Act 10 helping Milwaukee County balance the books
Over at the MacIver Institute, I have a new article up on the effect of Act 10 on the Milwaukee County budget and the comments of County Executive Chris Abele.
In an interview, Abele agreed with the report. “Absolutely Act 10 gives more flexibility.”
Abele said the best defense of Act 10 is the effect it has. “Your taxes didn’t go up and your services didn’t get cut. That is the best refutation to anything the unions would say.”
Before Act 10, the Milwaukee County Executive could propose savings in employee benefits in the budget, but they would have to be negotiated. Now employee benefits are no longer part of the collective bargaining process.
Milwaukee County went into this budget cycle with a structural deficit of $28.5 million. The county is facing an increase in health care and pension costs of $16.2 million, according to the PPF report.
Abele said that the question was how much of the increase in health care costs were passed along to the employees. “It either gets passed on to the employees or the taxpayers.”
With the Act 10 reforms in place, the county executive was able to propose changes in the county health plan for employees. For example, if the budget passes, the county will no longer be making a defined contribution to an employee’s flexible spending account of $500 for singles and $1,500 for families. In addition, deductibles and premium co-pays would also rise. The total savings in health care from the original budget forecast is $11 million.
As a result of health care savings, the PPF report says, “Employee/retiree health care savings bridge about 37% of the $28.5 million budget gap in the 2013 recommended budget, and bridged nearly 40% of the projected $55 million budget gap in 2012.”
I imagine his comments are not making him friends at the courthouse, but as he said it’s hard to argue with the results.