Bloomberg News

Walker’s Union Law Saves Wisconsin Money as Teachers Quit School

February 02, 2012

Jan. 31 (Bloomberg) -- When Wisconsin Governor Scott Walker championed a law restricting collective bargaining for most public employees, he gave school districts cost-cutting tools. He also took away something: $800 million in aid.

The exchange, which helped trigger recall drives that threaten Walker himself, has created winners and losers among districts trying to control expenses. It also raised questions about how schools should attract and retain quality educators, said administrators on both sides of the debate.

Almost 5,000 teachers, administrators and staff members retired last year, doubling the 2010 number, according to the Wisconsin Retirement System. Classes in hundreds of schools have grown as there are fewer to lead them. And for every district that says it has benefited financially as teachers contribute more toward retirement and medical care, others say they have lost, according to a survey by the Wisconsin Association of School District Administrators.

“Some good things came out of it and some bad things came out of it,” Miles Turner, the association’s executive director, said in a telephone interview. “It helped every district by recapturing benefit costs, but that relief was not equivalent to the loss in revenue.”

The measures pushed by Walker, 44, set off the most prominent of several confrontations between labor and the Republican governors of Midwest states. Ohio voters repealed a law in November limiting collective bargaining for public employees that first-term Governor John Kasich pushed last year. Indiana’s Legislature is poised to approve a bill that would exempt nonunion employees from paying dues when working alongside union workers, making it the nation’s 23rd right-to- work state.

Net Teacher Gain

The Wisconsin law requires public employees to pay 5.8 percent of their salaries for pension benefits and 12.6 percent of the premiums for health care, which Walker said would give schools greater financial flexibility. Cullen Werwie, Walker’s press secretary, said that the changes have been good for education and that teacher hirings outnumber dismissals.

“The results speak for themselves,” he said in an e-mail.

The law is at the center of the fight to recall his boss.

Walker’s opponents submitted more than 1 million signatures Jan. 17, almost twice as many as needed to force the third recall election of a U.S. governor. State election officials are examining examining the validity of the petitions.

Mass Retirement

“It’s like that old labor song, ‘Whose Side Are You On?’” said Mordecai Lee, a political scientist at the University of Wisconsin Milwaukee. “In Wisconsin, just about everyone except the little old lady off the grid has taken sides.”

Turner said the law’s impact varies with the availability of federal stimulus money, student enrollment, the overall financial health of districts and the status of their contracts -- the higher employee contributions don’t begin until labor deals expire.

In the district of Elmbrook, a suburb west of Milwaukee, 52 teachers -- 10 percent of the faculty -- retired at the end of the last academic year.

“That was unprecedented,” said Keith Brightman, assistant superintendent for finance, operations and human resources.

The district, which serves 7,000 students, started the school year with a projected $8 million deficit, Brightman said in a telephone interview. It closed almost half of it with the higher contributions from teachers, whose contracts ended June 30. The remaining gap was bridged with reductions in health care and retirement coverage, Brightman said.

Retaining Rookies

“This is a key benefit to us, as labor represents 80 percent of our costs,” he said. “The conversation now is how do we keep those great new teachers and maintain the quality that we’ve had?”

The state’s largest district, Milwaukee Public Schools with 80,000 students, is in the middle of a contract and does not benefit from the law, said Roseann St. Aubin, a spokeswoman.

Nor does the Racine Unified School District, in the state’s southeast corner. David Hazen, the chief financial officer, said he is worried about a state-approved voucher program that he says provides incentives for residents to move their children out of public schools -- along with the state funding that comes with them.

“There are 250 vouchers this year, 500 next year, and then it’s unlimited,” Hazen said. “That’s when we’re looking at extreme distress on the system.”

Not So Easy

When Walker ran for governor in 2010, he argued that public employees should pay more for benefits, saying they are the haves “and the taxpayers who foot the bills are the have- nots.”

A Jan. 25 poll by Marquette University Law School reported 74 percent of respondents favor requiring state workers to pay more for pension and health benefits; 48 percent support limits on collective bargaining, while 47 percent oppose; and 65 percent are against reductions in aid to public schools.

Patrick Meyer, a social-studies teacher in the Kaukauna Area School District, near Appleton, now has six classes instead of five and one planning period instead of two. Since retirements and dismissals last year, class sizes “have bumped up,” he said.

“I don’t think the public has a lot of sympathy for us, and I don’t expect it,” Meyer, 38, said in a telephone interview. “But the essential question is, ‘What do they want? If this job is so great and such cake, why isn’t John Q. Public banging down the doors to do it? The reason why? It is hard.”

No Cure-All

Campaign ads supporting Walker ahead of the possible recall election have called Kaukauna schools beneficiaries of the new law.

“We are in a better place financially as a result of this legislation,” District Administrator Mary Weber said in an e- mail, saying that she expects no dismissals in the coming school year. While the law worked for the Kaukauna district, “it is not necessarily a panacea for all,” Weber said.

It has undermined the ability of Monona Grove schools, near Madison, to recruit teachers, said superintendent Craig Gerlach.

“It’s not working for us,” Gerlach said in a telephone interview. “There’s a level of unfairness here, and we can’t continue to balance the budget on the backs of our employees.”

“It’s going to cost you $75,000 or $100,000 to go to college to become a teacher,” he added, “and in our district you’re going to make $29,000. Why would you do that?”

--With assistance from Stephen Merelman in New York. Editors: Stephen Merelman, Jeffrey Taylor

To contact the reporter on this story: Tim Jones in Chicago at tjones58@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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