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Pensions: More Talk, No Action From County Board

Posted by Chris Liebenthal on December 23, 2010

From Milwaukee County First:

The Milwaukee County Board is now talking about possibly changing the traditional defined-benefit pension system to a defined-contribution system.  The resolutions is being pushed by Supervisor Joe Sanfelippo, who is eying up a run for the soon to be vacant county executive position.

Sanfelippo correctly points out that the county is facing an fiscal crisis and long term steps needs to be done.  What Sanfelippo doesn’t tell you is that the fiscal crisis is the Board’s own fault, and now they are trying to make the workers pay for it.

For two straight years, the Board has willfully and knowing passed an illegal budget.  The budgets are illegal because they come with a built in deficit while the law requires that the budget be balanced.  The budget deficit comes from concessions that have not been introduced in negotiations with the unions, much less accepted by them.

Ironically, Sanfelippo should know this, since he is a member of the Personnel Committee, which handles the contract negotiations.  If Sanfelippo was so worried about the expense of these legacy costs, why hasn’t he had them presented tot he unions as part of the negotiations process?  The answer is simple.

He hasn’t done so because he knows that the unions would take it to arbitration and that the County would most likely lose, since the concessions are out of line for what other governments are paying their workers and even with what the County is paying other county workers.

In other words, Sanfelippo is doing his best Walker imitation and offering up empty rhetoric instead of real solutions to the county’s fiscal woes, which he had a large part in creating.

As for his idea of switching to a 401k, the problem lies in that this would have to be worked out with the unions.  The problem is that the unions are painfully aware of the fact that there is a recession going one.  They are also keenly aware of what the recession did to peoples’ 401k plans and how it has caused all sorts of problems for people who are retired or were considering retirement.  To get the unions to agree to such a ridiculous concept, they would demand a lot of concessions from the county, including pay hikes and better benefits.  The County simply cannot afford this and tax payers shouldn’t be expected to pay for what amounts to little more than a campaign statement.

If the County Board ever gets serious about wanting to resolve the legacy costs with the pension, their best bet would be to stop the county’s retirement system and enroll with the state’s system, just like every other body of government in the state (with the exception of the City of Milwaukee).  The unions would be probably much more likely to agree with this without demanding exorbitant compensation for doing so.

That would help relieve some of the legacy costs without becoming burdensome on the tax payers or the workers.  The state’s retirement system is relatively stable, especially when compared to the county’s.  They could do it the same time that they combine health care plans to help reduce that cost at the same time.

But that is if the Board is actually serious about taking care of the fiscal problems the County is facing.  If not, they will go on as they are, floating one ridiculous scheme at a time.



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