"This is a disaster," Mark Miller, the Wisconsin Senate Democratic leader, said in February after Republican Gov. Scott Walker proposed a budget bill that would curtail the collective-bargaining powers of some public employees. Miller predicted catastrophe if the bill were to become law -- a charge repeated thousands of times by his fellow Democrats, union officials and protesters in the streets.
Now the bill is law, and we have some early evidence of how it is working. And for one beleaguered Wisconsin school district, it's a godsend, not a disaster.
The Kaukauna Area 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. June 29, 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 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, Wisconsin unions had offered to make benefit concessions during the budget fight. Wouldn't Kaukauna's money problems have been solved if Walker had just accepted those concessions and not demanded cutbacks in collective-bargaining powers?
"The monetary part of it is not the entire issue," says Arnoldussen, a political independent who won a spot on the board in a nonpartisan election. Indeed, some of the most important improvements in Kaukauna's outlook are because of the new limits on collective bargaining.
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 negotiate only with them," says Arnoldussen. "Well, you know what happens when you can negotiate with only one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.
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