May 2012

Wisconsins 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 bills largely consistent with the recommendations of newly elected Gov. Scott Walker.3 One bill (Act 10) enacted administrative changes to close the deficit.4 The second bill (Act 32) enacted a budget based on the Act 10 administrative changes.5 Walker signed both of them (jointly referred to here, unless otherwise indicated, as Act 10).6

Maureen Martin is senior fellow for legal affairs at The Heartland Institute. A more complete bio appears on page 23. Wisconsin Budget Project, Biennial Budget, undated (circa 2011). [http://www.wisconsinbudgetproject.org/primer_biennialbudget.html]

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] 2011 Wisconsin Act 10. 2011 Wisconsin Act 32.

The text of Act 10 is 45 pages long and contains numerous provisions, many accomplishing important reforms. The text is available here: [http://docs.legis.wisconsin.gov/2011/related/acts/10.pdf]. Act 32 text is available 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 any proposed or pending legislation, or as necessarily reflecting the views of The Heartland Institute.

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Act 10 virtually eliminated the $3.6 billion deficit7 by reducing state spending, especially state funding for local school district K-12 education, which was cut by about $749 million.8 To make up the shortfall, Act 10 also provided school districts with measures previously unavailable to them to accomplish spending reductions. Most controversially, Act 10 largely eliminated collective bargaining for general public union members employed by the state, local government, and schools. As many as 100,000 teachers and other union supporters invaded the state capitol in Madison in February to protest these measures, and 14 state senators fled the state rather than allow a vote in the senate to go forward. President Barack Obama weighed in, calling the collective bargaining loss proposed in the bill an assault on unions,9 ignoring the fact collective bargaining is banned for federal government workers. (He himself later froze federal pay.10)

Many districts have balanced their budgets for the first time in years. Some even have surpluses and are hiring more teachers and reducing class size.

The eyes of the nation were on Wisconsin. Opponents of the bill predicted the law would have dire consequences for educational quality: fewer teachers, larger class sizes, program cuts, and worse. According to early results, however, in all but a handful of districts the dire predictions have not come true. All evidence points to schools functioning normally. Many districts have balanced their budgets for the first time in years. Some even have surpluses and are hiring more teachers and reducing class size. Certainly, its early in the game. But a review of Wisconsin spending in the recent past establishes beyond a doubt that deficits were mounting; in 2009, the state faced the largest deficit in 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 had to be done.

PolitiFact/Wisconsin, Gov. Scott Walker says he eliminated Wisconsins $3.6 billion deficit without raising taxes, Milwaukee Journal Sentinel, January 29, 2012. [http://www.politifact.com/wisconsin/statements/2012/jan/29/scott-walker/gov-scott-walker-says-he-elimina ted-wisconsins-36-/] Matthew DeFour, Governors office says school survey shows benefits of cuts, Oshkosh Northwestern, April 6, 2012. [http://www.thenorthwestern.com/apps/pbcs.dll/article?AID=2012204070601]
9 8

Brady Dennis and Peter Walsten, Obama joins Wisconsins budget battle, opposing Republican anti-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 Isnt, The Heritage Foundation, July 6, 2011.

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Act 10 reduced spending,11 and taxes did not increase but rather fell slightly, for the first time in 12 years. Had nothing been done, property taxes for the average homeowner would have increased by $700.12 In addition, Wisconsins Department of revenue predicts the state will have a $154 million budget surplus by the end of the budget period in 2013 and will place half of it in the states Rainy Day Fund.13 In 2012, the states cash flow has been smoother than in previous years, eliminating the need for temporary borrowing for the states general fund from other funds with temporary surpluses. Such fund-shifting was the norm in prior years.14

Some Caveats
While Act 10 was clearly the right choice for Wisconsin taxpayers, it is premature for unrestrained celebration of the measures benefits.

While Act 10 was clearly the right choice for Wisconsin taxpayers, it is premature for unrestrained celebration of the measures benefits.

The deficit has been eliminated only by use of a cash-basis accounting system, which recognizes income only after it actually arrives in the states coffers and recognizes expenses only after the bills are actually paid. Most publicly held companies use an accrual basis accounting system under Generally Accepted Accounting Principles (GAAP). Accrual-based accounting is forward-looking, recording both anticipated income and expenses incurred but not yet 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 being addressed over time.15 A larger threat to Act 10s already considerable success comes from constitutional challenges brought by Wisconsin unions in the federal court in Madison. As discussed below, the judge there in late March 2012 upheld most Act 10 limits on collective bargaining, rejecting the unions argument the acts exemption of police and fire unions from these provisions was unconstitutional. If that ruling is appealed and reversedits too early to knowthen Wisconsin

PolitiFact/Wisconsin, Kathleen Falk says Gov. Scott Walker didnt balance the budget and presided over 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-wa lker-didnt-balance-/] John McCormack, Wisconsins 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] Walker reports state budget surplus, WTAQ radio, May 11, 2012 [http://wtaq.com/news/articles/2012/may/11/walker-reports-state-budget-surplus/] 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/] 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.htm l]
15 14 13 12

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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 typically plugged with what one legislator called funny money,16 one-time fixes and illegal diversions of cash from segregated funds supposedly restricted for specific purposes. For example, to fix deficits in the 200102 budget, the state securitized about $1.5 billion in tobacco litigation settlement payments scheduled to come in through 2017, in return for a lump sum payment of about $1.2 billion. In those two years, all of the tobacco settlement 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 of tobacco money thus vanished into the black hole of the general fund.

