The impact of Wisconsin’s Act 10 on municipal management in smaller municipalities: Views from local elected officials

Abstract

This article examines elected officials’ opinions on Wisconsin’s controversial 2011 collective bargaining reform. Survey results from elected officials serving on city councils and village boards with less than 10,000 residents demonstrate that Act 10 is still viewed through a partisan lens, making its overall impact on municipal governance unsettled. We also find that officials who first came to office prior to Act 10 generally think the law has had a positive fiscal impact. Overall, the authors conclude that Act 10 cannot yet be viewed as a successful governance reform because it is still viewed by local policymakers through a narrow fiscal and partisan lens.

Keywords

Collective bargaining public administration public management public sector reform Wisconsin's Act 10

Terry Moe (2009) bemoaned the paucity of literature discussing the nexus of collective bargaining and public performance. In this article, we use the 2011 curtailing of collective bargaining in the US state of Wisconsin as a case study to help fill the research gap identified by Moe. Wisconsin is particularly significant for several reasons, including the fact that Wisconsin was, in 1959, the first US state to enact a public state employee collective bargaining law (Stein and Marley, 2013). That action further cemented Wisconsin’s position as a leader in the broader organized labor movement (Rickman and Colburn, 2012). However, five decades later the power of organized labor in Wisconsin was drastically limited with the passage of Wisconsin Act 10. The legislation spurred dramatic social protests in Wisconsin’s state capitol, political high-drama culminating in the attempted recall of Wisconsin Governor Scott Walker, and competing claims regarding the long-term impacts of the near elimination of public-sector collective bargaining in Wisconsin.

In this article, we argue that the immediate fiscal impacts of Act 10, while easy to understand, are only a small part of the reform’s legacy. Rather, the long-term efficacy of Act 10 will be determined by the extent to which local and state government officials translate the redefined relationship between public employee and manager into increased public-sector innovation and performance. Previous research by the author (2015) demonstrates the potential for collective bargaining changes to increase public performance. But performance gains can only occur if Wisconsin’s public governing boards are willing to move past the partisan divisions that defined the passage of Act 10 (Stein and Marley, 2013). Thus, the basic conceptual framework guiding our study is that the success of Wisconsin’s collective bargaining reforms are dependent on the willingness of local government boards, and specifically the individuals populating those boards, to embrace Act 10 regardless of their personal political preferences. If local municipal board member attitudes on Act 10 are primarily informed by their partisan affiliation, as we suspect, collective bargaining reform remains a source of unproductive political conflict rather than a tool for improved governance.

Specifically, survey data from Wisconsin city council and village board members are used to determine that population’s general opinion of Act 10, the extent to which these elected officials see performance gains attributable to the law, and the extent to which their opinions of Act 10 are viewed through a partisan lens. Focus is placed on board member attitudes because governance is, as demonstrated by Ford and Ihrke (2015), Gabris and Nelson (2013), and Nelson et al. (2011), an activity in which perceptions are reality. For example, if a Wisconsin city council member supports merit pay, a reform now possible in a post-collective bargaining environment, one might conclude that same board member supports the larger reform that made merit-pay possible. But if Act 10 attitudes are a function of partisan affiliation, the partisan loyalty of board members may take precedence over any specific policy initiative, creating a board group dynamic marred by conflict and inefficiency (Gabris and Nelson, 2013). In other words, the performance of a governing board is dependent on how board members perceive board conflict, trust among members, the presence of coalitions, partisanship, and the true motivations of their fellow board members (see Golembiewski, 1995). Hence, in a human governing environment perceptions of key concepts matter as much as objective indicators of the same concepts. In the following sections we explore local governing board members’ perceptions of Act 10, and the implications of those perceptions, by providing background on the issue of public-sector collective bargaining, detailing the importance of the Wisconsin case, presenting hypotheses and original data, presenting the results of a series of quantitative analyses, and finally discussing the lessons from the presented findings.

Background

Lance Compa (2014) provides a detailed history of both private and public sector collective bargaining in the United States. In the private sector, blue-collar employees first fought to unionize and bargain for wages and working conditions in the 19th century. Though some business interests considered union-organizers little more than political rabble-rousers (Compa, 2014), the 1935 passage of the National Labor Relations Act solidified the place of labor unions and collective bargaining in the private sector. The actual process of unionizing and bargaining is fairly simple. First, workers vote to certify a union as the official bargaining unit, and then management and the union negotiate for wages and working conditions. Of course, the specifics of any single labor contract differ greatly by industry, company, and union, but the basic idea of workers being able to more powerfully negotiate as a collective rather than as individuals is consistent across industries, companies, and unions.

The onset of public sector collective bargaining in American states did not occur until 1959, when Wisconsin passed legislation enabling public employees to unionize (Stein and Marley, 2013). While most state and local employees did not face the same safety risks as unionized private sector workers, organizers nonetheless saw an opportunity for teachers, public safety officers, and state employees to protect and/or improve their working conditions via unionization and the collective bargaining process (Stein and Marley, 2013). What began in Wisconsin spread to other state and local governments, eventually making public sector unions a beacon of strength in the organized labor movement, even as traditional private sector union influence and membership declined (Klingner, 1993).

