Free Markets, Free People
Byron York brings us the story of one school district in Wisconsin which sees the new law limiting collective bargaining by public sector unions as a "God send".
The Kaukauna School District, in the Fox River Valley of Wisconsin near Appleton, has about 4,200 students and about 400 employees. It has struggled in recent times and this year faced a deficit of $400,000. But after the law went into effect, at 12:01 a.m. Wednesday, school officials put in place new policies they estimate will turn that $400,000 deficit into a $1.5 million surplus. And it’s all because of the very provisions that union leaders predicted would be disastrous.
In the past, teachers and other staff at Kaukauna were required to pay 10 percent of the cost of their health insurance coverage and none of their pension costs. Now, they’ll pay 12.6 percent of the cost of their coverage (still well below rates in much of the private sector) and also contribute 5.8 percent of salary to their pensions. The changes will save the school board an estimated $1.2 million this year, according to board President Todd Arnoldussen.
Of course there’s an additional benefit to this – if they run a “surplus”, they can lower taxes, can’t they?
Anyway, other benefits accrued from the law:
In the past, Kaukauna’s agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust — a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.
Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, ‘We can match the lowest bid,’" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.
Funny how that works, no? I’m just the vindictive enough type of person to let WEA stew in their own juices and take the lowest bid that isn’t theirs. It tends to make for a very competitive bid the next time they’re given the opportunity. Aren’t markets an amazing thing?
Then there are work rules. "In the collective bargaining agreement, high school teachers only had to teach five periods a day, out of seven," says Arnoldussen. "Now, they’re going to teach six." In addition, the collective bargaining agreement specified that teachers had to be in the school 37 1/2 hours a week. Now, it will be 40 hours.
The changes mean Kaukauna can reduce the size of its classes — from 31 students to 26 students in high school and from 26 students to 23 students in elementary school. In addition, there will be more teacher time for one-on-one sessions with troubled students. Those changes would not have been possible without the much-maligned changes in collective bargaining.
Teachers’ salaries will stay "relatively the same," Arnoldussen says, except for higher pension and health care payments. (The top salary is around $80,000 per year, with about $35,000 in additional benefits, for 184 days of work per year — summers off.) Finally, the money saved will be used to hire a few more teachers and institute merit pay.
Or, the schools will have some options that actually benefit the students vs. benefitting the teachers. I know … for most of us that’s what we thought the system should always have been about, no? But for too long, public sector unions ruled the roost and were able to get working conditions and benefits from friendly politicians that were essentially ruining the education system (and other parts of government) by limiting options and choices.
The introduction of some market based mechanisms plus more options is sure to benefit students over teachers as it should be – not, I’d argue, that teachers come out of this on the poor side of things. On the contrary – now they have to join the rest of us an work 40 hours a week, pay for their benefits and do a bit more to earn that $125,000 in salary and benefits for 184 days work.
Tough stuff, huh?
At least for now:
Acting with unusual speed, the state Supreme Court on Tuesday ordered the reinstatement of Gov. Scott Walker’s controversial plan to end most collective bargaining for tens of thousands of public workers.
The court found that a committee of lawmakers was not subject to the state’s open meetings law, and so did not violate that law when it hastily approved the collective bargaining measure in March and made it possible for the Senate to take it up. In doing so, the Supreme Court overruled a Dane County judge who had halted the legislation, ending one challenge to the law even as new challenges are likely to emerge.
The changes on collective bargaining will take effect once Secretary of State Doug La Follette arranges for official publication of the stalled bill, and the high court said there was now nothing to preclude him from doing that.
This, however, is not the end to law suits against the bill, it’s just one case which has been settled that had stopped implementation of the law in its tracks. In fact, this finding was more about how the lower court judge had exceeded her authority:
The court ruled that Dane County Circuit Judge Maryann Sumi’s ruling, which had held up implementation of the collective bargaining law, was in the void ab initio, Latin for invalid from the outset.
"The court’s decision …is not affected by the wisdom or lack thereof evidenced in the act," the majority wrote. "Choices about what laws represent wise public policy for the state of Wisconsin are not within the constitutional purview of the courts. The court’s task in the action for original jurisdiction that we have granted is limited to determining whether the Legislature employed a constitutionally violative process in the enactment of the act. We conclude that the Legislature did not violate the Wisconsin Constitution by the process it used."
The court concluded that Sumi exceeded her jurisdiction, "invaded" the Legislature’s constitutional powers and erred in halting the publication and implementation of the collective bargaining law.
So – the law must now be officially published for it to take effect and according to the court, there’s nothing standing in the way of that happening.
I wonder if we’ll be treated to another spectacle of teachers and the like throwing a collective tantrum. Oh, wait, it’s summer – they’re on vacation. With no works stoppage available to them to make their point, probably not.
