories.

Kaukauna Area School District

The most successful school district in implementing the Act 10 changes is undoubtedly the tinyKaukauna Area School District,79 with just 1,748 students in the current school year.80 Using Act

It has been less than a year since Act10 went into effect, but already there issubstantial evidence of its success inhelping school districts balance theirbudgets.

81 Michael Louis Vinson, supra note 79.

82 Kathy Walsh Nufer, “Union law helps Appleton schools balance budget,” Post-Crescent (Appleton),August 3, 2011.

83 Byron York, “Wisconsin schools buck union to cut health costs,” Washington Examiner, July 2011.[http://washingtonexaminer.com/politics/2011/07/wisconsin-schools-buck-union-cut-health-costs/115972]

84 “Bad Old Days,” supra note 64, p. 11.

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10 changes, the district moved from a deficit of $400,000 to a surplus of $1.5 million.

The district got there by requiring teachers to contribute 12.6 percent of their health insurancepremiums and 5.8 percent of their salaries toward their pensions. The district also reduced thenumber of paid sick days to five from ten.

The district used the savings to reduce class sizes: elementary school classes from 26 to 23students; middle school classes from 28 to 26 students; and high school classes from 31 to 25students. The district also will be implementing merit pay for teachers.81

Appleton Area School District

The Appleton Area School District lost about$8.4 million in state aid, and its tax levydropped by about $700,000 for the 2011–12school year. But the district balanced itsbudget this year by using Act 10’s cost-saving measures. The district will save about$7.5 million due to teacher contributions toward pension and health insurance premiums, and itwill save an additional $3.1 million in health care premium reductions won from the WEA Trust.Property taxes will decrease slightly.82

Hartland-Lakeside School District

The superintendent of the Hartland-Lakeside School District, about 30 miles west of Milwaukee,looks forward to an even more collegial relationship between teachers and the administration inthe district as a direct result of Act 10. Not to mention a balanced budget.83

In the six years prior to 2010, the teachers’ early retirement program alone each year had deficitsof between $350,000 and $700,000.84 In 2011, but before Act 10 became law, unionized teachersin the district agreed to switch insurers from WEA Trust to United HealthCare, agreeing as wellto tiny salary raises, with total savings pegged at around $1 million. But regional union officialsnixed the deal.

The superintendent talked to one of the teachers, a union rep. “We don’t want to lay people off. Idon’t understand why we can’t do this,” he told her. He said she replied, “You make it seem likeI have any say in this.”

The Appleton Area School Districtbalanced its budget this year by usingAct 10’s cost-saving measures.

85 Ibid.

86 “Marinette School District Adopts Balanced Budget,” Peshtigo Times, undated (downloaded December29, 2011). [http://www.peshtigotimes.net/index.php?id=17482]

87 “Bad Old Days,” supra note 64, pp. 20–21.

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“Our teachers were very angry [at unions reps] that they were not allowed [to make the switch]when it was their decision,” he said.

With Act 10 in place, the district required teachers to contribute 5.8 percent of their salaries totheir pensions and changed insurance carriers. Together, these moves saved the district $900,000per year. Even so, the district had to ask taxpayers in a referendum for a property tax increase ofabout 2 percent, but it could have been worse. The advantage of Act 10 is the administration nowhas better relationships with its teachers, the superintendent said.85

School District of Marinette

The School District of Marinette, about 54 miles north of Green Bay, reduced its spending thisyear by about 3.3 percent and adopted its first balanced budget in a long time, as a result ofAct 10.

By adopting the pension and health careprovisions of Act 10, the district made up fora loss in state aid of $1.4 million and a dropin the revenue limit of $1.1 million. Classsizes were maintained, and there were noteacher layoffs.

“This is definitely a huge and positive step inthe right direction,” the school board

president said. “This is all possible thanks to the changes in Madison.”86

West Bend School District

The West Bend School District was looking at a $6 million deficit for the 2011–12 school yearand was considering laying off 37 teachers. Last year it asked the teachers to contribute the Act10 specified amounts to their health insurance premiums and pension accounts and accept afreeze on step raises and other concessions, without success.

