Monday, October 12, 2009

The Great G.A.S.B.

Bruce from Badger Blogger is still trying to play "gotcha" with me. The most recent episode involves Bruce discovering that the County budgets for fringe benefits, like health care and pension obligations. This simplistic attack is also echoed by the usual suspects, and Wiggy as well.

On the surface it does look bad. I really should go hide and be quiet, I suppose. Except for the simple fact that there is more to it than they would have you believe.

First of all, the budgeting of pension and other similar post-retirement benefits into the current budget started during the Bush administration, when they changed some of the rules regarding the Governmental Accounting Standards Board (GASB). Bush had this new clause put in to make it easier for people like Walker to justify trying to privatize everything.

Even though I am far from being retired, and wouldn't be eligible to collect anything for at least another 18 years, the federal government requires the County to budget it as if they are paying me now. Since I obviously cannot collect it, one would think that this money would, oh, I don't know, maybe be directed toward the pension fund. But it isn't. In fact, the pension fund hasn't been fully funded once during Walker's tenure.

This in turn, raises the amount due to the fund by greater and greater amounts each year. This self-inflicted shortage has only been made exponentially worse by the crummy economy. By the ever-increasing shortage to the pension fund, and the ever-increasing requirement for money to be put in each consecutive year because of these short payments, it makes it look like the employees are costing much more than they are.

But once one gets past the distraction and actually starts to look at the problem, a very disturbing realization manifests itself.

In 2008, Walker left 717 fully funded positions unfilled. In 2009, the number is 89. That means in the past two years, there has been over 800 positions which were fully funded by the County Board, but were never filled. On top of that, as I just mentioned above, not all of the money that has been budgeted for the pension fund as gone to the pension fund.

This easily adds up to tens of millions of dollars.

Has anyone ever bothered to ask Walker what he did with all that money?

Post Script I: The popular opinion on the right is that the unions should just roll over and give Walker all the concessions he is looking for. It sure would help the budgeting process.

While I can not speak for the unions or the bargaining committee, I would find it extremely feasible to get that agreement if Walker would do just one thing: Show the same consideration he showed to almost all of his upper management people by giving them raises that would counter the loss of wages and benefits first.

Post Script II: James Rowen had a really good point a few weeks ago. Since this was obviously contrived by Walker a long time ago, shouldn't he be claiming any concessions as campaign contributions?


  1. the federal government requires the County to budget it as if they are paying me now

    I think you mean the FASB, which is NOT "the Feds."

    Moreover, those are the same standards required of private industry accounting--it's called "honesty."

    Are you telling us that in the case of County employees, dishonesty is the better policy?

  2. Chris, you are laughably incorrect in this post.

    It's true the County's total spending on benefits as a percentage of total salaries doesn't reflect what you get. A lot of that is expenses for retirees, including pension funding and health insurance.

    However, GASB rules are not set by the federal government. GASB did not require governments to account for the cost of their post-employment benefits because Bush said so. GASB policies are put together by accountants and government finance professionals.

    Governments should account, for the taxpayers, for the cost of the benefits they promise to their employees. Taxpayers have the right to know what level of benefits they are funding and whether the cost is worth it.

    Your second point about funded but filled positions is similarly incorrect. County managers are required by law to come in with balanced budgets. They cannot fill vacant positions - that cost the County money - if doing so would cause them to finish the year with a deficit. The County has few other options - you cannot turn off the lights or not buy paper or not pay on a contract that is legally binding. If a department relies partially on revenues and those revenues don't come in, then the Department doesn't have the funding to pay for the positions.

    The money associated with those unfilled positions didn't "go" anywhere - it went to the County's bottom line.

  3. No Daddio, there is a difference between FASB and GASB, and the standards are different.


    So, if I understand you correctly, you are saying that Walker took money from one fund, namely the 800+ positions, and reshuffled it to somewhere else to make up for a shortfall in his budget.

    Didn't Doyle catch hell for that?

  4. I was up reading your blog and wrote a response but it was too long to fit into the comment box so I put it on my blog:

    I go into the math of the pension problem, if you're interested. Nice blog, by the way.

  5. I assume you're admitting that you were wrong about GASB, and that GASB 34 had nothing to do with Bush nor providing ammunition for privatization. Are you man enough to admit to your mistake or are you just going to ignore it?

    No, you do not understand me correctly. Doyle took hell for stealing money from segregated funds, such as the transportation fund, to finance spending in other areas, such as GPR, in a budget. In effect he was taking the gas tax, which taxpayers are promised will be used to fund roads, and used it to fund all sorts of other things. It was deliberate policy.

    At the County, departmental managers held positions vacant during the year to balance their departmental budgets. Looking at their budgets online, many departments have significant revenue budgets as well as tax levy. If those revenues don't come in, it's not prudent to fill every position because personnel is often the only area of flexibility a government has to offset a revenue deficit.

    There is quite a difference between adjusting staffing levels during the year to offset a revenue shortfall and deliberately taking revenue that was promised to be used for one purpose and using it on another. The first, assuming you've put together a prudent budget, is good management - it's not prudent to go on filling positions if your revenue is not coming in. The second is not prudent because it shows you cannot prioritize your spending.

  6. Umnnhhh....yah. You got me.

    GASB. FASB. Different.

    But NOT Bush-appointees, nor controlled by Bush.