Big Labor's Wisconsin Vendetta
Walker's reforms are saving money, which unions cannot forgive
WSJ Editorial, January 24, 2012
They swore revenge for his offenses, and last week Wisconsin Democrats delivered what they say are a million signatures for the recall of Republican Governor Scott Walker. If they do make the ballot and cause a recall vote as early as this spring, they'll have to campaign against reforms that have already saved taxpayers tens of millions of dollars and rescued the state from a budget crisis. Game on.
Since last summer, unions have fired every weapon in their arsenal at Mr. Walker and state senators who voted for his collective-bargaining reforms for government workers. Union members must now contribute a very reasonable 5.8% of salary toward pensions and 12.6% toward health insurance, and unions must collect dues from members, rather than having it done by the government. In their pique, Big Labor waged and lost a bitter fight over the election of a state Supreme Court Justice and spent millions trying to recall Republican state senators.
Those efforts mostly failed and the GOP retained its majority, but the unions feel about Mr. Walker the way Cato the Elder felt about Carthage: Walker delenda est, Scott Walker must be destroyed. Last year state senator Spencer Coggs called Mr. Walker's plan "legalized slavery" while others predicted disaster for school districts and public services.
It's not turning out that way: The Apocalypse has not arrived for services, and Mr. Walker was able to balance the state budget without new taxes or looming deficits.
Some of the most significant results have come in local school districts, where school boards and governments have been able to use the public-union reforms to reduce budget shortfalls. In districts like Wauwatosa, Racine, LaCrosse and Eau Claire, the changes in health and pension contributions prevented layoffs that were expected to be widespread and in some cases allowed the boards not to fire a single teacher.
There are a few unfortunate counter examples. In three of the largest school districts—Milwaukee, Kenosha and Janesville—schools had locked themselves into long-term agreements with unions that predated Mr. Walker's reforms. Unable to take advantage of the changes, Milwaukee and Kenosha, which serve more than 100,000 students altogether, saw layoffs of more than 800 teaching positions for the 2011-2012 school year.
By contrast, Madison's school district, the second largest in the state, had no teacher layoffs because it was able to ask employees to make additional contributions toward health care and pensions.
The reforms have also let school districts introduce competition to reduce health-care costs. Under the old rules, most school districts bought health insurance through the WEA Trust, a virtual monopoly provider and a creature of the Wisconsin Education Association Council. By freeing districts to consider other insurers, the reforms have saved districts millions of dollars, sometimes without even changing their plan.
The Wisconsin-based MacIver Institute estimates that the Appleton school district was able to save $3.1 million over the previous year, despite continuing to get insurance through WEA Trust. With other insurance options available, WEA Trust had to cut its prices to keep the business. Based on statewide media reports, MacIver estimates that as of September 74 local units of government were saving some $162 million.
In mid-December, Wisconsin taxpayers got evidence of the direct benefits of reform in their latest property tax bills—an average annual increase of 0.3%, the smallest since 1996. Potential Democratic challengers to Mr. Walker, including Former Dane County Executive Kathleen Falk and Milwaukee Mayor Tom Barrett, will have to explain why the state should punish Mr. Walker for reforms that are helping taxpayers and local governments save money.
The only loser here are government unions that have less control over state and local politics. With the state no longer automatically withdrawing dues for the unions, labor leaders face the prospect of smaller checkbooks to buy politicians and intimidate reformers.
Mr. Walker reduced that influence on behalf of taxpayers, and the only point of the recall is union retribution designed to show other politicians that they don't dare cross that line. If Big Labor can't take out Mr. Walker after so much effort, Wisconsin-style reforms might well spread to other states. The Wisconsin recall fight is the statewide election of the year, with implications for taxpayers nationwide.