The district implemented the health insurance and pension measures enabled by Act 10 andcancelled step raises after the law went into effect. The district also implemented a layoff policybased on merit, rather than the prior seniority system.87 It also saved $1.8 million by adopting aconsumer-driven health insurance policy with a $2,000 deductible coupled with a personal healthsavings account. Although the plan is optional, 80 percent of the district’s employees are

“This is definitely a huge and positivestep in the right direction. This is allpossible thanks to the changes inMadison.”

— School Board PresidentMarinette School District

88 John Torinus, “Two schools save big with consumer-driven plans,” JohnTorinus.com, undated (2012).[http://johntorinus.com/blog/consumer-driven-health-plans/two-schools-save-big-with-consumer-driven-plans/]

89 “Bad Old Days,” supra note 64, pp. 11–12.

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participating.88

New Berlin School District

In the New Berlin School District in 2010, thedistrict was attempting to negotiate contractterms with the union, which had beenworking without a contract for the past year.Looking at a $2.1 million deficit and possiblelayoffs of 27 employees, the district andteachers union had reached an impasse. Theunion had rejected the district’s offer to savethe 27 jobs through a wage freeze the firstyear and a 1 percent raise for the second year,but maintenance of automatic annual stepincreases. No contributions for health insurance premiums and pensions were involved.

When Act 10 was imminent, the district again asked the union to negotiate, but it came back with“an untenable position,” said the district’s finance director. “We were so far apart that we just letAct 10 go into effect.”

The district implemented the Act 10 changes for pensions, saving $1.2 million. It altered itshealth insurance plan to save $1.5 million, with no employee contributions. It also eliminatedcash payments to some teachers upon retirement. Overall, the district expects to finish thisschool year with a surplus. It also requires teachers to be available for students about 30 minutesper day.

“The reality is, before Act 10 we were unable to come up with any cost-savings strategy or anykind of educator effectiveness strategy, or to reverse the trend of putting adult employee needsbefore student needs,” the finance director said. “The tools given to us were absolutelynecessary. We could have been facing cuts in programs, increasing class sizes, and awatered-down curriculum.”89

A Tale of Two Other School Districts: Success? Not Yet

Union contracts remain in place and block implementation of Act 10 cost-saving measures in thelargest school district in the state, Milwaukee Public Schools (MPS), and another of the largest,the Kenosha Unified School District. Large teacher layoffs have taken place in both districts and

“Before Act 10 we were unable tocome up with any cost-savingsstrategy or any kind of educatoreffectiveness strategy. ... The toolsgiven to us were absolutelynecessary.”

— Finance DirectorNew Berlin School District

90 The MTEA famously sued the MPS for not covering the costs of the prescription drug Viagra under itshealth plan. After nationwide publicity, the union dropped the suit. Ibid., p. 15.

91 Erin Richards, “MPS budget would eliminate 260 teaching positions,” Milwaukee Journal Sentinel, April29, 2010. [http://www.jsonline.com/news/education/92454009.html]

92 The practice of layoff by seniority is referred to “as union members ‘eating their young.’” “Bad Old Days,”supra note 64, p 14.

93 Erin Richards and Amy Hetzner, “Seniority system cuts fresh MPS teachers amid budget crunch,”Milwaukee Journal Sentinel, June 14, 2010. [http://www.jsonline.com/news/education/96349689.html]

94 “Bad Old Days,” supra note 64, pp. 14–15.

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loom in the future. After a year of intransigence and negative nationwide publicity,90 theMilwaukee Teachers’ Education Association is beginning to make some concessions. No sign ofanything similar in Kenosha, though.

Milwaukee Public Schools

As it looked at the 2010–11 school year budget, MPS issued layoff notices to 260 teachers and422 other employees as it faced multi-millions of dollars in deficit spending. Schooladministrators said the deficit resulted largely from the cost of teacher benefits. For every dollarspent on salaries, the district spent 74.2 cents in benefits, officials said.91

The teachers receiving layoff notices includedMegan Sampson, who teaches English atBradley Tech, one of the worst-performingschools in Wisconsin. She and eight othernew teachers at the school were laid off basedon lack of seniority. She had been handpickedby her principal, received outstandingperformance reviews, and had just been

named Outstanding First Year Teacher by the Wisconsin Council of Teachers of English.92

