Scott Walker's boost in aid tied to Act 10; school staff must pay 12% of health care costs

Gov. Scott Walker is touting a 2017-'19 budget plan that would offer schools a $648 million increase in per-pupil aid and overall education funding that would "exceed the highest levels in state history."

But districts would have to fully comply with the vestiges of Walker's controversial Act 10 law before receiving any of the new per-pupil money.

According to specifics Walker released Wednesday, school employees would have to contribute to 12% of the cost of their health-care plans for their students to receive per-pupil aid boosts of $200 and $204 in the first and second years of the budget, respectively.

The moves raise questions about how GOP lawmakers will require schools to spend their money. Especially when Act 10 and other recent GOP-led legislation has aimed to move decision-making power away from the state and to local government.

Act 10, which Walker signed in 2011, dramatically curtailed collective bargaining for public unions and required state workers to contribute to more of their health insurance and pension benefits.

Walker defended the proposal after a speech in Milwaukee Thursday, saying it's consistent with what taxpayers experience in their workplaces and that there’s nothing to stop districts from crafting economic incentives that reward employees in other ways.

"Most people in this state pay something for their...health insurance. Districts that choose not to do that are out of whack with where the rest of the state is at,” he said.

RELATED:  Act 10's impact, five years later

RELATED: Scott Walker talks to Trump team about national expansion of Act 10 labor limits

State Rep. Chris Taylor (D-Madison) called Walker's idea “horrible” and said it will negatively affect districts’ abilities to attract good teachers.

“It’s despicable that he is pitting school kids against educators, conditioning more money desperately needed for school kids on slashing educator compensation for some districts," she said.

But Assembly Speaker Robin Vos (R-Rochester) said he supports the budget provision because it's aimed at making sure "that the taxpayers reap savings based on our Act 10 reforms."

“I don’t want us to prescribe exactly how it has to be done, but if the goal is to say we need to have local governments (and) school districts have pension and health-care systems more similar to the private sector where you try to incentivize the right behavior, I think that’s common sense," he added.

Specifics of aid proposal

Currently, districts receive $250 in per-pupil categorical aid, and the proposed increases would mean $450 per pupil next year and $654 per pupil the following year. But to qualify for it under Walker's plan, districts would have to certify to the Department of Public Instruction that their employees will pay at least 12% of all costs and payments associated with employee health-care plans.

State Superintendent Tony Evers is opposed to the proposal. As of Thursday, his office, school associations and school attorneys were trying to get clarification on whether the provision could include all deductibles and co-payments, or just premium contributions from employees.

Vos, for his part, indicated that he thought the provision referred to 12% of overall costs.

The confusion persists because Act 10 called for a 12.6% employee premium contribution solely for participants in the state health plan. School districts outside the plan did not have to have employees contribute 12.6% toward the premium, since they could achieve savings through actions like plan or provider changes.

Districts like Madison initially opted not to have employees contribute to health-care premiums. The district only recently required such contributions, which range now from 1.5% for lower-paid staff to 10% for higher paid staff, according to the Wisconsin State Journal.

Milwaukee Public Schools requires contributions ranging from 2% for staff who make less than $25,000 and who choose high-deductible plans to 14% for higher paid staff on higher-cost plans.

"I think it would be really tough for some of the lowest-paid employees to contribute 12%," MPS spokeswoman Denise Callaway said Thursday.

Lack of clarity on affected districts

The provision would affect a number of other districts in southeastern Wisconsin if the 12% bar applies solely to premiums.

In West Allis-West Milwaukee, where employees pay 10%, staff would pay an additional $13.14 a month for a single plan and $32.81 for a family plan. They currently pay between $63 and $158 a month, depending on the plan.

If the district changed its employee contributions to qualify for the boost, it would receive about $1.7 million in additional aid for the 2017-'18 school year alone.

The Wauwatosa School District pays the entire premium for its staff, but requires employees to pay up to 14% of their total health care costs through a $2,600 deductible, which Superintendent Phil Ertl says meets the spirit of the budget proposal.

Ertl said his district would comply with the law in order to receive the per-pupil funding. But he said any changes would simply be a shell game.

“My concern is that, if (it's based on the premium), we would be penalized for making good decisions when Act 10 came through,” said Ertl.

Mike Ford, an assistant professor in the Department of Public Administration at the University of Wisconsin-Oshkosh, said Act 10 aimed to give school districts flexibility, and it delivered on that promise.

But "placing new mandates limiting the ability for school districts to make compensation decisions runs counter to the management goals of Act 10," he said.

Per-pupil aid must go to schools

Walker's full budget proposal added another important layer of spending specificity: Districts that receive the aid boost would have to direct all the per-pupil money "to individual school buildings."

That means centrally funded items such as special education or district transportation or even guidance counselors could be short-changed.

State Sen. Luther Olsen (R-Ripon), who chairs the Senate Education Committee, said he finds some problems with that logic. He said he understood the urge to make sure new funding goes to children and not to centralized bureaucracies. But the restrictions might prevent districts from making necessary investments in new technology equipment or centralized purchases for middle-school textbooks.

"I think it flies in the face" of local control, he said.

Reporters Jason Stein and Patrick Marley in Madison contributed to this story.

Contact reporter Erin Richards at erin.richards@jrn.com or (414) 426-9838 or @emrichards.