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News & ArtsSaturday, March 31, 2012
Media / Money / Olympia The Bullshit Budget Debate
Posted by Goldy on Sat, Mar 31, 2012 at 9:35 AM
Two quick comments on the Seattle Times editorial board's latest call for legislators to balance the state budget by slashing pension benefits for state workers: 1) The Blethens can't manage their own fucking pension, let alone advise others; and 2) The editors' insistence that slashing pensions sets our state on a "sustainable path" suggests that they are either idiots or liars.
The only reform that can possibly set our state budget on a sustainable path is tax reform. We've been slashing spending for years, and still the budget gap grows. Not even an economic recovery can set things right again, because in the long run we have a tax structure that over-relies on taxing a base—the sale of goods—that has been steadily shrinking as a portion of the overall economy for more than a half-century. And as state revenue shrinks as a portion of the state economy, so does its ability to meet demand for state services at a constant level. It's simple math.
I'm not suggesting that we shouldn't have a debate over pensions and other priorities and reform, but until we're willing to put revenue back on the table, the entire budget debate is bullshit.
2
There is one legislative candidate willing to support tax reform: http://www.electgregorygadow.com
3
I'm going to need another Special Session to have revenue part of the negotiations.
Rob McKenna will understand, we need to get the budget right befor he is allowed to start fundraising again.
It's want is best for Washington State, and he must want what is best for the state.
Rob McKenna will understand, we need to get the budget right befor he is allowed to start fundraising again.
It's want is best for Washington State, and he must want what is best for the state.
4
State workers are the popular demon with the republican mouthpiece, the Seattle Times--the Fox news of print.
The implication is that all state employees benefit from the pension program. This isn't the case. Higher ed teaching, administrative and exempt employees are under TIAA-CREF which is a more controlled 401K type plan.
I don't know if in general government everyone has a pension or not. This is clearly not a path to savings so much as it is a political weapon of convenience. Pick on people who did nothing more than apply for a job with a specific salary and specific benefits. They had no choice about union representation. They had no choice about the retirement plan offered. But boy, do they make a handy symbol for people who want to portray these same people as dicks.
The conservative argument, whether it comes from the wimpy Democrats or the Republicans, is that "we can't afford it" and so over the years, every public employee (save coaches and the like) has taken pay cuts, whether they earn $25,000 a year, $50,000 a year and perhaps if they have earned $100,000 a year.
Public universities and colleges aren't even public any more. The democratically controlled legislature has stripped the shit out of each. Higher education isn't the cash cow for the legislature that it used to be. But they still can't look past their short noses for any sort of long range overall reform for the state.
They obviously cannot do the math, they refuse to see the math, and will deny there is math to be done.
The implication is that all state employees benefit from the pension program. This isn't the case. Higher ed teaching, administrative and exempt employees are under TIAA-CREF which is a more controlled 401K type plan.
I don't know if in general government everyone has a pension or not. This is clearly not a path to savings so much as it is a political weapon of convenience. Pick on people who did nothing more than apply for a job with a specific salary and specific benefits. They had no choice about union representation. They had no choice about the retirement plan offered. But boy, do they make a handy symbol for people who want to portray these same people as dicks.
The conservative argument, whether it comes from the wimpy Democrats or the Republicans, is that "we can't afford it" and so over the years, every public employee (save coaches and the like) has taken pay cuts, whether they earn $25,000 a year, $50,000 a year and perhaps if they have earned $100,000 a year.
Public universities and colleges aren't even public any more. The democratically controlled legislature has stripped the shit out of each. Higher education isn't the cash cow for the legislature that it used to be. But they still can't look past their short noses for any sort of long range overall reform for the state.
They obviously cannot do the math, they refuse to see the math, and will deny there is math to be done.
5
yes too bad the dems are so afraid of their own visions, plans, policies, they don't even put them on the table, message them, or fight for them.
brad owen takes the gub chair when she is abroad. isn't that the time to pass a tax hike with fifty percent plus one? and, you know, put it on that table, in the form of enacting it, then letting the gop sue and standing up for majority rule?
why not fund disability lifeline to save lives, with a tax on....on out of state banks maybe.....get some balls, and actually be democrats?
we should not expect the gop to be putting things on the table for us.
brad owen takes the gub chair when she is abroad. isn't that the time to pass a tax hike with fifty percent plus one? and, you know, put it on that table, in the form of enacting it, then letting the gop sue and standing up for majority rule?
why not fund disability lifeline to save lives, with a tax on....on out of state banks maybe.....get some balls, and actually be democrats?
we should not expect the gop to be putting things on the table for us.
