Milwaukee School Board Uses Act 10 to Cut Labor Costs and Address Huge Deficit by Education Action Group 1 Dec 2011 post a comment Share This: MILWAUKEE - The sky is falling. Hell's freezing over. Well, almost. The Milwaukee school board has decided to invoke Act 10 and cut labor costs, without permission from its large and influential teachers union. Welcome to the real world of school finance, Milwaukee. If you recall, Milwaukee was one of those districts that couldn't accept the benefits of Act 10 this year. That's because the school board, despite its financial problems, retroactively entered into a four-year collective bargaining agreement with its teachers union, complete with salary increases, in 2010. Apparently someone in Milwaukee woke up in recent months. The district announced last week that the school board took "bold action" Nov. 17 by approving a three-year wage freeze for all employees, which will be applicable as soon as current collective bargaining agreements expire. The teachers contract expires in June 2013, while pacts with the district's other unions expire next year. The board also voted to increase employee contributions to health insurance premiums based on income, with a top contribution of 14 percent for those making at least $75,000 per year. Employees will also be required to pay 5.8 percent of their salaries toward retirement pensions. The moves will save the district an estimated $170 million over the next five years, and will put a dent in its anticipated $24 million budget deficit in fiscal 2013 and $33.6 million in fiscal 2014. "We have put off decisive action for too many years," Superintendent Gregory Thornton was quoted as saying. "To me, it was the elephant in the room, the massive mountain on the horizon. "Without the adjustment to those costs, our most conservative five-year forecast showed the district laying off an additional 200 to 300 teachers over the next two years." We're sure the teachers union (and other employee unions in the district) are furious, but that has to be a secondary concern. Labor costs eat up about 75 percent of a typical school budget, and in the current financial environment there's no other acceptable place to cut. As Alan Borsuk of Marquette University wrote in a recent editorial, "MPS is not only facing up to the changes spurred by Gov. Scott Walker, but its long history of not dealing with the ugly place it was heading due to galloping benefit and retirement costs." We salute the Milwaukee board for finally facing reality, and recognizing that the schools exist for students, not the people who staff them. When spending cuts are necessary, they must be aimed at adults, so students will experience as little impact as possible. All of this begs the question - what would the school board have done if Act 10 did not exist? Does anyone really believe the notoriously stubborn Milwaukee Teachers' Education Association would have agreed to an across-the-board plan to curb labor costs? What are the chances Thornton and board members will publicly (or even privately) thank Gov. Walker for boldly implementing Act 10? Probably little to none. That's OK. We're sure the governor is getting his own satisfaction watching school officials use the tools he provided to save money for students.