Wisconsin State Employees & Budget Cuts

[PLAYER57832]

In the real world (aka private sector), people pay 7-12% of their income for their pensions and 15-25% for their health care. The Wisconsin unions were paying 0.8% and ~5%, respectively. When the teachers are making 40-50k per year (aka 9 months) as well as 30-40k per year in benefits (that they pay next to nothing for), I'd say there is room for sacrifice.

And what about the fact that they previously took pay cuts or limited pay raises in exchange for paying less for their benefits.

Sounds like sour grapes, not a reason to bust a union.

[thegreekdog]

They didn't actually cut taxes. They provided credits and incentives for businesses that create jobs. So, it's not business tax cuts in the strict sense of the term (like cutting the tax rate). In order to take advantage of the tax advantages, a business actually has to create more Wisconsin jobs. So, in order to get the $2,500 per person (I think that's what it is), the job has to be created first. That's why I was keen on getting someone to post the tax bill instead of throwing out the words "tax cuts for businesses."

Greecepwns - typically with tax credits there is a limit to the amount of credits the state will grant. I'm not sure what Wisconsin's limit is. With tax incentives (i.e. where the state gives you money), there is also a limited pool of money. And if the money is not used up, it goes back into the state's general fund (at least that's how it works in Pennsylvania with the film credits and the R&D credits that go unused).

Furthermore, the tax credit (if it's $4,000 per job) is most likely a one-time credit (all but one state, I think Maryland, do one-time credits). If we take the $45,000 per job and $3,150 in income tax, that's one year of tax which, as you said, does not offset the corresponding credit. Assuming that person sticks around for more than one year, you've made up for the $4,000 tax credit in two years. I hope that helps.

I want to say this is it, but I am uncertain. Disregard the following if I am incorrect. All bills are posted under the "Bill Search" section of [url=legis.wisconsin.gov]the official website of the legislature[/url]. I found this under 2011 Wisconsin Acts.

I see something about the credit lasting two years after a company relocates.

That works, but unfortunately it involves multiple sections of the Wisconsin tax code (which is a bear to read by the way). Here's the explanation from Checkpoint (one of the research tools I use):

"Effective in 2010 and subsequent taxable years, taxpayers certified wtih the Department of Commerce pursuant to Wis. Stat. s. 560.2055(2) can get refundable credits for: (a) up to 10% of the wages paid to eligible employees and (b) for training costs for employees, subject to the tier-based limitations..."

It's refundable which means that even if the company does not have income, it still gets loot back from Wisconsin. This may be troubling, but let's read further. Also, 10% of wages paid to eligible employees is a higher percentage than the Wisconsin personal income tax rate and a company can get those training costs too. So, also troubling, but let's read further.

"Eligible empoyees are full-time employees who meet statutory wage requirements in Wis. Stat. Chapter 560. This means they must work at least 2,080 hours per year including paid leave and holidays and earn at least 150% of the federal minimum wage."

Wisconsin wants the employees to be taxpayers for state personal income tax purposes.

"For the period beginning January 1, 2010 and ending June 30, 2013, the total amount of credits under the program, including credits against personal income taxes [for partnerships and S corporations], cannot exceed $14.5 million statewide."

This is why I said read on. The most Wisconsin can give out between 2010 and 2013 is $14.5 million. Not really a huge amount, right?

"Refunds pertaining to 2010 and 2011 will not be paid until the 2012 tax year."

Okay... so the company won't get its loot until 2012.

"Taxpayers who fail to maintain required employment levels may be required to repay credits claimed for the noncompliance year."

Hmm... that's good.

EDIT - Okay, I did some more research. The credit was already in place before Governor Walker took office. The Republican regime just expanded the credit and the amount of loot (I think). That's what the statute greecepwns included says.

[Phatscotty]

There's also the business tax cuts and further cuts for new companies. The idea that so many companies will be flocking to Wisconsin that they will make up for the deep cuts in revenue is defying the Laffer curve. Crunch all the numbers you want, but history and economics are not on your side here.