“Based on the pressures we’re under as a low-performing school, I absolutely would havechosen a different nine [for layoffs],” her principal said. The MTEA responded by calling forincreases in state aid and use of federal stimulus funds to plug the deficit.93

Late in 2010, MPS signed a four-year contract with the MTEA, which means the Act 10cost-saving measures cannot be imposed until June 2013. In the summer of 2011 the district hada $180 million deficit due in part to the loss of $82 million in one-time federal stimulus money.Also, as the state reduced school aid, MPS faced the loss of another $84 million. The uniondeclined to reopen the contract. As a result, 354 teachers and 173 other employees were laid offfor the 2011–12 school year.94

Through late 2011, MPS had laid off 1,000 teachers and other employees—just under 10 percentof its staff. In a surprise move in November 2011, the MPS board voted to implement the Act 10pension provision, requiring employees to pay 5.8 percent of their salaries into their pension

The Milwaukee teachers uniondeclined to reopen the contract. As aresult, 354 teachers and 173 otheremployees were laid off for the2011–12 school year.

95 Alan J. Borsuk, “MPS quietly implements changes,” Milwaukee Journal Sentinel (op-ed), November 26,2011.[http://www.jsonline.com/news/education/mps-quietly-implements-changes-s536smc-134543918.html]

96 Education Action Group, “Sucking the Life Out of America’s Public Schools: The Expense of TeachersUnion Contracts,” April 10, 2012.[http://eagnews.org/wp-content/uploads/2012/04/Milwaukee-Contract-Analysis.pdf].

97 Victor [no last name listed], “Milwaukee unions rare decision to cooperate draws attacks from otherunions,” Public School Spending, March 21, 2012. [http://www.publicschoolspending.com/daily-updates/milwaukee-unions-rare-decision-to-cooperate-draws-attacks-from-other-unions/]

98 “Bad Old Days,” supra note 64, p. 17

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accounts and make contributions toward health insurance premiums when the current contractexpires.95

A recent analysis of the MTEA contract discloses alarming numbers about teacher pay andbenefits. MPS was spending nearly $843 million in salaries for the year—of which about 43percent went for benefits in the current contract. Even if wages are frozen, teachers receiveautomatic step increases and annual lump sum payments. Teachers pay none of their healthinsurance costs (about $128 million) and none of their pension contributions (about$28 million).96

In mid-March 2012, the MTEA president, MPS Board president, and MPS superintendent jointlyasked the Wisconsin legislature to enact special legislation enabling the union contract to beimmediately reopened for negotiation concessions without invalidating the entire contract. Thelegislation was quickly passed and signed by Walker. Negotiations are now underway.

Union officials in Green Bay, Kenosha,Madison, and Racine protested the move byMTEA. All four districts have unexpiredunion contracts. Union officials in thosedistricts said in a letter they “believe that suchlegislation would be detrimental to ourmembers’ best interest; i.e. our Districtswould likely push for similar legislation,given the precedent established by the MTEA.”97

Kenosha Unified School District

Like MPS, the Kenosha Unified School District signed a union contract in 2010, though for threeyears, not four. Only a few months later, the district faced a $36 million deficit, a deficit thatremained despite a wage freeze for non-teacher personnel in the district. The district asked theunion to reopen the contract, but it refused. In response, the district eliminated 107 full-timeteaching positions and the jobs of 50 other employees.98

For the 2012–13 school year, preliminary layoff notices were issued in April 2012 to 209

The Kenosha school district asked theunion to reopen the contract, but itrefused. The district eliminated 107full-time teaching positions and thejobs of 50 other employees.

99 Terry Flores, “Unified staff reductions total 274,” Kenosha News, April 10, 2012.[http://www.kenoshanews.com/news/unified_staff_reductions_total_274_359207866.html]

100 “Kenosha Teacher Receives Threats Over Walker Ad Involvement,” WISN.com, December 6, 2011.[http://www.wisn.com/Kenosha-Teacher-Receives-Threats-Over-Walker-Ad-Involvement/-/9374034/8043924/-/item/0/-/y654r8z/-/index.html]

101 Kristi Lacroix, “Freedom from Teachers’ Unions; a newsletter by a public school teacher,” April 19,2012.[https://app.e2ma.net/app/view:CampaignPublic/id:24830.11807612776/rid:9ff831ec67041dd7ff58f7f6475e5eba]

