Wisconsin Act 10 and Its Impact on Chilton Schools
First published on 23 March 2012 Posted in Business Office
Since the implementation of Act 10, we have had a number of people ask how this has affected the Chilton School District. As you may recall, it was February, 2011 when Governor Walker presented his Budget Repair Bill that eventually became known as Act 10. Act 10 requires all employees who participate in the State insurance plan to pay a minimum of 12% of the premiums. All state and local government employees are required to pay 50% of the state imposed retirement rate. Currently employees pay 5.9% of their gross wages toward their retirement and the district pays the same. Act 10 also limits collective bargaining to base wages and they can only be increased to a maximum of the Consumer Price Index (CPI) annually. Any increase to base wages beyond CPI requires going to referendum and getting the approval of the community. It is these three parts of the Act 10 legislation that are considered the “tools” that assist schools in balancing their budgets. Part of the reason for providing the “tools” is due to the decreased financial support by the State and the reductions to the Revenue Limit formula that caps the amount of State and Local tax that schools can receive.
Chilton was able to negotiate a one-year extension to the collective bargaining agreement with our teacher’s union which will expire June 30, 2012. In this agreement are the “tools” from the budget repair bill.
Though we do not participate in the State insurance plan (we have been able to attain a better insurance plan at a lower premium), all employees now pay 12% of their insurance premiums. Unlike some districts in the state, our employees were already paying a portion of premiums. It is because we had both a lower premium rate and were already requiring some insurance premium deduction by employees that we did not see as significant a cost savings with this change, but a cost savings was realized.
The largest cost savings was attained with the requirement of all employees paying for 50% of the State imposed retirement rate. Here too, it is important to point out that there were some employment classifications in Chilton that were already required to pay the employee portion of the retirement rate, but Chilton did see a large cost savings with this part of the legislation.
The last “tool”, collective bargaining for base wages, is the only part Chilton has yet to work with. The staff had agreed to a 1.5% wage increase for the 2011-2012 year (recently released CPI is 1.64%) prior to Act 10. The staff recently voluntarily agreed to a wage freeze for the 2012-2013 year (CPI is 3.16%). The district has formed a Compensation Advisory Committee made up of both administrators and teachers with a goal of working collaboratively to present both the teacher’s union and the board of education with a comprehensive compensation plan. It will be a few years before we really know the impact of how this part of the legislation has affected the Chilton district.
It is important to inform the public that Chilton has been and continues to be a very fiscally conservative district. Even with the savings realized from minimal wage increases for our employees and the savings from increased insurance and retirement payments by employees, Chilton still needed to make cuts to our budget for the 2011-2012 year and project the need to make additional cuts in the future. We are already considered a low spending district by the State (which means our shared educational costs are lower than the state’s minimum allowable amount). In a comparison to other school districts, we have one of the lowest insurance premiums. We had our employees sharing in the cost of insurance premiums prior to the implementation of Act 10. It is because of all of these earlier financial decisions that Chilton did not realize as large a savings as you may have heard other districts declaring.
Chilton is proud of its ability to provide this community and its students with an excellent educational experience on a fiscally tight budget. We foresee State financial support continuing to decline; Chilton has gone from 78% State support in 2007 to 69% support in 2011 (5 years). This means a tax shift to the local taxpayer, but we continue to work with neighboring districts for additional areas to cooperatively provide services and search for additional cost savings that can be attained. Our mission continues to be “Preparing Students to Achieve Their Potential”. Though we will continue to be challenged by budget constraints, we will do everything possible to minimize the budgetary impact on students and programs.