Economic recession has eroded tax bases, leading to under-funding and historic deficits. Listen carefully and you hear a key word over and over - 'discretionary.' Discretionary spending it the part of any budget that can be negotiated. Why should budgets be negotiated? Start at zero every year and there is nothing to negotiate. Give instructions to spend the money as they would their own, then again this has proven to be a bad idea. After all our current recessionary state is due to folks spending what they did not have.
After generations of spending nonexistent money, individuals and governmental entities from coast to coast are facing financial truths. Many lacked the necessary financial skills thus the current situation. Rampant spending has hurled us all into debating the financial crisis that should have never existed if spending had been controlled at all levels. Governments got use to spending what they did not have. Several school districts in this state floated bond elections that paid for items like uniforms, electronic devices, books, maps, band instruments, etc. The bond election became the 'credit card' for a number of school districts in this state. The life of most of these items will be exhausted by the time the bond is paid off. Exactly like a consumer 'credit card'.
After all this spending taxpayers have finally said enough! However, modest budget-cutting suggestions are condemned by those who have grown used to government bloated. The public school lobby is a live and well walking the halls of the state house in Austin. You hear the stuck-pig squeals of the public schools of this state who have no intention of weaning themselves from taxpayer-funded largess. Budget cutting discussions in Wisconsin had teachers abandoning kids and classrooms to swirl in anger at the Wisconsin statehouse. Caused sympathetic doctors to write phony medical excuses for the teachers so they would not be in violation of their collective bargaining agreements with regards to their absences from the classroom.
Permanently reshaping the financial landscape in taxpayers favor is something that has to happen if we wish a more vibrant future.
Monday, March 21, 2011
Friday, March 18, 2011
Paying for the sins of government leadership
Inept is term that comes to mind when listening to the issues in Wisconsin. What fools would give collective bargaining rights to public employees?
In 1906 and 1907 a report was conducted in Boston that detailed mismanagement in the city's government. The report is just as true today and applies not just to Wisconsin, but other governmental entities as well.
The report blamed the mayor and alderman (one could fill-in the blank with school board, commissioner's court, etc.) who, the report said, "appointed department heads who lacked technical qualifications, and employees, therefore, had no incentive to perform efficiently themselves." This appears to be the case in most governmental entities since they adhere to the 'good ole boy' code of employment and promotion. In the case of Wisconsin the bad teachers get to stay on board due to a clause in their collective bargaining agreement that prevents one from being dismissed from their job for in ability to perform.
Things really come to light when governmental entities (Texas school districts) have deficits, have exercised poor judgment with regards to financial investments and financial budgeting, and have unfunded pension liabilities. Lack of funds to pay for public sector pensions is becoming a lighting rod for angry taxpayers suspicious or mistrusting of government, their employees and union representatives.
Why are taxpayers so angry? First, pension deficits can be huge and significantly add to a budget deficit. Second, the decisions to challenge pension payments often involve public safety employees and teachers (taxpayers hate coming out against these groups of employees in most cases for they know the value of the service provided). Third, the most divisive, few retiring from private sector employment have a defined benefit pension like the public sector and are wondering why they have to pay for someone else's retirement. Most private sector employees have to pay for their own retirements.
In the 'old' days a good retirement plan offset lower wage paying jobs. However, in this day and age the low wage paying jobs in the public sector pay more than the wage paying jobs of the private sector. To help understand the retirement discontent by taxpayers perhaps a dollar and cents comparison is in order: average government worker is promised $2.85 per hour worked from his or her retirement plan, while the average private sector worker with a pension receives only $0.41 per hour worked. Public workers in Wisconsin have a sweet deal. Most of them put less than 1% of their pay into their pensions and 6% of the cost of health insurance premimums. Who is going to be on the lake fishing while enjoying retirement? Thus the disconnect and the discontent on behalf of taxpayers. Then you get a scenario like in Wisconsin and it all comes to light and taxpayers really get 'heart burn'. Especially when they realize there is a $2.44 difference in retirement benefit pay. Pension warfare is alive and well and politicians will be forced to deal with the issue now that taxpayers have taken their heads out of the sand.