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teachers, eight administrators, and 13 secretaries. The union threatened it would formally objectto each layoff through the grievance process.99

Kristi Lacroix, a teacher at LakeviewTechnology Academy in the district,appeared in a television ad for Walker in late2011 and thereafter received vicious emailsand phone calls, including a suggestion sheget “protection.”100 She was at her school onFriday, April 13, 2012, when seven teachersreceived layoff notices. Lacroix wrote aboutthe situation in the first issue of hernewsletter, Freedom from Teachers’ Unions:

So, who should I be angry with? I know that as a teacher, my union – WEAC – tells me Iam supposed to blame Scott Walker, but I feel I must take a closer look at how mydistrict got to this point.

See, my district did not use Act 10. That’s because we are stuck with the union contractuntil June of 2013 and it would take the Jaws of Life to get us free. Although there werenumerous meetings between the district and the union, no union concessions were evermade that could have saved the district millions of dollars and prevented many layoffs.The district is faced with a 30+ million structural deficit. I was never asked if I wanted tomake concessions, nor was I ever consulted by my union about Act 10. As always, unionleaders made decisions that were best for them and then claimed they were representingthe teachers. Make no mistake, though, their decisions are based solely on the desire tomaintain forced unionism.

Who is representing the teachers that received layoff notices this morning? Will theunion return the dues that were supposed to be used to HELP the teachers? Will the uniongive a refund of dues to the laid off teachers to help them pay their mortgage, put food onthe table, or find a new job? I am guessing the answer is “no”.101

“My district did not use Act 10. That’sbecause we are stuck with the unioncontract until June of 2013 and itwould take the Jaws of Life to get usfree.”

— Kristi Lacroix, TeacherKenosha School District

102 “Bad Old Days,” supra note 64, p. 3.

103 Neal McCluskey, “Retiring General Counsel’s Shocking Admission: The NEA Is a Union!”Cato@Liberty, July 10, 2009.[http://www.cato-at-liberty.org/retiring-general-counsels-shocking-admission-the-nea-is-a-union/]

104 WEAC History Book, Introduction. [http://www.weac.org/about_weac/history/history_book_intro.aspx]

105 The report sets forth the 50 largest school districts in ranked order plus the per-pupil spending for eachdistrict. Available at [http://maciverinstitute.com/2012/03/maciver-large-school-district-report-card/]

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Per-Pupil Spending and Student Achievement

Not long ago, WEAC’s motto was “Every child deserves a great school.”102 But not according toBob Chanin, who retired in 2009 as general counsel to the National Education Association. In afarewell speech, he said:

Why are these conservative and right-wing bastards picking on NEA and its affiliates? Iwill tell you why: It is the price we pay for success. NEA and its affiliates have beensingled out because they are the most effective unions in the United States. ...

When he joined the NEA in the early 1960s,Chanin said, it was an “apolitical, do-nothingorganization.” So current attacks by“right-wing bastards” are a good thing, hesaid, because NEA “embraced collectivebargaining. It supported teacher strikes. Itestablished a political action committee. ...”He continued:

And that brings me to my final, and most important point. Which is why, at least in myopinion, NEA and its affiliates are such effective advocates. Despite what some among uswould like to believe, it is not because of our creative ideas. It is not because of the meritof our positions. It is not because we care about children. And it is not because we have avision of a great public school for every child. NEA and its affiliates are effectiveadvocates because we have power. And we have power because there are more than3.2 million people who are willing to pay us hundreds of millions of dollars in dues eachyear because they believe that we are the unions that can most effectively represent them,the unions that can protect their rights and advance their interests as educationemployees.103

So much for WEAC’s avowal its purpose is “to improve the lot of public schools andschoolchildren for the betterment of everyone who lives and works in Wisconsin.”104

Still, many argue increases in school spending directly relate to school achievement, and thusWalker’s cuts will have dire consequences for Wisconsin schools. Research conducted recentlyby the MacIver Institute suggests otherwise.

On March 22, 2012, MacIver issued its MacIver Institute Large School District Report Card.105

NEA and its affiliates are sucheffective advocates ... not because wecare about children. ... [It’s] becausewe have power.

