The Leaflet – Governor Walker’s Act 10

Published June 1, 2012

It has been a year since Wisconsin’s Act 10, which limited collective bargaining rights for most public employees, went into effect. The passing of these reforms has led to next week’s nationally significant recall election of Governor Scott Walker.

As the media is talking about ad money and polls, research organizations such as The Heartland Institute and American Enterprise Institute recently have released reports looking at the actual results of these improperly criticized reforms.

Heartland’s new Policy Brief, “School Districts Flourish Under Walker’s Act 10,” explains some of the benefits the state and school districts have experienced due to these reforms.

According to the report’s author, Maureen Martin, who is a Wisconsin resident and general counsel and senior fellow for legal affairs at The Heartland Institute, “Act 10 virtually eliminated [the state’s] $3.6 billion budget deficit … and provided school districts with measures previously unavailable to them to accomplish spending reductions.”

A new report from the American Enterprise Institute focuses on the impact Act 10 has had on public employee compensation. The report found, “Before the reforms, Wisconsin state employees received total compensation (salary and benefits) about 29 percent higher than comparable private-sector workers. After the reforms, the compensation premium is about 22 percent.”

Regardless of the outcome of the upcoming recall election, Act 10 was a landmark bill with national policy implications. These reports show that in just one year there has been substantial evidence of its success in helping school districts balance their budgets without having to lay off teachers.

This week’s edition of The Leaflet features research and commentary addressing health care compacts, carried interest tax, Stafford loans, global warming skeptics, gambling cafés, and academic drug detailing.

John Nothdurft
Director – Government RelationsThe Heartland Institute



Research & Commentary: Interstate Health Care Compacts
Health Care

While the Supreme Court considers the fate of the federal health care law, some states are attempting to take more control over health care by engaging in interstate health care compacts.
An interstate health care compact involves two or more states jointly deciding they want to select the health care system that is best suited for their states by placing the power to regulate health care with the states rather than the federal government. Engaging in a health care compact requires Congressional approval, but once made law, it trumps conflicting federal laws.
Opponents of interstate health care compacts argue they put entitlement programs and their participants at risk and could abandon guaranteed coverage of preexisting conditions.
Advocates, however, claim health care is better regulated by the states. Health care is too complex and too large for the federal government to give adequate attention to state-specific circumstances. States are better aware of their residents’ needs and their economic climate, and are therefore better equipped to assess which health care systems would be most effective and efficient.

An interstate health care compact would give states authority to challenge the progression of the federal health care law. Instead of a one-size-fits-all system, states would have the opportunity to choose what suits them best.

As stated by the Health Care Compact Alliance, “Some states may choose to promulgate all of their health care regulation at the state level. Others may choose to push authority and responsibility further downstream to the county level. The point here is that the health care compact will take the authority and responsibility for health care regulation from the federal government and move it, lock, stock, and barrel, to the states.”
As of February 2011, 37 states were contemplating an interstate health care compact, and 10 states already had introduced legislation to that effect.


Research & Commentary: Carried Interest Taxes
Finance, Insurance and Real Estate
One issue currently under debate is how carried interest, the share of the profits of an investment or investment fund that is paid to an investment manager as compensation, will be taxed. Under current law, when an entrepreneur or private equity, venture capital, or hedge fund firm sells a business or takes it public through an initial public offering, the profits on the sale are generally taxed as a capital gain. In this Research & Commentary, Legislative Specialist Matthew Glans discusses carried interest from various perspectives.

Research & Commentary: Stafford Student Loans
As outstanding U.S. college student debt passed the $1 trillion mark this year and college costs continued to rise faster than health care costs, U.S. policymakers have made several changes and proposals to meet increasing public concern. President Barack Obama proposes to extend a five-year artificial cap on federal student loan interest rates at 3.4 percent, which House Republicans quickly passed and Republican presidential candidate Mitt Romney also endorsed.

Global Warming Skeptics More Knowledgeable than Alarmists, Study Finds
Global warming alarmists often accuse skeptics of being “anti-science,” but a new study finds skeptics are more scientifically knowledgeable than the alarmist name-callers.

Michigan AG Shuts Down Internet Gambling Cafés
Michigan Attorney General Bill Schuette reached an agreement in May with eight Internet Sweepstakes Cafés to shut them down. If they reopen, Schuette said, he will shut them down through criminal or civil court suits.

Research & Commentary: Illinois Cigarette Tax Won’t Fix Medicaid
Budget & Tax
After raising the state’s personal income and corporate tax last year, Illinois is considering a $1 per pack hike in the state’s cigarette tax. Advocates claim the tax would help pay for ballooning Medicaid costs, which are over budget by $2.7 billion.
Such an increase, however, fails to address the structural problems of the Medicaid program and would disproportionately burden low- and moderate-income Illinoisans and create numerous unintended consequences. The continuing need for new revenue sources shows the real problem in Springfield is inefficiency and lack of spending restraint, not insufficiently high taxes.


Heartland’s Emerging Issues CallTopic: Renewable Portfolio StandardsWednesday, June 6, 2012 at 1:00 pm ESTRSVP by emailing Robin Knox at [email protected]

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