Scott Walker's phony 'freeze'

Dusk is falling outside the Walker residence as Scott Walker, back from a tough day of cracking down on lazy judges, is greeted by his wife.

Scott: Hi, Honey, I'm home.

Tonette: Hi, Scooter. Why so glum? Tough day at the office?

Scott: Pretty rough. No matter how hard I try, I can't get my budget to balance.

Tonette: That's too bad. I got our household budget to balance today.

Scott: Really? I thought we were way overextended. What did you do?

Tonette: Well, I had this great idea. I just quit paying the mortgage.

Scott: You can't just not pay. They'll get you later, and charge you more interest and fees and who knows what.

Tonette: Maybe so, maybe not. Maybe we won't live that long. Maybe we'll win the lottery. Maybe the mortgage company will agree to take less. Maybe they'll lose our file. Who knows? All I know is we're getting through to the end of the month.

Scott: Thanks, Honey. I think you're on to something...

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And so Scott Walker proposes a "tax freeze" budget for Milwaukee County, despite the fact that costs of health care, fuel, and other items are increasing from last year. What's his secret? He just doesn't pay $27-million that's due to the pension fund.

The Journal Sentinel reports:

In his 2006 budget address to the County Board, Walker did not mention his pension-funding plan but said he did not want to let the ongoing cost of "horrific" pension sweeteners approved by former County Executive F. Thomas Ament force additional trims in crucial county safety-net services.

Milwaukee County saw a flood of retirements in 2004 under the new benefits. That, pension-fund investment losses early in the decade and previous underfunding of the annual contribution by Walker, Ament and the County Board have pushed the 2005 requested contribution to $45.9 million. Walker proposes to fund $19.2 million of that, about 42% of the amount requested by the Pension Board.

Walker portrayed the underfunding of the annual pension payment as a way to spark debate over trimming pension benefit levels for county employees, as he proposed recently.

But unless that benefit change happens, the underfunding would mean that county taxpayers will actually pay more for the Ament-era pension enhancements. That's because the pension fund would charge the county for the $27 million shortfall, with interest tacked on, in taxpayer contributions to the fund in future years.

Walker wants a related change that would spread that repayment over 30 years, compared to the current five-year payback.

"Wow," said Pension Board Chairman Walter Lanier, who expressed surprise at the size of the shortfall. That board will study the impact on the viability of the fund, he said.

Supervisor Richard Nyklewicz Jr., chairman of the County Board's Finance Committee, called the pension contribution shortfall "irresponsible."

Supervisors will be hard-pressed to replace the $27 million pension contribution shortfall without cutting county services. Under the state's new limits on local taxation, Milwaukee County can raise property taxes by only $8.5 million, or 3.7%.

So Walker, as usual, has proposed a political budget that he hopes will get him through another year and closer to the next election. Next year's budget, conveniently, won't come until after the primary for governor.

But sooner or later, someone's going to have to pay the piper -- with interest. The idea that county workers are going to give back any significant pensions benefits is pie in the sky. As the City of Milwaukee found out, even if the unions agree the courts take a dim view of taking away benefits that people have already earned. The city and county systems are not identical, but in case after case the courts ruled that the city could not reduce benefits. Walker might want to ask his friend Bradley DeBraska, retired police union boss, about that.

Walker asked the voters a year ago to approve a scheme for the county to borrow money long-term to pay off pension obligations. The voters said no. But Walker seems to have done it anyway.

Yet the Journal Sentinel gives him a pass. On the editorial page, the paper credits Walker for keeping his tax promise. It does note:

Walker took another gamble of sorts by putting only $19.2 million in the budget to cover the county's pension obligations, far short of what is needed. Walker is hoping county unions will agree to concessions in their pension benefit levels in new labor contracts. We hope he's right since, as Walker says, the pension enhancements passed under his predecessor are costing the county a bundle and may eventually force the county to make even deeper cuts in service and staff in the future. But we would also hate to see the emphasis on the pension givebacks threaten other concessions the unions might agree to on health insurance, which could also save a lot of money.

Yes, and if gas prices fell to $1 a gallon that would save a lot of money, too.

Walker slashed the court budget, saying the state should pay for the court system, not the county. Maybe, in his campaign for governor, he will explain what state services he would cut to pay for the courts, since he is committed to not raising state taxes, either.

Walker's budget is phony through and through. But by creating the illusion that he has proposed a tax freeze, the onus is on the County Board for any increase in taxes. If the board passes an honest budget, the levy will go up, but Walker will claim innocence.

I guess we should be thankful he at least put $19-million of the $46-million owed the pension fund into his budget. He could have just decided to pay nothing and declare a $19-million tax cut, which would be just as honest as his phony "freeze."