CHICAGO (AP) — Wisconsin Gov. Scott Walker said Monday that he would be willing to consider changes in the state’s $77 billion pension system, with a report expected to be released this week on how the system could be improved.
“What I’ve said is I’m not proposing any changes at this time,” he told reporters after a speech at the Commercial Club of Chicago. “That doesn’t mean I won’t be open to them.”
Walker’s comments came just days after the Pew Center on the States determined Wisconsin was the only state in the nation with enough money to meet its current obligations and to pay pensions that have been promised to public employees. The Republican governor on Monday touted his efforts.
“We’re turning things around, we’re moving the state forward,” Walker said as he mentioned how the state has brought down the unemployment rate, seen property taxes go down for the first time on median valued homes in 12 years and turned a budget deficit into a surplus.
Walker suggested that some of what was done in Wisconsin could work elsewhere — a contention that helps explain why he was at the Commercial Club of Chicago, which has warned that companies will leave the state if Illinois does not reform its pension system.
Walker, who successfully fought back a recall effort, did his best to sound like a good neighbor to Illinois. Last year, he greeted the news that Illinois was raising personal income taxes and corporate tax rates with a call for disgruntled Illinois businesses to “Escape to Wisconsin.”
“I’m not here to poach businesses,” Walker said. Instead, he suggested that if major employers, particularly in the Chicago area, that have a “global presence,” they should consider Wisconsin.
“We’re interested not in taking companies, but rather with working with companies looking to grow,” he said.
Walker said he had a “good working relationship” with former Chicago Mayor Richard Daley and would like to build a similar relationship with Mayor Rahm Emanuel.
“It’s important for us to have a strong Illinois, a strong Chicago,” he said.
Walker said he did not know what the report on Wisconsin’s pension system, due to him and the Legislature, might say, and would not speculate. One thing he did stress was that he would not attempt to touch the pensions of current retirees, which he noted would be illegal.
Walker has repeatedly said he has no plans to alter the system, despite calling for the report to look at moving to defined contribution plans like a 401K or no longer requiring participation in the state system.
Many public workers and union leaders fear Walker has his eyes on changing the state’s pension system from a plan where benefits are guaranteed to the plans commonly offered by private businesses that have no such guarantee.
A number of Wisconsin unions, including those representing teachers and state workers that pushed unsuccessfully to recall Walker, have already joined together to fight any changes.
Both the Legislature and Walker would have to approve any changes to the system before they would take effect. Lawmakers aren’t scheduled to be in session again until January, after the November elections.
A unique feature of Wisconsin’s pension system adjusts payouts to state workers based on how well the investments are doing. When times are good, retirees benefits can go up, but when the markets are down benefits can be reduced.
Benefits had been steadily increasing, but following the 2008 recession they dropped for the first time in 26 years. That so-called smoothing effect helps Wisconsin’s pension system spread losses out among its beneficiaries rather than looking to tax dollars or other means to make up the difference.