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End of collective bargaining saves WI school district nearly $2 million - unexpectedly!

I've decided to start having some fun with real world economics results that are clearly understandable to anyone with even a basic understanding of how markets work, but which seem to be totally perplexing to the headline writers and editorialists in the mainstream news media.

Today's story concerns the Kaukauna, WI public school district.  After re-negotiating teacher contracts in the wake of Gov. Walker's notorious (to Democrats anyway) bill that eliminated most collective bargaining rights for public employees, this district found itself going from a $400,000 budget deficit to a $1.5 million budget surplus.  The reason?  Teachers are now required to contribute 5.8% of their salary to their retirement pensions, as well as pay 12.6% of the cost of their health insurance.

But here's the real killer:

In the past, Kaukauna's agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust -- a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.

Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, 'We can match the lowest bid,'" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.

What?  Competition saves money?  No-bid crony contracts where only one service provider is locked in, result in unnecessary cost markups?  Well knock me over with a feather!

Actually this is worth mocking for two good reasons.  First, because teachers are finally making pension and health care contributions on par with the rest of us who don't have cushy union contracts, and incredibly no one has died of starvation or has been shoved off a cliff in a wheelchair.  And second, because the WEA Trust was obviously trying to gouge the school district by needlessly raising health insurance premiums just as the new Obamacare rules were going into effect.  Geez Louise people, didn't you get all those Democratic Party memos explaining how Obamacare would lower the cost of health care and save everyone a ton of money?  Such SHOCKING behavior, and from an organization run by a labor union (the working man's friend!) no less.  For shame.


Regarding the story about Amazon.com closing its sales associate program in California that I posted yesterday, you owe it to yourself to read the response from Bill Quick, who is really steamed because he now stands to lose $3500 to $5000 a year.  To briefly recap, a new California law considers anyone in California with an online retail sales associate link on their website to have a "business nexus" (and therefore a virtual point of sale) in California.  From now on, vendors who sponsor these associate programs will be required to collect California sales tax on all sales generated through them.  Amazon's response to the new law was to simply terminate its relationship with all associates in California.

Quick thinks that the goal of the tax bill was never to raise more revenue.  Instead, it was designed by the California legislature as a sop for big box brick and mortar retailers like WalMart and Home Depot, who lose millions of dollars in sales each year to Amazon. 
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Comments (32)

Pretty much everything is "... (Below threshold)
Caesar Augustus:

Pretty much everything is "unexpected" to a leftist. For the simple reason that leftists are by definition brainless.

Interesting. ... (Below threshold)
James H:


But you can't make the teac... (Below threshold)
jim m:

But you can't make the teachers pay for their benefits. It's for the Children!!!!

Now we see that the unions really didn't want to hire more teachers and reduce the class sizes. They didn't want to help the children at all, they wanted to help themselves. They just wanted to line their own pockets just as we always said they did.

Once again we see that when you do the opposite of what the left wants, you actually accomplish what the left says it's trying to do. It's almost as if the left wants to keep people in need so they can keep a grip on power. (Aw, Heck. Who am I fooling? That is what they want.)

Its a lot cheaper to run wh... (Below threshold)

Its a lot cheaper to run when you dont have to pay for dumbing down with dem-witted greed.

What the dim bulbs in Sacra... (Below threshold)

What the dim bulbs in Sacramento (and elsewhere in CA) fail to understand is that Amazon customers WILL STILL BUY FROM AMAZON. They will just click directly to Amazon rather than through an affiliate. This will have no positive impact on the Big Boxers. The only losers are the affiliates (who will lose varying levels of extra income) and the taxpayers (whose state coffers will not expand, either via sales tax collections or via income taxes paid by affiliates).


Instead, it was designed... (Below threshold)
Jay Guevara:

Instead, it was designed by the California legislature as a sop for big box brick and mortar retailers like WalMart and Home Depot, who lose millions of dollars in sales each year to Amazon.

Wait - are you saying that the Reds ... er ... Democrats in the Legislature did this to help effing Wal-Mart? Seriously?

