Friday, February 13, 2009

MPS: Beyond a bailout

The Wisconsin Taxpayers Alliance report on MPS is, beyond your political persuasion, disturbing. It is quite apparent (and my daughter-in-law and son and sister are beneficiaries) that its current labor contract and compensation policies are unsustainable. Educating inner city children is a challenge but MPS is quite clearly doing less with more and the reason is unaffordable benefits packages. No one who pays competitive wages (and MPS does) can survive with a burden rate of almost 60%. The district's 2.4 billion dollar unfunded liability to retirees is going to bankrupt it. There isn't the tax capacity in the city to fund that without turning it into Detroit and the state isn't going to come to the rescue. For conservatives or liberals, the process will not be pretty.

1 comment:

George Mitchell said...

The auto industry situation provides a fairly good proxy of where MPS and many urban school districts are headed. These districts will collapse financially unless the benefit packages are restructured. As today's news on the Big 3 suggests, bankruptcy might be the only option.