New law helps Milwaukee schools save millions on retirement benefits

Jun 8, 2013 by

MILWAUKEE – Milwaukee Public Schools, which in recent years has been struggling to balance its budget by laying off teachers and cancelling student programs, has found a tool to deal with its immediate financial problems.

That tool is Act 10, the controversial law promoted by Wisconsin Gov. Scott Walker that severely limits collective bargaining privileges for state employee unions, including teachers unions.

In the past, Wisconsin school boards had to negotiate employee and retiree benefits with the teachers union, which guaranteed that high costs would prevail. Under Act 10, school boards are allowed to make changes to compensation programs without union approval.

The law has allowed the Milwaukee school board shave more than $1 billion from its long-term benefit obligations to employees, according to a report issued by the Thomas B. Fordham Institute.

A story about the Fordham report was published by the Milwaukee Sentinel Journal.

MPS will be spending about 45 percent less per-pupil on retiree pension and health care expenses by 2020, the report says.

“Without Act 10, MPS would eventually spend an additional $105 million – 9.2 percent of its entire budget – in 2020 due to the growth of retirement expenses,” the reports says.

The moral of this story is simple – when unions are involved in shaping school district budgets, there is less money available for student instruction. When unions are removed from the equation, there’s a lot more money to spend on students.

And students are the reason public schools exist, right?

New law helps Milwaukee schools save millions on retirement benefits – powered by Education Action Group Foundation, Inc..

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