After chaos ensued from unions protesting in Wisconsin and Democratic lawmakers actually leaving town and hiding to prevent a vote, Governor Scott Walker finally managed to pass his Wisconsin Budget Repair bill, which included language that required union workers to increase contributions to their health insurance and pensions among other things.
The collective bargaining portions of the budget repair bill Walker signed into law is referred to as Act 10.
Unions took the issue to court and most of Walker's budget repair bill was upheld, with a hold placed on some specific portions.
Jump to Friday, January 18, 2013 and a federal court has upheld Walker's Act 10 union law in it's entirety.
Via Journal Sentinel:
A federal court of appeals on Friday upheld Wisconsin's law repealing most collective bargaining for most public employees, handing a victory to Gov. Scott Walker and his fellow Republicans who put the law in place amid tumult two years ago.
Parts of the collective bargaining law, known as Act 10, remain on hold because of a state judge's ruling in a separate case, but Friday's decision was a setback for public employees and their unions.
Last year, U.S. District Judge William M. Conley largely upheld the legislation but struck down parts of Act 10 dealing with prohibitions on government employers withholding union dues from workers' paychecks as well as a section requiring labor unions to vote to recertify yearly. A three-judge panel of the U.S. Seventh Circuit Court of Appeals in Chicago reversed that lower court's ruling in a split decision Friday that upheld the law in its entirety.
"Today's court ruling is a victory for Wisconsin taxpayers," Walker said in a statement. "The provisions contained in Act 10, which have been upheld in federal court, were vital in balancing Wisconsin's $3.6 billion budget deficit without increasing taxes, without massive public employee layoffs, and without cuts to programs like Medicaid."
Walker's assertions about balancing the budget without raising taxes, was confirmed when reports came out showing that the state’s $3.6 billion budget deficit, was indeed turned into a surplus.
Via ABC News in June 2012:
One of the hallmarks of Walker’s governorship that he often touts has been a reduction in the state’s $3.6 billion budget deficit.
According to figures from the Wisconsin Department of Administration, Wisconsin will have a positive budget balance of $154.5 million or, in other terms, a surplus of $89.5 million, by June 30, 2013. (Roughly $65 million of the $154.5 million is a modest reserve for the state, so it can’t be spent by an administration.)
By September 2012, the Department of Revenue showed that Wisconsin collected $126.6 million more revenue than previously expected, which was 4.7 percent more for in the 2012 fiscal year than it did in the 2011 fiscal year.
The reason:
DOR spokesperson Laurel Patrick emphasized despite the numbers being good news, this is only “one part of the equation” that will make up the budget.
Patrick said the reasons why the actual collections were larger than what the department had originally projected in May 2012 were wage growth and business profits being stronger than anticipated.
DOA Secretary Mike Huebsch was pleased with the revenue release and said state agencies must continue to find ways to save money by being more efficient.
“After years of record budget deficits, we are clearly headed in the right direction. However, fiscal stewardship does not take a break. As state agencies prepare their biennial budget requests, we will ensure that agencies continue to be fiscally responsible, while providing the best possible services to our citizens,” Huebsch said.
A jump in revenue, without raising taxes.
An LA Times article in July 2012, shows how Walker's budget repair bill helped almost immediately after implementation:
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.
Those that were locked in to the insurers affiliated with the union, did not see those types of savings and it cost 519 workers, 334 of them teachers, their jobs.
Local governments that couldn't immediately employ Walker's savings faced dire consequences. The Milwaukee public school system, for example, had negotiated a new contract with its teachers union right before Walker's budget reform bill was passed. In the wake of Walker's bill, the school system went to the union and tried to work out concessions in line with the savings that would have been possible under the new legislation. But the union refused to negotiate, and two days later the district laid off 519 employees, including 334 teachers. The school system had estimated that if employees agreed to contribute 5.8% of their salaries toward pensions, as mandated by the new state law, that would have saved $20 million, enough to avoid 200 teacher layoffs.
Walker managed to cut spending, change collective bargaining laws which made union workers pay their "fair share" into their own healthcare and pensions, as non-union workers across the country do, and balanced Wisconsin's budget without raising taxes.
Another example of common sense, conservative economic policies turning state's deficit into a surplus.
Related:
Texas Budget Surplus Estimated At 8.8 Billion: A Shining Example Of How Conservative Policies Work.