Sunday, September 25, 2011

More math- Wisconsin public employee benefits version

Hidden in all the corruption and immunity stories out of Fitzwalkerstan was a report released by the Legislative Fiscal Bureau illustrating the drops in take-home pay of state employees under WisGOP's union-busting bill. Not surprisingly, the lower-paid workers are hit harder. The study takes family health insurance coverage as its baseline for the employees making $25K, $50K, and $100K, and because that payment is a flat rate (was $89 a month, now $208 a month), that $1,428 a year increase will hit a lower-paid person harder than a higher-paid one.

And that lower-paid person didn't have their mortgage/rent payment go away, nor did their food or gas bills change in any significant way, so how are they going to make up for this? Cutting back on discretionary spending and delaying larger one-time purchases like cars and big appliances. Good luck growing the state's economy when hundreds of thousands of families are doing this at the same time.

And if you try to argue, "Well, taxes will be lowered so it'll make up for it," you would be wrong on 2 counts. 1. The LFB projects property taxes to be up between 1-2% on the average homeowner in each of the next 2 years, and that's if your home drops in value by 2%. If you're one of the fortunate few not to see your home value go down, your taxes will go up even more due to the rising mill rates. Nice deal, huh? 2. The only drop in income taxes state employees and their families will feel are results from the reduced take-home pay (because the health and pension contributions are pre-tax), and that's a tax break that helps higher-income earners more because of the higher tax rates they pay. In fact, the $25K income earner may get a double-whammy, as the Walker budget also cut the state's EITC and Homestead tax credits. So lower-income workers are facing lower take-home pay, higher taxes, and on top of it are scapegoated for a budget problem they didn't cause, while Cindy Archer pulls in 6 figures to sit at home and have other hacks interview for her already-filled job. Don't think we don't notice the different set of circumstances.

And lastly, there's a talking point making the rounds that "public employee pensions are bankrupting governments." And maybe that's true elsewhere, but it is absolutely not true in Wisconsin. The updated financial report of the Wisconsin Retirement System (which covers pretty much all state and local gov't employee benefits for people that don't work in Milwaukee) shows the system is 99.8% funded, meaning practically everyone would get their full, current benefit. (if you want real fun, here's all 161 pages of it) And the only danger to that staying fully funded was Wall Street and D.C. oligarchs screwing around to drop the value of securities that are in the WRS. (oh crap).

So the bottom line is that there is no pension crisis regarding Wisconsin public employees, and this hasn't become more or less stable with Act 10 going in, because the WRS is getting the same amout of money into the system, it's only changed who's paying it (page 2 has the totals, it's the worker and not the government paying the bill). And we know the Walker-claimed fiscal crisis was a complete fraud that did not have the state in such severe danger that people's take-home pay had to be cut by thousands in order to keep the state afloat.


The real state budget crisis may be coming in the next few months, when higher unemployment, Teabagger cuts from the Feds, and reduced state tax revenues are going to translate into a serious in-year budget deficit (watch when the rev numbers come out next month). But the pension and revised budget figures prove that there was nothing close to a serious problem when Scotty, Cindy Archer, and other inner-circle cronies decided to "drop the bomb" this winter. Anyone with a modicom of budget and actuarial knowledge knows this, but as usual, the right-wing noise machine is trying to use other situations natiowide to muddy the Wisconsin situation.

But that's not surprising, because the Walker boys have never been about what happens to Wisconsin and Wisconsinites, but are lapdgos for a Koch-fueled national agenda of corportocracy. And it's one of the biggest reasons why they must go.

H/T Free Wisconsin

No comments:

Post a Comment