In another report about public sector employment it was stated "many seem to be employed in the public sector because they were not strong leaders and do not have the leadership skills to make it into similar positions with private companies." The report was not addressing the public sector employees as individuals without necessary skills, merely pointing out the possible fact existed that governmental entities don't have the most capable individuals employed. The report might be on to something. Private industry seems to have more capability to solve problems with limited resources than public entities with the same available resources. One would think by now issues regarding education, public safety, etc. would be solved.
Public v. Private is a great debate.........
In 1906 and 1907 a report was conducted in Boston that detailed mismanagement in the city's government. The report is just as true today and applies not just to Wisconsin, but other governmental entities as well.
The report blamed the mayor and alderman (one could fill-in the blank with school board, commissioner's court, etc.) who, the report said, "appointed department heads who lacked technical qualifications, and employees, therefore, had no incentive to perform efficiently themselves." This appears to be the case in most governmental entities since they adhere to the 'good ole boy' code of employment and promotion. In the case of Wisconsin the bad teachers get to stay on board due to a clause in their collective bargaining agreement that prevents one from being dismissed from their job for in ability to perform.
Things really come to light when governmental entities (Texas school districts) have deficits, have exercised poor judgment with regards to financial investments and financial budgeting, and have unfunded pension liabilities. Lack of funds to pay for public sector pensions is becoming a lighting rod for angry taxpayers suspicious or mistrusting of government, their employees and union representatives.
Why are taxpayers so angry? First, pension deficits can be huge and significantly add to a budget deficit. Second, the decisions to challenge pension payments often involve public safety employees and teachers (taxpayers hate coming out against these groups of employees in most cases for they know the value of the service provided). Third, the most divisive, few retiring from private sector employment have a defined benefit pension like the public sector and are wondering why they have to pay for someone else's retirement. Most private sector employees have to pay for their own retirements.
In the 'old' days a good retirement plan offset lower wage paying jobs. However, in this day and age the low wage paying jobs in the public sector pay more than the wage paying jobs of the private sector. To help understand the retirement discontent by taxpayers perhaps a dollar and cents comparison is in order: average government worker is promised $2.85 per hour worked from his or her retirement plan, while the average private sector worker with a pension receives only $0.41 per hour worked. Public workers in Wisconsin have a sweet deal. Most of them put less than 1% of their pay into their pensions and 6% of the cost of health insurance premimums. Who is going to be on the lake fishing while enjoying retirement? Thus the disconnect and the discontent on behalf of taxpayers. Then you get a scenario like in Wisconsin and it all comes to light and taxpayers really get 'heart burn'. Especially when they realize there is a $2.44 difference in retirement benefit pay. Pension warfare is alive and well and politicians will be forced to deal with the issue now that taxpayers have taken their heads out of the sand.
In another report about public sector employment it was stated "many seem to be employed in the public sector because they were not strong leaders and do not have the leadership skills to make it into similar positions with private companies." The report was not addressing the public sector employees as individuals without necessary skills, merely pointing out the possible fact existed that governmental entities don't have the most capable individuals employed. The report might be on to something. Private industry seems to have more capability to solve problems with limited resources than public entities with the same available resources. One would think by now issues regarding education, public safety, etc. would be solved.
Public v. Private is a great debate.........
Wednesday, March 16, 2011
Earned Income Tax Credit
For years I have been hearing about this class shifting government program, so the other day when I was having my tax forms filled out at one of the local tax prep operations I decided to ask some questions about the EIC.
First question I asked of the tax prep individual is why the EIC box was not checked off on my form, and the answer "You do not qualify". Fair enough answer, but I wanted to know why I did not qualify. So I ask why do I not qualify? "You are retired". I then asked what if I am unemployed? "You might qualify if you had earned income". What is earned income? Received no real answer, so I hit the IRS website in search of an answer. Real winner here for I am more confused as to what earned income is now than before.
Any how the Earned Income Tax Credit program was first floated by the Nixon administration. Ronald Reagan dubbed it "the best pro-family, the best job creation measure to come out of Congress." Mind you both of these guys were from the conservative party known as Republican.
