Christian Schneider

Friday, September 26, 2008

Wisconsin's Government Retiree Health Care Costs Spiraling Out of Control

By Christian Schneider

Categories: Wisconsin

Imagine you're a young guy who has just started dating the girl of your dreams. You get around to the discussion of how many people she has "been with." She says "two." (That's what girls always say, usually accompanied by an extensive story about how she dated some guy for years.)

Now imagine there was a Girlfriend Registration Service, where prospective girlfriends had to report their past exploits. Everything is on there - the Spring Break trip to Cancun and everything. When you go look up the new love of your life, you find out her number isn't two - it's 34.

Fortunately, for us, there's a Girlfriend Registration Service for local governments - called the Government Accounting Standards Board (GASB). A few years ago, GASB began requiring local governments start reporting the amount of health care costs they owe to retirees in the future. Previously, governments just paid these costs on a year-to-year basis. But now, they have begun reporting their future unfunded liabilities - and in many cases, they are stunning.

Today, the Wisconsin Policy Research Institute released a report detailing local government postemployment liabilities. A review of financial documents reveals that the Wisconsin governments required to report their liabilities carry nearly $6 billion in future retiree health care costs. Of this amount, the largest three liabilities are carried by governments in the Milwaukee area: the Milwaukee Public School (MPS) district at $2.2 billion, Milwaukee County at $1.5 billion, and the City of Milwaukee at $806.3 million. In many cases, these liabilities dwarf the annual budgets of these governments (for instance, the MPS budget is $1.2 billion, while their liability is $2.2 billion.)

Taxpayers are wondering why they pay more and more in taxes, yet see little direct benefit. This may be a reason why - a growing chunk of the taxes they pay go to people who don't even workfor the government anymore.

For think tanks looking for a big, juicy topic, this one is a grand slam. The WPRI report landed on the front page of the Milwaukee Journal Sentinel - the state's biggest paper. For anyone looking for guidance or direction on how to start putting these numbers together, feel free to e-mail me and I'll provide a step by step guide.

posted by Christian Schneider
10:42 am
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Tuesday, August 26, 2008

Wisconsin Candidates In Full Retreat on Universal Health Care

By Christian Schneider

Categories: Single-Payer Follies, Wisconsin

Last fall, Wisconsin Senate Democrats pushed hard for a new single-payer style state health insurance system (unironically known as "Healthy Wisconsin"), which would have raised taxes on workers by $15.2 billion.

While passage of Healthy Wisconsin was always a longshot (even the state's Democratic governor derided the plan), Senate Democrats continued to push for passage, believing universal health care was the central issue on which they could base their 2008 campaigns.

According to their own candidates, they were wrong.

The Wisconsin State Journal today examined the health care plans of several Democrats seeking election to the state senate - and none of them embrace the costly universal plan:

When Senate Democrats unsuccessfully pushed a plan to give health coverage to every person in the state last year, they all voted for it together.
But though health-care reform remains a top issue for Democrats on the campaign trail, incumbent and first-time candidates are no longer united in embracing the $15 billion plan, and some are backing away from it.
"The issue is money and right now, not many legislative candidates are talking about big, broad programs simply because we all understand that practically speaking, there's no money," said Jim Holperin, a new Democratic Senate candidate who praised the Healthy Wisconsin plan but said his focus was on reviving the economy.
The once-united Senate Democrats now acknowledge differences on the signature proposal that defined their agenda for the last two years and would restructure one-sixth of the state's economy.
UW-La Crosse political scientist Joe Heim said several Senate candidates he's observed generally seem to be distancing themselves from the controversial plan.
"I may be wrong, but I do think they're avoiding the specifics of it," Heim said.

Of course, the primary reason Democrats are distancing themselves from the plan like it's a pair of thrift store underwear isn't because of finances - it's because the voters of Wisconsin have wisened up to the significant downsides of government-run health care.

Naturally, we here at the Wisconsin Policy Research Institute take full credit for this turnaround in public opinion, just as we will take credit when the Packers make the playoffs this year.

posted by Christian Schneider
5:33 pm
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Friday, June 20, 2008

Government-Run Health Care in Wisconsin: No Deficit of False Rhetoric

By Christian Schneider

Categories: Wisconsin

Yesterday, the Wisconsin Policy Research Institute released a report which discusses the Healthy Wisconsin health plan proposed by Wisconsin Senate Democrats. The report, written by George Lightbourn and yours truly, makes two main points:

Healthy Wisconsin is government-run health care; and

Healthy Wisconsin will run large deficits, since personal income won't keep up with health care costs.

Most informed observers would have the following reaction to the report:

"Well, DUH!"

This is actually a fairly reasonable response. But I should mention a couple things that justify the need for this report. First of all, the authors of the Healthy Wisconsin plan maintain that it isn't government health care. Take the following quote from Senator Jon Erpenbach:"We didn't want it where it was a government-run type of system. We wanted to keep it in the private sector."

With statements like that framing the debate, we thought it necessary to show that the plan is, indeed, government-run health care, and that it would have a massive effect on other government-run programs.

Furthermore, the fact that it is government health care is relevant beyond just making the plan's authors look wrong. The fact that the program will likely run large deficits will have a largely negative effect on other public sector health programs, and would likely force higher taxes to plug the deficit. The Lewin Group actuarial report, which Senate Democrats use to support their plan, actually concedes that taxes will have to be raised in the future beyond the levels authorized in the plan.

Yet perhaps the most interesting part of the report is the reaction it has received since its release this morning. Plan proponents, such as the group One Wisconsin Now, have proven themselves completely incapable of discussing the merits of the plan. They laughably fall back on the old tried and true talking points, such as how "Big Oil" is responsible for all this. Like 3rd graders, they go after co-author George Lightbourn, calling him "bankrupt." I'm surprised they somehow couldn't work Alberto Gonzalez into their talking points.

My only reaction to this is to express a little disappointment they didn't go after me, too. I feel a little left out, seeing as I am clearly morally bankrupt. Maybe I should e-mail them some examples so I can work my way into their next release. Plan author Jon Erpenbach also issued a press release denouncing the report. In their defense, you have to give both Erpenbach and One Wisconsin Now credit for their consistency - neither of them actually read a word of our report. Both issue sweeping bromides about health care for all and such, yet never approach the actual subject matter of the report.

So for those brave enough to actually read the report, criticisms are certainly welcome. But the main theses of the study are fairly solid, and even backed by data that supporters of Healthy Wisconsin are themselves circulating as support for their program.