An Open Letter To Tom Barrett

For Immediate Release                                              Contact: Jeanne Tarantino June 17, 2010                                                                              262.309.1415

Lt. Governor Candidate Kleefisch Sends Open Letter to Gubernatorial Candidate Tom Barrett

Oconomowoc--- Wisconsin Republican Candidate for Lt. Governor Rebecca Kleefisch sent the following open letter to Wisconsin Democratic Gubernatorial Candidate Tom Barrett on Thursday, June 17, 2010:

      Dear Mayor Barrett,

I had the chance to review your plan for "Putting Madison on a Diet." Your plan contains some good ideas for reducing the cost of state government and I hope the next administration adopts some of these initiatives.  

I noticed that the largest potential savings in your plan is found on page 5. It claims to save taxpayers $339 million by combining the purchasing power of state and local public employees to reduce the costs of providing them with health insurance. This seemed pretty impressive so I took a look in the footnotes of your plan to see how this estimate was generated.  

Your figure is based upon an assumption that there are 103,600 state employees and 287,200 local government employees receiving health insurance.  That seemed awfully high to me, so relying on the skills I honed as a journalist, I thought we should double check that assumption.  We called David Schmiedicke, the Budget Director for Governor Jim Doyle, and asked him how many state employees received health insurance. He said that there are only 64,000 health insurance contracts with state employees.  So, it appears that you have overestimated the savings for your proposal by 70% or $140.5 million dollars.  Still, if the rest of your numbers are right, and I am getting skeptical, your plan would still save about $200 million.

I am not writing to critique your math or diminish your efforts to find taxpayer savings. Instead, I am writing to offer a simple and fair idea that would save more money for the taxpayers than any proposal contained in your 23 page plan.  

I would propose that we have state employees pay the "employee share" of their pension contributions.  Presently, state employee pensions are funded with supposedly equal contributions from the employer and the employee. Over the years, public employee unions have convinced the state to pay both the employer and the employee contributions.  For folks in the private sector, that would be like having your employer pay for both your 401K contribution andtheir match of it.  

According to the non-partisan Legislative Fiscal Bureau, the employee share of the pension contribution for 90% of state employees is about 5% of their salary.  For the other 10% of the state workforce, the employee share of the pension contribution is larger. Using the 5% figure, the state would save $175.8 million dollars a year (all funds)* if employees actually paid for the "employee share" of the state pension. Because the employee share is even higher for 10% of state employees, the actual number for the potential savings is probably closer to $200 million a year. 

Over the course of the next budget, this one simple and fair idea would save the taxpayers at least $351.6 million and perhaps as much as $400 million. So, as you can see, Mayor Barrett, the idea of having state employees rather than taxpayers pay for the employee share of the pension contribution would save more than any idea in your government diet plan.  In fact, if this idea were extended to all public employees, the savings just might approach $1 billion in the next biennium - if you are correct in assuming that the workforce of local government employees is about 2.5 times the size of the state government workforce.  

In reading your plan for putting government on a diet, I was surprised how little of the plan asked for any concessions from state employees. Can you imagine a business looking for ways to reduce its costs without examining ways to reduce its labor costs? When it comes to this subject you propose a future study and "negotiations" with the unions (page 23 of your plan). But, of course, it was poor negotiations with public employee unions that put the taxpayers on the hook for the employees' share of the pension contributions in the first place.  

In reality, your plan fails to propose any specific, serious reductions in state employee benefits. I am left to wonder if this is another case of special interest politics, the kind of politics that we the people have grown weary of and can no longer afford. It's time to bring all the players to the table and reduce their caloric intake, too!  

For too long, the public sector unions have had their fill at the expense of the Wisconsin taxpayers. I saw this firsthand as a journalist in the Milwaukee County Pension scandal. During the course of the last few years as hardworking taxpayers across the state have had to make all sorts of sacrifices, we have not asked the same of public employees.

Will you join me in proposing that state employees pay their fair share of their pension costs so that taxpayers across this state don't have to make even greater sacrifices to support Wisconsin's new privileged class?


Rebecca Kleefisch

*The 175.8 million savings is for all funds. The figure for General Purpose Revenues is $71.6 million.