I was a little surprised by the Milwaukee Public Schools (MPS)’ response to my recent Wisconsin Interest piece on the district’s long-term fiscal challenges. Specifically, I was confused by the following two paragraphs in a blog item posted yesterday by Milwaukee Journal Sentinel education reporter Erin Richards:
MPS officials on Wednesday objected to the assertion that the district is headed toward financial insolvency. They reiterated that they have raised the minimum retirement age, raised the number of years needed to reach retirement, and increased future retiree contributions, all of which should make a significant impact on legacy costs.
MPS Spokesman Tony Tagliavia reported there is a report coming out in the coming months that will reflect the impact of the changes made.
First off, my article makes clear that I took MPS’ aggressive actions to address their legacy costs into account (Incidentally I have also blogged about these actions and applauded MPS as they have been taken). In the article I write:
Critics and reformers have called on MPS to make the difficult decisions necessary to offset the cost of retiree health benefits. The problem, however, is that MPS Superintendent Gregory Thornton and the MPS board have already made difficult decisions to rein in costs.
In November, the board voted to require employee contributions to fund from 7 percent to 14 percent of their health care premiums, depending on salary. The board also voted to introduce four furlough days as well as to institute a salary freeze in 2013, 2014 and 2015.
Second, I obviously did not have access to a report that has not yet been released. I will certainly blog about it when it comes out because I find this topic incredibly important.
Today’s op-ed from MPS School Board President Michael Bonds clears up some of the confusion. It appears MPS’ response in the Journal Sentinel blog item is to my colleague Christian Schneider’s op-ed in Wednesday’s Milwaukee Journal Sentinel (His response to Bonds is here).
To be clear, these are two distinct pieces that use different data and make different points. Bonds does not specifically mention my article but he does reference Schneider’s “colleagues at the Wisconsin Policy Research Institute,” so I want to make a few points to address any confusion:
1. The number I use for MPS’s current unfunded liability is from MPS. It is not from the 2008 actuarial analysis referenced by Bonds in his op-ed.
On November 15, 2011 Superintendent Gregory Thornton made a presentation to the MPS Board of Directors titled “Proposed Plan Changes to Manage MPS OPEB Liability” that estimated MPS unfunded actuary liability at $2.2 billion dollars. That is the number I reference in the article. That document is available here.
2. The future trends in MPS annual health care and annual retiree health care costs I use are from MPS and do reflect actions taken by MPS to address their liability. The numbers are not from the 2008 actuarial analysis referenced by Bonds in his op-ed.
Those numbers can be found on page 36 and 37 of the agenda book from the November 17, 2011 MPS board meeting. Click here to download that document. The MPS estimated projections go five years into the future and I do, as I write in my article, take those estimates out another five years.
3. Annual projected future MPS costs for the district’s second pension used in my article are from MPS, and reflect the suspension of that second pension at the expiration of the current MPS-MTEA contract.
I obtained those numbers from a February 28, 2012 analysis done for the district by Gabriel Roeder Smith & Company. That document is available here (see the last page for the numbers used in my article.)
4. I did contact MPS.
On May 2, 2012 I sent an an e-mail to MPS’ Communications Director outlining what I was doing, asking for comment, and asking specifically “what the MPS position is on how the long-term budget outlook can be improved?” I sent a similar e-mail to MTEA president Bob Peterson the same day. I received no response or acknowledgement from either.
Bonds’ concludes his op-ed by stating:
We appreciate what we hope and can only assume are WPRI’s efforts to accurately inform the public and believe that goal would best be served by using the most relevant, up-to-date information rather than 3-year-old data that, at this point, paints a misleading picture of what is a very important issue.
I agree with Bonds. I am a Milwaukee resident with two children that wants a strong sustainable education system that is an asset to the city. That is why I brought attention to the issue, and that is why I demonstrated my desire for accuracy by contacting the district in good faith, and using information publicly released by MPS in 2011 and 2012.
Anyone with questions about my article is free to contact me at email@example.com.