- Post 23 May 2012
- By Copy Editor
MADISON — While a lightning rod for controversy and recall, Wisconsin's Act 10 has paid significant dividends to taxpayers, according to a new analysis by the Beacon Hill Institute for Public Policy Research, at Suffolk University in Boston.
Act 10, which curbed collective bargaining for most unionized public employees, in the whole has saved taxpayers more than $1 billion, according to The Economic Impacts of the Wisconsin Budget Repair Act. The study is slated for release this week by Beacon Hill Institute, a prominent free market think tank.
What the analysis found is that without the law, which in part requires covered public employees to contribute more to their benefits and holds wage increases to the rate of inflation, Badger State governments would have been forced to raise taxes or make deep job cuts to meet budget expenses.
As it was, Gov. Scott Walker and the Republican-controlled Legislature pushed through reforms and reductions that filled a $3.6 billion budget shortfall, although organized labor asserts Republicans balanced the budget on the backs of public employees.
The measure drew the ire of organized labor and the Democratic Party, with tens of thousands of protesters packing the Capitol. Ultimately, it was the Walker-led reforms that launched a recall campaign in which the governor in two weeks must defend his term at the polls, facing Milwaukee Mayor Tom Barrett in a historic gubernatorial recall election.
The Beacon Institute analysis argues the law may have been controversial, even divisive, but there’s no disputing its benefit to taxpayers.
“The cost-saving measures prevented painful tax increases that would have damaged the state’s private economy resulting in slower job and income growth,” said Paul Bachman, BHI director of research. “Moreover, the provisions avoided further painful layoffs of school teachers and other public employees.”
There have been numerous media reports of school districts and municipalities that have balanced their budgets or hired more educators by employing the so-called tools of Act 10.
Municipalities will realize annual cost savings of between $775 million and $1.2 billion, according to the analysis.
Lower taxes 'at what cost?'
BHI also found that, by not raising taxes to cover the $3.6 billion budget gap, the state prevented the loss of 11,500 to 14,000 private sector jobs “by keeping more money in the hands of households and businesses.” ... continues...