Pwn, the business tax cut will cost gov't is 110 million dollars. I have shown, in detail, how easy it is to make that money back. I fully believe what he is doing here is a good thing for WI. I feel this strongly because I have predicted in the past and am seeing firsthand in the present that Walkers tax cuts are bad for Minnesota, my state. this is from a competitive point of view.

I guarantee you, any business owner who drives to Wisconsin and sees the huge "Open for Business!" (where it used to have the previous gov's name) sign has wondered to themselves about the possibilities for their company, some of those have even made phone calls to WI chamber of commerce and the like, and some of those liked what they heard and are exploring options further. This isn't speculation as companies are already leaving Minnesota to WI. We are also under attack, competitively and economically, from Iowa, North and South Dakota, and I guarantee you also that a lot of business will come from Illinois.[/quote
]Okay then, I'll crunch the numbers, and tell me how many companies of 700-900 people (not exactly 900, we'll assume 800 for fairness) will need to relocate to Wisconsin to make up that 100 million dollars.

not only employees pay taxes. there is a sales tax that goes primarily from the actual products sold by the company, and all the way down to family members that come and visit the new WI employees...

Hutchinson has been recording net losses since at least 2008.

a profit is not required to pay tax, especially sales/county/property/gas/cable/energy/permit/fees/licenses taxes.

Can I ask where the 110 million dollar number is coming from?

I saw it a while ago, posted here, from a Wisconsin Newspaper, and a few other times on my top-secret source.

Sorry if I missed it. If this is correct, it will take roughly 7 Hutchinson-like companies moving to WI under these conditions. Not easy whatsoever.

Okay, first, lets realize Hutchinson moved to WI the very first month after the corporate tax bill. There is still a lot of time, and 7 companies, very easy. 1 more from Minnesota (guarantee there will be more) 2 from Illinois is not unrealistic at all, given Ill. is raising taxes, Minnesota raising taxes too btw. I also would bet a decent amount there will be a few companies larger than Hutchinson that move to WI. I also have to mention many homegrown businesses will benefit, and many corporations that are already in WI will be hiring a few new workers as well. Not to mention, the overall case, people are going to be able to keep more of their own money.

To me, this is pro-liberty, pro-jobs, pro-increased revenues (we'll see I guess), pro-increased health insurance coverage. I have said before this works a lot like the Stimulus package was supposed to work, except this is real growth that does not need to be taken from other tax-payers, it is created. renewable too!

good times.

[Woodruff]

In the real world (aka private sector), people pay 7-12% of their income for their pensions and 15-25% for their health care. The Wisconsin unions were paying 0.8% and ~5%, respectively. When the teachers are making 40-50k per year (aka 9 months) as well as 30-40k per year in benefits (that they pay next to nothing for), I'd say there is room for sacrifice.

And what about the fact that they previously took pay cuts or limited pay raises in exchange for paying less for their benefits.

This is without question the case. But hey, that's their tough shit. They should never have agreed to the lower pay, and instead squeezed the shit out of the state like they're being squeezed now.

[PopeBenXVI]

I thought I should share this pic I took of a bunch of Union thugs this past Sunday. I had to turn around to get a picture of that sign. I am sure he is the only one who thinks that way. LOL!

http://www.facebook.com/album.php?aid=1 ... 4fdb1f3b00

Hope the picture link works - My first attempt at linking a pic:/

[GreecePwns]

If anything Scotty, this is all pro-speculation. There is no guarantee all these businesses move to Wisconsin. I see Walker noticed the potential for loss when he cut tax credits to the lowest income tax bracket by $16 million. So much for shared sacrifice. It seems the tax credits will be paid by the lower class of Wisconsin.

In other news, Rockefeller's dog just drank the milk of a starving child.

