Wisconsin has gotten mighty used to multi-billion budget surpluses over the past 12 years, something that was unimaginable before the passage of Act 10.
Rich Government Benefits Were Bankrupting Wisconsin
Back in 2010, the state was facing an immediate $127 million budget shortfall and a $3.6 billion structural deficit going into the next budget cycle. Gov. Scott Walker correctly identified bloated public sector union contracts as the main culprit. Despite the left waging what we would today call a weeks-long “insurrection,” Walker and the Republican-led legislature passed a package of reforms that instantly turned around the state’s financial situation.
Bringing Government Benefits Closer In Line With The Taxpayers Who Finance Them
Act 10 required government employees to pay 12.6% of their health insurance premiums (still less than half the usual contribution of private sector workers toward their health insurance) and half of the contributions made towards their own pensions. Previously, they paid nothing; state taxpayers picked up both the employer and employee match. For perspective, the average private sector worker pays 17% of their health insurance premiums for single coverage and 28% for family coverage, according to the Kaiser Family Foundation.
Act 10 also limited what public-sector unions could negotiate for. These changes were meant to give state and local governments more flexibility to identify potential savings and keep their budgets balanced. It had an immediate impact.
Much more ion Act 10, here. Further background: the Milwaukee Pension Scandal