July 23, 2012

WE ALL KNOW WHERE WE'RE HEADED...:

California, look to Wisconsin : Golden State cities hoping to avoid bankruptcy should look east for ideas. (Steven Malanga
July 17, 2012, LA Times)

When Walker introduced his so-called budget repair bill in February 2011, he argued that the biggest beneficiaries of his plan would be cities, towns and school districts, which would gain the flexibility to cut costs without having to negotiate every change in compensation or work rules with local unions. His legislation specifically eliminated collective bargaining by government workers for benefits and required greater contributions from them toward pensions.

How local officials employed those changes to cut costs proved revealing. The state's teachers union, Wisconsinites learned, had used its power to collectively bargain for healthcare benefits to demand that local school districts provide coverage through a nonprofit insurer affiliated with the union. Once the state ended bargaining on healthcare, school boards began competitively bidding out their health insurance.

By the opening of the new school year in September, just two months after the budget bill went into effect, 23 districts had rebid their contracts, saving $16 million, or an average of $211 per student. The MacIver Institute, a Madison-based think tank, estimated that if all the state's districts were able to negotiate similar deals once their contracts with the union-affiliated insurer expire, schools could save $186 million.

As mayor of Milwaukee, Barrett employed Walker's reforms before he knew he'd be facing the governor in the recall election. In mid-August 2011, barely a month after the changes went into effect, the Milwaukee Journal Sentinel reported that the city would save as much as $36 million in its next budget from "healthcare benefit changes it didn't have to negotiate with unions" as a result of the new state legislation. When asked whether Walker's reforms should be credited for the savings, Barrett brushed aside the question and asserted that virtually everyone was in favor of having workers contribute more to their healthcare.

Posted by at July 23, 2012 5:44 AM
  

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