However, Klingner (1993) and others, in a time of increasing public sector union leadership, saw trouble ahead for the public labor movement. In the early 1990s, there was a growing resentment from private sector employees experiencing declining wages and job security spurred by a national recession. First, private-sector employees began to take notice of the unique protections and benefits enjoyed by many of their white-collared peers (Klingner, 1993). Second, the declining influence of private sector unions isolated public sector unions, making them a possible target of politicians seeking to decrease the political power of organized labor (Hartney and Flavin, 2011). Third, in a time of divisive state and national politics, public unions were increasingly identified solely as supporters of the Democratic Party. Anzia and Moe (2015) put it succinctly, concluding that “Public sector unions are a bulwark of the Democratic Party, and collective bargaining is the unions’ power base, providing members, money and activists (p. 114).” Fourth, research and popular sentiment began linking public sector union strength with decreased government performance, and increased government cost (Anzia and Moe, 2015). In summary, over time the public debate over the role of public sector unions shifted from protecting the rights of workers, to organized labor’s impact on politics and government efficiency.

Fuller and Mitchell (2006), for example, chronicled the three decades long evolution of Wisconsin teacher union contracts, concluding that union contracts inevitably grow over time in length, scope, and specificity. Fuller and Mitchell (2006) attribute union contract sprawl to the one-sided nature of public sector collective bargaining, arguing that unions collectively bargain with school board members who owe their political position to the very union with which they are bargaining (Fuller and Mitchell, 2006). Indeed, public sector labor unions are a powerful interest group in local and state government, and there is evidence that they exercise undue influence in low-turnout local government elections (Berry and Howell, 2005; Ford, 2015; Hess and Leal, 2005; Miller, 2008). To put it another way, critics of public sector unions claim bargaining units essentially pick their management, creating a bargaining dynamic that has less negotiation than a dictation of labor demands (Anzia and Moe, 2015).

As public sector union membership and power declined, public sector unions became, according to Freeman and Han (2012), the last “stronghold of trade unionism (p. 387),” and a prime target of anti-labor activists. A popular critique of public unions posited that private sector employees disproportionally shouldered the burden of the 2008 recession, thereby facing higher costs for their own health and retirement benefits while at the same time funding the continued low-cost benefits enjoyed by public sector employees (Freeman and Han, 2012). The widespread budget distress caused by the great recession led many governments to consider layoffs, restructuring, and other cost-savings’ measures in the face of state aid reductions (Reilly, 2013; Reilly and Reed, 2011). Ammons et al. (2012) and Levine and Scorsone (2011) described these stress-induced changes as having an ongoing permanent impact on local government, meaning the great recession forever changed the fiscal realities of state and municipal government employment. However, the recession also opened a policy window (Kingdon, 1995), and the anti-labor critique manifested in Republican domination of the 2010 election cycle, as well as the introduction of legislation raising the cost of public employee benefits in many US states (Lewin et al., 2012).

The importance of the Wisconsin case

Overall, the debates over public benefits after the great recession blurred the lines between administration and politics; both financial realities and political power spurred changes within US states. The most dramatic battle over public sector collective bargaining occurred in Wisconsin, where newly elected governor Scott Walker bluntly described public sector employees as the ‘have’s’, and the private sector employees as the ‘have not’s’ (Stein and Marley, 2013). During his successful gubernatorial campaign, Walker shared anecdotes of his failed attempts to gain concessions from Milwaukee county unions while serving in his previous position of Milwaukee County Executive. Indeed, prior to the passage of Act 10, public employees in the state of Wisconsin had wide-scoping collective bargaining powers.

Before Act 10’s enactment, public state and municipal unions could bargain over wages, often creating step and lane pay schedules where employee raises were tied to formal education, and years of service. Unions could also bargain over a wide variety of items relating to conditions of employment. Examples of employment conditions addressed in bargained contracts include workload, sick-time, banking days, availability of restrooms, reimbursement policies for use of personal vehicles, professional development funds, tuition reimbursement, release time for political service, overtime policies, worker safety, layoff procedures, rules of due process, etc. Essentially, any subject a union deemed a working condition could be bargained. Also commonly bargained in Wisconsin public sector union contracts were provisions for employer funding of employee pension costs. Before Act 10, state employees were required to split the costs of their pension with their employers. However, public unions commonly bargained for their employer to fund the employee portion of their pension contribution, meaning in practice public organizations paid 100 percent of employee pension costs. Similarly, unions commonly bargained for public organizations to pay most or all of their health care costs.

Prior to Act 10, Wisconsin labor unions were also a potent political force. The state teachers union, in particular, was viewed as the state’s most powerful special interest group (Stein and Marley, 2013). Arguably, the power of unions was in part tied to their structural characteristics. First, to be certified in Wisconsin, a public sector union needed to obtain support from a majority of voters in a certification vote, as compared to a majority of those who would actually make up the union. Second, unions would be certified indefinitely unless a decertification vote occurred. Third, unions would generally work under two year bargaining contracts, with the option to renew. Fourth, union dues were automatically deducted from employee paychecks, though employees did have the option to request that the portion of their union dues that paid for political advocacy be returned.

