Wisconsin offers California lessons on balancing budget

[Amelia]

California, look to Wisconsin
Golden State cities hoping to avoid bankruptcy should look east for ideas.


Now that three California cities have declared bankruptcy, perhaps it's time to consider the lessons of Wisconsin.

One of the reasons Wisconsin Democrats couldn't unseat Republican Gov. Scott Walker in the state's recall election was that his challenger exemplified how Walker's narrowing of collective bargaining privileges for government workers benefited the state.

As mayor of Milwaukee, Tom Barrett had relied on Walker's reforms to balance his city's budget. And Barrett wasn't alone among Wisconsin officials. Walker comfortably defeated Barrett in large part because in the 11 months that the governor's reforms were in effect, Wisconsinites got a good glimpse of how they worked, even in Milwaukee, where the savings allowed government to remain solvent and avoid widespread layoffs.

....

read more: Wisconsin offers California lessons on balancing budget - latimes.com

 

[Claudette]

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

I seriously doubt it.

 

[salem.hills]

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.

 

[Truthseeker420]

Maybe it is because California liberals are supporting Wisconson conservatives.

Most Red States Take More Money From Washington Than They Put In | Mother Jones

 

[Wiseacre]

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.

 

[Listening]

California, look to Wisconsin
Golden State cities hoping to avoid bankruptcy should look east for ideas.


Now that three California cities have declared bankruptcy, perhaps it's time to consider the lessons of Wisconsin.

One of the reasons Wisconsin Democrats couldn't unseat Republican Gov. Scott Walker in the state's recall election was that his challenger exemplified how Walker's narrowing of collective bargaining privileges for government workers benefited the state.

As mayor of Milwaukee, Tom Barrett had relied on Walker's reforms to balance his city's budget. And Barrett wasn't alone among Wisconsin officials. Walker comfortably defeated Barrett in large part because in the 11 months that the governor's reforms were in effect, Wisconsinites got a good glimpse of how they worked, even in Milwaukee, where the savings allowed government to remain solvent and avoid widespread layoffs.

....

read more: Wisconsin offers California lessons on balancing budget - latimes.com

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

But Chris told us he would.

 

[Listening]

Maybe it is because California liberals are supporting Wisconson conservatives.

Most Red States Take More Money From Washington Than They Put In | Mother Jones

Another blathering talking point.

The most dependent "Red States" used to be blood sucking Blue States.....some habits die hard.

Try again and stop seeking truth up Black Label's ass. It ain't there.

 

[Amelia]

Maybe it is because California liberals are supporting Wisconson conservatives.

Most Red States Take More Money From Washington Than They Put In | Mother Jones

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.

 

[g5000]

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.

 

[Listening]

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 $40K extra 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 of public employees.


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

Just promise the public employees an 8.5% return and take it from the private sector.

Didn't you read "Socialism for Dummies" ?

 

[g5000]

Just promise the public employees an 8.5% return and take it from the public sector.

Didn't you read "Socialism for Dummies" ?

Actually, governors and mayors are having to exercise both options. They are having to raise taxes and force public employees to increase their contributions.

It's a real shit sandwich, and everybody has to take a bite.

 

[Wiseacre]

I still remember a story out of Wisconsin back in '09 I think, about a school district that figured out they couldn't make ends meet. So, they went to the union and said we either have to cut jobs or benefits. The union believed they would get a bailout, so they refused to make any cuts. Obama and the Dems gave 'em the bailout they needed, through the stimulus package.

I can only assume that's what the democrats in CA, NY, IL, and other blue states are figuring, we'll just hang on, raise taxes, and cook the books somehow until we can get the next bailout.

 

[g5000]

​

I still remember a story out of Wisconsin back in '09 I think, about a school district that figured out they couldn't make ends meet. So, they went to the union and said we either have to cut jobs or benefits. The union believed they would get a bailout, so they refused to make any cuts. Obama and the Dems gave 'em the bailout they needed, through the stimulus package.

This is true. But now the stimulus money has run out.

So...raise taxes and/or contributions.

Or wait for another "stimulus", as you said.

 

[daveman]

Wisconsin offers California lessons on balancing budget

Fuck that. We prefer unsustainable leftist spending policies. And when it fails, it's always someone else's fault. Tax the rich!

/California

 

[syrenn]

I am ALL FOR union busting in California!

 

[daveman]

Maybe it is because California liberals are supporting Wisconson conservatives.

Most Red States Take More Money From Washington Than They Put In | Mother Jones

California can't support themselves.

California budget deficit has swelled to $16 billion, governor says | Fox News

 

[Wiseacre]

I am ALL FOR union busting in California!

Public unions should not be able to negotiate with politicans for wages and benefits, it's an unholy alliance that always screws the taxpayers. You should be able to join or not, your choice.

 

[PoliticalChic]

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.

State and Local debt $2.5 trillion
State and Local pensions (underfunded) $3 trillion

The Other National Debt - Kevin D. Williamson - National Review Online

 

[daveman]

I am ALL FOR union busting in California!

Public unions should not be able to negotiate with politicans for wages and benefits, it's an unholy alliance that always screws the taxpayers. You should be able to join or not, your choice.

The left supports freedom of choice -- but only when you choose what they dictate.

 

[syrenn]

I am ALL FOR union busting in California!

Public unions should not be able to negotiate with politicans for wages and benefits, it's an unholy alliance that always screws the taxpayers. You should be able to join or not, your choice.

I agree....no one should be forced to join a union and employers should not be forced to deal with them. I also think its bullshit that the state will not contract with companies that are none union.