There’s no shortage of political gridlock and bad news when it comes to public-sector pension reform. (Consider recent goings-on in Chicago and Philadelphia.) But the reforms that Wisconsin undertook in 2011give cause for hope on this front—at least for the time being.
According to a technical report released today by the Thomas B. Fordham Institute (an easier-on-readers summary report by Dara Zeehandelaar and Amber M. Winkler can be found here), authors Robert M. Costrell and Larry Maloney predict that the new authority granted under the Wisconsin Budget Repair Bill—also known as “Act 10,” the measure that focused attention on the Wisconsin statehouse in 2011 and put newly-elected Governor Scott Walker into the spotlight—did much good for the Milwaukee Public Schools’ perilous fiscal condition. It reduced that district’s per-pupil spending on teacher retirement from a projected $3,512 in 2020 to a far more affordable $1,924 per pupil.
Good news, yes. (See media coverage here, here, and here.) But Act 10’s pay-as-you-go policy on retiree health benefits means that some sizable costs, necessary to meet obligations to current employees, are simply being postponed. Changes made by the state and district give MPS some time, but further action may still be required.
Still and all, Milwaukee—and Wisconsin—have taken significant (if painful) steps toward resolving the retirement conundrum. It’s difficult—but it’s not impossible.
Click here to read the full report, Milwaukee: Saved by Act 10…For Now.