Act 10, the legislation that drastically curtailed the scope of collective bargaining for state and local employees, was actually a budget-repair bill (Stein and Marley, 2013). A budget-repair bill, sometimes referred to as a mini-budget by legislators, is a bill created to address imbalances in the original Wisconsin biennial budget (Ford, 2015). Because Wisconsin uses a two-year budget cycle, it is not unusual for governors to introduce a budget-repair bill to correct for discrepancies between budgeted revenues and expenditures, and actual revenues and expenditures. However, the use of a budget-repair bill as a policy vehicle for the executive was speculated as a reason why Governor Walker introduced his reforms in this manner (Cullen, 2015). Unlike a regular piece of legislation that must originate from the legislative branch of government, a budget-repair bill can come directly from the Governor, giving him or her total control over the bill’s initial drafting.

Wisconsin Act 10 did several things. First, it limited the scope of public sector collective bargaining to total base wages (Wisconsin Act 10, 2011). For example, if a school district paid $1,000,000 in base wages for all teachers in the previous year, the teachers union could bargain only over the increase to that aggregate number. Meaning, a bargained increase in wages did not mean increased wages for all employees; gone were the days of the step and lane pay schedule. Second, the bill limited base wage increases to the rate of inflation, giving municipalities the option of raising wages by a larger number only if approved by direct referendum. The subject of working conditions was struck from state statutes as a bargaining item, meaning pay scales, mandatory breaks, paid leave, etc. could no longer be bargained (Ford, 2015). Third, Act 10 eliminated the ability for governments to pay the employee share of health and retirement benefits, a bargained benefit for most Wisconsin public employees (Ford, 2015). This change effectively doubled an employee’s out-of-pocket cost for healthcare and retirement benefits. Fourth, Act 10 changed certification procedures for public unions by requiring that 51 percent of all employees vote to certify as opposed to 51 percent of all voters. In addition, Act 10 required annual recertification votes, barred direct dues deduction from paychecks, and stipulated one-year contracts without possibility of renewal. Lastly, Act 10 exempted public safety employees from these changes, meaning police and fire unions maintained their collective bargaining rights after the passage of the law (Stein and Marley, 2013).

The policy ramifications of Act 10 were vast. The pendulum of power swung strongly in the favor of management. The previously drawn out process of collective bargaining became a simple two-question exercise: (1) Does the union want an increase to base wages? And (2) Does the union want that increase to equal the rate of inflation, or be less? This proposed scaling back of union power ignited a political firestorm in Wisconsin. Large protests crippled the Wisconsin State Capitol, and the minority Wisconsin Senate Democrats together left the state to prevent a vote on the bill’s passage (Cullen, 2015; Stein and Marley, 2013). After much high drama, the Senate Democrats returned and the bill was passed. Even after its passage, however, drama continued in the form of a series of recall elections in which Scott Walker himself became the first American Governor to survive a recall election (Cullen, 2015). Even today, the political debate surrounding Wisconsin Act 10 continues in the state (Cullen, 2015). However, little is known about the actual impacts the law is having on the governance of municipalities. Ford (2015) details the many governance changes that could theoretically occur in local governments as a result of Act 10. Example reforms include merit-pay systems, restructuring government, job enlargement and enrichment, and increased use of contracting for core government services. Ford (2015) cautions, however, that the post-Act 10 governing environment increases the consequences of poor management because workers are more mobile, and managers no longer have a contractually established status quo from which the employee–manager relationship can be built.

While Ford (2015) notes the potential of Act 10, no scholarly research has actually examined its legacy. As Lewin et al. (2012) stated, there is a literature gap on the topic of whether changes to collective bargaining help or hinder government performance. In the Wisconsin specific case, think tanks and print media have taken the step of quantifying the fiscal impact of Act 10 by simply adding up the increased public employee contribution for health and retirement benefits (Healy, 2016). While certainly relevant to understanding the overall impact of Act 10, it is largely disconnected from collective bargaining; states across the country made changes to employee health and retirement plans without limiting worker collective bargaining rights (Cullen, 2015; Ford, 2015). As Martin et al. (2012) and Perlman (2011) note, compensation changes designed to offset state aid cuts is the new status quo for local government. During the Act 10 battle, Wisconsin’s public employee unions actually offered these fiscal concessions (Stein and Marley, 2013). The authors argue that the larger unique impact of Act 10 should be judged by the extent to which state and local government uses the near-elimination of collective bargaining to enhance service quality through reforms, such as the aforementioned merit pay, contracting out, job enlargement and enrichment, and government restructuring. In the absence of these types of innovation, Act 10’s legacy is likely to be political, i.e. a reform designed to reduce union influence. In this article the authors address the research gap regarding Act 10 by asking local elected officials in Wisconsin their opinions of the law five years after its passage. Specifically, the authors test two hypotheses informed by the previous discussion. Formal hypotheses are considered because even though there is little specific research relating to Wisconsin’s Act 10, there is a developed Public Administration literature on the politics of public sector unions that is applicable beyond the high-profile Wisconsin case.

Hypotheses, survey, and data

Hypothesis One: City council and village board member opinions on the effectiveness of Act 10 are influenced by their ideologies.
Given the politically charged climate in Wisconsin both at the time of Act 10’s passage and after its implementation, it is logical to expect that local elected officials still view the curtailing of collective bargaining through a partisan lens. Though simple, if true this hypothesis casts doubt on the ability for municipal governments to move past the politics of Act 10 and use the law to improve government performance.
Hypothesis Two: City council and village board members who came to office before Act 10 have more negative views on the effectiveness of the bill than those who came to serve after Act 10’s passage.
Hypothesis two is built on the belief that the Act 10 social and political unrest is influencing officials’ perceptions of the legislation. The authors expect the general opinions of Act 10 to be higher amongst officials elected after its passage because those officials were not directly involved in the Act 10 political debate as elected officials.