6
@5, you have that wrong.
There isn't a +1 margin required to pass a revenue increase. An amendment to the Republican budget bill in the House failed on the last day of the regular session because, although it had a constitutional majority voting for it it did not have a legislative 2/3 supermajority to pass.
The court case will decide this conflict between the state constitution explicite description and I-1053.
There isn't a +1 margin required to pass a revenue increase. An amendment to the Republican budget bill in the House failed on the last day of the regular session because, although it had a constitutional majority voting for it it did not have a legislative 2/3 supermajority to pass.
The court case will decide this conflict between the state constitution explicite description and I-1053.
7
The bread and butter of a fat retirement is the number of years worked, if you dedicate 40% of your life to a place, you can get a fat pension, which kind of seems like a decent trade. There are a number of positions that have a maximum monthly wage cap, mine is around $3,700 (I can't find the table right now):
Calculating Your PERS 2 Retirement Benefits
Monthly retirement income = 2% x service credit years x average monthly final compensation
Example
Suppose you retire at age 65 with 32 years of service credit and a monthly average final compensation of $2,000. Your retirement benefit would be $1,280 each month, calculated as follows:
2% x 32 x $2,000 = $1,280
This calculation results in the standard single life benefit. It will be different if you choose to continue benefits to a survivor upon your death.
http://www.washington.edu/admin/hr/benef…
8
Who cares if the tax base is shrinking as a percentage of the overall economy? What matters is whether the tax base is shrinking compared to legitimate expenditures of the state. For example, if we take education, is the cost of educating a single student increasing over time (if so, why?) and is the number of students that need to be educated increasing? It should be very easy to demonstrate the demographic reasons or material cost reasons for budget changes. Appealing to an argument about the growth of the overall economy is BS. It's the same as saying that if I work harder (or just buy more stuff) that the state should spend more money. That's obvious nonsense.
10
Have you done even one post on HB-2100, a tax on financial assets yet?
No?
Then...stop the hypocrisy.
11
@8: Actually, you don't know what the fuck you're talking. The metric that most closely tracks growth in demand for public services is growth in the economy. I've explained it before, and I'm working on a more thorough explanation for future publication, but that is a fact.
Even population plus inflation doesn't grow revenues fast enough to provide services at constant level. I know it is simplistically appealing to assume that does. But it doesn't.
Even population plus inflation doesn't grow revenues fast enough to provide services at constant level. I know it is simplistically appealing to assume that does. But it doesn't.
12
@Goldy 11, I'd be prepared to accept that growth in the economy might be a reasonable proxy for overall growth in demand for state services (over the long term presumably since some demand is counter-cyclical), but I haven't seen that explained and it's not obvious to me that it is a better measure than others. Feel free to link to your previous explanations or anyone else's.
Regardless of whether growth in the economy is a reasonable proxy for estimating demand, it seems a pretty poor way of explaining why demand or unit costs have increased and therefore a poor way of justifying increasing tax revenue. Surely the explanations involving the direct causes of increased demand or increased costs are quite simple, so why not just make the argument based on those? When explanations are not straightforward or are based on indirect measures, it sets off my BS detector. It may be simple math, but if there is any confusion or doubt around cause and effect, the simplicity of the math is not sufficient to make a compelling argument.
BTW my politics would be regarded as left-wing in Europe, so I hope you'll treat my comments as genuine, friendly, criticism regardless of how much knowledge you think I bring to the discussion. I'm interested in understanding your point and I have a natural inclination for progressive taxation; I just don't see it as compelling or healthy to link government expenditure with economic growth as in this post.
Regardless of whether growth in the economy is a reasonable proxy for estimating demand, it seems a pretty poor way of explaining why demand or unit costs have increased and therefore a poor way of justifying increasing tax revenue. Surely the explanations involving the direct causes of increased demand or increased costs are quite simple, so why not just make the argument based on those? When explanations are not straightforward or are based on indirect measures, it sets off my BS detector. It may be simple math, but if there is any confusion or doubt around cause and effect, the simplicity of the math is not sufficient to make a compelling argument.
BTW my politics would be regarded as left-wing in Europe, so I hope you'll treat my comments as genuine, friendly, criticism regardless of how much knowledge you think I bring to the discussion. I'm interested in understanding your point and I have a natural inclination for progressive taxation; I just don't see it as compelling or healthy to link government expenditure with economic growth as in this post.
13
@5, not only were you wrong about the 2/3rds requirement to pass a revenue measure, but you assumed that Brad Owens would be more willing than Gregoire to help that kind of legislation. Owens is a DINO.
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