EIC is nothing more than a program to transfer wealth in this country. A bridge between the have and have nots one might say. In 2007, the U.S. Treasury paid out $49 billion to 25 million taxpayers. I dug deeper into what might happen with one who files a tax form for 2010 and this will be a possible result:
A single mother of two making $16,000 a year gets a $5,000 tax refund; if she earns $25,000 her windfall is $3,200. In either case it is a flat out gift to her from other taxpayers who earned higher wages. Absolutely a transfer of wealth program. Along with the additional benefits available to qualify for and most likely received I am poorer than she in the end.
Anyone need to put a retired person on their payroll? Guess I need to make $1.00 to qualify for EIC.
First question I asked of the tax prep individual is why the EIC box was not checked off on my form, and the answer "You do not qualify". Fair enough answer, but I wanted to know why I did not qualify. So I ask why do I not qualify? "You are retired". I then asked what if I am unemployed? "You might qualify if you had earned income". What is earned income? Received no real answer, so I hit the IRS website in search of an answer. Real winner here for I am more confused as to what earned income is now than before.
Any how the Earned Income Tax Credit program was first floated by the Nixon administration. Ronald Reagan dubbed it "the best pro-family, the best job creation measure to come out of Congress." Mind you both of these guys were from the conservative party known as Republican.
EIC is nothing more than a program to transfer wealth in this country. A bridge between the have and have nots one might say. In 2007, the U.S. Treasury paid out $49 billion to 25 million taxpayers. I dug deeper into what might happen with one who files a tax form for 2010 and this will be a possible result:
A single mother of two making $16,000 a year gets a $5,000 tax refund; if she earns $25,000 her windfall is $3,200. In either case it is a flat out gift to her from other taxpayers who earned higher wages. Absolutely a transfer of wealth program. Along with the additional benefits available to qualify for and most likely received I am poorer than she in the end.
Anyone need to put a retired person on their payroll? Guess I need to make $1.00 to qualify for EIC.
Monday, March 14, 2011
Robust and complacent thinking
The robust economy of the 90s and early 2000s provided no incentive for efficiency and cost savings in the maintenance of our governmental entities. As things 'hummered' along the tax money rolled into the vaults as fast as it could be collected. Once in the vault it was used to create niche projects, programs, etc. rather than address the issues related to maintenance of what was already up and running.
Without any regard for the fact that one day things may not be as robust Texas schools and governmental entities felt comfortable with their customary ways and lacked motivation to think outside the box and demand more for less. The good times brought with them a less-than-disciplined and less-than-efficient approach to asset and financial management. It's like these folks thought the funds would always be in the vault and the vault would continue to fill.
The robust days of past are gone and no one knows for sure when and if they will return. Time for all these governmental entities and schools to learn from a key lesson of the Great Depression - do more with less. The individuals who pay the taxes to keep your doors open have had their world turned upside down, and now it is time for your world to experience the same. After all it is only fair since you only exist at the expense of taxpayers.
In a recent editorial in the local rag by One Man's Opinion it appears as if the writer feels he is receiving a good return on his tax dollars with regards to education spending. It is the writers right to have such an opinion; however, one would be willing to bet that One Man has been in the workforce for a while and he has not worked along side a high school ONLY graduate in some time. Then again perhaps he has been given an opportunity to work along side one of the exceptional and this could cloud one's opinion of the system as a whole.
Several polls have been published and it depends upon which you encounter; however, the one most striking at a dinner conversation the other night while in Seattle was regarding a poll that stated only 30% of high school graduates were college ready. Wished I had asked what organization was responsible for the poll for this writer has seen polls that show college readiness ranging from 40% to 60%. Most if not all know that polling is a manageable exercise to achieve whatever end result one may desire.
Before you buy off and take sides on the budget cut debates perhaps one should consider the complacent thinking theory. Individuals became complacent in their thinking with regards to their individual budgets when things were robust. The powers that be have informed us that this is one of the main reasons for our economic downfall. Individuals lived on credit and the bills came due and many could not pay. Stimulus funds equalled credit extended to schools and governmental entities and two years later the bills have come due.
Robust has a tendency to make one complacent - it is historical.
Without any regard for the fact that one day things may not be as robust Texas schools and governmental entities felt comfortable with their customary ways and lacked motivation to think outside the box and demand more for less. The good times brought with them a less-than-disciplined and less-than-efficient approach to asset and financial management. It's like these folks thought the funds would always be in the vault and the vault would continue to fill.
