The discussion is about public unions but it would also certainly apply to private unions too.

What I've been trying to make Gimpy understand is that private unions, for all their flaws, are not the problem. As has been mentioned, if a private union demands too much the company folds. It's a built in and vital safety valve that does not exist in the public sector.

They can squeal all they want. The taxpayer is the one who has to pay for it all and that well is getting pretty dry. The states who follow Wisconsin's lead will fare better than the ones who can't or won't.

Correct me if I'm wrong...but haven't public unions already made concessions? I don't see thats how thats a problem when they are willing to deal. the real issue is is that republicans don't even wanna do that..they just want to get rind of the unions altogether.

again as i said, If these bills seemed like anything more than just union busting id be more receptive. Instead however, governors are giving large handouts to corporations while asking the common man to foot the bill for economic recovery. They want to take away public union bargaining rights but think its great to give huge tax breaks to corporations. even though its pretty wishy washy wither the whole trickle down idea works.

WIsconsin Budget Battle Explained Pt. 1
 

This very issue has had me extremely tied up. I do consulting from a fiscally conservative perspective as part of my work, and lately I've had to hammer out about a paper each day, versus my average of once a week. Seems as though you guys have the basis covered pretty well, but I'd like to add a few things:

First, let's start with a "Word-of-the-Day", shall we?
Emphasis on the last two works mine.

If ANY private organization and union were to engage in the same types of negotiations routinely seen in the public sector, people would go to jail. As far as the principle of the issue is concerned, public unions should not exist, as has been effectively communicated here. If for no other reason, they ultimately impose a non-accountable indirect tax to the taxpayer. In other words, for every public employee the taxpayers require, that employee must be hired into a system that diverts money from wages into the union's and therefore the Democratic Party's coffers. There is no ethical justification for this. Prior to Governor Walker's changes, public employees WERE allowed to opt out of the unions - however, "fair pay" clauses required them to pay nonetheless.

Ergo, everytime a municipality needs to hire a teacher, that teacher's compensation package includes a direct contribution to the union which directly contributes to a single political party.

The compulsion of public union participation is ultimately an unfair, unaccoutable Democratic Party tax leveraged on the people of Wisconsin.

Now, enough with broad principle, I feel I should share the facts of what has happened here with clarity as most of the national media are confused in their reporting, likely due to their own confusion. I'm going to use some CAPS here to stress important points, and I'll try not to editorialize too much.

The bill that caused the initial outcry from the unions is Governor Walker's Budget Repair bill. The direct purpose of this bill is to address the shortfall in the CURRENT budget. Wisconsin budgets are biennial. For those of you new to this, that means we budget for two years at a time.

Our current biennial budget expires in June. In that budget, we face a significant shortfall of approximately $137 million. The budget repair bill addressed that part directly by attempting to enact employee pension and healthcare contribution increases while REFINANCING the current debt. That former piece was only modestly controversial, and was quickly conceeded to by the unions as soon as this next part was understood.

That part is that which addresses collective bargaining priviledges for public employees. Governor Walker included the so-called "anti-union" provisions in the Budget Repair bill in order to address what is known as a STRUCTURAL DEFICIT. What that means to one who may not be familiar with fiscal terminology is essentially that the system in and of itself is set up to run into deficit spending.

Meanwhile, as this is a fiscal bill, it was believed that a "superquorum" of 3/5 of the senate be present to vote on it. That would equal 20 senators. The Republicans had 19; the democrats 14.

Now, there were ultimately four provisions in this part of the bill that caused so much controversy.

1. Limiting collective bargaining for public sector unions to wages and limiting THAT to the rate of inflation.
2. Ending mandatory financial participation in the public union.
3. Requiring union members to vote annually for recertification, and for THAT vote to require a 51% majority of ALL MEMBERS.
4. Ending automatic withholding of union dues.

I'm going to editorialize here. Most people who are only loosely paying any attention to this story have only heard of that first provision. However, I believe that was the one of LEAST concern to the union and political leadership. The latter three stand to be far more damaging to the unions financially.

