2011 Wisconsin Act 10

2011 Wisconsin Act 10, also known as the Wisconsin Budget Repair Bill or the Wisconsin Budget Adjustment Act, is a controversial law enacted by the 100th Wisconsin Legislature which significantly limited the rights and compensation of state and local government employees in Wisconsin. It was the signature act of Republican governor Scott Walker, who described it as a tool needed to address a projected $3.6 billion budget deficit. The introduction of this bill provoked immediate outrage from labor unions and their allies, and resulted in months of mass protests at the Wisconsin State Capitol. Democratic members of the Wisconsin Senate then fled the state to deny a quorum for the bill, remaining in Illinois for three weeks. Republicans in the legislature eventually stripped out budgetary items to circumvent budget-related quorum rules and passed the legislation on March 9, 2011. The law was signed by governor Walker on the morning of March 11 and was followed by a ceremonial signing later that day.
The legislation ended most collective bargaining rights for public employee labor unions, exempting certain public safety unions such as police, fire fighters, and sheriffs deputies. The law also made it much more difficult to certify and maintain a public employee union, and made it more difficult for unions to collect dues from members. The legislation also adjusted the public employee retirement system to shift the burden of contributions more onto employees, adjusted public employee health insurance plans to cap employer contributions, made it easier to fire employees who engaged in work stoppages or strikes, and enabled changes to state Medicaid programs.
The law was challenged in court, most notably in the case Madison Teachers Inc. v. Walker. The plaintiffs alleged that the law violated constitutional rights to association and equal protection, and separately charged that the law's rules for local government units violated the state constitution's home rule amendment and violated their rights to freely enter into contracts. Wisconsin circuit court judge Juan B. Colas initially heard the case and struck down several provisions of the law, but, on appeal, the Wisconsin Supreme Court overturned that ruling in a 5-2 decision in July 2014, upholding Act 10 in its entirety. Litigation against Act 10 continued after 2024, as Wisconsin circuit court judge Jacob Frost again struck down parts of the law where public safety unions were treated differently than other public employee unions.

