MILWAUKEE — There's a lot of talk these days about the city's pension crisis and want it means for city workers, city taxpayers, and services.
TMJ4'S Charles Benson goes in-depth to look at: Who is in the pension? What does it mean for residents? When did the pension crisis start? Why does it need to be fixed now?
To understand the city's pension obligations, we stopped by the jobs fair at the Greater Milwaukee Urban League where Athena Turner is looking for a good-paying job with benefits.
"Yes, that is important to me because I do have a family," said Turner.
One of the benefits of working for the City of Milwaukee is its pension. Its biggest financial obligation is to firefighters and police officers.
But the cost of those benefits earned by public safety workers for their years of service to the city has soared in recent years.
Rob Henken isn't a pension expert, but he sure understands Milwaukee's pension problem. He is President of the Wisconsin Policy Forum, and he has written about it extensively.
Benson: Is it hyperbole to say that Milwaukee is heading off a fiscal cliff -if something isn't done?
Henken: It is certainly not hyperbole.
So, let's start with... Who is in the city's pension?
"The city has made a promise. So, when an employee went to work for the City of Milwaukee, that employee was promised a pension benefit is all laid out on paper," said Henken.
What does it mean and what will it cost city taxpayers?
Henken says the pension is not the result of new or enhancement benefits but legal obligations to city workers.
"First of all, it is completely appropriate to focus on this pension issue because there is essentially about a $60 million increase in the property taxpayer contribution that is now going to be required to support that pension fund."
The City has eliminated 1,000 jobs since 2000 with big cuts in fire and police positions.
When did the fiscal crisis begin?
"We put out a report in the fall of 2009 ringing alarm bells," said Henken.
The problem started when investment returns on the city's pension funds dropped during uncertain economic times in the late 2000s. That forced the city to make up the difference with property taxes and stagnant shared revenue - but eventually, it wasn't enough.
"The city just has not been able to see its revenues increase at the pace that would be required to maintain all existing services and again, pay these obligations for its employees or retirees," Henken said.
The city has postponed the fiscal cliff until 2025, thanks to federal covid relief money and planning - which brings us to the why part of this story....
Why does it need to be fixed now?
Henken says without a new reliable revenue source - Milwaukee will be staring at potential cuts for up to 25% of its workforce.
“So, think about if staffing for the police department, fire department, the libraries would have to be cut by that much and in fact that they would have to be cut more because it's the city's property tax levy only support certain functions,” said Henken.
Finding a solution not only benefits the city but people like Athena who want to live and maybe someday work for the city.
"I want to work for the city I live in," said Turner. "I would love that."
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