Daniel Bice
Milwaukee County OKs plan to become first public pension system to give credits to furloughed workers.
It took more than an hour of debate and three votes, but the Milwaukee County Board decided Thursday to give county workers pension credits for the time they are furloughed because of budget cutbacks due to COVID-19.
The county already does this for the first 30 days that its employees are furloughed, but this proposal would extend the pension credits for as long as someone is off the county payroll.
County officials have said they are unaware of any other pension system that is doing this for its furloughed workers.
“Why would we stick our necks out and go in a direction that no one else has done?” asked Supervisor Sheldon Wasserman. “We’re talking San Francisco. We’re talking anywhere in the United States. Why would we do this?”
But the proposal eventually passed on 13-4 vote, with several County Board members saying they were lending a helping hand to frontline county workers who had their hours trimmed or cut altogether because of the pandemic.
“It clearly is the right thing to do,” said Supervisor Ryan Clancy.
The board narrowly rejected two efforts to return the proposal to committee after vigorously debating the matter. Both went down on 10-8 votes.
Thursday’s hearty and sometimes heated discussion stood in stark contrast to the handling of the matter as it sailed through two committees before reaching the full County Board. The Pension Study Commission approved the plan unanimously in a six-minute meeting without questions by its five members.
But Supervisor Willie Johnson Jr., chairman of the Pension Study Commission, said there was no need for further review of the plan to award the free pension credits to the furloughed workers. The proposal, he said, would affect only about 160 county workers at minimal cost to the county.
“I have enough information to go forward,” Johnson said.
The debate came against the backdrop — so to speak — of one of the biggest blunders in the history of the County Board.
Milwaukee County taxpayers are still footing the bill for the unprecedented and massively generous “backdrop” payments and other enhancements approved by the board some 20 years ago.
Under the plan, the county paid large, lump-sum bonuses to county workers for staying on long past their retirement date. Originally described as being “revenue neutral,” the program has ended up paying out far more than $300 million in backdrop payments to more than 2,400 county retirees.
Wasserman said at Thursday’s meeting that he has serious concerns about any proposal backed by the Milwaukee County pension office.
The pension scandal, Wasserman noted, led to the rise of former Gov. Scott Walker —who left the Legislature to run for county executive, then won the governor’s office — and the
approval of Act 14, which cut the pay and terms for Milwaukee County Board members. He called the plan to give pension credits to furloughed workers “radioactive.”
“It does not pass the smell test,” said Wasserman, a former Democratic lawmaker.
But Supervisor Jason Haas, chairman of the board’s Finance Committee, said the pension credit proposal is nothing like the backdrop program.
Haas said the money for the furloughed workers’ retirement plans is already in the county budget. Beyond that, he said the county has made a number of changes since the pension scandal to prevent a recurrence of that fiasco.
He said he trusted the numbers given to him by the county staff.
“We’ll be fine,” Haas said the proposal. According to county numbers, more than 1,500 of the county’s 4,000 workers have been furloughed as of Aug. 8 as a result of budget cuts due to the pandemic. Of those, more than 180 employees had been off the job more than a month through Aug. 8.
The cuts have hit everything from the parks to the courthouse, with officials saying they have tried to avoid reductions to public health, public safety and emergency management.
A fiscal analysis done by the Milwaukee County Comptroller’s Office found that there would be “no fiscal impact” from the proposal.
The county would have seen an “actuarial gain” of $50,000 to $150,000 had it decided not to contribute to the retirement plans for furloughed county workers this year. Spread out over 20 years, that would have meant a drop of $3,700 to $11,000 annually that the county would have paid toward the main pension fund for the furloughed workers.
Supervisor Sequanna Taylor said no one wants to make the wrong decision, especially when it involves the county pension system.
But she said the County Board had an obligation to make the furloughed workers “whole” by giving them the retirement credits for their time off the job due to the pandemic.
Supervisor Patti Logsdon said she understood the desire to help out these valuable county workers. But she said she was also accountable to the taxpayers who would have to pay for the pension credits, no matter how much money was involved.
“I’m stewards of their money,” Logsdon said.