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Walker and Abele’s New $17 Million Pension Mess

Issue of the Week

Dec. 6, 2016
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Photo Credit: Megan McCormick / via Wikimedia Commons

Wisconsin Gov. Scott Walker built his political reputation by blasting Milwaukee County elected officials who signed off on a pension deal that cost taxpayers dearly.

The problem is that Walker, too, is responsible for pension errors that have cost taxpayers dearly.

In fact, a Walker-era problem was made known to the public just last week, when it was revealed that the county sent out $11 million in checks to 1,283 retirees who’d been underpaid for years. The final sum of the Walker administration’s error is $17 million, resulting from using the wrong mortality table for some county employees from 2001 through 2008.

The error is just one of a handful the county has been trying to clean up with the IRS in recent years, including the $20 million Walker-era error fixed last year. County workers discovered this latest one in 2008, while Walker was still county executive, and it’s finally being resolved now. Unfortunately, according to an IRS rule, an 8% interest rate is being attached to the back payments, so the Abele administration’s foot dragging hasn’t helped matters.

Members of the county’s Personnel Committee were upset on Friday when Abele aides briefed them on the matter. Although supervisors were aware that the county was trying to fix errors to make the county’s pension system compliant with IRS regulations, they said the administration didn’t let them know that this fix would cost $17 million until after they signed off on the budget in mid-November. Although Abele officials swear the corrected errors won’t affect the 2017 budget, it will have an impact on the 2018 budget, and supervisors said they would have liked a heads-up when finalizing next year’s budget.

“This is without question administrative error,” said Supervisor James “Luigi” Schmitt, chair of the Personnel Committee. 

It’s ironic—and sad—that Chris Abele is once again following the political playbook of his predecessor, Scott Walker, who failed to fix errors in the pension system while claiming to be a careful steward of the county’s finances. 

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