Wisconsin’s public employees have already agreed to accept pay cuts and to place more of their compensation in Wisconsin’s public employees pension fund. And upon closer examination, Walker’s house-on-fire rhetoric regarding his state’s finances doesn’t hold up to scrutiny, as McClatchy found:Ironically, in Wisconsin, where Republican Gov. Scott Walker is trying to weaken public-sector unions and reduce pension benefits, he’s exempted police and firefighters, who are among the most unionized public employees. And Wisconsin’s public-sector pension plan still has enough assets today to cover more than 18 years of benefits.
Keep in mind, that’s nearly two decades of benefits that could be paid even before the changes to which Wisconsin’s current public employees have agreed go into effect. Overall, Wisconsin’s pension system is 97 percent funded, according to the Center for Retirement Research.
In fact, as the Center for Economic and Policy Research pointed out, “the shortfalls facing most state and local pension funds have been seriously misrepresented in public debates”:
The major cause of these shortfalls has not been inadequate contributions by state governments, but rather the plunge in the stock market following the collapse of the housing bubble. Given the low PE ratios in the stock market, pension fund assumptions on the future rate of return on their assets are consistent with most projections of economic growth and past experience. Furthermore, when expressed relative to the size of their economies, most states are facing shortfalls that appear easily manageable.
Walker has already been scolded by his state’s finance director for falsely claiming that he would have to lay off state employees if his budget bill wasn’t passed by a certain date. Politifact also rated Walker’s repeated assertions that his state is broke as “false.”