June 7,
2012
Column
#1,606
Walker
Election: A Victory for Taxpayers
By Mike
McManus
The victory
of Gov. Scott Walker in Wisconsin this week, overwhelmingly defeating the
attempt to recall him - is also a victory for taxpayers everywhere.
Gov. Walker
had the temerity to ask state employees to start contributing to their
pension costs. What a meany! Some years ago, they paid .2 of one percent,
but in recent years had contributed NOTHING for their own retirement. Gov.
Walker persuaded the Legislature to pass “Act 10” requiring that they
contribute 5.9% of their salary for their pension.
He also
increased the employee contribution for health insurance from 4.35% of the
premium paid by the state, to 12.6%, while the state paid 87.4%, or $13,972
per worker annually. Employees suddenly had to pay $308 million a year for
their pensions and health care, due to Act 10. That made them furious.
Yet
according to a study by Jason Richwine of the Heritage Foundation and Andrew
Biggs of the American Enterprise Institute, even with the increased
contributions by public workers, “pension benefits for Wisconsin public
employees are roughly 4.5 times” larger than private sector Wisconsin
workers. And Wisconsin state employee benefits are 22% more than those of
neighboring states.
While
Wisconsin wages of public workers are about equal to earnings of private
sector employees with similar education – total compensation including
benefits is a bloated $81,637 per public sector worker compared to $67,068
for private employees of larger firms.
Yet
public sector employees were so incensed by having to contribute more for
pensions and health - they gathered 900,000 signatures demanding a recall of
Gov. Walker a year into his term. It was only the third attempted recall of
a governor in American history. And it was the first to be defeated.
Walker won
his second gubernatorial race by 140,000 more votes than his initial
election. He even earned 38% of the union vote, many of whom felt it was
not right to recall a governor who was guilty of no malfeasance. He simply
led the state to erase a $3.6 billion deficit without raising taxes partly
by asking public workers to pay a fairer share of overly generous benefits.
He also reduced unemployment to 6.7 percent – well below the 8.2% U.S. rate,
and a point lower than when he took office.
Taxpayers
delivered a clear message: no more public sector free lunches.
They
delivered a similar message on the same day in San Diego, America’s eighth
largest city with 1.3 million residents and San Jose, the 10th
largest U.S. city (946,000 people).
By a whopping 70% vote
in both cities, the public changed the retirement plans for new public
employees from open-ended entitlements to 401(k)-style retirement plans that
caps what taxpayers are on the hook for.
Why? San
Diego’s pension benefits cost $87 million in 2004, but $233.6 million this
year. Similarly, San Jose’s pension costs jumped from $73 million a year a
decade ago to $245 million - accounting for more than half of city payroll!
The clear
message in Wisconsin and California is that taxpayers think public employees
are over-compensated.
What’s
fair? I propose three changes.
First,
salaries and benefits of public workers should be no more than earned by
private employees with comparable skills and education.
For example,
why should taxpayers give $81,000 a year salary to AVERAGE federal
employees, when private workers earn much less? I suggest that the two-year
freeze on federal salaries be extended for a decade.
Second,
public employees should be expected to pay for a fairer share of their
health and pension benefits. Wisconsin public employees now pay less for
pensions than half the states. Minnesota public workers pay 11% of salaries
for pensions, double that of Wisconsin.
Millions of us in the
private sector have no pensions or 401ks.
At present,
federal employees pay a stunningly low .8 of one percent toward their
pensions! Former Wisconsin Governor Tommy Thompson is running for U.S.
Senate by proposing that federal workers pay more for pensions and health
benefits, saying they should be in line with comparable private workers.
There is no better way
to begin cutting the federal deficit of $1.5 trillion. (Federal workers earn
$200 billion.)
A third
issue is why has the Obama Administration added 140,000 federal workers in
only three years? There are now 2.2 million federal employees, not counting
the military or postal workers.
Government
workers have always been far more secure in their jobs than those in the
private sector. Why?
It is time
to write new contracts with public employees.
Copyright © 2012 Michael
J. McManus, President of Marriage Savers and a syndicated columnist.
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