National conservatives and Wisconsin Republicans have settled on a new talking point that they’re flogging relentlessly in the recall wars: Scott Walker’s proposal to bust public employee unions is already a success. Mere days after it became law.
In making this claim, it seems that Walker and conservative pundits are singing from the same sheet music. Walker made it on Face the Nation this Sunday; Rush Limbaugh has pushed it on his show; and Wisconsin GOP’ers facing recall campaigns are hammering away at it on the stump and in local media.
The notion that they’re pushing, however, is laughably bogus.
The basic claim focuses on a single school district out of hundreds — the Kaukauna School District, near Appleton, Wisconsin. After Scott Walker’s law went into effect last week, school officials announced new policies that they say will turn a deficit of $400,000 into a surplus of $1.5 million. Conservatives are claiming that this is because of Walker’s reforms to collective bargaining rules — the savings are the result, they say, of the fact that teachers and other school staff will pay more in health care costs and pension costs.
On Face the Nation this weekend, Walker amplified this claim, pointing to this specific school district as proof that his reforms had given schools and local governments the “tools” they need to turn their budgets around. “Those are the things we promised,” Walker exulted.
Limbaugh has also pushed this claim hard, arguing on his show recently that this proved Walker’s critics wrong. “Remember all of those fights, all of those protests, and all the bickering, and all the caterwauling, and all the complaining from these public employees in Wisconsin about taking their collective bargaining rights away?” Rush said. “That law goes into effect and immediately turns a $400,000 budget deficit into a one-and-a-half-million-dollar surplus in one school district.”
But here’s the thing: The collective bargaining ban, in and of itself, was not responsible for achieving these savings and this surplus. As the Appleton Post Crescent reports, the teachers union had already offered up financial concessions that would have produced almost identical savings and an almost identical surplus.
What’s more, the use of this one district to declare Walker’s policies a success is almost comical in its cherry-picking. There are 424 school districts in Wisconsin, and as the AP recently noted, Walker’s policies mean draconian budget cuts to 410 of them, with labor officials and school districts predicting increased class sizes and layoffs.
Walker’s premature declaration of victory — and the right wing echo chamber’s flacking of it — could look awfully silly when the full bill for his policies really comes due. And the notion that this one school district’s fiscal success is in any way a referendum on the most controversial aspect of Walker’s union busting proposal is laughable. This fight has never been about public employees’ unwillingness to make fiscal concessions — and always about stripping them of their rights.
By: Greg Sargent, The Washington Post, July 6, 2011
Wisconsin’s budget may be in a hole, but the state’s pension system is among the healthiest in the nation.
In fact, the Badger State was one of just two states to fully fund its public employee pension in 2009, according to a report released Tuesday by the Pew Center on the States. New York was the other.
Although nationally there was at least a $1.26 trillion gap in 2009 between what states have promised in public employee retirement benefits and what they have set aside, Wisconsin stands out as a leader in managing its liabilities for both pension and health benefits over the long term, the Pew report concluded. The shortfall is 26 percent greater than it was in 2008.
Pew researchers attribute the gap to unwise decisions by retirement benefits fund officials and the Great Recession that whacked pension fund investments. In all, 31 states were below the recommended 80 percent funding level for their pension plans in 2009, compared with 22 states that fell short of that threshold the previous year.
“Over the last decade, it was all too common for state leaders to skip or shortchange their annual retirement contributions and increase retiree benefits without checking the price tag or figuring out how to pay the larger, long-term bill,” said Susan Urahn, managing director for the Pew Center on the States. “Now, policymakers in many states are taking a long overdue look at how they have managed, or failed to manage, the considerable costs for public employees’ retirement benefits. Even in states like New York and Wisconsin, where pension systems are well-funded, governors have sought policy changes aimed at reducing their pension liabilities.”
The report was released at a time when Wisconsin sits at the epicenter of state budget battles across the country as governors are focusing on public employee benefits to cut costs and balance budgets. Wisconsin Gov. Scott Walker ignited a firestorm with his “budget repair” proposal that strips public employees of many of their collective bargaining rights and requires them to contribute more of their income toward their retirement benefits. Several states followed with similar proposals, fueling a debate over the role of pension systems in the financial crisis in the states.
At a Capitol Hill forum Tuesday sponsored by the American Action Forum, a conservative think tank, the consensus among panelists was pensions are not to blame for states’ fiscal woes. One panelist, Eli Lehrer, vice president of the Heartland Institute, said given the health of Wisconsin’s pension fund, Walker would be wise to focus his budget balancing effort elsewhere.
“The pension system in Wisconsin is fully funded,” Lehrer said. “As a budget focus, I think he’s better off expending his political capital somewhere else.”
Andrew Biggs, a pension expert at the American Enterprise Institute, said just because Wisconsin’s pension fund is solvent doesn’t mean it should be off-limits.
“It could be well-funded and still be a drain on the budget,” Biggs said.
Pew researcher Stephen Fehr said retirement benefit costs for all states continue to rise, and while states like New York and Wisconsin should be commended for maintaining their funding obligations amid hard times, they face financial strains.
“They don’t have a pension crisis, but on the other hand they do have some pressures as all states do when it comes to figuring out how do we pay our bills,” Fehr said.
New York and Wisconsin have fulfilled their pension fund obligations regardless of the economic times, Fehr said.
By: Larry Bivins, Greenbaypressgazette.com, April 27, 2011