People complained when no one paid federal income tax, but when the time comes to help these people get jobs the same people propose policies which make said jobs as lower-paying as possible, so as to mitigate the effects of job creation. The people spend almost every dollar they make. If anything, the tax credit should go to the lowest tax bracket so as to directly effect sales tax collected instead of this speculative handout to businesses paid off the backs of the lower class.

[Night Strike]

If anything Scotty, this is all pro-speculation. There is no guarantee all these businesses move to Wisconsin. I see Walker noticed the potential for loss when he cut tax credits to the lowest income tax bracket by $16 million. So much for shared sacrifice. It seems the tax credits will be paid by the lower class of Wisconsin.

In other news, Rockefeller's dog just drank the milk of a starving child.

People complained when no one paid federal income tax, but when the time comes to help these people get jobs the same people propose policies which make said jobs as lower-paying as possible, so as to mitigate the effects of job creation. The people spend almost every dollar they make. If anything, the tax credit should go to the lowest tax bracket so as to directly effect sales tax collected instead of this speculative handout to businesses paid off the backs of the lower class.

I just ran those numbers in the article you linked and it's a completely misleading article. They complain that a single mother with 2 kids making 15k per year would lose $302 off the current $702 tax credit. But she's not even paying income taxes in the first place!* She is receiving money through wealth redistribution: it wasn't the money she had already paid into the system, it's money someone else paid into the system. It's welfare under the guise of a tax credit. When you put these number in the light of facts instead of vague claims about her not getting as much of her taxes back from the state, we can get to the reality of the debate.



*Disclaimer: I did those calculations based on the federal 1040 form. I'm fairly certain that in most states, if you aren't paying federal income taxes, you also aren't paying state income taxes. I could be wrong, but someone would need to show the actual Wisconsin numbers to correct that assumption.

[thegreekdog]

If anything Scotty, this is all pro-speculation. There is no guarantee all these businesses move to Wisconsin. I see Walker noticed the potential for loss when he cut tax credits to the lowest income tax bracket by $16 million. So much for shared sacrifice. It seems the tax credits will be paid by the lower class of Wisconsin.

In other news, Rockefeller's dog just drank the milk of a starving child.

People complained when no one paid federal income tax, but when the time comes to help these people get jobs the same people propose policies which make said jobs as lower-paying as possible, so as to mitigate the effects of job creation. The people spend almost every dollar they make. If anything, the tax credit should go to the lowest tax bracket so as to directly effect sales tax collected instead of this speculative handout to businesses paid off the backs of the lower class.

The EITC is not a tax credit, it's a subsidy for the poor. They get this money from the federal government (I did not know the state had a similar credit).

I do think your "give money to the poor so they pay sales tax" is an interesting theory. I wonder if it has been tried anywhere.

In any event, as I laid out above, the tax credits (which liberals are calling tax cuts) for businesses are meant to bring jobs into the state. I'm not sure you answered whether you would rather have these jobs in the state or would rather have the state employees unions be able to collectively bargain for things other than salary. I mean, that's really what the discussion should be about here.

[thegreekdog]

In the real world (aka private sector), people pay 7-12% of their income for their pensions and 15-25% for their health care. The Wisconsin unions were paying 0.8% and ~5%, respectively. When the teachers are making 40-50k per year (aka 9 months) as well as 30-40k per year in benefits (that they pay next to nothing for), I'd say there is room for sacrifice.

And what about the fact that they previously took pay cuts or limited pay raises in exchange for paying less for their benefits.

This is without question the case. But hey, that's their tough shit. They should never have agreed to the lower pay, and instead squeezed the shit out of the state like they're being squeezed now.

I think protesting for two months (or whatever) instead of working, calling for recalls on all Republican senators (and the governor in about a year or so), having the Democrat senators leave the state, having the President of the United States indirectly rip Governor Walker and presumably challenging the bill on constitutional and procedural grounds is squeezing the shit out of the state.

Or, you know, they can wait until the next election and vote these people out.

