If you're weary of obnoxious government largess, you may want to take a breather and tune in here, here, or here to the Milwaukee County, Wisconsin pension scandal and the heartening recall rebellion.
The Milwaukee County Board of Supervisors oddly asserts it was doing the taxpayers a favor in November 2000 by ladling out huge pension increases for county workers instead of the usual gratuitous wage increases. After all, pension benefits were to be paid out from a plump pension fund ripe from the stock market run-up, instead of reaching deeper into the pockets of taxpayers right away.
Viewed through a politician's prism this would be seen as cleverly killing two birds with one stone. To Milwaukee County taxpayers, though, that was the last straw.
An intrepid internet journalist actually ran the numbers and found that the county executive could retire on schedule in 2008 with a lump sum of between $2.1 and $2.5 million, plus $98,000 per year with annual increases. The benevolent county tosses in paid up health insurance for life to assist humble public servants scraping by on their meager pensions. Unelected county workers are also paid for all the sick time they never took, retroactive to the day they started.
A recall committee was formed to collect petitions and within two weeks, garnered the 73,000 signatures required to recall the county executive. How do suppose the politician's responded to the will of the people? Humility? Shame? Remorse for being caught?
The county executive did what any modern day, responsible elected official would do: he sued his accusers over failing to file the proper paperwork. Grasping at straws, he asserted the recall committee failed to notify him of their efforts. I guess he missed the month of non-stop press coverage.
Petitioners trudged forward despite the lawsuit and within a month of starting, 180,000 signatures against the county executive were collected in the dead of winter. (That's one in four adults in the county.) Facing an insurmountable election, the county executive saw the writing on the wall, he found himself lacking, and he retired last week.
Most of the executive's staff was sacked the same day. One staffer was quoted as saying, “No party. No cake. It all just happened so fast.” "Let them eat cake," indeed! Welcome to the real world.
Caught in the glare of talk radio, the rest of the county board scrambled to defend the pensions. My favorite justification was, in not so many words, "Eh, the IRS would probably limit those lump sum payoffs as illegal anyway. What are you complaining for." (Let's ask the county's legal counsel to see how he missed this. Oh, wait, he retired last month with $122,000 for accrued sick leave, a $111,000 lump sum, $53,000 pension with annual increases for life, and, of course, paid up health insurance.) Remember kids, decades of shuffling paper really can pay off.
Some board members, of course, feigned ignorance of what they voted for. Can taxpayers believe that these middle-aged looters not only crafted their own pension benefits, but they never personally bothered to check what they themselves would stand to gain? Has human behavior changed in all of recorded history?
The gall of the lawsuit and inane excuses from the county board spurred on the recall army to expand their efforts. Nearly half of the county board is now facing recall from their $52,000 salaried, part time jobs. Unfortunately, secession from the half of the county that won't recall their supervisors doesn't look like a viable option.
One enjoyable and cynical aspect of this electoral melee is that officials are oblivious to the depth of public outrage. Palace intrigue blinds them from seeing scores of elderly taxpayers braving Wisconsin's winter weather to collect signatures outside grocery stores and malls.
In every great saga, the empire struggles to strike back. In a letter to constituents, one elected "public servant", feeling the heat, labeled the recall effort "a fire of destruction." More reasonable folks believe electoral recall efforts are closer to Schumpeter's creative gales of destruction than a scorched earth policy. One county supervisor admitted asking the sheriff for martial law to settle people down.
The real kick in taxpayers' pants is that they have to make up the difference if the pension fund returns less than 13% per year indefinitely. Under Wisconsin law, once pensions are granted to public employees they cannot be rescinded without compensation. That leaves Milwaukee County taxpayers with only one option to avoid being eternal udders for pensioners: fire most of the county workers. How sweet and fitting.
Given how frequently governments distract the masses from scandal by starting wars, Chicagoans should consider themselves fortunate that Milwaukee County doesn't own gunboats, yet. (Don't forget Milwaukee's biological weapon: the billions of gallons of untreated poop that the Metro Milwaukee Sewerage District dumps into Lake Michigan.
Thanks again, Greenspan, for yet another unintended(?) consequence of easy money and speculative bubbles. This one saddled Milwaukee County taxpayers for decades.
March 7, 2002
