February 27, 2011 in Opinion

Smart Bombs: Here’s a teachable moment

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We’ve heard plenty about how public employees are to blame for budget deficits around the nation. It’s as if the Great Recession never happened, and instead public employee unions suddenly began looting state treasuries at a pace that Bonnie and Clyde would find exhausting.

Never mind the fact that they’ve been granting concessions that force members to pay more for their benefits and forgo previously approved raises. Never mind the hundreds of thousands of layoffs.

Let’s look at some data.

The number of state and local workers has edged up across the nation relative to population figures, according to an analysis done by the Center for Budget and Policy Priorities. From 1980 to 2010, hiring went from 59 workers to 62 workers per 1,000 people.

Workers in the education field account for the increase, CBPP found, owing to efforts to reduce class sizes, better assist special-needs children and other worthy changes. In fact, the relative number of state and local employees outside the education field has declined over that 30-year period, and a total of 426,000 state and local workers have been laid off since August 2008.

Voters, it should be noted, have been generally supportive of these efforts to improve education, but legislatures haven’t always followed along. Washington state voters passed two initiatives (I-728 and I-732) to reduce class sizes and increase teachers’ pay. The Legislature has had to suspend those measures multiple times for lack of revenue.

Then again, the revenue situation is also a reflection of the will of the people, who passed Initiative 695 (cheaper car tabs) and rejected an income tax on the wealthy (I-1098) that would’ve funneled most of the money to education.

Despite these mixed messages, there is no shortage of politicians and pundits who offer themselves up as spokespersons for The People. How they can proclaim “what the people want” is beyond me.

Not a bargain. The budget showdown in Wisconsin has shined a spotlight on the collective bargaining rights of public employees. The governor wants to sharply curtail those rights to help close a budget gap.

But is gutting collective bargaining a panacea? Not according to CBPP, which found that North Carolina is facing a 20 percent budget gap in 2012. Wisconsin’s is 12.8 percent.

Can’t blame the public employee unions; they’ve been outlawed in the Tar Heel state.

Revenue Reality. The irony of the emergence of the tea parties was once again reinforced when the Tax Foundation released its latest figures on state and local tax burdens.

Overall, these taxes when measured against income dropped in the 2009 fiscal year. We already know that the federal tax burden is in decline, which means that taxpayers haven’t had it this good since the 1950s, according to the Bureau of Economic Analysis.

Taxed

Enough

Already?

Numbers don’t lie. Initiative merchant Tim Eyman is fond of calling Washington state’s tax burden among the nation’s highest. Maybe he should open a branch operation in Idaho, where it’s worse.

In the Tax Foundation report, Washington state finished 29th. Idaho was 28th.

The only way Washington climbs the charts is when federal taxes are included in the calculation, but those rates aren’t set in Olympia or Spokane or Seattle. This is merely a reflection of the number of high-income people who choose to live in Washington, where there is no income tax.

The doctor will see you. At times in the health care debate, it would seem there are two systems in the world: ours and Canada’s. Talk about reform here, and you hear about the lengthy waiting times there. And, guess what? In that one area, we kick socialist Canadian butt.

So is that the end of the story? No, says Aaron Carroll, who runs the insightful Incidental Economist blog. He charted the wait-time totals from a 2010 Health Affairs study and showed that the percentage of sick people waiting six days or longer to see a doctor is higher in the United States than in Sweden (the best), the Netherlands, New Zealand, the United Kingdom, Austria, Germany and France.

All of them have universal coverage.

Smart Bombs is written by Associate Editor Gary Crooks and appears Sundays on the Opinion page. Crooks can be reached at garyc@spokesman.com or at (509) 459-5026.

Four comments on this story so far. Add yours!

• 

  hawken on February 27 at 8:48 a.m.

  Crooks Writes:

  How they can proclaim “what the people want” is beyond me.

  It’s called national elections at which time the majority of the people declare what they want. The message was loud and clear. It’s the only poll that counts.

  Numbers don’t lie.

  
  Public Employee Unions are sucking the life out of state, city and small town governments. Here are some numbers. Here is some data.

  The $2 Trillion Hole
  By JONATHAN R. LAING
  |
  Promised pensions benefits for public-sector employees represent a massive overhang that threatens the financial future of many cities and states.

  ,,,, most Americans have ignored at their own peril a far bigger pocket of privilege — the lush pensions that the 23 million active and retired state and local public employees, from cops and garbage collectors to city managers and teachers, have wangled from taxpayers.

  Some 80% of these public employees are beneficiaries of defined-benefit plans under which monthly pension payments are guaranteed, no matter how stocks and other volatile assets backing the retirement plans perform.

  In contrast, most of the taxpayers footing the bill for these public-employee benefits (participants’ contributions to these plans are typically modest) have been pushed by their employers into far less munificent defined-contribution plans and suffered the additional indignity of seeing their 401(k) accounts shrivel in the recent bear market in stocks.

  Most public employees, if they hang around to retirement, can count on pensions equal to 75% to 90% of their pay in their highest-earning years. And many public employees earn even more in retirement than their best year’s base compensation as a result of “spiking” their last year’s income by working ferocious amounts of overtime and rolling in years of unused sick and vacation days into their final-year pay computation.

  A survey by the watchdog group California Foundation for Fiscal Responsibility found that some 15,000 Golden State public employees are knocking down $100,000 or more, while some 200, mostly police and fire chiefs and school administrators, are members of the $200,000-a-year-and-up club.

  Finance professors Robert Novy-Marx at the University of Chicago and Joshua Rauh of Northwestern University asserted in a recent paper that the funding gap for state pension plans alone might exceed $3 trillion…
  http://online.barrons.com/article/SB126843815871861303.html#articleTabs_panel_article%3D1

  The funding gaps have been in place and growing for years. The recession did not create, nor legislate these absurd numbers. It did expose them and add to them in the last two years.

  This deep hole of $2-$3 Trillion, makes the $800 Billion Obama stimulus, which was a catastrophic failure, look like loose change.

• 

  Arch_Druid on February 27 at 9:09 a.m.

  @Hawken, “the people” proclaimed to fix the economy and generate new jobs. The GOP however chose to engage in specifically silly acts which can include targeting unions simply because the unions in general support the Democrats.

  Did “the people” speak loudly for the loss of jobs that GOP like Superintendent Tom Luna wants to do? To destroy the livelihood of public sector employees altogether as GOP Gov. Walker wishes to do? Did “the people” speak loudly in support of gutting programs that benefit them? Did “the people” speak loudly in support of the kind of stupidity that was definitely on full display in the House of Representatives as reported by Dana Millbank and Froma Harrop?

  Or are the GOP acting without a mandate from “the people.” Choosing to do what they wish to do and the only time “the people” have anything to say is when they can be manipulated into voting against their better interests. There is a quite wide disparity between what “the people” said they wanted in 2010 and what the GOP have chosen to do since that time.

• 

  greenlibertarian on February 27 at 9:48 a.m.

  … indignity of seeing their 401(k) accounts shrivel in the recent bear market in stocks.

  LMAO at the utter ignorance.

  From 3 days ago:

  Fidelity: Average 401(k) balances reach 10-year high

  http://www.usatoday.com/money/perfi/retirement/2011-02-23-fidelity-report_N.htm

  However, anecdotally, stupidity is at an all time high. Witness, the teabaggers.

• 

  DickAdams on February 27 at 10:00 a.m.

  I often wonder about Crooks and his (f)smart bombs. They smell bad.