States’ Busted Budgets Not Caused by Union Pay

This is what David Lenohardt wrote in the NYT on March 1. His major points:

Government workers receive compensation that is similar–with somewhat lower salaries and somewhat better benefits on average–to that of private sector workers with similar qualifications.

Government pay is skewed too heavily toward pensions and health insurance.

Health plans for union workers and retirees are much more likely to require little or no co-payment, which leads to lots of medical treatments that don’t make people any healthier, and to huge costs.

Many government workers receive pensions that start at age 55 and still let retirees draw a full salary elsewhere.

Only recently have teachers’ unions started to cooperate with serious efforts at teacher evaluation, and they are still not giving their full cooperation.

The cause of our looming federal and state deficits . . .is Americans’ collective desire for low taxes and generous government benefits. . . Eventually we will have to pay for the government we want.

I have a friend that retired from the state, receives his pension, and was rehired as a contract employee by the same agency:  working full time and receiving his pension from the same agency.  Texas has a defined benefit retirement plan so that retired employees receive a guaranteed benefit rather than a value based account as in a typical 401K account. Steven Greenhouse discusses the differences between retirement plans.

In Texas, the Margin Tax and a cigarette tax were supposed to make up income deficits created from reducing the property tax , and to date, the Margin Tax has  increased revenues modestly but not at the levels expected at enactment.   (David Gilliland, Texas Margin Tax).

One result for Austin has been the expected layoff of 1000 teachers and the expected closure of exemplary inner city, low income schools. ( AISD News Release)