A friend of mine shared this explanation about the budget situation in Wisconsin. Her brother wrote it for his daughter to explain to her the fireworks earlier this year. The letter was emailed to Scott Walker this week, who simply replied, “Wow.”
Things are wild and out of control at the State Capitol in Madison, and in particular, the Capitol building. As you know, Scott Walker was elected governor in November. He is a Republican and the former County Executive for Milwaukee County. He is a no-nonsense conservative who believes in a balanced budget. He wants to improve the business climate in Wisconsin so that there is better job growth here and better employment and more prosperity for everyone in the state.
At the same time Walker was elected governor, the voters also elected a large number of Republicans to the State Assembly and the State Senate, so both houses (Assembly and Senate) are controlled by Republicans and we now have a Republican governor.
The governor is facing a large budget deficit. That means that the government is spending more than it is taking in in taxes. The Constitution of the State of Wisconsin requires a balanced budget. That means that the state must always spend the same amount that it is taking in. The previous governor (Doyle) was a complete ass in that he balanced the budget by significantly raising taxes and playing games with the budget. He took money from the road construction fund and from the medical malpractice fund and used it in the general fund to balance the budget. Later, the Supreme Court would tell him that that was illegal and so the state had to pay that money back to those funds. That left Walker, who took office in January, with a problem. Wisconsin runs its business on a two-year budget. It has to be balanced according to the State Constitution. The current two years runs out soon, and the budget is not balanced. There is a $30,000,000 deficit that Walker has to fix. Much of that is because of the bad policies of the previous governor, Doyle.
About four weeks ago, Walker proposed a budget repair bill in order to take care of the shortfall in the current budget. He also proposed his plan for the next two-year budget, because for that budget he has a projected 3.6 billion dollar deficit to take care of. That is a huge amount of debt. Most Democrats believe that the proper solution is to simply raise taxes to take care of that deficit. That is an awful thing to do in a recession, as that takes money out of the private economy and will hurt job growth. Also, giving more money to government never makes it more frugal and efficient, it just makes it bigger and more bloated.
The big controversy with Walker and his budget repair bill is that the bill also requires that the public employees in Wisconsin (teachers, Department of Natural Resource workers, State Patrol officers, all state employees of any nature) have to begin to start paying more money for their pensions and for their health insurance premiums. Public workers enjoy excellent health insurance and pension benefits, much better than everyone in the real, private sector world. Most people do not have pensions. A pension is when you work for a long time for a company and then, when you retire, the company gives you a retirement check every month until you die. That is what happened with Grandpa Warmington. When he retired after 40 years, he and Granny began to, and still do, get a check every month, and they will until he dies. Now that he has died, Granny gets the check. That is a pension is all about. Fifty years ago, there were a lot of pensions out there. A lot of big companies had pensions. Now, they are too expensive, and most everybody now has to save for their own retirement through a 401K program. The only exception to that is public sector employment. Public employees still have a pension. They are very lucky to have that pension, as most other workers in the real world do not have such a great benefit.
In addition, public employees pay a very small amount for their health care premiums. Most workers in the real, private sector world have to pay a significant amount of their health care premiums . Public employees again have a great advantage in that they have to pay hardly anything for their health care premiums. Walker, with his new proposed legislation, requires the public, government employees to pay a higher percentage for their pension and a higher percentage for their health insurance premiums.
At first, the public employee unions went crazy and hated the idea that they would have to pay the extra out of their paychecks each month. However, when they sensed that the rest of the real world would not sympathize with them, since they are still getting great benefits, they changed their tune, and this is why. The most controversial part of Walker’s plan is that the public employees will be stripped of some of their collective bargaining rights. Right now, the public employees have the right to collectively bargain through their union. They can bargain on all different types of subjects, including the number of students in the classroom, the number of sick days, work safety, wages, benefits, and a dozen other subjects. Walker has now proposed to take away all of those rights, except for wages. They can still bargain with the government regarding the amount of wages they are paid. This is what is causing them to protest.