We test our two hypotheses using a regression equation where a combination of individual council/board member characteristics and city/village characteristics is used to predict a council/board member’s attitude toward Act 10. Years of service measures the number of years a council/board member has served in their current position. Gender indicates a council/board member’s sex. College educated is a dummy variable indicating that a council/board member holds a bachelor’s degree or higher. Prior elected experience is a dummy variable indicating that a council/board member has previous experience as an elected official. Age is a council/board member’s self-reported age. Board size is the total number of council/board members serving a municipality. Term limits is a dummy variable indicated that council/board member is serving under term limits. Tax rate is the total municipal tax rate for the city/village represented by the respondent. State aid is the total amount of state aid sent to the city/village represented by the respondent. Population is the total population in a municipality in the most recent US census. Pct. Poverty is the total percentage of a city/village’s residents living below the federal poverty line. City is a dummy variable indicating that respondent represents a city as opposed to a village. Respondents per-board indicated the number of individual serving on a respondent’s council/board who responded to the survey. Below is the formal regression equation predicting Act 10 Attitudes:
Act 10 Attitudes = Years of Service + Gender + College Educated Dummy + Prior Elected Experience Dummy + Appointed to Council Dummy + Age + Board Size + Presence of Term Limits Dummy + Tax Rate + State Aid (log) + Population (log) + Pct. Poverty + City Dummy + Respondents Per-Board + Error
In the summer of 2015 the authors mined e-mail addresses for city council and village board members serving Wisconsin municipalities with fewer than 10,000 residents. The project is a collaborative effort between the authors and the Wisconsin League of Municipalities, and is designed to increase understanding of the changing needs of and governance strategies in Wisconsin’s oft-overlooked smaller municipalities. These places face unique challenges such as brain drain, immigration, cultural shifts, reductions in tourism revenue, and a comparatively smaller nonprofit sector capacity. In addition, the vast majority of Wisconsin’s cities and villages, 512 out of 598, have fewer than 10,000 residents (Wisconsin Blue Book, 2015). Most importantly, focus was placed on municipalities with less than 10,000 residents because existing anecdotal research on Act 10 solely comes from larger municipalities where the fiscal benefits of increased employee healthcare and pension contributions are obvious (Healy, 2016). Thus far no research, anecdotal or otherwise, has looked at how council/board members serving smaller municipalities feel about Act 10. In many ways, Wisconsin’s larger municipalities are cultural and fiscal outliers, meaning understanding the governance changes resulting from Act 10 requires a closer look at the plurality of smaller cities and villages throughout Wisconsin.

As discussed in the introduction, the unit of analysis for this project is the city council/village board members. It is this population who enacts (or fails to enact) policy changes enabled by Act 10, and thus the population whose attitudes we seek understand. We developed a contact list by mining e-mail addresses from the websites of Wisconsin cities and villages with less than 10,000 residents. Once e-mail address mining was complete, a governance survey developed by the authors in conjunction with the Wisconsin League of Municipalities was e-mailed to 767 city council and village members using the Qualtrics online survey tool. The survey instrument included topics and questions used in previous municipal governance surveys conducted by Ford and Ihrke (2015), Heidbreder et al. (2011), and Ihrke and Niederjohn (2005).¹ Though no formal pre-test was done for the survey instrument, the individual items were used in the Ford and Ihrke (2015) and Ihrke and Niederjohn (2005) surveys, and the survey itself was reviewed by and discussed with the Wisconsin League of Municipalities prior to distribution. A total of 202 city council and village board members representing 116 cities and villages completed the survey in two waves (132 in late 2015 and early 2016, and 70 more in a follow-up solicitation in the summer of 2016), resulting in a response rate of 26.3%. The total response rate was higher than online municipal surveys conducted by Ford and Ihrke (2015), and paper surveys conducted by Ihrke and Niederjohn (2005) and Johnson and Ihrke (2004). As can be seen in Table 1, an average of 2.36 members per-board responded to the survey. To check for possible response bias the authors compared the total and municipal tax rates per $1000 of assessed value of cities and villages in the sample, and the total population of Wisconsin cities and villages with less than 10,000 residents. The two groups were not statistically different; the sample has a mean total tax rate of $21.51 compared to $21.81 in the population, and a mean municipal tax rate of $6.64 in the sample and $6.69 in the population. In addition, the mean poverty rate in the sample, 11.25%, is not statistically different than the mean poverty rate in the population of Wisconsin municipalities, 11.00%. We note that the lack of known data regarding the make-up of council/board members in the population make it impossible to check for bias using the council/board member as the unit of analysis. However, the similarities between the represented municipalities, as well as the geographic dispersion of cities and villages in the sample, give a degree of confidence in the sample’s representativeness.
Table 1.
Summary statistics for continuous variables