Budget deficits were typically plugged with one-time fixes and illegal diversions of cash from segregated funds supposedly restricted for specific purposes.

Since 2003, almost $1.3 billion has been shiftedsome would say stolenby the legislature from the transportation fund and used to support general state spending. This fund, which consists of proceeds from gasoline taxes and vehicle registration fees, is supposed to be used only for road repairs and other transportation projects.18 In 2010, voters in 52 Wisconsin counties approved an advisory referendum to halt such transfers by a vote of 70.5 percent to 28.6 percent.19 For the 200709 budget year, Gov. Jim Doyle (D) and the legislature transferred $200 million from the Injured Patients and Families Compensation Fund to offset deficit spending. That fund was established in 1975 to pay medical malpractice judgments against health care professionals in excess of their malpractice insurance coverage. Created by annual fees paid by these professionals, the fund was denominated as irrevocable by the legislature. The Wisconsin Supreme Court in 2010 held the transfer was unconstitutional because the professionals had a
Jason Stein, Patrick Marley, and Lee Bergquist, Walkers budget cuts would touch most Wisconsinites, Milwaukee Journal Sentinel, March 1, 2011. [http://www.jsonline.com/news/statepolitics/117154428.html] In 200102, revenue bonds were issued returning $681 million to the state general fund. In 2002, such bonds returned $598.3 million to the state, which it used for shared revenue payments. The tobacco settlement 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 and Securitization and Repurchase Transactions, January 2011. [http://legis.wisconsin.gov/lfb/publications/Informational-Papers/Documents/2011/81_Tobacco%20Settlem ent%20and%20Securitization%20and%20Repurchase%20Transactions.pdf] 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)] 18 17 16

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property interest in the fund.20 (Walkers 201112 budget restores these funds.21) By 2009 the budget deficit had reached By 2009 the budget deficit had reached $6.6 billion, the largest in state history.22 In $6.6 billion, the largest in state history. that year the Wisconsin legislature partially cancelled out the deficit by using about $2 billion in one-time-only federal stimulus funds.23 That budget also increased taxes a total of $1.4 billion, including higher taxes on telephone lines, cigarettes, income, and capital gains.24 None of those measures was enough to wipe out the deficit, though, and, by late 2010 it amounted to about $3.6 billion. Wisconsins budget is broken due to an overreliance on one-time fixes, illegal transfers, unsustainable federal funding, and economic weakness due to high taxes and job-killing regulations, Walker said, vowing to repair the problem. He proposed Act 10.25

Act 10 Enactment
Legislative History Act 10 (the administrative bill) was introduced in both houses as identical companion billsSenate Bill 11 and House Bill 11in mid-February 2011. On February 15, 2011, the Joint Committee on Finance held a public hearing and recommended, by a vote of 12 to 4, passage of both bills as amended.26 The senate adopted the joint committee version on February 17, 2011a day after 14

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] Jason Stein, State to repay Malpractice Fund Wednesday, Milwaukee Journal Sentinel, August 2, 2011. [http://www.jsonline.com/news/statepolitics/126583773.html] 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] 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] Patrick Marley, Steve Schultze, and Steven Walters, Doyle signs budget, vetoes proposed county sales tax increase, Milwaukee Journal Sentinel, June 29, 2009. [http://www.jsonline.com/news/statepolitics/49434702.html]
25 24 23 22 21

20

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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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 a vote 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 the assembly agreed. The committee adopted a new version of AB 11, removing funding provisions requiring a quorum. On the same day, the senate approved the bill by a vote of 18 to 1. The assembly concurred on March 9, by a vote of 53 to 42. Walker signed the bill, by then known as 2011 Act 10, on March 11.30

The Litigation Five days later, on March 16, 2011, Dane County (Madison) District Attorney Ismael R. Ozanne filed suit, on several grounds, in Dane County Circuit Court seeking a temporary restraining order and a permanent injunction against publication of Act 10, the last step in the legislative process enacting that administrative bill. Most importantly, the suit alleged that the senate violated the states open meetings act in passing it. Ozanne sought a judgment declaring Act 10 void.31

The Dane County district attorney sought a temporary restraining order and permanent injunction against publication of Act 10.

