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Will candidate vows improve or hamper state government?

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Mark Klipstein
July 28, 2010

The top candidates vying to succeed Gov. Doyle in the November election all say further cuts of some kind in state employee staffing and compensation are on the table. One candidate, Milwaukee County Executive Scott Walker, has gone the furthest, calling for major changes in the highly regarded Wisconsin Retirement System (WRS).


Walker echoes a recent report from the pro-business Wisconsin Policy Research Institute warning of a “gap” between public- and private-sector retirement plans. In so many words, the report proposes fixing the state budget by making WRS— among the nation’s few fully funded state pensions—more like the patchy retirement insecurity now afflicting most private-sector workers.


Walker says public employees should start contributing to their own retirement accounts. Tellingly, that “solution” has been touted by some of the same people who cheered when Gov. Tommy Thompson raided state pension funds in 1987, a move overturned by the state Supreme Court.


Actually, state employee compensation is a small part of the state budget. Pension costs are a small part of that. Excluding the UW System and Corrections, benefits and wages make up just 7 percent of the state budget.


Moreover, in collective bargaining, employees accepted lower pay in exchange for the state’s pledge to pick up their pension costs. That deal saves tax dollars. The state otherwise would pay higher Social Security and Medicare taxes. Thus current pension funding is a win/win/win for government, employees and taxpayers.


Anti-government rhetoric and WRS’ relatively stable performance may lead some taxpayers to believe that retired state employees are immune from the national financial meltdown. Actually, state pension payments to most retirees have been trimmed two straight years and WRS says protecting assets probably means another three years of cuts.


If you work for a business that has cut compensation and staff, pushing employees to work harder while outsourcing work, then you are now where state employees have been for over a decade. State workers just suffered two-year, 3.0 percent to 3.4 percent wage cuts through furloughs and layoffs. Meanwhile, the Doyle era leaves state government with far fewer employees. Wisconsin now has fewer state workers per capita than neighboring states.


Anti-pension rhetoric shifts attention from real budget issues by inciting animosity between stressed public- and private-sector workers, Walker, meanwhile, continues pushing privatization schemes and use of private consultants. He ignores audits and studies showing that outsourced public programs increase state costs.


Pension-giveback rhetoric could worsen current irrational state budgeting. In so many words: We need to cut staff because of deficits, but our duties then require us to replace those staffers with more expensive consultants, and when that causes deficits to grow even worse, we will need to cut even more staff.


As usual, you get what you pay for. If you dislike government, then making it more dysfunctional and more expensive may be nifty politics. But that damages one of the nation’s best pension systems while devolving state government so even less of the public’s vital work gets done.


Mark Klipstein is president of the State Engineering Association, a bargaining unit whose nearly 1,200 members include represented engineers and specialists working for the state in many agencies and the UW System. He is a civil engineer working out of Waukesha at the Wisconsin Department of Transportation. Readers can reach him at (608) 233-4696 or wisea@wisea.org.

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