N Mean Std. Dev. Source

Years of service 202 6.53 5.65 Survey

Age 202 56.44 11.23 Survey

Board size 202 6.65 1.20 Survey

Total tax rate 202 21.52 3.70 Wisconsin Taxpayers Alliance

State aid 202 4,836,086 4,597,463 Wisconsin Taxpayers Alliance

Population 202 3,373.43 2,801.57 Census

Pct. poverty 202 11.25 7.38 Census

Respondents per board 202 2.36 1.30 Survey

Tables 1 and 2 display summary statistics for the variables used in the analysis. As can be seen in Table 1, the average council/board member is about 56 years old, has six and a half years of experience, and represents a city of 3,373 residents with a total tax rate of $21.52 per $1000 of assessed value and a poverty rate of 11.25 percent. Data on total tax rate, poverty rate, state aid, and population were obtained from the United States Census Bureau and the Wisconsin Taxpayers Alliance. All categorical variables used in the analysis are displayed in Table 2. Over one-third of the survey respondents identify as conservative, 12.38 percent identify as liberal, and about 52 percent identify as moderate. About 45 percent of surveyed city council and village board members began their tenure prior to Act 10 becoming law.
Table 2.
Summary statistics for categorical variables.^a

Yes No

City 32.67% 67.33%

Male 71.29% 28.71%

College or more 48.51% 51.49%

Conservative 35.64% 64.36%

Liberal 12.38% 87.62%

Moderate 51.98% 48.02%

Held office 18.81% 81.19%

Appointed 36.63% 63.37%

Term limits 1.98% 98.02%

Served during Act 10 44.55% 55.45%

a
N = 202.

Table 3 displays summary statistics for five focal variables measuring respondents’ opinions on aspects of Act 10, and a focal additive index variable measuring overall respondent attitudes on Act 10. Respondents were asked to rate their level of agreement, on a five-point likert scale, with each of the five statements displayed in Table 3, where 1 = Strongly Disagree and 5 = Strongly Agree. Reponses to the five statements were used to create a 25-point additive index variable deemed Act 10 Attitude. The index shows a high degree of internal consistency as evidenced by a Chronbach’s Alpha of .93.
Table 3.
Summary statistics for Act 10 Support Index.^a

Mean Std. Dev.

Wisconsin Act 10 strengthened the financial health of my municipality 2.98 1.18

Wisconsin Act 10 strengthened the morale of municipality’s workforce 2.57 .97

Wisconsin Act 10 has increased innovation in my municipality 2.83 1.04

Wisconsin Act 10 has led to cost savings that are unrelated to increased employee and pension insurance contributions 2.81 1.08

Wisconsin Act 10 has resulted in cost savings that sufficiently offset cuts in shared revenue 2.35 1.01

Act 10 Attitude Additive Index (Chronbach’s Alpha of .93) 13.55 4.67

a
N = 202.

In addition to the statements in Table 3, council/board members were asked two open-ended questions related to Act 10. The results are included in order to better tell the story behind the quantitative survey data. The first open-ended question was “How has Act 10 impacted the financial health of your municipality?” Below is a sampling of answers to that question, as can be seen there is substantial variation in council/board member views:
Act 10 created higher taxable income, offsetting any savings that were promised. We spend more time in human resource management as the unions are no longer guiding that process (by default they did that for free).

Act 10 has hindered our financial health

The dissolution of the union gave us little to use to counterbalance the cuts to shared revenue, transportation aids, or recycling grants. It was governance by sound bite without real substance at the local level.

Fairly neutral. While we saved on the pension costs, we already were close to the employee contribution for the health insurance. We did ended up giving a large part of the pension savings back to the employees in a wage increase of 3.0% at the inception of the change in the pension change and another 3% four months later. These were the first wage increases given by the Village in two years.

Without Act 10 like many other municipalities we would be in financial trouble.

The second open-ended question, “How has Act 10 impacted employee management in your municipal government?” also prompted a vide variety of responses. Sample responses are below:
Employee morale is in decline.

We have left our employees pretty much alone.

We had an exodus of experience that has left us economically better but technically worse off.

Disgruntled workers increased levels of dissatisfaction

No big changes

Actually Act 10 brought our employees more together. The Police and the Public Works are unionized and they stepped forward and made mid-term contract changes to recognize that they were all part of the team and accepted the pension and insurance changes that were imposed on the non-represented. We have not had any employee turnover associated with Act 10.

Overall, the open-ended responses reveal an inconclusive spectrum of opinions, but do provide the reader with some color regarding the specific views held by elected council and board members.

Results

In this section the hypotheses are tested using various quantitative methods. First, the authors test the relationship between ideology and support of Act 10 by conducting a series of analysis of variance (ANOVA) tests. The results, displayed in Table 4, show significant differences between the three identified ideological groups. Conservatives are more likely than moderates and liberals to think Act 10 strengthened the financial health, employee morale, and level of innovation in their municipalities. Conservatives are also more likely to agree that Act 10 generated savings unrelated to increased health and pension contributions, and overall savings large enough to offset cuts in shared revenue, i.e. cuts in state support to municipalities. Finally, conservatives are more likely than liberals and moderates to agree that the financial health of their municipality has improved in the past four years, even when Act 10 is not specifically mentioned. Overall, the results in Table 4 show conservatives tend to think Act 10 was more effective than both liberals and moderates, and then moderates tend to have higher opinions of Act 10 than liberals.
Table 4.
ANOVA tests comparing views on Act 10 by ideology

Statement Liberal mean response, N = 25 Conservative mean response, N = 72 Moderate mean response N = 105 F-statistic

Wisconsin Act 10 strengthened the financial health of my municipality. 2.24 3.55 2.76 17.40*

Wisconsin Act 10 strengthened the morale of my municipality’s workforce. 2.00 2.93 2.46 10.81*

Wisconsin Act 10 has increased innovation in my municipality. 2.12 3.39 2.12 22.14*

Wisconsin Act 10 has led to cost-savings for my municipality that are unrelated to increased employee pension and health insurance contributions. 2.08 3.31 2.65 16.83*

Wisconsin Act 10 has resulted in cost-savings that sufficiently offset cuts in shared revenue. 1.80 2.90 2.10 20.88*

The financial health of my municipality has improved in the past 2 years. 3.60 3.20 3.39 2.24

The financial health of my municipality has improved in the past 4 years. 2.44 3.42 2.87 11.93*

*
p < 0.001.