I’ve been busily reading everything I can about the Wisconsin situation as it stands right now. It has been an interesting exercise. Of course, one look at Memeorandum and you can instantly tell which ideological side a particular blog falls on. Also interesting are the titles of some of the stories/posts. Talk about sensationalist.
Of course, that’s not to say that we’re not hearing the same thing from some of the participants on the protests and demonstrations. Things like this:
“In 30 minutes, 18 state senators undid 50 years of civil rights in Wisconsin. Their disrespect for the people of Wisconsin and their rights is an outrage that will never be forgotten,” said Democratic Senate Minority Leader Mark Miller. “Tonight, 18 Senate Republicans conspired to take government away from the people.”
And where were the Democrats? In Illinois. BTW, it was actually a few weeks and 30 minutes as the Democrats were invited, nearly daily, to come back from their self-imposed exile and participate. A fact that James Joyner notes in his reply to the above quote:
Oh, nonsense. They were overwhelmingly elected in November and prevented from acting only by bad faith on the part of the Democratic minority. And the Democrats have the ability to either try to force Republicans out via the recall process or rally back to a majority in 2012 and undo this legislation.
That’s the process, isn’t it? Just as it appears that the majority of the country thought that the passage of the health care bill in Congress was a travesty and made the point on November 2nd of last year, now Wisconsin voters – who put the GOP into the majority – have a process they can use to reverse what has happened. But pretending that it was “disrespectful” to do what they did or a conspiracy to “take government away from the people” is, as Joyner notes, “nonsense”.
Apparently the move by the Republicans in the Senate was precipitated by two things as Christian Schneider at “The Corner” points out:
A letter Democrat Senate Minority Leader Mark Miller sent the governor today, indicating Miller’s unwillingness to further negotiate any details of the bill, was what prompted the GOP’s decision to take the bill to the floor.
“It was like, ‘I’m in the minority, and I’m going to dictate to you what your options are,’” said one GOP source about Miller’s letter. It was just three days ago that Miller had sent Fitzgerald a letter urging more negotiations, despite the fact that Governor Walker had been negotiating with at least two Democrat senators for nearly a week. “With his recent letter, it became clear that all he wanted to do was stall,” said the GOP source.
Another action that provoked the GOP senators to act was Democrat Senator Lena Taylor’s very public decision to have a spring election absentee ballot sent to her in Illinois. The spring election is scheduled for April 5th, which indicated Taylor’s desire to stay out of the state for another month. “That sure didn’t help,” said one GOP source.
Gov. Scott Walker has an Op/Ed in the WSJ that’s an interesting read. One of the points he raises is about what unions are claiming and how unions are actually acting:
The unions say they are ready to accept concessions, yet their actions speak louder than words. Over the past three weeks, local unions across the state have pursued contracts without new pension or health-insurance contributions. Their rhetoric does not match their record on this issue.
Of course it could be said that they are simply establishing their negotiating position. But my guess, given the outcry these past weeks, is that they feel they have the backing not to have to negotiate the cuts they previously said they were willing to make.
Since the bill has been passed the uproar will most likely continue for a couple of days or so, peak and subside. Outside forces have been attempting to finance and enable recall drives. Under WI law, a politician has to have been in office for a year before he or she can be recalled. Interestingly that applies to only 16 Senators, 8 GOP and 8 Democrats. Even more interesting is every one of them has a recall petition being initiated against them.
As I understand it, Walker won’t be eligible for recall until next year. Will the public still be motivated at that time to sign on or will it go the way of Indiana?
When Gov. Mitch Daniels repealed collective bargaining in Indiana six years ago, it helped government become more efficient and responsive. The average pay for Indiana state employees has actually increased, and high-performing employees are rewarded with pay increases or bonuses when they do something exceptional.
In fact, an oft neglected part of the story, which John Fund revealed recently, is why Walker and the GOP are taking the action they’re taking:
The governor’s move is in reaction to a 2009 law implemented by the then-Democratic legislature that expanded public unions’ collective-bargaining rights and lifted existing limits on teacher raises.
A state already headed for the financial shoals saw a Democratic legislature expand the “rights” of the unions that had help put them in office and lift the limits on pay for other government union members. I have it on good authority that the GOP Senators, when faced with this legislation, didn’t flee to Illinois.
Recalls aren’t easy things to do, and, we’ll see how they work out in Wisconsin. My guess is, after everyone has a chance to cool down a bit, the recall drives – for both sides – will meet with less and less success.
And, of course, depending on which side is most successful is making the case for their side, voters will either return Democrats to the majority in 2012 and see the bill repealed or the voters will decide what was done wasn’t such a bad thing (we’ll see how the budget deficit looks next year) and leave well enough alone.
We’ll monitor and report.
One of our commenters recently asked for a explanation of what “collective bargaining” was and why it was a “bad thing” for government unions.
Here’s a vid from the Heritage Foundation that does a good job of explaining it: