Scott Walker’s Illiteracy Costs Wisconsin Taxpayers 87 Million Dollars

When Scott Walker introduced his controversial anti-collective bargaining law, he claimed it was “necessary” in the name of fiscal restraint.

You may recall this claim   by Walker in February 2011.

“The bottom line is we are trying to balance our budget and there really is no room to negotiate on that because we’re broke,” the Republican governor said.

Later when testifying before Congress, Walker admitted that his union busting bill wouldn’t save money at all during this exchange with Rep. Dennis Kucinich.

KUCINICH: Let me ask you about some of the specific provisions in your proposals to strip collective bargaining rights. First, your proposal would require unions to hold annual votes to continue representing their own members. Can you please explain to me and members of this committee how much money this provision saves for your state budget?

WALKER: That and a number of other provisions we put in because if you’re going to ask, if you’re going to put in place a change like that, we wanted to make sure we protected the workers of our state, so they got value out of that. […]

KUCINICH: Would you answer the question? How much money does it save, Governor?

WALKER: It doesn’t save any. […]

KUCINICH: I want to ask about another one of your proposals. Under your plan you would prohibit paying union member dues from their paychecks. How much money would this provision save your state budget?

WALKER: It would save employees a thousand dollars a year they could use to pay for their pensions and health care contributions.

KUCINICH: Governor, it wouldn’t save anything.

It turns out, for all the expertise that Walker and his Koch Puppet friends claim to have about all things fiscal, they made a itsy bitsy little error that will cost the State’s pension fund  $87.5 million dollars this year. That’s right, the bill that was supposed to save money because Wisconsin was broke, will increase the state’s expenses.  Nice going Scott.

There was a little noticed provision in Walker’s centerpiece legislation, that will boost employee benefits in the state’s retirement system.  As a result, Wisconsin’s retirement system costs will increase by $87.5 million.  Since we know that Wisconsin’s Republicans would never spend a penny on the workers of Wisconsin, when that money could go to the Koch Brothers and other sugar mommas and sugar daddies, we’re left with facing the reality that no one thought Walker’s centerpiece legislation was important enough to read.  Or maybe the state’s retirement system is just a little too intellectually challenging for Wisconsin’s Republican Party.  It isn’t as if the Koch controlled Republicans weren’t warned, as reported by the Wisconsin State Journal.

“The unanticipated costs aren’t a back-breaking amount for the massive retirement fund, but they illustrate why laws that alter the complex retirement system should be examined carefully before enactment, said Robert Conlin, secretary of the Department of Employee Trust Funds.

Conlin’s predecessor, David Stella, stepped down in January saying that elected officials disregarded his plea for a thorough examination of how changes in the law would affect the $82 billion pension fund.”

Ooops.  It’s possible that Walker’s centerpiece law, the one that was supposed to save money, may bring a few more surprises in September, when the final contribution projections for 2014 are approved.

To be fair to Walker and his merry men, Wisconsin’s pension fund is a complex system with several moving parts, like salary levels, retirement rates and investment returns, which were paid for by Wisconsin’s employers.  So it may have taken a bit of time to study the situation and figure out the repercussions of Walker’s centerpiece legislation.  It seems though, he was so anxious to do slice and dice collective bargaining that it will cost the state $87.5 million.  As a result, while seeking to be the cool union basher to his coporate friends, Walker winds up driving the clown car.

The effect is compounded because higher benefits mean the annual contribution must be increased to cover the higher future benefit cost. In turn, that means employees must put even more money in their accounts, which boosts projected benefits again, and requires a still higher contribution, Murphy said. The benefits structure eventually stops the cycle, Murphy said.

“The system is still in very good health,” Conlin said. “Our contribution rate is still low compared to other states.”

A separate study of the retirement system, including possibly creating a separate 401(k) plan or allowing employees to opt out of the system, is under way and due to be delivered to Walker and the Legislature’s budget committee by June 30.

Image from Blogging Blue

6 Replies to “Scott Walker’s Illiteracy Costs Wisconsin Taxpayers 87 Million Dollars”

  1. Great article Adalia. Thanks for the reminder of his graceless moment in front of Congress.

    Saving money, eh? His legislation cost the state millions to litigate, his voter ID overturned, now his signature legislation ends up costing the state more money. Fiscal conservative? Not so much.

    Milwaukee County was just ordered to backpay the public sector employees Walker cut. Everywhere he goes… he costs money for illegal moves or plain stupidity. But this takes the cake.

    Priceless stupidity.

  2. Temporary Wisconsin Governor Scott Walker learned to lie as a career from his father. This skill booted him out of college. Yet in politics serving ALEC his ability to repeat a basic lie about “standing up” and “making hard decisions” over and over until his followers believe it is unfortunately working for a while. His polished skills plagiarism where quickly recognized as ALEC’s work was submitted as his own. Soon people will recognize the lies and stop repeating them and Temporary Governor Scott Walker will be exiled from Politics.

    Temporary Governor Scott Walker has done serious damage to Wisconsin in a very short amount of time, and the endgame is a mindless end under the guise of false budget and job formation claims. Governance is not about secret meetings, secret agendas, secret attorneys, secret agreements or secret funds. This policy direction is unacceptable in the past, unacceptable now, and unacceptable in the future. The long term costs of even another year of Walker will take decades of recovery once he and his ilk are all gone.

  3. Adalia, I don’t think this was an unintentional oversight on the part of Gov. Walker and his Republican allies in the legislature.

    Among the provisions in Gov. Walker’s biennial budget was the commission of a study of the Wisconsin Retirement System, presumably to see if changes needed to be made to the system. That $87 million shortfall could be just the excuse Gov. Walker and Republicans are looking for to “reform” the WRS into something more closely resembling a 401k or some other such nonsense while also allowing Gov. Walker and Republicans to get their hands on that very big pot of money.

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