• What You Need to Know About the Budget Repair Bill
  • March 14, 2011
  • Law Firm: SmithAmundsen LLC - Milwaukee Office
  • It is imperative that school board members and district administrators understand the scope and impact of Governor Walker’s Budget Repair Bill (“BRB”). When you see the actual budget in the first week of March, you will see that all of the changes in the BRB are being put in place because the Governor knows that the cuts to state aid that he will be imposing on school districts will financially cripple them if they cannot eliminate some of the obligations from union collective bargaining agreements; costly obligations that bind and restrict school districts. The BRB imposes a number of significant changes in the law. You need to know what they are and how they will affect your district moving forward.

    Significant Changes in the Law

    Although we have all heard much about the Governor’s proposal—that all employees must pay their half of the WRS contribution and that they must pay a greater portion of their health insurance—these two items are not the most significant change in the law as proposed by Governor Walker.  

    • Bargaining is restricted to only increases in base pay. The most significant change in the law is the Governor’s proposal that the only topic that can be addressed in collective bargaining agreements is “base wages.” What this means is that all other topics are prohibited subjects of bargaining. Imagine the budgetary consequences if the following items are no longer controlled by a collective bargaining agreement:
    • Health Insurance: Under the BRB unions cannot bargain over health insurance.  This means that employers can unilaterally set benefit levels and deductibles, change carriers without regard for whether the new carrier’s plan or administration is “substantially similar” or “equivalent” to the prior plan, and the employer can unilaterally determine employee contributions to the plan.
    • Seniority: Under the BRB unions cannot bargain seniority language into the contract. Employers can now determine layoffs and promotions based upon merit rather than length of service.
    • Sick Leave: Under the BRB unions cannot bargain over sick leave benefits.  Employers can set the rules for how much sick leave is earned and whether sick leave can be used when caring for family members or attending doctor’s appointments.  Likewise, sick leave banks and sick leave payouts for future sick leave may be eliminated.
    • Overtime: Although employers will still be required to follow state and federal wage and hour laws, the generous provisions of collective bargaining agreements can be eliminated.  Things such as double time, minimum call-in and holiday pay can be eliminated.
    • Time Off: Most collective bargaining agreements are replete with generous time off provisions: vacations, holidays, personal days, funeral leave and other paid, excused absences.  Under the BRB unions cannot bargain over these items and employers will be free to unilaterally set time off provisions.
    • Early Retirement: Most school districts’ collective bargaining agreements with teachers include provisions that allow teachers with 15 or 20 years of experience that have reached a minimum retirement age to receive generous post-retirement benefit packages.  These OPEB obligations have had huge effects on school districts, but under the BRB, they will no longer be found in collective bargaining agreements.
    • Work Loads: Currently collective bargaining agreements address issues like prep time, maximum class loads and compensation for overloads.  Under the BRB, school districts will have the flexibility to increase class loads, making it possible to teach more class periods without increasing the number of teachers.

    Considerations as the BRB moves forward:

    All of these changes will have immense impacts on school districts, their budgets, and how they operate.  Schools need to prepare for what may come out of the BRB.

    •All districts will need this flexibility permitted by the BRB to survive under the upcoming state budget. The BRB provides that its terms first become effective when a contract expires or when it is terminated, extended, modified or renewed, whichever occurs first.  Therefore, binding yourself to a contract at this time is simply ill advised. If you are not currently under contract, it is best to hold off on ratifying or signing a new contract before speaking with your legal counsel.
    •Be aware that the BRB may not relieve you of all of your obligations under your previous contracts.  Some benefits may be “vested” and union members may have rights to certain benefits even after the contract is terminated.  This can be a complicated issue that you should discuss with your legal counsel.
    •Be aware that once your contract expires, you will no longer have layoff procedures for teachers, and your ability to terminate teachers will be governed by §118.22 Wis. Stats.  The BRB eliminates the provision in §118.22 that formerly allowed parties to create contracts that did not follow the statute.