Walker to ruin funded, best-run pension system in the USA
Bruce Murphy, columnist for Milwaukee Magazine, had some great points in his column this week why Scott Walker’s state pension gimmick is just a gimmick:
1. Wisconsin has one of the best-run pension systems in the country. Unlike in states such as Illinois, the pension system here has been run responsibly and is quite unlikely to ever run short of money.
2. Walker can’t simply do this by fiat but must negotiate with the state employees unions, and that means giving up other things to gain the pension contribution. It’s not a given that this is the most cost-effective measure for the state to bargain for in negotiations.
3. Walker’s approach may punish all employees for the greedy few. The only clear problem with the state pension is employees who run up their pension benefits by working overtime in their last years to drive up the final average salary by which their pension is computed. This is a distortion of the system, and it’s possible the union could be persuaded to consider changes attacking this problem. Illinois, for instance, is capping pensions at $106,800. This kind of approach would protect all employees while trimming benefits for a small group of top dogs.
4. Walker’s approach in Milwaukee County has been a willingness to let the parks and county bus systems decline, the courthouse go dirty and other programs to suffer, in order to cut costs. That has included threatening furloughs to push the unions into wage and benefits givebacks. But Walker inherited a government with one of the most lucrative pension plans in the nation. There is no evidence the state government is in any way comparable. In fact, it has fewer employees per capita than the average state, as the Wisconsin Taxpayers Alliance has found. A push to furlough or lay off employees may simply make state government less efficient – and less fair to its employees. And that ultimately could affect the state’s ability to recruit good workers.