Next, the authors conduct a multivariate regression analysis predicting the previously discussed Act 10 attitude index variable. Controls for various council/board member demographics and community characteristics that could plausibly impact opinions on Act 10 are included in the model. These variables include gender, age, and education level (see Ihrke and Niederjohn, 2005), board size and member background (see Heidbreder et al., 2011), and community size (logged), tax rate, level of state support (logged), poverty, and status as a village (Johnson and Ihrke, 2004). Finally, a control for the number of respondents per-council/board is included to ensure that the characteristics of municipalities with multiple respondents do not exert disproportionate influence on the results. Regression diagnostics were conducted and no evidence of co-linearity or heteroskedasticity was found. Finally, no continuous independent variables in the model are from the survey instrument, ensuring that common source bias will not impact the findings (Favero and Bullock, 2015).

The results of the ordinary least squares regression model predicting the Act 10 attitude index are displayed in Table 5. Overall, the model explains 30.9 percent of the variance in the dependent variable as evidenced by the R-squared statistic of .309. The results support hypothesis one, identifying as conservative significantly increases support for Act 10. Specifically, being conservative increases the Act 10 attitude index by 3.6 points on a 25-point scale. In addition, males are more likely to support Act 10, and members serving on larger boards have a lower opinion of Act 10. None of the community characteristic variables are significant predictors of Act 10 support. The differences between Act 10 attitudes by council/board member ideology are displayed graphically in Figure 1. As can be seen conservatives are more supportive of Act 10 than liberals and moderates, moderates are more supportive than liberals, and liberals by far have the lowest level of support for Act 10.
Table 5.
Ordinary least squares regression results for the dependent variable Act 10 attitude index.^a

Coeff Std. Err.

Years of service .056 .054

Male 1.806 .666

College educated −.816 .602

Conservative 3.630* .623

Held office before? −.201 .744

Appointed? 1.081 .632

Age .016 .028

Board size −.928 .263

Term limits? −3.452 2.088

Tax rate −.073 .087

Log state aid .709 .764

Log population −.012 .753

Pct. poverty −.012 .048

City? −1.212 .745

Respondents .197 .240

Constant 14.302 7.676

a
N = 202; R-squared = .309.

p < 0.01; p < 0.001.

Figure 1.
Predictive margins of ideology with 95% CIs.

Hypothesis two states that views on Act 10 differ between council/board members who served during Act 10, and those who came to serve after Act 10. The regression results presented in Table 5 show no significant relationship between tenure and the dependent variable. Using individual item measures, two of the seven measures (see Table 6) indicate that, contrary to hypothesis two, board members who came to office before enactment of Act 10 had more favorable views of the legislation than council/board members who came to office thereafter. Overall, hypothesis two is not supported.
Table 6.
Comparing views on Act 10 between council/board members served or did not serve when Act 10 was enacted.

Statement Yes N = 90 No N = 112 T-statistic

Wisconsin Act 10 strengthened the financial health of my municipality. 3.16 2.83 −1.97

Wisconsin Act 10 strengthened the morale of my municipality’s workforce. 2.62 2.52 −.17

Wisconsin Act 10 has increased innovation in my municipality. 2.92 2.76 −1.12

Wisconsin Act 10 has led to cost-savings for my municipality that are UNRELATED to increased employee pension and health insurance contributions. 2.90 2.74 −1.05

Wisconsin Act 10 has resulted in cost-savings that sufficiently offset cuts in shared revenue. 2.42 2.29 −.94

The financial health of my municipality has improved in the past 2 years. 3.16 2.94 −1.46

The financial health of my municipality has improved in the past 4 years. 3.14 2.90 1.69*

*
p < 0.05.

Discussion

In this article, we explore the perceptions of Wisconsin city council and village board members on Wisconsin’s controversial 2011 collective bargaining reforms. The ideologically motivated differences in opinions of Act 10 suggest the reform is still very much in its political phase. Not shockingly, conservative officials in Wisconsin’s smaller municipalities think Act 10 is having a comparatively more positive fiscal and management impact than both liberal and moderate council/board members. Also interesting, and in contrast to expectations, is the finding that officials entering office prior to Act 10 have comparatively more positive views of the law’s fiscal impact than those who entered office after Act 10’s passage. On the surface, this supports previous research showing a positive fiscal impact on local government attributable to Act 10 (Ford, 2015; Healy, 2016). As stated, this study focused on perceptions due to the demonstrated impact of board group dynamics on local government’s performance (Ford and Ihrke, 2015; Gabris and Nelson, 2013). Given that members of Wisconsin policymaking boards still have ideologically motivated opinions of Act 10, it is unlikely that the potential of the reform as a source of government’s improvement and innovation is being realized; rather than governing in this new environment, policymakers in smaller municipalities have diverse opinions motivated by the external factor (to the board) of personal ideology.

