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Act 10 Saves School District $1.2 Million in Benefit Costs

New report says the Hamilton School District has seen a big reduction in pension and health care costs because of changes in state's collective bargaining law.

The controversial state law that eliminated most collective bargaining rights for school employees reduced benefit costs for the Hamilton School District by $1.2 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, Hamilton paid $1.62 million toward pension costs for workers; in 2011-12, that dropped to about $168,000, the report said.

The district saw an increase of $228,000 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, Hamilton spent $5.48 million on health care costs; that rose to $5.71 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.

Sandra November 14, 2012 at 02:41 PM
That's great. Solve the state's debt on the backs of educators, the ones who prepare our children for the future. I for one am grateful for the education my daughter is getting and I owe it to her teachers. How are any of the other most "influential" people in the state, such as teachers helping to save the state money?
Will Silvers November 14, 2012 at 02:53 PM
Not sure I fully agree with Act 10, but it seems fair that employEE portion of retirement be paid by employEEs. I would want to insure the employER portion is still being paid... seems like it isn't at only 168k being paid so far. I would have thought total paid towards pensions would be more than 10% of last years total.
Luke November 14, 2012 at 07:39 PM
Sandra, To answer your question, Act 10 applies to everyone on the Wisconsin Retirement System, not just teachers. In addition, Act 10 changed the law so that elected officials were included under the same plan. And contrary to your sentiment, all jobs done by public servants are important, not just those done by teachers. Finally, Wisconsin's constitution makes the retirement of those covered by Act 10 one of the most amazing benefits in the state. The retirement benefits are actually treated as property rights, and the taxpayers are obligated to supply the revenue that is promised to those who have contributed to the plan, at retirement, if funding comes up short. In other words, regardless of what happens to the economy, the promised retirement is guaranteed by the taxpayers. It isn't often that you will come across such an amazing plan
AG November 15, 2012 at 01:16 AM
About time the Public School Teachers gave back for the kids instead of their selfish greedy acts. You saw the greed by the Chicago school teachers just a few weeks ago asking for a 16% pay raise while people are struggling to pay their bills.
Sandra November 15, 2012 at 02:27 AM
All public employees are definitely appreciated as well. The article I was reading was about the Hamilton School District, where my daughter attends...that is why I only addressed teachers. Others were not included in that article. I just think we should show appreciation for ALL public employees and not just balance the budget on their backs. They are among the hardest workers I know. Many of the elected officials of whom you speak make MUCH more money than the public servants. I just think everyone, including myself should have to pay and should be able to bargain for his/her rights,

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