In fact, when Walker gave ground in negotiations on the first provision I layed out, Democrat State Senator Mark Miller, who was still on hiatus from Wisconsin and his duties, told the Wall Street Journal that they intended to return the following day. Furthmore, Walker staffers had indicated that an agreement was struck. Yet, Miller pulled an about-face the following day, remaining in Illinois and accusing the Walker administration of not negotiating in a letter. Walker then released emails to the public proving otherwise.

My conclusion is simple, and one would have to be naive to not follow - Miller though he had won a victory with concessions from Walker and told the media the 14 Democrats would be returning home. The union and political leadership reviewed the agreement and overruled that decision. This is the only logical explanation for the events that occurred. And, as such, it helps the illustrate the point that this is ultimately about money.

More to come...

WI Budget Battle Explained Pt. 2
 

Continuing on...

Eventually the Republicans decided to use the so-called "nuclear option", which was stripping all spending measures from the bill and passing it without a single Democrat present. This was a key miscalculation on the Democrats' part - they believed that the components regarding the pension and healthcare contributions would preserve the need for the supermajority under the fiscal bill clause in the state constitution. Unfortunately for them, said clause only requires the supermajority for appropriations (spending). Ergo, the vast majority of the bill remained intact, and the refinancing portion would be passed now that the Democrats had no further reason to continue their absense.

Furthermore, in a brutal miscalculation Milwaukee Mayor Tom Barrett, Governor Walker's opponent in the 2010 election, publically stated during a policy forum that he believed the bill should be broken up into separate parts. He believed that doing so would result in a vote against the union-related portions. I believe the Republicans were galvanized by this.

Okay, Moving On...

While Governor Walker's Budget Repair bill has stolen the headlines, most people are unaware of the true scope of why Walker deemed the steps taken within are necessary. Guaranteed to be FAR more controversial is Walker's 2011/2012 biennial budget proposal.

To lay down some background, I'm going to borderline editorialize again here, but if you don't agree with this concept, your math needs some work.

Wisconsin is facing a $3.3 BILLION shortfall in the next biennium. I'm going to lay some serious blame here. First, Governor Scott McCallum (R) (who entered office as a result of Gov. Tommy Thompson leaving to join President Bush's cabinet as Secretary of Health and Human Services) raiding the state's ongoing tobacco settlement fund to help balance the budget. Following that, however, Governor Jim Doyle (D) managed to balloon a $600 million deficit into a $6.6 BILLION deficit between 2002 and 2009 (bear in mind the fact that Wisconsin became the 4th highest taxed state in the process).

Doyle's mismanagement is well-documented. He routinely raided the Registration Fee trust (transportation fund) to the tune of millions. He cut sweetheart deals with heavy contributors (the Potowatami's, whom I believe run the state's largest casino, pay next to nothing to the state). There's more, but the details get boring.

However, in his most egregious act of fiscal irresponsibility, he diverted over $2 BILLION in one-time stimulus funds to the state's '09/10 biennium. Here's where we run into an old word-friend yet again: that is PURE structural deficit.

When you face a structural deficit, it's not as simple as cutting funding. Such deficits occur when you use money to create, grow, or even sustain ongoing programs. Government programs, by and large, are long term. That means these programs will maintain a cost beyond the structure of the current budget.

The problem doesn't arise until you pay for such costs without using renewable revenues. In other words, Doyle paid for $2.3 billion in spending using ONE TIME money. In the next biennium, that spending will still be there. The money, on the other hand, will not. That's the structural deficit.

Had Gov. Doyle made the cuts necessary to not require the stimulus influx, Gov. Walker would only be facing perhaps a hair over a $1B deficit, rather than three times that amount.

When such a large portion of state resources goes to NEGOTIATED contracts that have been paid for THROUGH structural deficit spending, that ultimately means that the structure requiring such spending needs to be changed. Hence the repair bill.

The trick here is simple: Municipalities are going to lose more than $1.5B in the upcoming biennial budget. That money needs to be made up. Either there can be mass layoffs (unacceptable in this employment climate), taxes could be raised (more unacceptable in the 4th highest taxed state as it is), or liabilities need to be reduced.

And that is the subject of my next post on the matter.

WI Budget Battle Explained Pt. 3
 

This part will mostly be opinion, but I assure you it will be well-reasoned.

I left off discussing the reduction of liabilities that need to be funded. This is precisely where Gov. Scott Walker was making his point about collective bargaining.

