As Act 10 faces new legal scrutiny, WILL warns of massive tax hikes or spending cuts on the horizon
The News: The Wisconsin Institute for Law and Liberty (WILL) released a new report highlighting the significant fiscal impact that eliminating Act 10 could have on Wisconsin municipalities. WILL’s new report Back to the Past: The Fiscal Threat of Reversing Act 10 for Local Governments, estimates the fiscal impact for local and county governments to be at least $480 million annually.
The Quotes: WILL Research Director, Will Flanders, stated, “Ending Act 10 would bring about $480 million in new costs for local governments statewide. Localities would be forced to do one of two things, cut crucial services or dramatically increase funding by raising property taxes. Either way, Wisconsinites would be at a loss.”
Washington County Executive Josh Schoemann stated, “Local governments have been granted greater flexibility from Act 10, which has resulted in more efficient delivery of services, pay increases for hard-working public servants, and lower property taxes for residents. I cannot imagine going back.”
About Act 10: In 2011, Wisconsin became a leader in public sector union reform with the passage of the Budget Repair Bill—better known nationally as “Act 10.” The law signed by Governor Scott Walker strongly limited the power of public sector unions to extract more and more money from state taxpayers. Today, likely based on the liberal composition of the Wisconsin Supreme Court, a lawsuit was recently filed that seeks to reverse the landmark legislation.
Report’s Key Findings: The impact of overturning Act 10 on Wisconsin would be quite dramatic. In education, the law allowed school districts to move away from a ‘steps and ladders’ pay system to systems where teachers can be rewarded for their impact on academics. Terminating Act 10 would likely restore the old system where quality played no role in teacher pay.
Furthermore, WILL studied the effects of ending Act 10 by comparing salary, health insurance, and retirement plan costs for municipal employees around the state, to understand what types of additional costs would be imposed on taxpayers. WILL found that in total, $480 million in new costs would arise.
The Total Impact: In our previous report, “Back to the Past: The Fiscal Threat of Reversing Act 10 in Public Education” WILL showed that school districts alone could be on the hook for $1.6 billion annual if Act-10 is fully repealed. This puts the total fiscal impact on schools and local municipalities at roughly $2.1 billion.
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