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

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 isnt over, Milwaukee Journal Sentinel, March 12, 2011. [http://www.jsonline.com/news/statepolitics/117862214.html] 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 or trust money, or releases, discharges or commutes a claim or demand of the state. WIS. CONST. article 8, 8.
29 28

27

Legislative Fiscal Bureau, supra note 26, p. 857. Ibid., p. 858. Ibid.

30

31

Ozanne v. Fitzgerald, Case No. 11CV1244 (Dane County Circuit Court March 18, 2011) (granting preliminary injunction). [http://www.wispolitics.com/1006/110318Sumi_decision.pdf]
33 Ozanne v. Fitzgerald, Case No. 11CV1244 (Dane County Circuit Court May 26, 2011) (granting permanent injunction). [http://graphics8.nytimes.com/packages/pdf/national/052611-ruling-sumi.pdf]

32

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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 the courts have no power under the state constitution to determine whether the legislature followed its own rules.35 Sumi further found Act 10 void under the open meetings act because the committee meeting room had insufficient seating capacity for the public and inadequate notice was given.36

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

She also sternly warned state officials: I must state that those who act in open and willful defiance of the court order place not only themselves at peril of sanctions, they also jeopardize the financial and the governmental stability of the state of Wisconsin.37 Subsequent appellate proceedings were dismissed or denied by the state supreme court. On June 14, 2011, the court declared Sumis decision void ab initio in a 4 to 3 ruling. It also affirmed the 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 consume Wisconsin. 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 not insert themselves into controversies or exacerbate existing tensions. 39 Prosser stated the judiciary lacks the power to interfere with the legislative process, and that publication is an inherent part of that process. He chided Sumi for interfering and for ignoring long-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

34

Ibid., p. 10. See Wis. Stat. 19.87.2. Ibid., pp. 1415.

35

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] 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-001cc4c0328 6.html#ixzz1rVWglSiG] Ozanne v.. Fitzgerald, Case No. 2011 WI 43 (June 14, 2011), 15. [http://wicourts.gov/sc/opinion/DisplayDocument.pdf?content=pdf&seqNo=66078]
39 38 37

36

Ibid., 18. Ibid., 46.

40

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packed with reporters and television cameras, the entire proceedings were televised across the state, and thousands of demonstrators were present outside the building at the time of the meeting. 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 Act 10and then only after the Act was published. There is no constitutional violation in this case.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, it was approved by the assembly by a vote of 60 to 38. On June 16, 2011, it was approved by the senate 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 decrease from 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 percent of their salaries toward the cost of their pensions. Employees are also now required to pay 12.6 percent of their health insurance premiums.47 These Act 10 changes alone are expected to save school districtsthere are 426 districts in the state, serving 881,886 studentsa total

41

Ibid., 61. Ibid., 72.

42

Assembly Bill 40, Wisconsin Legislative Documents, 2011-12 Wisconsin Legislature. [https://docs.legis.wisconsin.gov/2011/proposals/ab40] The text of Act 10 is 45 pages long and contains numerous provisions, many accomplishing important reforms. The text is available here: [http://docs.legis.wisconsin.gov/2011/related/acts/10.pdf].
45 44

43

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

Matt Patterson, The Battle for Wisconsin: Scott Walker vs. Public Employee Unions, Capital Research Center, May 2011, p. 2. [https://www.capitalresearch.org/pubs/pdf/v1304359513.pdf]
47

46

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

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of $451 million.48 # Second, collective bargaining is now limited for general employee unions, though not for public safety employee unions such as local and state police and firemen.49 Collective bargaining remains available for wages, but excludes items such as overtime, merit pay, performance pay, pay schedules, and automatic pay progression. Increases in base pay are limited to the increase in the consumer price index.50 # Third, Act 10 prohibits local government from collecting union dues, any employee can opt not 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 through competitive bidding, thus breaking the stranglehold of health insurer WEA Trust, founded by the 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 Wisconsins 426 school districts, 64 percent purchase health insurance from WEA Trust because WEAC locals formerly required, in their collectively bargained contracts, that school districts purchase health insurance from the WEAC captive insurer, regardless of how much the insurance cost. Estimates are that competitive bidding for health insurance will save 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 insurance saved $211 per year per pupil. If every district in the state saved that amount per pupil, the total 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 Wisconsins long history of unionization. Wisconsin is the birthplace of public-sector unionism. In 1932, a small group of state employees formed the Wisconsin State Employees Union/Council 24. A few years
Wisconsin Schools Already In Line to Save Hundreds of Millions of Dollars Through Newly Negotiated Teacher Contracts, MacIver Institute, July 13, 2011 [http://maciverinstitute.com/2011/07/wisconsin-schools-already-in-line-to-save-hundreds-of-millions-of-doll ars-through-newly-negotiated-teacher-contracts/]
49 48

Local and state police and local firefighters are exempt, as discussed below. Legislative Fiscal Bureau, supra note 26, p. 896.

