A quarter-century ago, a pension scandal rocked Milwaukee County, and its impact continues to reverberate today. This is not just a story of financial mismanagement; it's a tale of how decisions made in the past can shape, and often restrict, the present and future.
The scandal's origins lie in the early 2000s, a time of tech optimism and soaring stock markets. Milwaukee County, like many other entities, found itself with a pension surplus. In an effort to avoid large salary increases, the county offered enhanced pension benefits to its public employees.
However, a well-intentioned idea soon turned into a costly mistake. The county's human resources director, Gary Dobbert, brought back an idea from a conference in San Francisco: the backdrop payment. This concept, originally designed to encourage law enforcement officers to stay past retirement, was now being offered to all county employees, with no time limit.
The result? A handful of retiring employees continue to receive large backdrop payments, with some receiving millions. These payments, totaling over $400 million between 2001 and 2025, have had a profound impact on the county's budget.
One of the most visible impacts is on the county's bus system. Fares have increased, and routes have been reduced. Brenda Bates, a resident on disability, has had to cancel appointments due to the higher bus fares. Steve Taylor, the finance committee chairman, blames the pension scandal for the system's struggles, arguing that the money spent on pensions could have been invested in transit.
The scandal has also affected the county's swimming pools and parks. Monica McKinley, a resident, used to take her children to the pool in Washington Park, but now, the pool is closed, and she has to drive across town to swim with her grandchildren. The parks, once considered a crown jewel, are now in disrepair, with boarded-up and mothballed buildings.
Supervisor Sheldon Wasserman puts it bluntly: "It was just a disaster, and we still feel it every day."
The county's pension obligations have led to a situation where services are being cut, and residents are facing higher taxes. A new sales tax was introduced to help pay off the pension liabilities, but as Taylor points out, this doesn't provide any direct benefit to the residents who are paying it.
Despite these challenges, there is a glimmer of hope. In 2023, Milwaukee County transitioned into the Wisconsin Retirement Services system, which is considered the gold standard. This move provides some financial flexibility and a dedicated funding source for the pension system.
Erika Bronikowski, the county's pension administrator, expects the pension to be fully funded by around 2040. However, the county still has a long way to go, and the impact of the scandal will be felt for years to come.
This story serves as a cautionary tale. It highlights the importance of careful financial planning and the long-term implications of decisions made in the present. As Milwaukee County works to recover, it's a reminder that the past can cast a long shadow, and the road to recovery is often a long and challenging one.
