A misleading picture of MPS liability
The Christian Schneider column published Wednesday contains information that is, at best, flatly misleading.
Before he even gets to the main point of his argument – and there are critical problems there, too – Schneider falsely claims Milwaukee Public Schools “ignored Walker’s plan” when it “re-upped” employee contracts.
What plan exactly did MPS ignore?
The plan that became Act 10 was introduced in February 2011. The terms of MPS’ current employee contracts – which have saved the district an estimated $150-plus million in health care costs – were laid out months before in September 2010 and approved on Dec. 2, 2010.
The Journal Sentinel’s own PolitiFact Wisconsin found then-Gov.-elect Scott Walker first publicly hinted at his plan to curb public employee collective bargaining days later on Dec. 7, 2010. PolitiFact ruled the claim that the governor campaigned on his plan false. We did not know about the plan when we approved the contracts.
And what about Schneider’s central argument – that retiree benefit costs could bankrupt the district?
The author uses a 2009 liability analysis that came before aggressive and critical steps the Milwaukee School Board and the administration of MPS Superintendent Gregory Thornton took to address the district’s long-term liability.
MPS has acted to raise its minimum retirement age and years of service required to reach retirement, and we project that the steps will save the district several hundred million dollars in legacy costs over the next 30 years. We changed health plan administrators and plan design.
We formed a trust to fund the liability. The health care contributions that are part of the 2010 contract – and further contributions that will take place once contracts expire – will further reduce the liability. We froze a supplemental pension for teachers and ended it for new hires, shaving millions more from long-term liability.
All of those actions will significantly reduce the base liability – and we’ll know by just how much in the coming months. At the same time, we know our actions have shaved at least a full percentage point off the projected growth of that liability. Think of that like getting a lower interest rate on your mortgage.
MPS has taken aggressive steps to cut costs across the district and ensure more dollars are flowing to classrooms. The health care savings from our 2010 contracts estimated at more than $150 million will grow further as board actions in 2011 yield an additional $188 million in estimated health care and pension savings through 2017. We’re also moving toward a central kitchen to serve healthy meals more efficiently, saving an estimated $90 million over 15 years.
We’ve rebid our transportation contracts for an estimated $2.2 million in savings, and we’re using private-sector Six Sigma efficiency strategies to save money on operational costs such as textbooks, saving an estimated $2.7 million. Our 2011-’12 budget cut positions and spending at Central Services, saving $5.7 million. Millions more cuts at Central Services are in the 2012-’13 budget.
We would have been happy to share all of that information – particularly the information that affects legacy costs – with Schneider or his colleagues at the Wisconsin Policy Research Institute if anyone had asked.
We appreciate what we hope and can only assume are WPRI’s efforts to accurately inform the public and believe that goal would best be served by using the most relevant, up-to-date information rather than 3-year-old data that, at this point, paints a misleading picture of what is a very important issue.
Michael Bonds is president of the Milwaukee School Board.