Questions For Barrett

Dear Mayor Barrett,

I had the chance to review your plan for “Putting Madison on a Diet.”
Your plan contains some good ideas for reducing the cost of state
government and I hope the next administration adopts some of these
initiatives.

I noticed that the largest potential savings in your plan is found on
page 5. It claims to save taxpayers $339 million by combining the
purchasing power of state and local public employees to reduce the
costs of providing them with health insurance. This seemed pretty
impressive so I took a look in the footnotes of your plan to see how
this estimate was generated.

Your figure is based upon an assumption that there are 103,600 state
employees and 287,200 local government employees receiving health
insurance.  That seemed awfully high to me, so relying on the skills
I honed as a journalist, I thought we should double check that
assumption.  We called David Schmiedicke, the Budget Director for
Governor Jim Doyle, and asked him how many state employees received
health insurance. He said that there are only 64,000 health insurance
contracts with state employees.  So, it appears that you have
overestimated the savings for your proposal by 70% or $140.5 million
dollars.  Still, if the rest of your numbers are right, and I am
getting skeptical, your plan would still save about $200 million.

I am not writing to critique your math or diminish your efforts to
find taxpayer savings. Instead, I am writing to offer a simple and
fair idea that would save more money for the taxpayers than any
proposal contained in your 23 page plan.

I would propose that we have state employees pay the “employee share”
of their pension contributions.  Presently, state employee pensions
are funded with supposedly equal contributions from the employer and
the employee. Over the years, public employee unions have convinced
the state to pay both the employer and the employee contributions.
For folks in the private sector, that would be like having your
employer pay for both your 401K contribution and their match of it.

According to the non-partisan Legislative Fiscal Bureau, the employee
share of the pension contribution for 90% of state employees is about
5% of their salary.  For the other 10% of the state workforce, the
employee share of the pension contribution is larger. Using the 5%
figure, the state would save $175.8 million dollars a year (all
funds)* if employees actually paid for the “employee share” of the
state pension. Because the employee share is even higher for 10% of
state employees, the actual number for the potential savings is
probably closer to $200 million a year.

Over the course of the next budget, this one simple and fair idea
would save the taxpayers at least $351.6 million and perhaps as much
as $400 million. So, as you can see, Mayor Barrett, the idea of
having state employees rather than taxpayers pay for the employee
share of the pension contribution would save more than any idea in
your government diet plan.  In fact, if this idea were extended to
all public employees, the savings just might approach $1 billion in
the next biennium – if you are correct in assuming that the workforce
of local government employees is about 2.5 times the size of the
state government workforce.

In reading your plan for putting government on a diet, I was
surprised how little of the plan asked for any concessions from state
employees. Can you imagine a business looking for ways to reduce its
costs without examining ways to reduce its labor costs? When it comes
to this subject you propose a future study and “negotiations” with
the unions (page 23 of your plan). But, of course, it was poor
negotiations with public employee unions that put the taxpayers on
the hook for the employees’ share of the pension contributions in the
first place.

In reality, your plan fails to propose any specific, serious
reductions in state employee benefits. I am left to wonder if this is
another case of special interest politics, the kind of politics that
we the people have grown weary of and can no longer afford. It’s time
to bring all the players to the table and reduce their caloric
intake, too!

For too long, the public sector unions have had their fill at the
expense of the Wisconsin taxpayers. I saw this firsthand as a
journalist in the Milwaukee County Pension scandal. During the course
of the last few years as hardworking taxpayers across the state have
had to make all sorts of sacrifices, we have not asked the same of
public employees.

Will you join me in proposing that state employees pay their fair
share of their pension costs so that taxpayers across this state
don’t have to make even greater sacrifices to support Wisconsin’s new
privileged class?

Respectfully,

Rebecca Kleefisch

*The 175.8 million savings is for all funds. The figure for General
Purpose Revenues is $71.6 million.