Let's look at two of the most illustrative and egregious examples of misuse of contracts bargained collectively.

One:

2/3 of Wisconsin school districts buy their INCREDIBLY generous health insurance from a company called the WEA Trust. This is a health insurance company RAN BY THE TEACHER'S UNION. This company routinely charges roughly 25% more than the cost for the same insurance through other carriers. One small school district in the state (Brown Deer) recently reported $170K in annual savings. In doing so, they've drawn the official protest of the teacher union which filed a complaint with the Wisconsin Employment Relations Commission.

In a fiscal analysis concerning the next biennium, my company believes that removing language requiring or implying requirement (compelled requirement) from Collective Bargaining agreements NAMING WEA Trust could save roughly $80-$100M.

Two:

Tenure recently resulted in Milwaukee's Teacher of the Year losing her job a mere few months after receiving the distinction due to a labor reduction. I believe that tenure costs the state jobs as much as dollars. For every ineffective 20+ year tenured teacher we could hire nearly 2 effective, highly motivated replacements. However, due to union contracts we are required to use tenure as the sole determining factor when it comes to reductions in force.

That translates into larger classrooms, higher costs, and higher pension liabilities as the pension takes into account your THREE highest earning years. There is no fiscal motivation for a tenured teacher to excel. Likewise, there is no benefit for a new teacher entering the system to compete. This is anathema to a strong system of education AND fiscal responsibility.

I literally could write hundreds of pages of examples regarding the disadvantages unchecked collective bargaining entails (heck, I have), but ultimately the principle is clear. What we are faced with is a system where those negotiating on behalf of the taxpayers are approaching said discussions with a bias towards the unions. This is collusion in the private sector. Giving a labor organization the financial ability to fund the appointment of whom they negotiate with is disasterous and has PROVEN to be such. Even now, some municipalities are attempting to rush through union contracts before the budget repair bill is published. Why would ANYONE enter into negotiations PRIOR to receiving tools to give them a further advantage in said talks, unless they weren't completely advocating those people who they are ostensibly representing? In these actions they are merely proving Walker's point, unwittingly.

In any case, short of not allowing private unions to donate money to political causes, I believe curtailing their abilities to require dues and membership along with restricting that which they can bargain on is the only possible solution to assuring representation of the taxpayer.

Wrong. They weren't willing to deal until they realized the issue was going to be forced and they had to.

Even then, they were not actually conceding. PRIOR to Wisconsin's budget repair bill passing they were rushing contracts to avoid the concessions.Of course they do. Even union stalwart and noted liberal Franklin D. Roosevelt knew that public unions were a horrible idea.They are, you just aren't completely understanding the issue. Unfortunately, runaway union bargaining has created structural deficits that need to be addressed. If the unions had used their power wisely, this would never have been an issue. Rather, they've created a seperate, minority middle class with protections and compensations far beyond the majority.

Furthermore, while they DO pay taxes, they do NOT contribute to government funding. This is a point missed by practically everyone. Here's the easiest way to describe it: take away a private sector employee's tax contribution. Government gets zero. Take away a private sector employee's job. Government gets zero.

Now, take away a public sector employee's tax contribution. Government LOSES that percentage of salary. However, take away a public sector employee's job? Government RETAINS the ENTIRE PORTION of that salary.

Government employees are a net loss to funding, and by extension, the taxpayer. That's not to say they are not necessary. However, that DOES stress FDR's point regarding the dangers of public unionization, specifically how they could hold those who actually provide for the government hostage.On the one hand, I actually agree with you. Hand outs (read: bailouts) are anathema to private growth. I will disclose however that I was in favor of the concept of bailouts due to one important thing: economies with high production CAPACITY combined with high consumption and access to natural resources are really only heavily vulnerable to fast collapses. In other words, once we hit rock bottom we have the capacity to dig out, but I believe it's better to skip some of that misery.

