Wisconsin’s Economy Today – Legacy Costs
Discussing Wisconsin’s economy with Wisconsin Department of Revenue Chief Economist John Koskinen. Wisconsin’s legacy cost is low and that has improved our bond rating.
Sound fiscal management is something as simple as pay your bills. Across the country state and local pension systems are short changed by 1.7 trillion with a T dollars. The state of Wisconsin is one of the only 4 states that have a fully funded pension system. States are short changing their systems and they’re making their legacy costs worse. We’re not doing that. If the actuary says you have to pay this amount we say ok. Other states will actually decide no, we can’t quite pay that much so we’ll short change you a little bit. And in In NJ case that’s over 6 billion in IL case it’s over 2 billion and that’s per year.
That means they’re actually hiding those costs and at some point those are tax increases waiting to happen. They will have to come up with that money at some point coming down the road. What’s been noticed among all the rating agencies now is that we don’t have that problem, part of the reason our bond rating is going up.