50

Escaping the financial shackles of WEA Trust insurance, Education Action Group, with support from the MacIver Institute, Fall 2010, pp. 46. [http://www.publicschoolspending.com/wp-content/uploads/2010/11/WEATrustfinalreport1.pdf] Christian DAndrea, M.P.P., How Wisconsin School Districts are [sic capitalization] Saving Money as a Result of 2011s 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/]
52

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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

The uproar in Madison during consideration of Act 10 is attributable in part to Wisconsins long history of unionization. Wisconsin is the birthplace of public-sector unionism.

According to the official WEAC history, WEACs predecessor, the Wisconsin Teachers Association, began in 1853 with eight teachers in Madison. By 1903, it had grown to 1,200 members.54 In 1935, the group was renamed the Wisconsin Education Association; in 1972, it became WEAC.55

WEAC openly admits its self-interest and insensitivity in hard economic times, such as the current ones, are longstanding. During the Great Depression the association lobbied to have the minimum [annual pay] increased to $65 [from $40], and demanded that teachers be paid in cash rather than scrip56, the history says.57 In 1959, the Wisconsin Collective Bargaining Law was passed, the first such law in the United States to allow public employee collective bargaining and the first law enabling teachers to organize into unions. In 1964, the Milwaukee Teachers Education Association (MTEA) was officially recognized as bargaining agent for teachers in that district. In 1971, state law was amended to require school districts to negotiate with teachers unions rather than merely allowing them to do so.58 The 1971 law prohibited teacher strikes, but nevertheless there was a bitter one in Hortonville in 197273. After that, legislation was introduced requiring mandatory arbitration. When that legislation failed to pass, WEAC determined to become politically active.59 The WEAC PAC and the statewide grassroots effort targeted anti-teacher, anti-education, anti-binding arbitration incumbents and candidates for defeat in the 1976 election: In November 1976, WEAC-backed candidates won 85 percent of their races, many of them against long-term anti-education incumbents. This solidified teachers standing as a major force in state politics, and sent a message to all elected officials that it was a

53

Matt Patterson, supra note 46, p. 1 [https://www.capitalresearch.org/pubs/pdf/v1304359513.pdf] WEAC History Book, Chapter 1. [http://www.weac.org/about_weac/history/history_book_chp1-1.aspx] Ibid.

54

55

Scrip is the general term for a currency substitute issued by cash-strapped municipalities during the Great Depression. What is [sic capitalization] Depression Scrip? 2005. [http://www.depressionscrip.com/what.html]
57

56

WEAC History Book, supra note 54. WEAC History Book, Chapter 2. [http://www.weac.org/about_weac/history/history_book_chp2-1.aspx] WEAC History Book, Chapter 6. [http://www.weac.org/about_weac/history/history_book_chp6-1.aspx]

58

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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 benefits packages.61 In the 1980s, WEAC describes itself as fending off attacks from conservatives [w]hom many believe wanted to replace public schools with for-profit ones. Vouchers particularly troubled WEAC: Milwaukees private school voucher program would become a national model for anti-public education and anti-teacher forces everywhere, with Wisconsins largest city serving as a testing ground for school privatization schemes cooked up in right-wing think tanks in Washington, D.C., and elsewhere.62 State laws passed in the 1990s limiting teacher pay raises and capping revenues raised by local property taxes were even worse, according to WEAC, which called these measures two of the most destructive anti-education laws in Wisconsin history and a cancer on public schools and education funding ...63 While pay raises were capped, there were no such limits on benefits. In 1998 the average teachers salary was $37,897; in 2011 it was $50,627, a 33.6 percent increase. During the same time 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 200910, 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

60

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

61

62

63

Bad Old Days of Collective Bargaining, Education Action Group, Spring 2012, pp. 56. [http://educationactiongroup.org/wp-content/uploads/2012/03/Wisconsin-Act-10-Report.pdf] Dave Umhoefer, Actions via Act 10 went ever further, PolitiFact/Milwaukee Journal Sentinel, February 1, 2012. [http://www.politifact.com/wisconsin/promises/walk-o-meter/promise/575/restore-qualified-economic-offer-s ystem-for-school/] 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_ro pes/page/full/] 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/].
67 66 65

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The Right to Collective Bargaining

Given Wisconsins history of union activism, its not surprising to hear many people in the state repeatedly refer to a right to collective bargaining. But collective bargaining is not a constitutional right anywhere in the United States, as an op-ed in the Milwaukee Journal Sentinel correctly noted. It went on to urge it should be, using Wisconsin as an example:

Collective bargaining is not a constitutional right anywhere in the United States.