However, that's a federal issue. Where exactly are governors giving handouts to corporations? Secondly, what makes you think that corporations pay anything in taxes to begin with? Third, if those tax reductions are targetted at corporations currently not doing business in a state, and upon moving to said state they would be given temporary tax BREAKS (Gov. Walker's plan), how does that cost ANYTHING? Rather, that would create (taxpaying) jobs and state revenue. Whereas, should the corporation NOT move here, there's no additional revenue from jobs OR the corporation to begin with. Ergo, net gain for state. And, no loss.Please cite which law/policy you're referring to, because frankly this sounds like a baseless talking point that has been proven false repeatedly.As far as I can tell, none of these policies are about trickle-down economics. Rather, they are about creating growth. To tell a business that they can open up shop here and not pay taxes for 3 years should they hire X number of people is NOT a tax cut. If they do not do business here, we have nothing to begin with, ergo no cut. However, it is a net GAIN if they do because they are creating taxable income and growth.

okay, so I'f I understand the Illiad:D, you had a big butterfly net and you were out looking for Dems to bring back to Madison.:hmmm:

You should've called Boba Fett.:haha:

:haha:

I would have towed Senator Chris "StickyFingers" Larson back myself, but alas...

http://www.jsonline.com/blogs/news/102442204.html

I wish we could get your revolution out here, but sadly, the red-guard controls this state:dead:. I believe 1 in 6 in ore-gone work for the state(?) or are drawing from a state pension. The last dope in chief, was a union guy, and gave the public union whatever they wanted. Fortunetly(sp), he was term limited out:yeah:. The last month of his term, he delcared that they were over budget and couldn't afford the PERs increases.



Only, at the last moment, did he decide they couldn't afford it.:har::har::har::har::har:

If it wasn't for the tech industry, this state would be an economic black hole. The greenies have wiped out all of the other industries here. There is one state, who has a higher unemployment than here, and guess who that is?:06::hmmm::haha:

On a side note, they just released the salaries for the city of portland employees. Guess what, 1 in 5 people earn >$150k:o

So I say we should redistribute the wealth from the greedy, rich city bosses, back to the poor tax-payers.

Oh, wait, they are all progressives, so they deserve it.

Don't worry Nik, it's gonna happen eventually. It has to. Economic realities cannot be ignored for very long.

The economy ain't bad enough yet for that to happen here. When the (public) unions get threatened, they will kill kittens until they get their way. Guess what, voters cave (almost) every time:shifty:.

With 1 in 6 working for the state... guess who wins.

The problem with the "tax the rich" strategy, is that they will pick up and move somewhere else.:up:

(see businesses leaving portland)
( see radio ads for businesses to relocate to Vancouver, WA because business taxes are lower:hmmm:)

...and the best part of all this, since businesses won't relocate here (OR) the state has to "put the porkchop on the kid so the dog will play with him"
(see solar industry)

but that's okay, they are green jobs:yeah::har:.

That's what I mean. 5 private sector workers supporting one state worker only works if the 5 private sector workers have jobs that pay well enough to afford him. As businesses leave the state that's going to become more and more difficult to maintain so I don't predict a good future for Oregon kittens! :o

Heh, as bad as WI is when anti-union proposals are fielded, I shudder to think how OR would react. :doh:

There WILL come a day of reckoning, however. States are simply running out of money, and tax increases will ultimately have a depressing effect. States need to address the structural issues, like Gov. Walker is - and unlike the Feds, they can't just print money.

I fear that at some point relatively soon, far-left states are going to hit a wall and require bailout. Unfortunately, there's no real way for the federal government to say no.

yes, states are running out of money, but for the wrong reasons. Average taxpayers are losing shares of the wealth and income, and taxes for the wealthy haven't kept up to reflect their increase of the share of income. where there used to be more taxes to be had because more people spread out had more money, now the tax base has dried up. There will be some tough choices, do we load the rich and corporations (because thats where more of the money is now) or do we take away programs and increase it for the middle class? (also is a middle road where we tax everybody). Unfortunately, I feel as if most of the burden of these recovery bills are being shifted upon the middle class . Why? because money wins again.

Personally, If i had my way we would first go where the money is and work the way down. If you need more taxes it makes sense to go where the majority of the cash is loaded. Call it unfair or whatever, But if you need water from a sponge, it makes sense to get some out of the saturated one before you go try to wring the last few little drops out of the one thats only damp at best.

Pic related:
http://blog.seattlepi.com/davidhorse...or-640x481.jpg

Or here in Mass for that matter. We already have Democrat politicians telling the unions that they need to "get out on the streets and get a little bloody".

It ain't going to be pretty around here when we hit that wall.