Wisconsin Reined in Public Sector Unions. Now Those Reforms Are in Jeopardy.

In 2011, Wisconsin made national news headlines when then-Gov. Scott Walker attempted to reform public sector collective bargaining as a part of his push for fiscal responsibility. At the height of the Tea Party movement, what became known as Act 10—which restricted the areas public sector employees could collectively bargain over—quickly transformed into a political hornet’s nest.

Democratic state lawmakers infamously fled the state for Chicago in an effort to block a vote on the bill as it was winding its way through the legislature, and Walker eventually faced a recall election.

He survived. This year, Act 10 turns 15. By all available evidence, it has worked exactly as intended. But despite the law’s positive impact for Wisconsin taxpayers and the state fisc, it is facing a questionable legal challenge that may finally doom it.

When Walker took office in 2010, Wisconsin was staring down the barrel of a $3.6 billion budget deficit. One of Walker’s primary responses was to push Act 10; the law allowed bargaining over wages but not things like pensions and health insurance. It also put state government employees on the hook for covering 12 percent of the premium costs for their government-provided health insurance plans, in addition to mandating more employee contributions to pensions.

While it’s difficult to calculate the exact cost savings to Wisconsin from Act 10, the MacIver Institute has estimated $35.6 billion in savings through 2025. But beyond dollars and cents, Act 10 also succeeded in cutting back on union power in Wisconsin—thus helping the government run more efficiently.

According to a recent analysis by the Center for Economic Policy and Research (CEPR), Wisconsin has seen the sharpest decline in union membership rates of any state in the country over the past 40 years. While the number of union members has declined nationwide in recent decades as America has transitioned to a more service-based economy, Wisconsin’s decrease has been particularly notable, especially since it historically had been one of America’s most unionized states.

Act 10 played a large role in the drop. Wisconsin’s public sector union membership rates saw “by far” the largest decline—at close to 29 percent—of any state, according to CEPR’s report. “Wisconsin’s steepest losses,” the report notes, “coincided with the 2011 passage of Wisconsin Act 10.”

“There was definitely a national trend of gradual union decline, but Wisconsin fell faster and further than almost anywhere else, and it had further to fall,” said Hayley Brown, the author of the report, in an interview with Wisconsin Public Radio. The law’s success has also prompted other states to follow suit with collective bargaining reforms in recent years.

Yet its future is far from certain. In December 2024, a county judge declared the law unconstitutional for allegedly violating the state constitution’s equal protection clause. The judge’s reasoning was based on the fact that public safety employees (like police and firefighters) were exempt from the law’s reach, while other government employees (like teachers) were not.

The U.S. Court of Appeals for the 7th Circuit effectively rejected this argument in a 2013 case—albeit one that involved an equal protection claim under the federal constitution, rather than Wisconsin’s constitution. Because collective bargaining does not involve a “fundamental right,” the court said, the law withstood scrutiny since it “further[ed] a legitimate government objective.” Other legal challenges to Act 10—including another 7th Circuit case and a 2014 decision by the Wisconsin Supreme Court—have also upheld the law.

But this most recent litigation poses the gravest threat yet. The December 2024 decision is now pending before the Wisconsin Court of Appeals. Once that court issues its ruling, the case will make its way back to the state’s highest court. Recent judicial elections swung the Wisconsin Supreme Court to a liberal majority, leading many to predict the law’s demise.

Act 10′s potential death would come at a real cost. The Wisconsin Institute for Law & Liberty (WILL) has estimated that striking it down would cost school districts in the state $1.6 billion annually, on top of $440 million annually in new costs to local government units. Meanwhile, for the average taxpayer who owns a $300,000 home—the average cost of a house in Wisconsin—overturning the law would result in a $624 hike in annual property taxes, according to WILL.

Both budgetary math and declining union power show that Act 10 worked exactly as Walker promised. Unfortunately, Wisconsinites may not be able to enjoy the law’s benefits for very much longer.

The post Wisconsin Reined in Public Sector Unions. Now Those Reforms Are in Jeopardy. appeared first on Reason.com.