In 2010, Megan Sampson was named an Outstanding First Year Teacher in Wisconsin. A week later, she got a layoff notice from the Milwaukee Public Schools. Why would one of the best new teachers in the state be one of the first let go? Because her collective-bargaining contract requires staffing decisions to be made based on seniority.

Ms. Sampson got a layoff notice because the union leadership would not accept reasonable changes to their contract. Instead, they hid behind a collective-bargaining agreement that costs the taxpayers $101,091 per year for each teacher, protects a 0% contribution for health-insurance premiums, and forces schools to hire and fire based on seniority and union rules.

My state's budget-repair bill, which passed the Assembly on Feb. 25 and awaits a vote in the Senate, reforms this union-controlled hiring and firing process by allowing school districts to assign staff based on merit and performance. That keeps great teachers like Ms. Sampson in the classroom.

Most states in the country are facing a major budget deficit. Many are cutting billions of dollars of aid to schools and local governments. These cuts lead to massive layoffs or increases in property taxes—or both.

In Wisconsin, we have a better approach to tackling our $3.6 billion deficit. We are reforming the way government works, as well as balancing our budget. Our reform plan gives state and local governments the tools to balance the budget through reasonable benefit contributions. In total, our budget-repair bill saves local governments almost $1.5 billion, outweighing the reductions in state aid in our budget.