[Woodruff]

I thought I should share this pic I took of a bunch of Union thugs this past Sunday. I had to turn around to get a picture of that sign. I am sure he is the only one who thinks that way. LOL!
http://www.facebook.com/album.php?aid=1 ... 4fdb1f3b00
Hope the picture link works - My first attempt at linking a pic:/

I'm pretty sure that's an anti-union individual carrying that sign.

[Woodruff]

In the real world (aka private sector), people pay 7-12% of their income for their pensions and 15-25% for their health care. The Wisconsin unions were paying 0.8% and ~5%, respectively. When the teachers are making 40-50k per year (aka 9 months) as well as 30-40k per year in benefits (that they pay next to nothing for), I'd say there is room for sacrifice.

And what about the fact that they previously took pay cuts or limited pay raises in exchange for paying less for their benefits.

This is without question the case. But hey, that's their tough shit. They should never have agreed to the lower pay, and instead squeezed the shit out of the state like they're being squeezed now.

I think protesting for two months (or whatever) instead of working, calling for recalls on all Republican senators (and the governor in about a year or so), having the Democrat senators leave the state, having the President of the United States indirectly rip Governor Walker and presumably challenging the bill on constitutional and procedural grounds is squeezing the shit out of the state.

The teachers had the Democrat senators leave the state?
The teachers had the President of the United States indirectly rip Governor Walker and challenge the Constitutional and procedural grounds?
The teachers called for recalls on all Republican senators?

Those are some damn powerful teachers. No wonder you guys fear them so much.
Or, you know, they can wait until the next election and vote these people out.[/quote]

[thegreekdog]

The teachers had the Democrat senators leave the state?
The teachers had the President of the United States indirectly rip Governor Walker and challenge the Constitutional and procedural grounds?
The teachers called for recalls on all Republican senators?

Those are some damn powerful teachers. No wonder you guys fear them so much.

Oh sorry, I assumed the teachers' unions represented the interests of the teachers.

[pimpdave]

The teachers' union sucks. The union that I'm in is cooler than all other unions.

Viva Unions!

[PLAYER57832]

The teachers had the Democrat senators leave the state?
The teachers had the President of the United States indirectly rip Governor Walker and challenge the Constitutional and procedural grounds?
The teachers called for recalls on all Republican senators?

Those are some damn powerful teachers. No wonder you guys fear them so much.

Oh sorry, I assumed the teachers' unions represented the interests of the teachers.

Yes, and what does that have to do with the above? Or are you now agreeing that the teachers had some legitimate reason to complain?

[thegreekdog]

The teachers had the Democrat senators leave the state?
The teachers had the President of the United States indirectly rip Governor Walker and challenge the Constitutional and procedural grounds?
The teachers called for recalls on all Republican senators?

Those are some damn powerful teachers. No wonder you guys fear them so much.

Oh sorry, I assumed the teachers' unions represented the interests of the teachers.

Yes, and what does that have to do with the above? Or are you now agreeing that the teachers had some legitimate reason to complain?

Woodruff is quibbling with me and it's annoying. If the teachers unions are supposed to represent the interests of the teachers and the teachers unions are getting Democratic senators to leave the state, etc., then, yes, I think the teachers are the ones doing this.

[john9blue]

I thought I should share this pic I took of a bunch of Union thugs this past Sunday. I had to turn around to get a picture of that sign. I am sure he is the only one who thinks that way. LOL!
http://www.facebook.com/album.php?aid=1 ... 4fdb1f3b00
Hope the picture link works - My first attempt at linking a pic:/

I'm pretty sure that's an anti-union individual carrying that sign.

that's what i thought too... "i'm entitled to your tax money" is too blatantly selfish to be serious... lol

[GreecePwns]

The EITC is not a tax credit, it's a subsidy for the poor. They get this money from the federal government (I did not know the state had a similar credit).

Well in the eyes of a poor person, money lost is money lost. This is reality, NS. But, if it is indeed true that a person who doesn't pay federal income tax doesn't pay state income tax, then it is a somewhat different story.