Legislation summary

Pension contributions: Employees were forced to take a cut in take-home pay to maintain pension contributions at existing levels to ensure pension system viability. Pension contributions, however characterized, are part of total employee compensation. Statements made, such as 'Employees of Wisconsin Retirement System employers, and the City and County of Milwaukee must contribute 50% of the annual pension payment' were framing devices used to justify the cut in take-home pay, as reduction in total compensation to public employees using these retirement systems was a policy goal for the Walker Administration, as tax increases to resolve the budget deficit were opposed by Governor Walker. The payment amount for WRS employees was estimated to be 5.8% of salary in 2011. 'State, school district and municipal employees who were members of the WRS generally paid little or nothing toward their pensions' was an additional framing device to reflect the policy goals of the Walker Administration, in reducing the power of public sector unions that were not political allies.
Health insurance contributions: State employees must pay at least 12.6% of the average cost of annual premiums. In addition, the law requires changes to the plan design necessary to reduce current premiums by 5%. Local employers participating in the Public Employers Group Health insurance cannot pay more than 88% of the lowest cost plan. The law also authorizes the Department of Employee Trust Funds to use $28 million of excess balances in reserve accounts for health insurance and pharmacy benefits to reduce health insurance premium costs. State employees on average paid approximately 6% of annual health insurance premiums.
Health insurance cost containment strategies: The law directs the Department of Employee Trust Funds and the Group Insurance Board to implement health risk assessments and similar programs aimed at participant wellness, collect certain data related to assessing health care provider quality and effectiveness, and verify the status of dependents participating in the state health insurance program. In addition, it modifies the membership of the Group Insurance Board to require that the representative of the Attorney General be an attorney to ensure the board has access to legal advice among its membership.
Pension changes for elected officials and appointees: The law modifies the pension calculation for elected officials and appointees to be the same as general occupation employees and teachers. Previous law required these positions to pay more and receive a different multiplier for pension calculation than general classification employees. Under the state constitution, this change is effective for elected officials at the beginning of their next term of office.
Modifications to Wisconsin Retirement System and state health insurance plans: The law directs the Department of Administration, Office of State Employment Relations and Department of Employee Trust Funds to study and report on possible changes to the Wisconsin Retirement System, including defined contribution plans and longer vesting periods. The three agencies must also study and report on changes to the current state health insurance plans, including health insurance purchasing exchanges, larger purchasing pools, and high-deductible insurance options.
General fund impact: Authorizes the Department of Administration Secretary to lapse or transfer from GPR and PR appropriations to the general fund estimated savings of approximately $30 million from implementing these provisions for state employees in the 2010–11 fiscal year. Segregated funds retain any savings from these measures.
Collective Bargaining: The law limits collective bargaining for most public employees to wages. Total wage increases cannot exceed a cap based on the consumer price index unless approved by referendum. Increases from the bargaining process for teachers are applied only to the base wages, and do not include the additional salary of teachers. Contracts are limited to one year and wages frozen until the new contract is settled. Collective bargaining units must take annual votes to maintain certification as a union. Employers cannot collect union dues, and members of collective bargaining units are not required to pay them. These changes take effect upon the expiration of existing contracts. Local law enforcement and fire employees, and state troopers and inspectors are exempt from these changes.
Career executive transfers: The law allows state employees in the career executive positions to be reassigned between agencies upon agreement of agency heads.
Limited term employees : The law prohibits LTE's from being eligible for health insurance or participation in the Wisconsin Retirement System.
State employee absences and other work actions: If the Governor has declared a state of emergency, the law authorizes appointing authorities to terminate any employees absent for three days without employer approval or any employees that participate in an organized action to stop or slow work.
Quality Health Care Authority: The law repeals the authority of home health care workers under the Medicaid program to collectively bargain.
Child care labor relations: The law repeals the authority of family child care workers to collectively bargain with the State.
University of Wisconsin Hospitals and Clinics Board and Authority: The law for UWHC employees. State positions formerly employed by the UWHC Board have been eliminated and the incumbents transferred to the UWHC Authority.
University of Wisconsin faculty and academic staff: The laws repeals the authority of UW faculty and academic staff to collectively bargain.
Debt restructuring: The law authorizes the restructuring of principal payments in fiscal year 2010-11 on the state's general obligation bonds. These principal repayments are paid in future years. Since the state must make debt service payments by March 15, the law had to be enacted by February 25 to allow time to sell the refinancing bonds. This provision was projected to reduce debt service costs by $165 million in fiscal year 2010-11. This savings were to help address one‑time costs to comply with the Injured Patients and Families Compensation Fund state Supreme Court decision and make payments under the Minnesota‑Wisconsin tax reciprocity program.
Medicaid deficit: Medicaid costs were expected to exceed current GPR appropriations by $153 million. The law increased the Medicaid GPR appropriation to address this shortfall.
Authorize DHS to restructure program notwithstanding current law: To reduce the growth in Medicaid costs, the law authorizes the Department of Health Services to make program changes notwithstanding limits in state law related to specific program provisions. The department was expected to develop new approaches on program benefits, eligibility determination and provider cost-effectiveness. The changes require passive approval of the Joint Committee on Finance before implementation.
Technical correction: Act 28 included language that required unused GPR expenditure authority in the Medicaid GPR appropriation at the end of the biennium to be carried over to the subsequent biennium. The law repeals this provision to ensure unspent funds in Medicaid lapse to the general fund balance.
Aging and Disability Resource Centers : The law transfers an estimated $3 million in savings in this appropriation to Medicaid. ADRC's are the intake and assessment element of the state's Family Care program.
Corrections: The law provides $22 million GPR to address shortfalls in the Department of Corrections adult institutions appropriation. These shortfalls are due to health care costs, overtime, and reductions in salary and fringe benefit budgets under Act 28.
Temporary Assistance to Needy Families Funding for Earned Income Tax Credit : The law allocates $37 million of excess TANF revenues to increase TANF funding for the EITC from $6.6 million to $43.6 million in fiscal year 2010-11. By increasing TANF funding, GPR funding for the EITC is reduced by a commensurate amount.
Income Augmentation Revenues: Allows the Department of Children and Families and Department of Health Services to use $6.5 million of already identified income augmentation revenues to meet fiscal year 2010-11 lapse requirements.
Act 28 Required Lapses by DOA Secretary: Under Act 28, the Department of Administration Secretary must lapse or transfer a total of $680 million in 2009-11 from appropriations made to executive branch agencies to the general fund. The law reduces this amount by $79 million to ensure the lapses can be met in the next five months as this was ineffectively addressed by the previous administration.
Lapse of Funding from Joint Committee on Finance Appropriation: The JCF appropriation included $4.5 million related to estimated fiscal year 2010-11 implementation costs of 2009 Wisconsin Act 100. This funding was not anticipated to be needed in fiscal year 2010-11, and the law lapses these amounts to the general fund balance.
Sale of State Heating Plants: The law authorizes the Department of Administration to sell state heating plants. The proceeds from any sale, net of remaining debt service, is deposited in the budget stabilization fund.
Shift Key Cabinet Agency Positions to Unclassified Status: The law creates unclassified positions for chief legal counsel, public information officer and legislative liaison activities in cabinet agencies. An equivalent number of classified positions were deleted to offset the new unclassified positions. These activities are critical to each cabinet agency's overall mission and should have direct accountability to the agency head.
University of Wisconsin–Madison flagship status: The law separates the flagship University of Wisconsin–Madison campus from the rest of the University of Wisconsin System.