All Communists hate Wal-Mart passionately. The notion that they'd do something to help Wal-Mart (or Home Depot, for that matter) is risible.

What next? The CA Legislature votes a new tax to help build the George W. Bush Presidential Library?

So eliminating union interf... (Below threshold)

So eliminating union interference with the health care industry made health care cheaper, and saved tax payer money to boot.

Ya know, that's just crazy enough to work

The citizens of Milwaukee a... (Below threshold)
jim m:

The citizens of Milwaukee and other districts where the communist, excuse me, democrat dominated school boards rushed to sign new contracts with the unions perpetuating the free benefits scam that the unions had. Those districts will experience no savings because the dems knew that it would save money and they hastened to make sure the cash lined the pockets of the unions rather the educate the children.

These savings are not unexpected and where possible the dems have made sure they won't happen.

Why not just cut o... (Below threshold)

Why not just cut out the middle man - make the children and elderly work to support the unions??

My guess is the collective IQ would improve, although junior male student would get much less sex from his teacher.

Florida just started making... (Below threshold)

Florida just started making 562,000 state workers pay 3% towards their retirement plans. They also fired 1600 from the South Florida Water Management District, with more state jobs on the chopping block.

Needless to say, most of my leftie friends are completely hacked off over this - some of them are unemployed, but still think cutting state benefits or state payrolls is just beyond reason...

Why not just cut out the... (Below threshold)
jim m:

Why not just cut out the middle man - make the children and elderly work to support the unions??

Isn't that exactly what we are doing already? With the gilded pension plans these public unions have they are retiring early with far greater benefits that anyone in the private sector. In order to pay for those cushy pensions the rest of us have to work longer and harder because our taxes are paying for those pensions and our ability to save comes after we pay our taxes. (Yes, while my 401k may be technically collected pre-tax, my ability to pay my bills is affected by how much tax I have to pay so therefore my ability to save is also impacted by how much tax I pay.)

Just think, all of that Wis... (Below threshold)

Just think, all of that Wisconsin teacher money NO LONGER GOING TO THE DEMOCRATS.

As for the stupid Kalifornia law; no, they actually thought they'd make money. After all, we're not talking a high IQ here, they're Democrats who've never held a job outside academia.

This state is going into the toilet. Some of the southern counties are starting to talk about splitting from the rest of this idiot state.

Although the "Amazon tax" c... (Below threshold)
Jim Addison:

Although the "Amazon tax" certainly favors the big box retailers like Wal-Mart, who can already offer free shipping on "ship to store" orders, Quick's theory cannot be correct.

It supposes much deeper and more strategic thinking on the part of the California Assembly than has been in evidence in many years.

You may look at the ... (Below threshold)

You may look at the premium amount and think that there is no way that you can afford it. You cannot afford to be without health insurance! shop around you may find it easy to find an affordable premium, I always find health insurance through "Penny Health" network.

This state is goin... (Below threshold)
This state is going into the toilet. Some of the southern counties are starting to talk about splitting from the rest of this idiot state.

That kind of talk has been going on for decades.

Read in the paper this morn... (Below threshold)

Read in the paper this morning that there was a last minute addition to Kalifornia's "balanced budget". School districts will be FORBIDDEN to lay off any teachers - despite the BILLIONS in funding cuts to K-12 education.

The Teacher's Union 'rejoiced'.

It's all 'about the children'.

My take on this, <a href="h... (Below threshold)
Rick Author Profile Page:
These are lies. How can wal... (Below threshold)
jerry person:

These are lies. How can walker take away $4million form the school and the colletive bargaining save 2 million the school still losses 2 million. This guy has walker math . Fuzzy. Next he will sell you ocean property in Wisconsin. This guy is lying so walker will give him a better JOB.

