Question No. 2: Gregg Underheim Response
Fairness dictates that there be a correlation between the level of pay of Wisconsin’s private sector employees and Wisconsin’s public sector employees. The taxes of private sector employees pay for wages, health care benefits and pension benefits of Wisconsin’s public sector employees. Therefore, it is important for both private and public sector employees that we enjoy a vibrant economy in Wisconsin.
When the economy turns down, as it recently did, many private sector employees were laid off or lost their jobs entirely. Public sector employees are not frequently laid off. However, some may lose jobs when government revenues are affected by a weak economy. Additionally, public sector jobs may be eliminated when the person who filled a specific job retires.
Currently there are mechanisms in place to control the rate of growth of public sector employees. The most widely known is the QEO provision which controls the rate of growth of teacher compensation. It came about because for many years WEAC (the teacher’s union) was able to successfully manipulate the mediation/arbitration laws and receive compensation increases at a rate well above inflation. I support maintaining the QEO provisions currently in law. I would point out that Mr. Hintz has promised WEAC that he would support eliminating that law.
Concerning public employee health care benefits, I do support finding ways to control those costs. The state of Wisconsin has done an excellent job of controlling cost increases recently. Their approach was to create three different tiers of health care choices for state employees. Each tier was based on the cost of health care providers in that tier. The premiums that state employees paid were determined by the tier of the plan which they chose. I support this approach.
Additionally, the state has formed drug-purchasing pools for state employees. Those pools are open to private sector businesses also. I support continuing this initiative and expanding it to individuals, too.
Furthermore, allowing municipalities to form larger pools, in different ways must be considered. Under current law there is a pool for municipalities; however, other forms of pool organization should be considered.
Finally, I do not support additional pension benefit increases for public employees. The Wisconsin Investment Board invests money for public employee benefits. Frequently, when the economy is good there seems to be a surplus of money in the fund. However, when the economy turns down, that “extra” money evaporates. Unfortunately, when the economy is good there is pressure to increase pension benefits. All too often the legislature complies. Then the economy turns down; the stock market falls; and the taxpayer is stuck with the obligation for pension benefits increases. Currently many units of government are stuck with unfunded pension obligations, which they will take from the taxpayer in the form of higher taxes.
When the economy turns down, as it recently did, many private sector employees were laid off or lost their jobs entirely. Public sector employees are not frequently laid off. However, some may lose jobs when government revenues are affected by a weak economy. Additionally, public sector jobs may be eliminated when the person who filled a specific job retires.
Currently there are mechanisms in place to control the rate of growth of public sector employees. The most widely known is the QEO provision which controls the rate of growth of teacher compensation. It came about because for many years WEAC (the teacher’s union) was able to successfully manipulate the mediation/arbitration laws and receive compensation increases at a rate well above inflation. I support maintaining the QEO provisions currently in law. I would point out that Mr. Hintz has promised WEAC that he would support eliminating that law.
Concerning public employee health care benefits, I do support finding ways to control those costs. The state of Wisconsin has done an excellent job of controlling cost increases recently. Their approach was to create three different tiers of health care choices for state employees. Each tier was based on the cost of health care providers in that tier. The premiums that state employees paid were determined by the tier of the plan which they chose. I support this approach.
Additionally, the state has formed drug-purchasing pools for state employees. Those pools are open to private sector businesses also. I support continuing this initiative and expanding it to individuals, too.
Furthermore, allowing municipalities to form larger pools, in different ways must be considered. Under current law there is a pool for municipalities; however, other forms of pool organization should be considered.
Finally, I do not support additional pension benefit increases for public employees. The Wisconsin Investment Board invests money for public employee benefits. Frequently, when the economy is good there seems to be a surplus of money in the fund. However, when the economy turns down, that “extra” money evaporates. Unfortunately, when the economy is good there is pressure to increase pension benefits. All too often the legislature complies. Then the economy turns down; the stock market falls; and the taxpayer is stuck with the obligation for pension benefits increases. Currently many units of government are stuck with unfunded pension obligations, which they will take from the taxpayer in the form of higher taxes.
posted by Miles Maguire at 11:56 AM
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