The findings yield lessons far beyond the Wisconsin case, and hold implications for the future of public sector management. As stated, Wisconsin is particularly relevant due to its position as the birthplace of public sector collective bargaining in the United States. In addition, Scott Walker’s legislation to curtail collective bargaining sparked a wave of similar moves to limit public sector collective bargaining in other states, including Ohio, Nebraska, Oklahoma, Louisiana, Illinois, Indiana, Michigan, Pennsylvania, New Jersey, New Hampshire, and Maine. However, no state experienced the political upheaval felt in Wisconsin. Why? In Ohio, for example, limits on collective bargaining passed by the legislature could potentially, and eventually were, overturned via a referendum. And so Ohio’s legislative action did not have the finality of Wisconsin’s, which perhaps lessened the passions of the state’s political actors. Perhaps more important is the fact that Wisconsin was first, thereby attracting national media interest due to the novelty of the bill’s introduction and high-drama political battle.

The Wisconsin case also demonstrates the importance of moving slowly when reforming public sector collective bargaining. The speed in which this major change was introduced galvanized Wisconsin’s ruling majority as well as public employees, and quickly became politicized. Simply, the dominant narrative during the Act 10 debate, and as demonstrated by this study, after the law’s implementation, was the political implications of weakening unions as opposed to the management implications of redefining the relationship between public employee and public sector management. A less extreme reform effort, such as clearly defining what work conditions could be bargained as opposed to eliminating all bargaining of working conditions, likely would have drawn less political backlash. In addition, the pairing of Act 10’s near elimination of collective bargaining rights with reductions in public employee take-home pay gave public employees a clear economic rationale to oppose the bill. A more creative approach pairing bargaining changes with financial incentives could have potentially made public employees more receptive to changes. However, the fiscal rationale for Act 10 pushed by Governor Walker made such an approach untenable in the Wisconsin case (Walker, 2013). Nonetheless, the immediate political backlash and long-term political hangover from Wisconsin’s Act 10 illustrate the risk in making dramatic public sector personal policy changes too quickly.

Perhaps the largest lesson from Act 10 is the need for state- and local-level policy makers to consider phase two questions before pushing dramatic changes to collective bargaining. Phase one questions, i.e. the basic questions of how to navigate the immediate politics of passing a piece of reform legislation, are fairly straightforward. In the Act 10 case Governor Walker attempted to minimize backlash my moving the legislation quickly, and even with the dramatic protests, was able to guide the law to passage within one month (Stein and Marley, 2013). In other words, the legislative process for the near elimination of collective bargaining in Wisconsin was fairly straightforward. The phase two questions, i.e. those dealing with how to utilize collective bargaining reforms to improve public performance, are much more difficult to answer. As demonstrated by this analysis, leaders in Wisconsin’s smaller municipalities have not, five years later, moved pass the political phase of the reform. Hence, as of yet there is little evidence of widespread management innovations made possible by the curtailing of collective bargaining in Wisconsin.

There are several specific things local Wisconsin board/council members can do to move past the politics of Act 10. First, strategic planning and board development exercises important to developing a successful board dynamic are crucial in a post-Act 10 environment. Such actions are important for any governing board, but more so for boards operating in brand-new governing territory. Second, citizen satisfaction surveys can be utilized to inform board decision making so as to deemphasize the impact of state politics in favor of resident preferences. Specific questions about citizen appetite for reforms such as merit-pay can help guide decision making so that leaders are taking actions because of citizen demand, rather than state government edict. Finally, boards are wise to update their employee manuals in cooperation with department heads and the mayor/city manager to create buy-in for local policy changes. All of these efforts would direct board member effort towards local solutions in the post-Act 10 environment, rather than fighting old political battles. However, it is possible that moving on from the politics of Act 10 may require employee and board member turnover to the point where the majority of both groups have only operated in a post-Act 10 governance environment.

More broadly, the authors argue that two phase two questions should be considered before Act 10-style reforms are considered. First, how can local government overcome the politics surrounding the reform’s passage? As suggested earlier, pairing reductions in collective bargaining rights with compensation increases could be an answer to this question. Second, how can local governments train managers to effectively lead in a post-collective bargaining environment? The existence of bargained contracts stipulating working conditions and compensation procedures, to a large degree, simplified the major tasks of public managers. Rather than having to create these policies, public managers could simply consult the union contract. In a post-collective bargaining world, managers must both create new policies, and work to obtain employee buy-in of said policies. Given this new management challenge, local government boards would be wise to provide additional training for existing managers, and to prioritize these competencies in future hiring decisions.

Overall, the redefining of the relationship between public employee and manager in Wisconsin changed the nature of the management task faced by local governments. The serious efforts necessary to ensure local governments are up to the challenge of effectively governing in a post-collective bargaining environment have, up to this point, been supplanted by the political divisions resulting from the controversial law’s passage. As Moe (2009) alluded, there may very well be performance gains to be had from collective bargaining reform. But, as the opinions of local Wisconsin government leaders shared in this analysis demonstrate, those gains are unlikely to materialize unless officials can move past the political phase of such reforms, and fully prepare for the task of governing for performance in a post-collective bargaining environment.

