Dee Perez-Scott Omits some Inconvenient Facts

Dee Perez-Scott Omits significant facts in her tirades against the Wisconsin governor. In her latest blog, Dee Perez-Scott states the obvious but omits important facts that don’t agree with her thesis. Indeed, unions have enabled many improvements in the pay and working conditions of American workers in the past either through strikes and collective bargaining or by exercising their political muscle to influence the Congress. As I have previously recognized, those changes were good and benefitted many workers. Unfortunately, the unions always wanted “more” making American companies non-competitive with their foreign rivals causing jobs to be exported. Their excessive demands have also brought several states to the brink of bankruptcy. It is their excesses and feather-bedding that have given them a bad name.

One of the salient facts that Dee omitted is that, a study by The Segal Co., a private benefits firm, found that state government workers paid between 20 percent and 60 percent of their premium costs for family coverage. If Wisconsin workers are paying around 6 percent, that puts them in the bottom fifth nationally among state employees, Segal’s data shows. A very small number nationally pay zero toward their premium. On health insurance, the governor wants state employees to pay at least 12.6% of the average cost of premiums which is about double what they currently pay but still well below the range of 20-60% cited above and well below the national average of 29% cited by Kaiser Premanente. Wisconsin Gov. Scott Walker says state employees could pay twice as much for health care premiums and still be paying less that half the national average. Politifax affirmed that the governor was right about that.

In Colorado, the state pays about 69% of health insurance costs; substantially less than the 87.4% Wisconsin will pay after the governor’s changes take place. So what is all of that bleeding-heart moaning I read in Dee’s blog?

The governor’s modest proposals also require employees who pay into the Wisconsin Retirement System to contribute 50% of their annual pension payment, an estimated 5.8% of salary; currently, employers make all pension contributions. What a deal! In Colorado, state employees contribute 10.5% of earnings towards their defined benefit retirement plans. In Wisconsin, teachers make $89,000 in salary and benefits, compared to $48,000 for all other workers in the United States. Admittedly, most teachers have college degrees and many have Masters’ degrees so this is not an entirely appropriate comparison. Nevertheless, it puts the compensation of teachers into perspective. Of course, if this compensation figure for teachers is only for 9 months of work, one could legitimately adjust it to $118,666 for a full 12 months. Perhaps because of the availability of comparative figures like these is the reason why union leaders have largely conceded the salary and pension cuts. They know the governor is right!

Falling tax revenue resulting from the recession is the greatest culprit of Wisconsin’s budget woes -- between 2008 and 2009; state tax revenues fell over 7%. Since July 2009, there has been an estimated dip in revenues of $200 million annually; the state saw little growth in tax revenues in 2010. Unemployment rose more than 4 percentage points between 2007 and 2010, forcing more Wisconsin residents on Medicaid and causing state Medicaid costs to rise. A series of tax cuts passed since 2003, most well before the current governor’s tenure, that cumulatively represent $3.7 billion and, by 2013, make up an $800 million-per-year reduction in tax revenues.

Walker's Democratic predecessor, Jim Doyle, estimated that in June of 2011, Wisconsin would still have a $10 million surplus, but Walker has said the state is facing a $137 million deficit today. Why the discrepancy? Walker made a number of adjustments to Doyle’s estimates, mainly accounting for higher-than-expected Medicaid costs. Walker also pushed through three tax cut bills in an attempt to deal with Wisconsin’s recession. The tax cut bills impacting projected tax revenues by $117 million -- the tax cuts went toward health savings accounts, deductions for relocated businesses, and exclusions for hiring new employees which all sound like highly desirable things. Yet, Dee Perez-Scott, in an even more preposterous post, characterizes these changes as “tax cuts to the rich-big business.” She didn’t spend any space writing about the tax cuts made by the previous Wisconsin administrations. I wonder what her schizoid response will be to the corporate tax cuts Obama wants to make.

However, it is not the immediate budget problem so much as the long term difficulty facing Wisconsin and other states. Wisconsin has an immediate budget shortfall of $137 million, projected to grow to $3.6 billion by mid-2013. That’s the reason why the collective bargaining arrangements have to be changed or the solution to fiscal problems will only be temporary and the state will be right back in the soup. I guess Dee Perez-Scott hasn’t thought about that or just doesn’t care. The unions can do no wrong. She wants the state and the taxpayers to give the unions whatever they want. The pension and health care data cited here shows where that kind of union power leads. It is so obvious that union power must be curbed that it is almost laughable. Yet, Dee in her unreasoned meanderings continue to demonstrate a singular disregard for any facts that don't suit her agenda, whether it be the unions or illegal aliens. She is totally lacking in perspective.

She is now chortling about the fact that someone tricked the governor into thinking he was one of the governor's supporters. What the governor said is just another way of expressing what is already in his proposal. He has to break the power of the union or everything he is able to accomplish will be for naught and Wisconsin will continue to sink into the fiscal abyss.