Why make collective bargaining a constitutional right? The fury in Wisconsin shows how easily workplace regulations, including collective bargaining, can be taken away. If we don't begin to shift our organizing to recognize legal rights of workers, we will always be at the mercy of those like Walker.68 Even federal Judge William M. Conley, who ruled in March there isnt such a right, nevertheless referred 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 Seventh Circuit in an unrelated case:70 The November 2010 elections dramatically changed the political landscape in Wisconsin. Republicans won the governors office and both houses of the state legislature, and picked up a U.S. Senate seat and two in Congress. When the new governor and his allies in 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 the governors budget-repair bill, which included measures curbing public-employee collective-bargaining rights. Democrats in the State Senate fled the state to thwart a vote on the bill and remained in hiding in Illinois for weeks. Mass protests were staged on the grounds 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 Court for the Western District of Wisconsin to uphold in late March the constitutionality of most of the bills collective bargaining provisions. At issue in the case was Act 10s exemption of public

Thomas Linzey and Mari Margil, Collective bargaining as a constitutional right? Milwaukee Journal Sentinel, March 7, 2011. [http://www.jsonline.com/news/opinion/117552243.html] 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-partsof-walker/html_9533b546-7aa1-11e1-8a55-0019bb2963f4.html] Judge Diana Sykes is a former member of the Wisconsin Supreme Court. The Seventh Circuit (which includes 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. 70 69

68

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safety officer unions from the collective bargaining limits. The case was brought against Walker and In the months of protests in Madison other state officials by three unions: WEAC, concerning Act 10, the state called in AFSCME, and SEIU. The unions argued it law enforcement officers from nearly was unconstitutional to exempt public safety workers such as police and firefighters from 200 municipalities and seven state the Act 10 collective bargaining limitations. agencies. There were as many as But the court found there was a rational basis 100,000 protestors at the state capitol. to exempt them because they might be needed in the future in light of the significant controversy surrounding the passage of Act 10. They perform a core government function, needed if general employee unions were to go on strike.72 The courts ruling was ironic, of course, in that the three unions that brought the suit were the primary instigators of the very unrest that doomed their legal challenge. Indeed, security concerns on the part of state officials are far from speculative. In the months of protests in Madison concerning Act 10, the state called in law enforcement officers from nearly 200 municipalities and seven state agencies, because there were as many as 100,000 protestors at the state capitol. The state will be reimbursing these municipalities and agencies, at a cost of more than $8 million.73 But as noted earlier, although the federal court ruling validated most of Act 10, it invalidated two key parts of it: the ban on automatic payroll deduction of union dues and the requirement for annual recertification of union representation. The first one, in particular, avoids a blow to union revenues. In August 2011, about two weeks after 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 annual recertification votes. WEAC attributed the layoffs to Walkers 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 treasury may be running a bit dry. With only a percentage of its former revenue coming in, its difficult to picture WEAC spending big money on future lobbying efforts. Suddenly the big spending political bully seems like a toothless shadow of its former self.75

72

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

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-001cc4c002 e0.html#ixzz1rbFvJJhH]
74

73

Kyle Olson, supra note 66. Ibid.

75

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But the federal courts ruling will no doubt result in a financial windfall for the Wisconsin Education Association Council and other unions that have suffered from a significant decline in revenue since Act 10 took effect.76 As noted above, the state is appealing part of the ruling. It is not known whether the unions plan to appeal.

Act 10 Success Stories It has been less than a year since Act 10 went into effect, but already there is substantial evidence of its success in helping school districts balance their budgets.
The courts invalidation of automatic dues deduction and recertification wont deprive school districts of other Act 10 provisions more directly related to education spending.

It has been less than a year since Act 10 went into effect, but already there is substantial evidence of its success in helping school districts balance their budgets. And 35 percent of the 426 districts in the state are not yet able to implement the acts provisions because they are subject to collective bargaining agreements set in place before Act 10 was enacted. When those agreements expire in the next few years, even more districts will be able to take advantage of its provisions.77 MacIver estimates total savings could 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 tiny Kaukauna Area School District,79 with just 1,748 students in the current school year.80 Using Act
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-bargain ing-is-not-a-right]

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

77

Wisconsin Schools, supra note 48.