The presented analysis does, however, have limitations. First, it is limited to the opinions of elected officials serving in smaller Wisconsin municipalities; the results should not be generalized beyond that population. Second, though council and board members are of interest in this article given their position as policymakers and collective bargaining partners, employee and city manager/mayor views are also relevant to understanding the impact of Act 10. Finally, the open-ended questions’ responses show how the diversity and nuance of views on Act 10 go beyond what can be easily quantified in an index. Despite these limitations, this study adds value as the first look at local officials’ views on the most significant governance reform in recent Wisconsin history (Stein and Marley, 2013). Further, the national attention placed on the Wisconsin case during the debate over Act 10’s passage means that this case is of interest to other states considering curtailing public sector collective bargaining.

The increased flexibilities for management spurred by Act 10 could theoretically help local municipalities navigate what Martin et al. (2012) called “The ‘New Normal’ for Local Government” United States (p. 17). However, the presented findings show that the long-term effects of Act 10 on Wisconsin local governments are not yet known. The open-ended question responses in particular shed light into the diversity of opinions on how Act 10 is impacting the financial and human resource management of Wisconsin municipalities. In the introduction the authors asked, is Act 10 working as a government management reform? At this stage, at least in Wisconsin’s smaller municipalities, the answer appears to be no; key officials still view the changes to collective bargaining through a partisan lens, meaning widespread non-fiscal governance impacts are not yet realized. This does not mean that Act 10 cannot be successful as a governance reform, but rather that focus must be placed on moving past the politics of Act 10 and onto the means by which the Act 10 changes can translate the redefined relationship between public employee and manager into meaningful gains in local government performance.

	N	Mean	Std. Dev.	Source
Years of service	202	6.53	5.65	Survey
Age	202	56.44	11.23	Survey
Board size	202	6.65	1.20	Survey
Total tax rate	202	21.52	3.70	Wisconsin Taxpayers Alliance
State aid	202	4,836,086	4,597,463	Wisconsin Taxpayers Alliance
Population	202	3,373.43	2,801.57	Census
Pct. poverty	202	11.25	7.38	Census
Respondents per board	202	2.36	1.30	Survey

	Yes	No
City	32.67%	67.33%
Male	71.29%	28.71%
College or more	48.51%	51.49%
Conservative	35.64%	64.36%
Liberal	12.38%	87.62%
Moderate	51.98%	48.02%
Held office	18.81%	81.19%
Appointed	36.63%	63.37%
Term limits	1.98%	98.02%
Served during Act 10	44.55%	55.45%

	Mean	Std. Dev.
Wisconsin Act 10 strengthened the financial health of my municipality	2.98	1.18
Wisconsin Act 10 strengthened the morale of municipality’s workforce	2.57	.97
Wisconsin Act 10 has increased innovation in my municipality	2.83	1.04
Wisconsin Act 10 has led to cost savings that are unrelated to increased employee and pension insurance contributions	2.81	1.08
Wisconsin Act 10 has resulted in cost savings that sufficiently offset cuts in shared revenue	2.35	1.01
Act 10 Attitude Additive Index (Chronbach’s Alpha of .93)	13.55	4.67

Statement	Liberal mean response, N = 25	Conservative mean response, N = 72	Moderate mean response N = 105	F-statistic
Wisconsin Act 10 strengthened the financial health of my municipality.	2.24	3.55	2.76	17.40***
Wisconsin Act 10 strengthened the morale of my municipality’s workforce.	2.00	2.93	2.46	10.81***
Wisconsin Act 10 has increased innovation in my municipality.	2.12	3.39	2.12	22.14***
Wisconsin Act 10 has led to cost-savings for my municipality that are unrelated to increased employee pension and health insurance contributions.	2.08	3.31	2.65	16.83***
Wisconsin Act 10 has resulted in cost-savings that sufficiently offset cuts in shared revenue.	1.80	2.90	2.10	20.88***
The financial health of my municipality has improved in the past 2 years.	3.60	3.20	3.39	2.24
The financial health of my municipality has improved in the past 4 years.	2.44	3.42	2.87	11.93***

	Coeff	Std. Err.
Years of service	.056	.054
Male	1.806**	.666
College educated	−.816	.602
Conservative	3.630***	.623
Held office before?	−.201	.744
Appointed?	1.081	.632
Age	.016	.028
Board size	−.928**	.263
Term limits?	−3.452	2.088
Tax rate	−.073	.087
Log state aid	.709	.764
Log population	−.012	.753
Pct. poverty	−.012	.048
City?	−1.212	.745
Respondents	.197	.240
Constant	14.302	7.676

Statement	Yes N = 90	No N = 112	T-statistic
Wisconsin Act 10 strengthened the financial health of my municipality.	3.16	2.83	−1.97*
Wisconsin Act 10 strengthened the morale of my municipality’s workforce.	2.62	2.52	−.17
Wisconsin Act 10 has increased innovation in my municipality.	2.92	2.76	−1.12
Wisconsin Act 10 has led to cost-savings for my municipality that are UNRELATED to increased employee pension and health insurance contributions.	2.90	2.74	−1.05
Wisconsin Act 10 has resulted in cost-savings that sufficiently offset cuts in shared revenue.	2.42	2.29	−.94
The financial health of my municipality has improved in the past 2 years.	3.16	2.94	−1.46
The financial health of my municipality has improved in the past 4 years.	3.14	2.90	1.69*

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Note

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