1. I read there was $5,000 ... (Below threshold)
jerry person:

1. I read there was $5,000 reward for anyone witnessing a true statement from walker’s lips. I might know of a half true statement does that count? Walker stated in his campaign he would never do anything on Sunday or after 10pm. He said I tell my daughters nothing good happens after 10pm or Sundays. I found out later he has no daughters and everything he does is on Sunday or after 12pm. The true part is nothing good ever happens after 10pm. So far walker has done nothing good for Wisconsin.

If a GOP ever told a truth ... (Below threshold)
jerry person:

If a GOP ever told a truth we would be shocked.

Keep drinking the Kool Aid ... (Below threshold)

Keep drinking the Kool Aid jerry.

BTW, does your Mom know you're using the computer?

Read My lips jerry: "No Mor... (Below threshold)

Read My lips jerry: "No More Kool aid!"

As comments #18-20 show; fa... (Below threshold)

As comments #18-20 show; faced with the facts, "Progressives" resort to a rebuttal of gibberish.

Read in the pap... (Below threshold)
Jay Guevara:

Read in the paper this morning that there was a last minute addition to Kalifornia's "balanced budget". School districts will be FORBIDDEN to lay off any teachers - despite the BILLIONS in funding cuts to K-12 education.

GarandFan, one little thing the paper probably forgot to mention is that the state constitution requires – requires! - 39% of the state budget go to K-12 education. It's a constitutional amendment introduced by Prop. 98 in 1988 (Thanks, teachers' unions!) that was subsequently amended a bit in 1990, but remains substantially the same.

See this from the Legislative Analyst's Office.

Long and short of it: K-12 get its snout in the trough before anything else in the budget. For this reason I doubt that K-12 s really facing billions in funding cuts (that sounds like typical communist bullshit propaganda), but don't have time now to look at the most recent budget. Last year, IIRC, K-12 received $39 BN out of a state budget of $97 BN, i.e., 40% of the budget.

Meanwhile, CA is 49th in educational results. Only MS is worse. I say, let's amend the constitution again, and then cut the crap out of K-12. We can only drop one place!

Here's the point, "jerry pe... (Below threshold)
Jay Guevara:

Here's the point, "jerry person."

Let's say, hypothetically (you're not agreeing with the principle, but just supposing for the moment that it's true) that the reports you dismiss as "lies" are in fact true.

Would that change your viewpoint?

Again, I'm not asking you to change your viewpoint, but merely asking whether you would consider changing your viewpoint if you knew the report were true beyond any shadow of doubt.

Jerry"I found out ... (Below threshold)
retired military:


"I found out later he has no daughters and everything he does is on Sunday or after 12pm"

12 PM is 12 noon dumbass

Also I can find no direct quote from walker regarding his "daughters". Please link to a reputable source instead of repeating heresay.
(I know that quoting reliable sources instead of just making shit up is hard for liberals but try)

However Jerry, I googled yo... (Below threshold)
retired military:

However Jerry, I googled your statement and found where you had posted it on 2 other sites almost word for word. Trying to start your own rumor mill there are you?

People like jerry are known... (Below threshold)

People like jerry are known as 'grass roots'.

Hahahahahahaha! AKA "Axelturf". The ones who begin letters to the editor with "I used to be a conservative until......(fill in the blank)."

Jerry, step away from the k... (Below threshold)

Jerry, step away from the keyboard and go back to remedial English. I would recommend that you especially pay attention to the grammar and punctuation lessons. Then take a class in reading comprehension.

We'll wait.

Jerry save yourself some ti... (Below threshold)

Jerry save yourself some time and just call Walker a poopy head, that's bascially your argument, right? What about the story here, you know the one about Walker's policies actually helping a school district out of thier budet hell?

I see young "jerry" has yet... (Below threshold)
Jay Guevara:

I see young "jerry" has yet to respond to my query. From this I conclude he is entirely bereft of intellectual honesty, and merely came here to do the cyber equivalent of leaving a flaming sack of dog crap on our doorstep, ringing the doorbell, and running away.

Say hello to George Soros for me.

And look for these facts to... (Below threshold)

And look for these facts to receive HEAVY coverage on CNN, CBS, MSNBC, ABC.......







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