Walker has a brilliant plan to tackle the huge 3.6 billion dollar deficit for the next two-year budget. He knows that the state is broke and he will not raise taxes. Raising taxes is the last thing you want to do in a recession. It only makes it worse. So, since he will not have the extra money from taxes, he has to reduce his costs, which means that the state will be giving the counties, cities, villages and school boards much less money. When these government entities see how little money they are going to get, they are going to be in trouble in terms of trying to balance their own budgets. Their only way to balance the budget would be to either reduce their costs, or increase their taxes. Included in the governor’s proposed law is a provision which tells these government entities that they cannot raise taxes in order to balance their budget. That way Walker makes sure that the state and all the local governments will not raise our taxes. Again, when government gets squeezed in a budget, the first thing that they always try to do is to raise your taxes, instead of becoming efficient and reducing their costs. That is government always does. Government is inherently inefficient and it always wants to raise your taxes whenever it gets into a budget problem. Walker is trying to end that. He will not allow the local governments, including counties, cities, and school boards, to simply raise taxes in order to solve their budget problems. So that means that these government entities have to reduce their costs instead of increasing revenue by raising taxes. Walker has indicated that they can simply cut their costs by requiring that their public employees pay more money into their pensions and more money for their health insurance premiums. This will help them to reduce their costs significantly and balance their budgets without laying off teachers and other government employees.
Thus, Walker has proposed a budget repair bill and a new two-year budget which will dramatically reduce the amount of money that government has. In order to deal with that much less amount of money, Walker has given the government entities the tools to deal with it. That is, they can reduce their costs by asking their public employees to pay more toward their pension and more toward their health insurance premiums each month. That way they can reduce their costs without laying off people. Walker does not want any people in the private sector or in the government sector to be laid off, as that only hurts the economy.
The public employee unions around the country and in the state are going crazy. They see this as an attack on workers’ rights. That is not true. The public employee workers in Wisconsin have more rights than any federal government employees. The so-called “rights” they enjoy are really privileges. Don’t listen to the press tell you that all of their collective bargaining rights are stripped. That is not true. They can still try to bargain with respect to wages and salaries. The public employees still enjoy work protection for safety and other issues much more than the average private sector worker and much more than the federal government workers.
What this is really about is power. For decades and decades, the public employee unions have always had a great deal of influence on the government, including the legislators in the Assembly, the Senate, and the governor’s office. Now, for the first time, they do not have power, and they are having a tough time dealing with the change in democracy that occurred in the elections in November. It is really all about government changing. Walker wants government to be smaller and efficient. He is amazingly well-spoken, cool and intelligent. Nothing shakes him. Most of the protestors in the Capitol are just students or people who are mostly not involved with the public employee union. They’re just clue-less, irrelevant people who want to protest about anything in order to somehow make their lives seem relevant. I have looked at the film, and most of these people have nothing to do with the public employees and most of them are very poorly-informed of the issues. Most just want to protest about anything they can, so that they can somehow make themselves relevant in this world. It’s very sad.
All in all, it is nice to see that the government is finally going to be tamed and under control and live within its means. I wish Obama and the federal government would do the same. The state government in Wisconsin cannot run a deficit. That is, the amount spent by the government must be equal to the amount the government takes in in the form of taxes. The federal government, however, has no such limitation and it often runs a deficit. In fact, Obama is, at this point, running the greatest deficit, I believe, since World War II. (We spent a lot of money in World War II fighting the war and therefore there was a great deficit at that time and that is understandable.) Obama is a big government boob who has no true intention to help balance the budget and reduce the national debt. The sad thing about that is that the debt has to be paid at some time and unfortunately that means that all of our debt will be paid by future generations such as you and your children.
Sometimes deficit spending (spending more than you take in) is necessary in order to get the economy going in the time of recession. Obama, however, spent the stimulus money in a stupid way by simply giving it to government instead of giving it to all of us in the form of tax cuts. But that is another story. I apologize for the long tirade, but you should be informed of the true situation here and not listen to the news stories which are not always accurate.
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