Wisconsin offers California lessons on balancing budget

Discussion in 'Politics' started by Amelia, Jul 17, 2012.

  1. Amelia
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    Amelia BANNED

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    read more: Wisconsin offers California lessons on balancing budget - latimes.com
     
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  2. Claudette
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    Claudette Gold Member

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    Anyone think Ol'Moonbeam Brown or the Legislature in Cali is listening??

    I seriously doubt it.
     
  3. salem.hills
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    salem.hills Right Winger

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    :lol: hard heads ----> The Milwaukee public school system, for example, had negotiated a new contract with its teachers union right before Walker's budget reform bill was passed. In the wake of Walker's bill, the school system went to the union and tried to work out concessions in line with the savings that would have been possible under the new legislation. But the union refused to negotiate, and two days later the district laid off 519 employees, including 334 teachers. The school system had estimated that if employees agreed to contribute 5.8% of their salaries toward pensions, as mandated by the new state law, that would have saved $20 million, enough to avoid 200 teacher layoffs.
     
  4. Truthseeker420
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    Truthseeker420 Gold Member

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  5. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    I don't think the cities, towns, and counties in CA and across the country are going to have much choice: either they rein in the public unions or declare bankruptcy.
     
  6. Listening
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    Listening Gold Member

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    OOOOOPPPPPs.......Walker DIDN'T get recalled.

    But Chris told us he would. :eusa_angel:
     
  7. Listening
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  8. Amelia
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    Amelia BANNED

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    Sting.

    Oh wait, Wisconsin is a blue state as measured by your article.

    Walker fixed Democrat excesses and was properly supported for it in the recall. Yet our state voted for Obama in 2008 and is still leaning Obama's way last I heard.

    Milwaukee is a deep blue money pit.
     
  9. g5000
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    g5000 Diamond Member

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    I hope you will pardon me for introducing some non-partisan facts into this conversation.

    During the derivatives bubble, states were told their public pension fund returns on investment were going to be higher than the old normal of 8 percent.

    If your state government expects a higher ROI than in the past, then your elected officials have two choices when it comes to future public pension obligations.

    Option 1: Lower the amount of contributions made by the state. Since the ROI is higher, then they will still be able to meet future obligations.

    Option 2: Increase the benefits given to future public employee retirees. If you keep the contributions the same, and ROI is higher, you will have more money in the pension fund in the future, which means you can give more generous benefits.


    Most states picked one of these options. Not just blue states. Red states, too. Some picked both options. They raised benefits and lowered their contributions.


    Today, the "new normal" is about 3.5 percent.


    To give you an idea of the scope of the problem this creates, let's use some real numbers.

    If you have a municipal bus driver, Ralph Kramden, and you expect to have to pay him $100,000 in retirement benefits when he gets his gold watch in 20 years, how much money do you have to invest now so that it grows to $100K in 20 years?

    Under the old normal ROI of 8 percent, you have to contribute $21,500 today for it to be worth $100,000 when Ralph retires.

    Under the derivatives bubble ROI of 12 percent, you only have to contribute $10,000 for it to grow to $100,000 in 20 years. That's a HUGE savings! You are going to look GREAT to the voters when you cut the budget!

    Under the new normal we are living in today with a ROI of 3.5 percent, you need to kick in a whopping $50,000. So you are $40,000 short there, Skippy. Where you going to get that from?

    Hmmm.

    The states did not hold up their end of the bargain, and since they don't have that needed $40K to kick into the kitty, they have...two options.

    Option 1: Raise taxes and piss off everybody.

    Option 2: Force public employees to increase their contributions and piss off public employees.


    If you were governor, which group would you rather piss off?

    I don't care if you are a red or blue governor or mayor. This is what you are looking at today.
     
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    Last edited: Jul 17, 2012
  10. Listening
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    Just promise the public employees an 8.5% return and take it from the private sector.

    Didn't you read "Socialism for Dummies" ?
     
    Last edited: Jul 17, 2012

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