Labor Policy Reform Makes Tax Relief Possible; $4.6 Billion Swing To Surplus

Credit Act 10 For Badger State’s Billion-Dollar Budget Surplus

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As this edition of the National Right to Work Newsletter goes to press, the Wisconsin Legislature is poised to send to GOP Gov. Scott Walker a $504 million package of income and property tax cuts.

It’s estimated that the property tax cut will save the average Badger State homeowner $100 over last year. Another provision will lower rates for all Wisconsin residents who pay state income taxes, including a reduction from 4.4% to 4.0% for the lowest bracket.

Once the 2014 tax relief legislation reaches Mr. Walker’s desk and he signs it into law, he will have approved a total of roughly $2 billion in tax reductions since taking office in early 2011.

At that time, Wisconsin had a $3.6 billion budget deficit, according to the nonpartisan Legislative Fiscal Bureau. This year, the state has a surplus of almost $1 billion.

National Right to Work Members in Wisconsin Helped Mobilize Support For Act 10

How was Wisconsin able to pull off a fiscal turnaround of such magnitude in such a short period of time?

Clearly, it could never have happened without Act 10.

Three years ago, Mr. Walker infuriated union officials in his home state and nationwide when he successfully advanced this sweeping budgetary and labor-policy reform.

Act 10 abolished forced union dues for teachers and many other public employees and also greatly narrowed the scope of government union monopoly bargaining in other ways.

Thousands of National Right to Work Committee members in Wisconsin deserve part of the credit for Act 10’s passage into law. In early 2011, they helped mobilize intense public support to stiffen the spines of legislators who were being subjected to a barrage of vicious Big Labor attacks.

And since Act 10 was adopted, National Right to Work Legal Defense Foundation attorneys representing the interests of independent-minded public employees who don’t wish to be corralled into a union have repeatedly defended it in the judicial system.

“The primary reason Committee members joined the battle to pass Act 10 and have fought to preserve it ever since is that it restores the Right to Work of most public employees and sharply curtails most government union bosses’ monopoly-bargaining privileges,” said Committee Vice President Mary King.

“But the benefits to taxpayers and other citizens who depend on K-12 schools and other vital public services have also been great.

“An in-depth analysis conducted by Wisconsin’s MacIver Institute late last year found that Act 10 had saved taxpayers at least $2.7 billion since its enactment.”

Act 10 Has Enabled School Districts to Fire Lousy Teachers, Hire Better Ones

Ms. King continued: “A large share of the savings stem from the fact that teacher union bosses no longer exercise veto power over which health-care provider furnishes insurance for public educators.

“Prior to Act 10, the vast majority of school districts effectively had no choice but to purchase grossly overpriced teacher health insurance from a subsidiary of the Wisconsin Education Association Council [WEAC/NEA] teacher union.

“School districts across the state are now collectively saving tens of millions of dollars a year simply because they are able to get competitive bids for health insurance.

“Of course, money school districts no longer have to throw away on overpriced health insurance can be returned to the classroom.

“Act 10 has also enabled school districts that were formerly shackled by monopolistic government unions to fire lousy teachers, hire better ones, and adopt pay-for-performance policies.”

Of course, all of the obvious benefits that Act 10 has brought to hard-working and conscientious public employees and countless other Wisconsin residents are of no importance to government union bosses.

Today they remain enraged about losing tens of thousands of formerly captive members and tens of millions of dollars annually in forced-dues revenue.

“No matter how successful Act 10 turns out to be, Big Labor will never forgive Scott Walker and his allies in the Legislature for rolling back its monopoly power over the vast majority of Wisconsin’s front-line public employees,” said Ms. King.

“Consequently, there’s no plausible reason for the governor to resist giving Right to Work protections to private-sector employees and the minority of state and local employees who are still subject to forced unionism.”