Michael Louis Vinson, Kaukauna schools project $1.5M surplus after bargaining changes, Post Crescent (Appleton), June 30, 2011. [http://www.postcrescent.com/article/20110630/APC0101/106300455/Story-%C2%AD%E2%80%90docu ments-%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%7Ch ead] Wisconsin Department of Public Instruction, EnrollmentAll Students; Kaukauna Area, 201112. [http://data.dpi.state.wi.us/Data/GroupEnroll.aspx?OrgLevel=di&GraphFile=GROUPS&S4orALL=1&SRegi on=1&SCounty=47&SAthleticConf=45&SCESA=05&Qquad=demographics.aspx&FULLKEY=0627580400 50&SN=Dr+H+B+Tanner+El&DN=Kaukauna+Area]
80

79

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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 insurance premiums and 5.8 percent of their salaries toward their pensions. The district also reduced the number of paid sick days to five from ten. The district used the savings to reduce class sizes: elementary school classes from 26 to 23 students; middle school classes from 28 to 26 students; and high school classes from 31 to 25 students. The district also will be implementing merit pay for teachers.81

Appleton Area School District The Appleton Area School District lost about The Appleton Area School District $8.4 million in state aid, and its tax levy balanced its budget this year by using dropped by about $700,000 for the 201112 Act 10s cost-saving measures. school year. But the district balanced its budget this year by using Act 10s costsaving measures. The district will save about $7.5 million due to teacher contributions toward pension and health insurance premiums, and it will 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 in the 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 deficits of between $350,000 and $700,000.84 In 2011, but before Act 10 became law, unionized teachers in the district agreed to switch insurers from WEA Trust to United HealthCare, agreeing as well to tiny salary raises, with total savings pegged at around $1 million. But regional union officials nixed the deal. The superintendent talked to one of the teachers, a union rep. We dont want to lay people off. I dont understand why we cant do this, he told her. He said she replied, You make it seem like I have any say in this.
81

Michael Louis Vinson, supra note 79.

Kathy Walsh Nufer, Union law helps Appleton schools balance budget, Post-Crescent (Appleton), August 3, 2011.
83

82

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] Bad Old Days, supra note 64, p. 11.

84

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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 to their pensions and changed insurance carriers. Together, these moves saved the district $900,000 per year. Even so, the district had to ask taxpayers in a referendum for a property tax increase of about 2 percent, but it could have been worse. The advantage of Act 10 is the administration now has 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 this year by about 3.3 percent and adopted its first balanced budget in a long time, as a result of Act 10.

This is definitely a huge and positive step in the right direction. This is all possible thanks to the changes in Madison.
School Board President Marinette School District

By adopting the pension and health care provisions of Act 10, the district made up for a loss in state aid of $1.4 million and a drop in the revenue limit of $1.1 million. Class sizes were maintained, and there were no teacher layoffs.

This is definitely a huge and positive step in the 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 201112 school year and was considering laying off 37 teachers. Last year it asked the teachers to contribute the Act 10 specified amounts to their health insurance premiums and pension accounts and accept a freeze on step raises and other concessions, without success. The district implemented the health insurance and pension measures enabled by Act 10 and cancelled step raises after the law went into effect. The district also implemented a layoff policy based on merit, rather than the prior seniority system.87 It also saved $1.8 million by adopting a consumer-driven health insurance policy with a $2,000 deductible coupled with a personal health savings account. Although the plan is optional, 80 percent of the districts employees are

85

Ibid.

Marinette School District Adopts Balanced Budget, Peshtigo Times, undated (downloaded December 29, 2011). [http://www.peshtigotimes.net/index.php?id=17482]
87

86

Bad Old Days, supra note 64, pp. 2021.

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participating.88

New Berlin School District In the New Berlin School District in 2010, the Before Act 10 we were unable to district was attempting to negotiate contract come up with any cost-savings terms with the union, which had been strategy or any kind of educator working without a contract for the past year. Looking at a $2.1 million deficit and possible effectiveness strategy. ... The tools layoffs of 27 employees, the district and given to us were absolutely teachers union had reached an impasse. The necessary. union had rejected the districts offer to save Finance Director the 27 jobs through a wage freeze the first New Berlin School District year and a 1 percent raise for the second year, but maintenance of automatic annual step increases. 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 districts finance director. We were so far apart that we just let Act 10 go into effect. The district implemented the Act 10 changes for pensions, saving $1.2 million. It altered its health insurance plan to save $1.5 million, with no employee contributions. It also eliminated cash payments to some teachers upon retirement. Overall, the district expects to finish this school year with a surplus. It also requires teachers to be available for students about 30 minutes per day. The reality is, before Act 10 we were unable to come up with any cost-savings strategy or any kind of educator effectiveness strategy, or to reverse the trend of putting adult employee needs before student needs, the finance director said. The tools given to us were absolutely necessary. We could have been facing cuts in programs, increasing class sizes, and a watered-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 the largest 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

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-pla ns/]
89

88

Bad Old Days, supra note 64, pp. 1112.

