Another Incomplete Wisconsin Tax Analysis

I just read an editorial from Don Huebscher, editor of the Leader-Telegram in Eau Claire. He started out opposing a wheel tax for Eau Claire County, Wheel tax only masks the real budget problem . I concur. Then he launches into a criticism of the disparity between the salaries and benefits of public and private employees.

According to Huebscher, the real problem is the excessive salaries paid to pubic employees.

Huebscher: The average public-sector worker in Wisconsin received $12,171 in state and local government benefits in 2005. The knee-jerk argument is that public employees trade salary for benefits.

Soglin: Let me jerk my knee. For example, Wisconsin school teachers rank tops of all states for benefits. They rank next to last in salary, that would be 49th. Yes, they do.

Huebscher: the average public salary was $34,352, just 1.3 percent below the average private salary of $34,819.

Soglin: First of all, those numbers are meaningless. You would not compare two automobiles that were priced at $34,000 and call them comparable unless you knew more about them. We need to know the positions and the responsibilities. Or perhaps we should also look at top managers. Public sector managers who are paid $80,000-100,000 would be making anywhere from $100,000-250,000 in the private sector.

Huebscher: Throw in the fact county employees can convert unused sick leave to pay for health insurance when they retire to a generous public pension, and the proposed new fee becomes even less palatable.

Soglin: That cost was already calculated in the employee benefit package.

Huebscher: It's well-documented that most other states pay lower property taxes as a percentage of income than we in Wisconsin. It's also documented that most other states tend to rely more on fees - including higher vehicle registration fees.

Soglin: It is not well documented. If it was well documented, it would be noted that:

• In Wisconsin the business sector pays 35% of all state taxes...nationwide the average is 40%. That difference means $800 million annually.
• Thirty years ago Wisconsin residential property accounted for 50% of all property taxes; now it is 70%. This is a result of Wisconsin Manufacturers & Commerce successfully shifting the tax load.
• When taxes and fees are combined, Wisconsin ranks about 18th in total revenue collected compared to the 50 states.

Soglin: Yes, I oppose the wheel tax. It is a flat regressive tax that does not take into account the value of the vehicle or its environmental cost.

Comments

[Brian]

Paul,
Wisconsin teacher salaries ranked 22 in the nation in 2006.
http://www.weac.org/News/2006-07/nov06/rankings.htm

Not that the top ranking is any good. Teachers' average salaries rank lower than nearly every other profession requiring comparable training.

[Shane Wealti]

Great analysis. This is why I read your blog on a daily basis.

[Dan Sebald]

This sort of falls in the category of WSJ grousing about teenagers being paid too much at the Madison city pool. But, to be fair, Don Huebscher didn't mention teachers in particular. The interesting thing is that the conclusion of his article, in itself, masks one of the problems. If the cost of health care weren't so high, then the benefits the public employees get wouldn't be worth as much, right? That might obviate his concern. Still, the idea that others' fairly benign quality of life should be brought down (by NAFTA or the state legislature) is troubling.

Yeah, no way on a flat rate vehicle charge. Environmental impact and vehicle weight (big factor on road longevity) should definitely be considered. Vehicle cost isn't so important. (Discouraging people from better quality anything is always dodgy. Lower environmental impact vehicles probably cost more!) Here's to a (big) gas tax. The more you use, the more you pay. When Gov. Doyle rescinded the indexed gas tax before an election season is when he lost me.

[Russ]

First, it's a well known fact that global competitive pressures have been forcing most private sector companies to hold the line on total employee compensation for at least a decade. Contrast that to public sector employees that refuse to accept wage and benefit freezes. Public sector workers refuse to share in the economic pain that competing in a global economy has imposed on the entire world. That is unacceptable and I don't think private sector workers are going to put up with it much longer.

Second, there is specific job sector classification that accounts for many thousands of public employees. "Management, professional, or Related Occupation". The average salary for Wisconsin public employees in that job classification is $33.23. The private sector average for the same classification is $32.75. For that job classification public sector benefits are 50% higher than the private sector.

Data source: U.S. Bureau of of Economic Analysis and Labor Statistics.

The BLS data speaks for itself, total compensation, wages and benefits, for Wisconsin public sector workers are considerably higher than their private sector counterparts in the same job classifications.

Now please Paul, don't continue to insult the intelligence of all the private sector citizens in this state.

[LarryC]

One thing I have never understood is why private employees, who really want what public employees have (as far as benefits), want to take something good away from public employees? Why don't private employees demand the same benefits that public employees have? Even better, why not demand the same benefits that legislators have? I can only guess that employers, who don't want to pay for the benefits, have somehow contorted the whole argument so that private employees actually believe it is in their best interest to have poor benefits. In reality it is only in the employers best interest to not provide good benefits.