I do think your "give money to the poor so they pay sales tax" is an interesting theory. I wonder if it has been tried anywhere.

It is economic truth that those with lower incomes spend a higher percentage of their income than those with higher incomes, while those with higher incomes save a higher percentage. I'm sure you've heard the phrase "living paycheck to paycheck" before. Sales taxes in general are regressive due to this, and I am opposed to them entirely (except in the case of Social Security, where the current regressive tax should become a flat one through the removal of the cap in which taxes are collected).

In any event, as I laid out above, the tax credits (which liberals are calling tax cuts) for businesses are meant to bring jobs into the state. I'm not sure you answered whether you would rather have these jobs in the state or would rather have the state employees unions be able to collectively bargain for things other than salary. I mean, that's really what the discussion should be about here.

The two issues are separate in my eyes.

If Walker was so concerned the unions would not make the financial concessions they promised, he should have written a contract in which they would do so while keeping the right to bargain. Instead, he did not do so and was unwilling to compromise, and my sympathies lie strongly with the unions. And, as Scotty has shown, he will still go to the media saying the unions were not willing to concede when he didn't even try to get them to.

Similarly, if he was so sure that the business tax credits would be recouped, would he have to then cut the subsidy to the poor, which coincidentally is only $1.5 million higher than the pool of money given out from the credit?

It seems he is more concerned with changing the rules so that conservative policy is easier to pass than anything, considering he also signed a bill that required tax increases to have a 2/3 majority vote instead of the normal majority. The vote for this bill in the legislature only had a simple majority, ironically.

[PLAYER57832]

Woodruff is quibbling with me and it's annoying. If the teachers unions are supposed to represent the interests of the teachers and the teachers unions are getting Democratic senators to leave the state, etc., then, yes, I think the teachers are the ones doing this.

I believe there is a lot more to this than that, but... Walker apparently got his way, so now we will see the real impact.

Me, I am more concerned with Penn State's 50% budget cut, but that would be another thread topic.

[thegreekdog]

If Walker was so concerned the unions would not make the financial concessions they promised, he should have written a contract in which they would do so while keeping the right to bargain. Instead, he did not do so and was unwilling to compromise, and my sympathies lie strongly with the unions.

I addressed this before, but I'll address it again. Just like Republicans are pro-business (although I would argue that Democrats are also pro-business), Democrats are pro-unions. With the next round of elections, we may have Democrats in places where such Democrats would be negotiating with unions. If a Democrat appointee or a Democrat elected official received significant monies from unions, specifically the state employees unions, what incentive does such Democrat appointee or Democrat elected official have to negotiate favorably relative to the state (as opposed to negotiating favorably relative to the unions)? I suspect that Governor Walker called for the removal of collective bargaining because he didn't want Democrats "negotiating" with the unions for things where there are not two sides in the negotiation. In the private sector, unions negotiate with the business... there are definitively two sides. In the public sector, unions negotiate with the government who may or may not be controlled by the people that union money helped elect.

[thegreekdog]

Woodruff is quibbling with me and it's annoying. If the teachers unions are supposed to represent the interests of the teachers and the teachers unions are getting Democratic senators to leave the state, etc., then, yes, I think the teachers are the ones doing this.

I believe there is a lot more to this than that, but... Walker apparently got his way, so now we will see the real impact.

Me, I am more concerned with Penn State's 50% budget cut, but that would be another thread topic.

Well, arguably there is more to this in that I wonder whether the state employees union actually represents the best interests of the teachers. Perhaps the unions could have "given more" in prior years to avoid this sort of thing happening, as an example. Or perhaps the unions did represent the teachers as best they could considering that the state was going to lay off a bunch of workers except for this recent law change.

[PLAYER57832]

It seems he is more concerned with changing the rules so that conservative policy is easier to pass than anything, considering he also signed a bill that required tax increases to have a 2/3 majority vote instead of the normal majority. The vote for this bill in the legislature only had a simple majority, ironically.