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

Milwaukee Public Schools As it looked at the 201011 school year budget, MPS issued layoff notices to 260 teachers and 422 other employees as it faced multi-millions of dollars in deficit spending. School administrators said the deficit resulted largely from the cost of teacher benefits. For every dollar spent on salaries, the district spent 74.2 cents in benefits, officials said.91 The teachers receiving layoff notices included Megan Sampson, who teaches English at Bradley Tech, one of the worst-performing schools in Wisconsin. She and eight other new teachers at the school were laid off based on lack of seniority. She had been handpicked by her principal, received outstanding performance reviews, and had just been named Outstanding First Year Teacher by the Wisconsin Council of Teachers of English.92 Based on the pressures were under as a low-performing school, I absolutely would have chosen a different nine [for layoffs], her principal said. The MTEA responded by calling for increases in state aid and use of federal stimulus funds to plug the deficit.93

The Milwaukee teachers union declined to reopen the contract. As a result, 354 teachers and 173 other employees were laid off for the 201112 school year.

Late in 2010, MPS signed a four-year contract with the MTEA, which means the Act 10 cost-saving measures cannot be imposed until June 2013. In the summer of 2011 the district had a $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 union declined to reopen the contract. As a result, 354 teachers and 173 other employees were laid off for the 201112 school year.94 Through late 2011, MPS had laid off 1,000 teachers and other employeesjust under 10 percent of its staff. In a surprise move in November 2011, the MPS board voted to implement the Act 10 pension provision, requiring employees to pay 5.8 percent of their salaries into their pension

The MTEA famously sued the MPS for not covering the costs of the prescription drug Viagra under its health plan. After nationwide publicity, the union dropped the suit. Ibid., p. 15. Erin Richards, MPS budget would eliminate 260 teaching positions, Milwaukee Journal Sentinel, April 29, 2010. [http://www.jsonline.com/news/education/92454009.html] The practice of layoff by seniority is referred to as union members eating their young. Bad Old Days, supra note 64, p 14. 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 93 92 91

90

Bad Old Days, supra note 64, pp. 1415.

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accounts and make contributions toward health insurance premiums when the current contract expires.95 A recent analysis of the MTEA contract discloses alarming numbers about teacher pay and benefits. MPS was spending nearly $843 million in salaries for the yearof which about 43 percent went for benefits in the current contract. Even if wages are frozen, teachers receive automatic step increases and annual lump sum payments. Teachers pay none of their health insurance 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 jointly asked the Wisconsin legislature to enact special legislation enabling the union contract to be immediately reopened for negotiation concessions without invalidating the entire contract. The legislation was quickly passed and signed by Walker. Negotiations are now underway. Union officials in Green Bay, Kenosha, Madison, and Racine protested the move by MTEA. All four districts have unexpired union contracts. Union officials in those districts said in a letter they believe that such legislation would be detrimental to our members best interest; i.e. our Districts would likely push for similar legislation, given the precedent established by the MTEA.97

The Kenosha school district asked the union to reopen the contract, but it refused. The district eliminated 107 full-time teaching positions and the jobs of 50 other employees.

Kenosha Unified School District Like MPS, the Kenosha Unified School District signed a union contract in 2010, though for three years, not four. Only a few months later, the district faced a $36 million deficit, a deficit that remained despite a wage freeze for non-teacher personnel in the district. The district asked the union to reopen the contract, but it refused. In response, the district eliminated 107 full-time teaching positions and the jobs of 50 other employees.98 For the 201213 school year, preliminary layoff notices were issued in April 2012 to 209

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] Education Action Group, Sucking the Life Out of Americas Public Schools: The Expense of Teachers Union Contracts, April 10, 2012. [http://eagnews.org/wp-content/uploads/2012/04/Milwaukee-Contract-Analysis.pdf]. Victor [no last name listed], Milwaukee unions rare decision to cooperate draws attacks from other unions, Public School Spending, March 21, 2012. [http://www.publicschoolspending.com/daily-up dates/milwaukee-unions-rare-decision-to-cooperate-draws-attacks-from-other-unions/]
98 97 96

95

Bad Old Days, supra note 64, p. 17

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

My district did not use Act 10. Thats because we are stuck with the union contract until June of 2013 and it would take the Jaws of Life to get us free.
Kristi Lacroix, Teacher Kenosha School District

Kristi Lacroix, a teacher at Lakeview Technology Academy in the district, appeared in a television ad for Walker in late 2011 and thereafter received vicious emails and phone calls, including a suggestion she get protection.100 She was at her school on Friday, April 13, 2012, when seven teachers received layoff notices. Lacroix wrote about the situation in the first issue of her newsletter, Freedom from Teachers Unions:

So, who should I be angry with? I know that as a teacher, my union WEAC tells me I am supposed to blame Scott Walker, but I feel I must take a closer look at how my district got to this point. See, my district did not use Act 10. Thats because we are stuck with the union contract until June of 2013 and it would take the Jaws of Life to get us free. Although there were numerous meetings between the district and the union, no union concessions were ever made 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 to make concessions, nor was I ever consulted by my union about Act 10. As always, union leaders made decisions that were best for them and then claimed they were representing the teachers. Make no mistake, though, their decisions are based solely on the desire to maintain forced unionism. Who is representing the teachers that received layoff notices this morning? Will the union return the dues that were supposed to be used to HELP the teachers? Will the union give a refund of dues to the laid off teachers to help them pay their mortgage, put food on the table, or find a new job? I am guessing the answer is no.101

