The tale of how we arrived at the current state of Wisconsin politics begins in 2000, when then-Milwaukee County Executive Thomas Ament and the Milwaukee County Board green-lighted an incredible pension give-away for public employees. These employees included those in the Ament Administration and the County Board. The resulting backlash gave rise to a young, relatively-unknown State Assembly Representative named Scott Walker, who used the scandal to win election to the County Executive position.
Lost in the resulting fallout of the Milwaukee County pension scandal was the question of why politicians should even have defined benefit pensions in the first place. Politicians, who serve as public servants, should not receive pensions. They don’t need to be enticed into running for office, and they certainly don’t need to be enticed into sticking around. Aside from throwing away taxpayer money, giving politicians pensions is bad public policy—it incentivizes politicians to vote their interest – running for reelection time and time again and becoming risk-adverse lest a position cost them their job while their pension continues to vest.
A defined benefit pension plan is one that promises a specific monthly payment to a former employee based on their past earnings, length of employment, and age. The financial health of the employer has no bearing on the its obligation to pay. These plans were in vogue during the middle of the 20th Century, but due to their cost, fell heavily out of favor in the 1980s and 1990s
Pensions have fallen out of favor almost everywhere, except with local governments, including the City of Milwaukee and State of Wisconsin.
Currently, politicians are the beneficiaries of the same system they create. It’s a classic example of the foxes guarding the henhouse. We should have systems that attract and retain the best talent for their municipalities, but not at the cost of future generations. The system in place now is bloated with untenable obligations that will be born by our children, but that the beneficiary-politicians will not be held accountable for.
Take for example the case of Alderman Tony Zielinski, who as a County Supervisor, voted for the County pension scandal before being elected to his current aldermanic seat. Despite his history, Zielinski has done nothing to address the same issue of politicians receiving defined benefit pensions at the City level. Because he is the beneficiary of the status quo, one that he helped create, there is no incentive for him to reform the system.
According to the City’s benefit calculator, Zielinski already stands to receive an almost $15,000 per year (lifetime) benefit from the City of Milwaukee – this benefit was received for only 12 years of service as an alderman.
Now, look at what happens if he serves another term – his pension promise skyrockets to over $29,000 per year, every year, until the day he dies. Incredible. (This also does not account for his County pension, a separate benefit that he could already be collecting).
Why are the collective interests of all Milwaukeeans put at risk for this self-serving system? Because asymmetric information always benefits those that posses it. Milwaukee Works, Inc. is committed to providing more information about this issue and other issues like it.
In the short term, we can tell Tony Zielinski and the other members of the Milwaukee Common Council that they should remove themselves from the City’s pension system. This is not too much to ask – honest government for the benefit of the collective, not the politicians.