The Madison School District is at risk of missing out on its $16 million share of proposed new school spending Gov. Scott Walker has included in his two-year budget plan.
That’s because Walker is attaching a major string to that $649 million: Districts must be in full compliance with the governor’s 2011 law shifting more pension and health insurance costs onto employees.
The law, known as Act 10, required local governments who offer a state health insurance plan to their employees to pay no more than 88 percent of the average premiums. Walker’s 2017-19 state budget will now require the same of all school districts, regardless of which health insurance plans they offer.
That spells trouble for the Madison School District, which for years after Act 10 was enacted didn’t require staff to pay any portion of their health insurance costs.
The district does now require employees to pay something toward their monthly health insurance premiums, but the contributions do not reach the 12 percent threshold Walker proposed. The contribution levels in Madison range from 1.5 percent for lower-paid staff to 10 percent for school district administrators.
“While we have not done an exhaustive review, we are only aware of the Madison School District that did not capture the reform savings,” said Walker’s spokesman Jack Jablonski.
If the Madison School Board does not make the change, the district could be left out of the funding increase of $200 per student in the first year of the biennium and $404 in the second year — amounting to more than $16 million the district would not receive.
Mike Barry, the Madison School District’s budget director, said district officials and school board members would need to discuss the governor’s proposal before considering next steps.
“We understand the idea of efficient use of taxpayer resources,” said Barry. “We’ve come at it the Madison way and we think we’ve been successful.”
Barry said while the district’s employee contributions do not meet the 12 percent level, the health insurance plan renewals with the district’s three HMOs have had no financial impact on the district in the past two budgets. He emphasized the strategy has been considered “successful” for the district.
Compliance with Act 10
Under Walker’s budget, the district would get a $5.5 million increase in the first year and a $5.6 million increase in the second year, based on 2016 enrollment figures.
If lawmakers agree, school districts will be required to “certify compliance” with Act 10 with the Department of Public Instruction before receiving the funds.
The Madison School District and Walker have been at odds in regard to Act 10 since it was first proposed. Its teachers union, Madison Teachers Inc., was the lead plaintiff in a lawsuit that unsuccessfully challenged the law.
Since the law was adopted, and after the district’s collective bargaining contracts with its employees expired, school board members continued to keep employees from paying toward health insurance costs until last year, when teachers began to pay 3 percent of their premiums.
Board member T.J. Mertz said the proposal undermines the board’s ability to exercise local control.
“(Supporters) of Act 10 have touted the idea of districts being able to compete for teachers, and teachers being able to make choices,” Mertz said. “The combination of salary and benefits in the compensation package is one way districts can position themselves in this market.”
Longtime board member Ed Hughes said the board’s approach to employee contributions to health care costs has been supported in the community.
“I’m proud of the collaborative working relationship we’ve forged with our teachers that’s delivered balanced budgets, kept a lid on health insurance costs and earned strong community support,” said Hughes. “We’ll persist and keep working together no matter what Gov. Walker throws at us.”
State Superintendent Tony Evers said he believes the Madison School District should be allowed to make decisions about how it spends its money.
“Madison School District might be making cuts in other areas in order to keep that insurance plan that they have,” said Evers.
Evers said he is not concerned about being put in charge of determining whether districts are “compliant” but is concerned about “another piece of local control being taken away.”
“Eighty-eight percent might be a magic number to some; I’m not sure it is for every school district,” Evers said.
Rep. Chris Taylor, D-Madison, said the governor is forcing the Madison district to “not adequately compensate our teachers; not adequately give them benefits.”
“He’s basically forcing us to cut teachers’ salary to get more money for our public school kids here in Dane County, which is absolutely outrageous,” she said.
Republican lawmakers, however, were supportive of the proposal.
“I definitely support the idea of making sure that people are using the tools we gave them,” said Assembly Speaker Robin Vos, R-Rochester. “If we’re going to continue to invest more and more state resources, they have to at least find ways to help us share the burden by reducing costs, asking employees to pay a small amount for their pension, their health care.”
Repeals of mandates for districts: Walker’s budget also recommends repealing the minimum hours of instruction for public schools, required monthly school board meetings and the requirement that school district administrators have contract terms of two years, among other mandates.
Limits on raising revenue: The budget also eliminates one way school districts have raised property taxes despite state-imposed limits on overall revenue. Since 2009, school districts have been able to spend above their revenue caps without first going to voters if the money is being used for projects intended to improve energy efficiency in the district. But districts rarely took advantage until 2012, when Walker and Republican lawmakers tightened revenue limits. Walker’s budget proposal said property levies associated with the revenue limit exemption grew 115 percent in the last three years and in 2016 alone, districts were authorized to spend $327 million above revenue caps.
Teacher licensing changes: Wisconsin teachers also will no longer need to renew their licenses to teach in classrooms if lawmakers agree to Walker’s proposal. Currently, teachers must renew their licenses every five years.