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The Wisconsin Union issue...in sporting terms

Discussion in 'Sports and News' started by Alma, Feb 25, 2011.

  1. Alma

    Alma Well-Known Member

    I find this terribly practical to understanding the issue correctly:


    Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.

    Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.

    How can this be possible?

    Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.

    Many of us are familiar with the concept of deferred compensation from reading about the latest multi-million dollar deal with some professional athlete. As a means of allowing their ball club to have enough money to operate, lowering their own tax obligations and for other benefits, ball players often defer payment of money they are to be paid to a later date. In the meantime, that money is invested for the ball player’s benefit and then paid over at the time and in the manner agreed to in the contract between the parties.

    Does anyone believe that, in the case of the ball player, the deferred money belongs to the club owner rather than the ball player? Is the owner simply providing this money to the athlete as some sort of gift? Of course not. The money is salary to be paid to the ball player, deferred for receipt at a later date.

    A review of the state’s collective bargaining agreements – many of which are available for review at the Wisconsin Office of State Employees web site - bears out that it is no different for state employees. The numbers are just lower.

    Later (big shocker here)

    Johnston goes on to point out that Governor Walker has gotten away with this false narrative because journalists have failed to look closely at how employee pension plans work and have simply accepted the Governor’s word for it. Because of this, those who wish the unions ill have been able to seize on that narrative to score points by running ads and spreading the word that state employees pay next to nothing for their pensions and that it is all a big taxpayer give-away.


    If the Wisconsin governor and state legislature were to be honest, they would correctly frame this issue. They are not, in fact, asking state employees to make a larger contribution to their pension and benefits programs as that would not be possible- the employees are already paying 100% of the contributions.

    What they are actually asking is that the employees take a pay cut.

    Interesting stuff. Journalists these days remain real suckers for rhetoric and bored for details.
  2. Starman

    Starman Well-Known Member


    Forbes, which has demonstrated in the past it knows jack-shit about sports, keeps its perfect record alive.
  3. GoochMan

    GoochMan Active Member

    David Cay Johnston's piece was pretty much spot-on I thought.
  4. Ben_Hecht

    Ben_Hecht Active Member

    . . . especially after their recent droolfest re Mr. Daniel Snyder.
  5. poindexter

    poindexter Well-Known Member

    Ask the Wilpons how that deferral worked out.
  6. LongTimeListener

    LongTimeListener Well-Known Member

    Very good column. However, it doesn't ask the analogous question, what if the ballclub, and possibly even the league, goes bankrupt? There are many similar private-sector pension situations, United being the most prominent, and the pension amounts were slashed in court as a matter of necessity. I don't argue that it's fair, but there is a lot of money owed that simply isn't there.

    The same column in fact could be written about Social Security (as spnited pointed out so clearly just a few weeks ago): You've already paid the money in. Yet there's a big debate about whether any of us below roughly 45 years of age are going to see a dime.
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