— Bob Chanin, Former General CounselNational Education Association

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The purpose is to provide a baseline by which “to track how, over time, these districts perform inthe face of sweeping reform in the 2012–2013 school year.”

The report ranks the 50 largest schooldistricts in the state, which educate about 59percent of Wisconsin students. The ranking isdone according to three categories, designedto account for student body differences suchas poverty levels and lack of Englishproficiency. Educating such students requiresextra effort, and outcomes are often notreflected in standardized testing, MacIverexplained.

The three categories used are student achievement, student attainment, and student population.

# Student achievement was measured by three sets of standardized testing. First is the GeorgeW. Bush Presidential Center’s Global Report Card, comparing math and reading scoresaround the world, based on state testing figures. The second is results from the WisconsinStudent Assessment System, a combination of the Wisconsin Knowledge and ConceptsExamination and supplemental testing from the Wisconsin Alternate Assessments. Theselatter tests are snapshot measures and do not measure individual student progress. Third isAdvanced Placement testing results.

# The second category, student attainment, consists of results from testing under the collegereadiness test, the ACT, plus the district’s graduation rate.

# The third category includes student attendance rates and a multiplier based upon theeconomic disadvantages of students and the number with low English proficiency.

The report’s overarching conclusion:

There is no direct correlation between average dollars spent per student and the quality ofthe school districts as a whole. It’s a revelation that is sure to displease many in theeducational establishment who regularly make the case for increased expenditures as thekey to improving quality. The performance we see in the state’s largest districts suggestthat other factors play a greater role than funding alone.

MPS spends more money per pupil than any of the other 49 school districts ranked by MacIver,at $14,863. MacIver ranks MPS dead last of the 50 school districts and gives it a grade of “F.”

“There is no direct correlation betweenaverage dollars spent per student andthe quality of the school districts as awhole.”

— MacIver InstituteLarge School District Report Card

106 The full report is available here:[http://maciverinstitute.com/2012/03/maciver-large-school-district-report-card/]

107 Wisconsin Department of Public Instruction, “All School Districts, FY 2009-2010 Comparative Cost perMember,” [http://www2.dpi.state.wi.us/sfsdw/Std_Rpts_Results.asp].

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© 2012 The Heartland Institute. Distributed by The Heartland Institute, a nonprofit and nonpartisanpublic policy research organization. Nothing in this report should be construed as reflecting the views ofThe Heartland Institute, nor as an attempt to aid or hinder the passage of legislation. Printed copies ofthis Policy Brief are available for $5.95 from The Heartland Institute, One South Wacker Drive #2740,Chicago, IL 60606; phone 312/377-4000; fax 312/377-5000; email think@heartland.org; Webhttp://www.heartland.org.

Elmbrook School District in Waukesha County is ranked at number 1, with a grade of “A.” Itspends $14,409 per pupil, the third highest in the state.106 The statewide average for all schooldistricts is $12,087 per pupil.107

Conclusion

In the short time Act 10 has been in effect in about two-thirds of the districts in the state, it hasaccomplished much. It will accomplish even more when it is fully implemented.

Due to local circumstances, not all school district budgets have been balanced against losses instate aid and property tax revenue caps. But many have been balanced. And as reality sinks in,further cost reduction measures can be put in place.

# # #

Maureen Martin, J.D., is a Wisconsin resident and general counsel and senior fellow for legalaffairs at The Heartland Institute. Formerly a partner in a large Chicago law firm, she has been inthe private practice of law for nearly 29 years, generally concentrating in litigation andenvironmental law. She has practiced throughout the country, receiving the highest possiblerating of AV for legal ability and legal ethics from Martindale-Hubbell. She was an adjunctprofessor of environmental law at Loyola University Chicago for more than 10 years.

In her private practice, Martin has litigated a wide variety of cases involving sophisticatedconstitutional law, class action defense, antitrust, commercial disputes, private property rights,lead-based paint issues, environmental law, bankruptcy, storm water and drainage issues, zoningand land use, and insurance coverage litigation. She is a graduate of Loyola University ChicagoSchool of Law, where she was a published member of the law review, recipient of an AmericanJurisprudence Award, a member of the Moot Court Board, and a legal writing instructor.