Government's Billion Dollar Word
By Christian Schneider
In the world of linguistics, words actually mean things. In many cases, tacking one qualifying word on to another can completely change the meaning of the original word being used. For instance, everyone enjoys a juicy apple. But one would be hard pressed to find someone that enjoys a “horse apple” in the same way. We often associate “wind” with a cool, gentle breeze. But if someone “breaks wind,” it’s liable to clear out your dinner party. If someone offers you “water,” they might think you’re thirsty. If someone offers you “waterboarding,” then you should immediately begin digging a getaway tunnel.
Even state government has its own language that often employs such qualifiers to its own benefit. Under the Wisconsin Constitution, the state may not run a “deficit,” meaning the books have to be balanced on a cash-in, cash-out basis. Yet the state continually runs a “structural deficit,” meaning its government merely pushes off much of its spending into future fiscal years, leaving taxpayers to pick up the tab down the road. In the case of the 2009-2011 budget, Governor Doyle’s acceptance of the word “structural” is worth about a billion and a half dollars to the taxpayer.
Conversely, in the cases where it helps to grow government, meaningful adjectives are cast aside to allow for profligate spending. Take, for instance, the way we fund state government employee retirement benefits.
Under the current Wisconsin Retirement System (WRS), each state government employee earns a taxpayer-funded employer contribution of roughly 5% of their salary every year. These same employees are expected to kick in an annual “employee contribution” of a similar amount – but in actuality, state government pays each employee’s individual contribution for them. In 2007, 99.6% of all contributions made to the WRS – both the “employee” and “employer” portions - were paid by state taxpayers.
In short, the “employee contribution” is nothing of the sort - there’s a better chance of seeing a “clay pigeon” eating birdseed than of seeing a government employee contributing a cent to their own retirement benefits. In 2007, these contributions combined cost taxpayers $393 million, and that’s just for employees at the state level.
Several weeks ago, Governor Jim Doyle announced that the state’s fiscal situation is going to much worse than he had anticipated. Lagging tax receipts and previous fiscal mismanagement could very well drive the state deficit up by $1.6 billion. As a remedy, Doyle suggested state employee cuts and furloughs, as well as funding reductions for school districts and local services. Many local governments are also looking at cutting staff and services.
Yet to date, no one has proposed an obvious budget remedy – merely making the term “employee contribution” mean exactly what it says. Requiring the WRS’ 263,000 participants to invest just a small amount of their money in their own retirement system could save state and local governments in the neighborhood of $1.3 billion over the upcoming biennium. Consequently, these governments could eliminate many of the program cuts that they are warning would be so damaging. Children would continue to learn, fires would continue to be put out, and garbage pickup would proceed on schedule if governments took the term “employee contribution” literally.
According to the state Department of Workforce Development, Wisconsin’s private sector lost 128,000 jobs in the last year, while government jobs actually increased by 5,700. To this point, the only sacrifice made by state employees has been to avoid running over all the private sector unemployed people wandering the streets on their drive to work.
Putting the “employee” back in “employee contribution” can go a long way to leveling the playing field between the state’s public and private employers, and eventually save the jobs of many of those government employees that will inevitably resist such a plan.
In 2003, Governor Doyle said he would be “open to every solution” that would allow him to fix the state’s shortfall without taxes. He could start by making the term “employee contribution” mean something again.
-June 1, 2009