Scott Walker And Your Property Tax BillJun 04, 2012 by DC
This is my "risk on" post for the week. Realtors rarely espouse political concerns for fear of disappointing and alienating their target customer base. I hate the thought of losing customers over political thoughts, but I'll trust that my savvy real estate advice can outweigh some political differences. In the event that you haven't heard, there is a small, local election taking place in Wisconsin tomorrow. It is the election that pits Scott Walker against Tom Barrett, though Barrett's name matters very little in this case. It is Scottt Walker against someone, anyone, else, and it is the most heated political contest I've ever witnessed.
The debate has been framed as a battle of the nasty, soul-killing GOP against the school teachers, and by some strange defaulted, misguided inclusion, the students. On one side you have the Governor and on the other, the Unions. This is how the lines have been drawn. Those who side with the school teachers and those who can be convinced to vote by the promise of free this or discounted that will vote for Barrett, those in favor of fiscal sanity for Walker. There have been many divergent arguments in this election, and many reasons positioned by both sides as to why their candidate should win tomorrow. The reasons Walker poses are based on fact and actions, the reasons Barrett poses are based on his name- it isn't Walker.
Through his "controversial" Act 10, Scott Walker stripped the unions of their collective bargaining rights, and required state employees to contribute just a little bit to their own retirement and health care costs. The collective bargaining rights that were removed did not relate to wages. The argument from the public sector union supporters is that he "picked" on them. That, somehow, they were chosen to bear the brunt of fixing the state's fiscal woes. That they alone, out of myriad professions in the state, were targeted to be maligned and vilified. What about all those crummy rich Realtors! This is unfair they said, and so they painted big blue fists on signs and misspelled words and marched and petitioned and wailed in the streets, going on about a year and a half. The result of this Act 10, the bill that stripped these collective bargaining rights and forced those employees to contribute a few percent to their own benefit packages has been nothing short of spectacular. The state has balanced its budget without enacting sweeping tax increases and the course towards sustainable fiscal policy has been set.
But we must get back to the reasoning of the left, that somehow Walker targeted poor teachers in his effort to satiate the rich. In order to understand why he did what he did, it's best to look at the state of Wisconsin not as a state, but as a corporation. In hard times, corporations make hard decisions. They cut staff. They ask other staff to accept less compensation. They do these things because they have to, because they cannot pass along the necessary cost increases to their customers or they will simply lose those customers and be worse than they were before. This is how corporations act because if they do not act, they cannot continue to borrow money forever. Without cuts and changes, they will simply fold.
Consider Wisconsin, the corporation. The corporation has employees, and it has obligations. Among these obligations are the normal functions of the state- protection, assistance for the needy, roads, infrastructure, etc. The corporation can only cut so much from the obligations list. It cannot cease to repair roads. It cannot cease to provide assistance (Badgercare) to those in need. It also cannot endlessly raise taxes, both property and income, in an attempt to plug a growing budget gap. In this analogy, the taxpayers are at once the shareholders and the customer. The state must fix the swelling operating costs, just as a company does the same when it has devolved into an operational path that is no longer sustainable.
If Wisconsin the corporation was to right its fiscal ship, it would either have to slash employees, or raise taxes. Illinois chose to solve their problems by raising taxes, but as with most tax increases that do not adjust the out of control spending, those tax increases have been entirely ineffective. Wisconsin saw this, (by the way, Wisconsin still has a higher individual income tax rate than Illinois, even after Quinn's tax increase) and opted instead to adjust the way the state's employees manage their job benefits. This is what many on the left do not understand. To view public sector unions as some untouchable entity that must forever be coddled is to view them in entirely the wrong light. To understand why Walker enacted the changes he did it is imperative to view these union members as exactly what they are- the taxpayer's employees.
As the employer of these union members, the state opted to tack a few percentage points onto the amounts that these employees of the state must contribute to their retirement and health benefits. Walker did not do this because he had hoped to pick on an individual profession, he did this because this profession just happens to be employed by the state. These employees are the teachers and the teachers are these employees. Consider the corporation's response to unmanageable costs and dwindling receipts- mass layoffs. Then consider what Walker did- tweak the benefits of state employees while enabling them to keep their jobs and still balance the state budget without forcing tax increases on the many to benefit the few.
And what of those benefits? A recent study by the Heritage Foundation found that before Walker's Act 10 public sector jobs in Wisconsin paid on average 29% more in total loaded wages than a comparable private sector job. After Walker's Act 10? Those same workers now receive only 22% more than their private sector neighbors. Sweet horror! This is why the union members have spent as much as $20MM in taxpayer money to force this recall election? These are the evils that cannot be tolerated by the giant blue fist? This return to some semblance of fiscal sanity has caused this firestorm that has branded Walker as an evil instrument of the far right? And when did it become only the fringed far right who favored fiscal responsibility? This is the height of absurdity.
Act 10 has done more than just balance the state budget, it has given school districts across the state the right to bid their health insurance programs for the first time in forever. Prior to Walker's bill, municipalities had to use the union preferred insurance provider, and as such, rates were fixed without any threat of competition. Today, school district's are saving millions of dollars by shopping their insurance packages, and in doing this they are saving taxpayers. You know, taxpayers like all those individuals who reside in Illinois but own vacation homes in Wisconsin.
The election tomorrow is beyond significant. It is the most important election in the country this year aside from the presidential one, and as both a Wisconsin and a lover of sanity resident I dare say it may be even more important than the outcome of that November contest. The argument in Wisconsin is not one made by an evil Governor against an unsuspecting group of teachers. The argument here is how best a corporation can adjust to difficult times while still retaining its employees. Walker figured out how to do that, and he deserves to fulfill his term as Governor.
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Jun 04, 2012, 07:59:05 John Tisdall wrote:
Very well said David
Its great to see you have the guts to take a political position with no fear of loss of business
Lets re-elect Scott and protect Wisconsin and America from becoming another european like disaster!!
Jun 04, 2012, 08:04:39 DC wrote:
Thanks John. Make sure you get everyone out tomorrow to offset Milwaukee and Dane Counties!
Jun 05, 2012, 07:17:36 Applewoody wrote:
It's interesting to weigh the real estate tax interests of Illinois residents who are Wisconsin vacation home owners against"overpaid" teachers and public safety workers in Wisconsin. Talk about playing to your market!
Jun 05, 2012, 07:46:24 DC wrote:
Come on now Chuck! It's not me who says they're overpaid, it's the actual statistics that bear that out. I'm less concerned about the tax dollars of my vacationing Illinoisans (though they should be allowed to vote in Wisconsin elections, instead of having those who do not own real estate dictate the tax bills of those who do), I'm more concerned about my own income tax payments. I pay enough, in addition to 100% of my IRA and my health insurance. As such, I have little use for those who cannot stomach few percentage point decrease in their take home pay. The dynamics of government are changing from an unsustainable model to a sustainable one, and the employees of the state will have to make the necessary adjustments just as the private sector has had to. Thanks for reading, David