[Madison, Wisc…] An analysis of new labor agreements in Wisconsin’s school districts indicates requiring teachers to make modest contributions to health and pension benefits can cut the cost of education by over $500 per student in Wisconsin in 2011-2012, saving school districts hundreds of millions of dollars without affecting class size or course offerings.
"Our analysis shows that the recent change to state law has empowered school districts to secure better deals for their taxpayers," said Brett Healy, President of the MacIver Institute. "Without impacting class size or course offerings, and without massive layoffs, school districts are saving more than $500 per student thanks to modest, concessions from the labor force."
A preliminary estimate based on an analysis of local reports conducted by the MacIver Institute suggests that, if adopted uniformly by every district in Wisconsin, local schools would stand to save $451,076,536.32 through new staff contracts that required the additional contributions to health and retirement benefits.
|Sample Group of Districts With Updated Contracts – July 2011|
|District||Health Contribution||Pension Contribution||Projected Savings|
|Madison||Up to 5% in ’11-12, up to 10% in 12-13||5.80%||$15,500,000|
|Racine||Switch to high-deductible plan||5.80%||$19,200,000|
The MacIver Institute analysis is a conservative estimate based largely on contract settlements that were agreed upon while Act 10 was being debated, and before the Supreme Court upheld its enactment.
“Without a doubt these savings would never had been reached had Governor Walker not dramatically changed the landscape in Wisconsin with his reform proposals,’ said Healy. “This is likely only the beginning. As more and more of the 425 local contracts come up for negotiation and government benefits in Wisconsin are finally brought in line with the private sector, the savings for taxpayers will continue to mount.'
Ninety three public school districts in Wisconsin will save a projected $154 million. However, 19 of these districts don’t yet have official projections tied to the savings from these new contracts, which suggests that the overall fiscal benefit will be much higher.
Still, MacIver’s analysis shows an average savings of $1.6 million per reported district. According to 2011 head counts from the Department of Public Instruction, these changes will affect 298,771 students. Therefore districts with newly negotiated contracts will save an average of $517.12 per student.*
The full report, written by MacIver Institute Education Policy Analyst Christian D’Andrea, can be seen online, here.
*UPDATE: Waukesha's updated contract runs from 2009-2011, thereby making it a retroactive agreement. As a result, its savings and student count were dropped from the overall tallies. As a result, per-student savings rose from $497 to $517 by counting only current contracts.