Opponents of Wisconsin Gov. Scott Walker have now succeeded in collecting over 1 million signatures for mounting a recall election, which now appears certain to take place later this year. Will the enemies of reform succeed in removing him?
They’ll have plenty of outside money for that cause. The state is the focus of the national battle to rein in the power of public-employee unions. And Wisconsin is a must-win swing-state for President Obama this fall, so Democrats want to start rolling back the wave that put Walker, a Republican, in office.
But if voters judge by results, the governor should be safe. The evidence so far contradicts the unions’ claim that the reforms have rendered the state ungovernable.
By the time Walker took office last year, the overwhelming majority of state and local government workers paid nothing toward the annual contributions to their pension accounts, which equaled roughly 10 percent of their salaries per year. The average employee also covered just 6.2 percent of his health-insurance premium. Walker moved to requiring them to pay 5.8 percent of salary (on average) toward their pensions and to double their health-insurance payments to 12.4 percent of premiums.
These two changes, the governor estimated, would save local governments $724 million a year, letting him cut state aid to localities and trim the state’s $3.6 billion biennial deficit.
Walker’s other moves angered unions even more. One was to allow government employees to bargain collectively only when negotiating wages; benefits and other areas would no longer be part of the contract-making process.
And he ended mandatory dues collection. Wisconsin unions were collecting up to $1,100 a year per member in these obligatory payments, which they then spent on getting sympathetic politicians elected. Walker’s reform let government workers opt out of paying these dues — potentially strangling the unions’ election spending.
The unions argued that the changes would damage public services beyond repair. In fact, they’re saving money already, with little disruption to services. In early August, noticing the trend, the Milwaukee Journal-Sentinel reported that Milwaukee would save more in health-care and pension costs than it would lose in state aid, leaving the city $11 million ahead in 2012.
School districts are yielding big dividends, too. Before the reform, many union contracts required districts to buy health insurance from WEA Trust, a nonprofit affiliated with the state’s largest teachers union. Once the law forbade such contract provisions, districts could start bidding for health care on the open market. When the Appleton School District put its insurance up for bid, for instance, WEA Trust suddenly lowered its rates and promised to match any competitor’s price. Appleton will save $3 million in the current school year.
According to a report by the MacIver Institute, as of Sept. 1, “at least 25 school districts in the Badger State had reported switching health-care providers/plans or opening insurance bidding to outside companies.”
The unions also predicted mass layoffs, but events have confirmed Walker’s claim that his reforms were a job-retention program for teachers, with districts’ savings on benefits allowing them to spare hundreds of jobs. So far, the Madison School District has laid off no teachers at all, a pattern that has held in many of the state’s other large school districts.
Will the recall succeed? An October poll for the Wisconsin Policy Research Institute (where I work) found that 71 percent of Wisconsinites believe that the state’s public schools have either stayed the same or improved over the previous half-year. More than three-quarters expect the state’s economy either to get better or to stay the same in the next year, up from 60 percent during the height of the union tumult in March.
So if Walker’s task is to convince the public that the state hasn’t devolved into unfunded anarchy, he may have an easier case to make than you’d think.
Christian Schneider is a senior fellow at the Wisconsin Policy Research Institute. Adapted from the new issue of the Manhattan Institute’s City Journal.