This is the part I saw and why I objected from the beginning. I see all the talk about "fiscal responsibility" as a crock.

And, if this really were democracy in action as many have stated, then why so quick to cut off debate. Cutting off debate is a tactic for those afraid they won't win.

[PLAYER57832]

Perhaps the unions could have "given more" in prior years to avoid this sort of thing happening, as an example.

Greekdog, this is the part that gets me. See, they HAVE given more in prior years. That IS why they now have more benefits than other people, because they did not take wage increases in the past. It was a trade they made. And, as grensp notes, Walker did not even try to negotiate with the unions. His entire goal was not to cut the budget, it was to cut unions. The budget, etc was just an excuse... and this union busting was not what he ran his campaign on, either.

[thegreekdog]

It seems he is more concerned with changing the rules so that conservative policy is easier to pass than anything, considering he also signed a bill that required tax increases to have a 2/3 majority vote instead of the normal majority. The vote for this bill in the legislature only had a simple majority, ironically.

This is the part I saw and why I objected from the beginning. I see all the talk about "fiscal responsibility" as a crock.

And, if this really were democracy in action as many have stated, then why so quick to cut off debate. Cutting off debate is a tactic for those afraid they won't win.

Oh come on! He didn't cut off the debate. He called for an effing vote! The Democrats could have debated, but they cut and ran. Your understanding of this situation is beyond ignorant.

And it is absolutely fiscally responsible! Compare the benefits that these state employees get compared to private unionized employees. It's vastly unfair especially when those private unionized employees are paying the salaries of the state employees. Governor Walker and the Republicans corrected this unfairness but the state employees still get vastly more than 50% of their retirement and health insurance funded by the taxpayers of Wisconsin. Stop trying to make this out as an attack on all unions when it was and continues to be an attack on state employee unions. And they are still (STILL!!!!) getting far better benefits than similarly situated workers in the private sector. Maybe those demonstrators should have spent their energy on helping out the steel worker (or, perish the though, the lawyer) that pays 100% of his health insurance and 100% of his retirement.

[GreecePwns]

If Walker was so concerned the unions would not make the financial concessions they promised, he should have written a contract in which they would do so while keeping the right to bargain. Instead, he did not do so and was unwilling to compromise, and my sympathies lie strongly with the unions.

I addressed this before, but I'll address it again. Just like Republicans are pro-business (although I would argue that Democrats are also pro-business), Democrats are pro-unions. With the next round of elections, we may have Democrats in places where such Democrats would be negotiating with unions. If a Democrat appointee or a Democrat elected official received significant monies from unions, specifically the state employees unions, what incentive does such Democrat appointee or Democrat elected official have to negotiate favorably relative to the state (as opposed to negotiating favorably relative to the unions)? I suspect that Governor Walker called for the removal of collective bargaining because he didn't want Democrats "negotiating" with the unions for things where there are not two sides in the negotiation. In the private sector, unions negotiate with the business... there are definitively two sides. In the public sector, unions negotiate with the government who may or may not be controlled by the people that union money helped elect.

Sorry I was late to join in this discussion and missed over this.

I would be okay with the removal of these negotiating rights had he actually asked them to concede first. He showed an unwillingness to compromise and subsequently went to the media saying the unions were the ones who were unwilling. Had the union turned down the offer to concede they would have no leverage whatsoever and I would not care for them at all.

It isn't that he removed the rights that I have a problem with. It is the way he did so and the way his other actions have shown his policies more about punishing his political opponents than anything else.

[Woodruff]

The teachers had the Democrat senators leave the state?
The teachers had the President of the United States indirectly rip Governor Walker and challenge the Constitutional and procedural grounds?
The teachers called for recalls on all Republican senators?

Those are some damn powerful teachers. No wonder you guys fear them so much.

Oh sorry, I assumed the teachers' unions represented the interests of the teachers.

Since the discussion was about the fact that the teachers were the ones that gave up the salary in order to gain the benefits that they are now being stripped of, I don't really understand your response.