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/-/9374034/80439 24/-/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:9ff831ec67041dd7ff58f7f6475 e5eba]

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Per-Pupil Spending and Student Achievement

Not long ago, WEACs motto was Every child deserves a great school.102 But not according to Bob Chanin, who retired in 2009 as general counsel to the National Education Association. In a farewell speech, he said: Why are these conservative and right-wing bastards picking on NEA and its affiliates? I will tell you why: It is the price we pay for success. NEA and its affiliates have been singled 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-nothing organization. So current attacks by right-wing bastards are a good thing, he said, because NEA embraced collective bargaining. It supported teacher strikes. It established a political action committee. ... He continued:

NEA and its affiliates are such effective advocates ... not because we care about children. ... [Its] because we have power.
Bob Chanin, Former General Counsel National Education Association

And that brings me to my final, and most important point. Which is why, at least in my opinion, NEA and its affiliates are such effective advocates. Despite what some among us would like to believe, it is not because of our creative ideas. It is not because of the merit of our positions. It is not because we care about children. And it is not because we have a vision of a great public school for every child. NEA and its affiliates are effective advocates because we have power. And we have power because there are more than 3.2 million people who are willing to pay us hundreds of millions of dollars in dues each year 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 education employees.103 So much for WEACs avowal its purpose is to improve the lot of public schools and schoolchildren 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 thus Walkers cuts will have dire consequences for Wisconsin schools. Research conducted recently by the MacIver Institute suggests otherwise. On March 22, 2012, MacIver issued its MacIver Institute Large School District Report Card.105
102

Bad Old Days, supra note 64, p. 3.

Neal McCluskey, Retiring General Counsels 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

103

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 each district. Available at [http://maciverinstitute.com/2012/03/maciver-large-school-district-report-card/]

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The purpose is to provide a baseline by which to track how, over time, these districts perform in the face of sweeping reform in the 20122013 school year. The report ranks the 50 largest school districts in the state, which educate about 59 percent of Wisconsin students. The ranking is done according to three categories, designed to account for student body differences such as poverty levels and lack of English proficiency. Educating such students requires extra effort, and outcomes are often not reflected in standardized testing, MacIver explained.

There is no direct correlation between average dollars spent per student and the quality of the school districts as a whole.
MacIver Institute Large School District Report Card

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 George W. Bush Presidential Centers Global Report Card, comparing math and reading scores around the world, based on state testing figures. The second is results from the Wisconsin Student Assessment System, a combination of the Wisconsin Knowledge and Concepts Examination and supplemental testing from the Wisconsin Alternate Assessments. These latter tests are snapshot measures and do not measure individual student progress. Third is Advanced Placement testing results. # The second category, student attainment, consists of results from testing under the college readiness test, the ACT, plus the districts graduation rate. # The third category includes student attendance rates and a multiplier based upon the economic disadvantages of students and the number with low English proficiency. The reports overarching conclusion: There is no direct correlation between average dollars spent per student and the quality of the school districts as a whole. Its a revelation that is sure to displease many in the educational establishment who regularly make the case for increased expenditures as the key to improving quality. The performance we see in the states largest districts suggest that 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.

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Elmbrook School District in Waukesha County is ranked at number 1, with a grade of A. It spends $14,409 per pupil, the third highest in the state.106 The statewide average for all school districts 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 has accomplished 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 in state 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 legal affairs at The Heartland Institute. Formerly a partner in a large Chicago law firm, she has been in the private practice of law for nearly 29 years, generally concentrating in litigation and environmental law. She has practiced throughout the country, receiving the highest possible rating of AV for legal ability and legal ethics from Martindale-Hubbell. She was an adjunct professor 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 sophisticated constitutional law, class action defense, antitrust, commercial disputes, private property rights, lead-based paint issues, environmental law, bankruptcy, storm water and drainage issues, zoning and land use, and insurance coverage litigation. She is a graduate of Loyola University Chicago School of Law, where she was a published member of the law review, recipient of an American Jurisprudence Award, a member of the Moot Court Board, and a legal writing instructor.

2012 The Heartland Institute. Distributed by The Heartland Institute, a nonprofit and nonpartisan public policy research organization. Nothing in this report should be construed as reflecting the views of The Heartland Institute, nor as an attempt to aid or hinder the passage of legislation. Printed copies of this 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; Web http://www.heartland.org.

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 per Member, [http://www2.dpi.state.wi.us/sfsdw/Std_Rpts_Results.asp].

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