ON-Lion Letter
As Wisconsin Gov. Scott Walker has signed into law the 2013-15 Wisconsin budget, school districts around the state are already using new tools and flexibility to exercise more control over their budgets.  Power to choose a district's benefits packages based on a competitive bidding process, employee benefit contributions, and teacher retirements, along with wage freezes and salary-schedule flexibility, have enabled many districts to reduce their debt.

In a new article for the Fall 2013 issue of Education Next, available now onlineChristian D'Andrea discusses the impact of the 2011-2013 Wisconsin Budget Repair Bill, or Act 10, on the state's school districts.

D'Andrea is a policy analyst at the John K. MacIver Institute for Public Policy in Madison, Wis.  The Lynde and Harry Bradley Foundation in Milwaukee supports both Education Next and the MacIver Institute.

In the article, D'Andrea recounts how Act 10 limited collective bargaining for certain public-sector employees, among them public school teachers, causing a storm of protest that lasted for months, until the Wisconsin Supreme Court validated the legislation.  While the plan called for a cut of 5.5% to education, dropping per-pupil funding by $550, funding limits could be offset at the district level by increased employee contributions to health care and pension programs, and by giving local school districts other tools such as wage freezes and adjustments in salary schedules.

The midsized district of Kaukauna turned a $400,000 deficit into a $1.5 million surplus, for example, in part by requiring employees to cover 12.6% of the costs of their health-care coverage.  Appleton, a district with more than 15,000 students, saved 3.1 million when the union–backed WEA Trust, which had a monopoly on providing health-care services, matched the lowest bid from a new, outside competitor.  Even Madison, the epicenter of protests, saved $10 million by paring down the number of available insurers and plans.

Many districts that used the cost-cutting tools of Act 10 were able to reduce their debt through a combination of employee pension contributions and teacher retirements, in addition to health-insurance changes, according to D'Andrea. 

The Oconomowoc school board used the collective bargaining changes to reduce its high school staff from 75 to 60 teachers, for instance, while offering the remaining teachers $14,000 stipends to take on extra classes.  The move saved more than a half million dollars, which the district then used to bolster its funding in elementary and middle schools, where it had experienced a significant rise in class sizes.


(Illustration by Randy Pollak)
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