The robust days of past are gone and no one knows for sure when and if they will return. Time for all these governmental entities and schools to learn from a key lesson of the Great Depression - do more with less. The individuals who pay the taxes to keep your doors open have had their world turned upside down, and now it is time for your world to experience the same. After all it is only fair since you only exist at the expense of taxpayers.
In a recent editorial in the local rag by One Man's Opinion it appears as if the writer feels he is receiving a good return on his tax dollars with regards to education spending. It is the writers right to have such an opinion; however, one would be willing to bet that One Man has been in the workforce for a while and he has not worked along side a high school ONLY graduate in some time. Then again perhaps he has been given an opportunity to work along side one of the exceptional and this could cloud one's opinion of the system as a whole.
Several polls have been published and it depends upon which you encounter; however, the one most striking at a dinner conversation the other night while in Seattle was regarding a poll that stated only 30% of high school graduates were college ready. Wished I had asked what organization was responsible for the poll for this writer has seen polls that show college readiness ranging from 40% to 60%. Most if not all know that polling is a manageable exercise to achieve whatever end result one may desire.
Before you buy off and take sides on the budget cut debates perhaps one should consider the complacent thinking theory. Individuals became complacent in their thinking with regards to their individual budgets when things were robust. The powers that be have informed us that this is one of the main reasons for our economic downfall. Individuals lived on credit and the bills came due and many could not pay. Stimulus funds equalled credit extended to schools and governmental entities and two years later the bills have come due.
Robust has a tendency to make one complacent - it is historical.
Friday, March 11, 2011
Budget cuts - Questions
Who should take care of people in need? Should it be the 'the government,' or charitable organizations, or 'the neighborhood'?
And if these entities decline to accept the obligations you have defined for them, what then?
And if these entities decline to accept the obligations you have defined for them, what then?
Sunday, March 6, 2011
More stimulus trivia
Of the American Recovery and Reinvestment Act two years ago, approximately $100 billion went to schools. Folks that is $100 BILLION, and not one school can show much of a return on the federal dollars invested on education under the act. Anyone ever hear the term 'black hole'? Public schools are a 'black hole'.
The Texas Education Agency has conducted random audits of the funds received by local districts and has determined that most of the funds were not misused. Kind of hard to misuse funds when they had no real targets to hit in the first place. In 2009 one school district in Texas apparently hired 290 additional employees with stimulus funds. It is now 2011 and the same school district recently approved a reduction in force plan of 290 employees. This particular school district in 2009 received $105 million of the $100 billion of stimulus funds.
Texas received $6.42 billion in stimulus funds. It appears that a great deal of the stimulus funds received by Texas was used for educator in-service training opportunities at some really nice resorts.
We wonder why teacher lay-offs are a possibility.
The Texas Education Agency has conducted random audits of the funds received by local districts and has determined that most of the funds were not misused. Kind of hard to misuse funds when they had no real targets to hit in the first place. In 2009 one school district in Texas apparently hired 290 additional employees with stimulus funds. It is now 2011 and the same school district recently approved a reduction in force plan of 290 employees. This particular school district in 2009 received $105 million of the $100 billion of stimulus funds.
Texas received $6.42 billion in stimulus funds. It appears that a great deal of the stimulus funds received by Texas was used for educator in-service training opportunities at some really nice resorts.
We wonder why teacher lay-offs are a possibility.
Thursday, March 3, 2011
Public v. Private and SOB stories
This was forwarded to me recently and I found it interesting. Individuals have to come to their own conclusions with regards to the public v. private issue. I like the way whoever wrote the piece emphasis "MAY POSSIBLY" for at this point no one really knows what the outcomes will truly be. I am willing to bet it may not be as bad as most are predicting with regards to state funding. Notice I stated state funding for the federal government funding that schools have come to depend is a whole separate matter.
"Our GOVERNMENT SCHOOLS have been giving us non-stop ... SOB STORIES ... about their ... IMMINENT BUDGET CUTS ... . I thought they were administered by Professionals who got the BIG BUCKS to make the tough decisions ... ???
EVERY DAY the public is told:
(1) How many Government School teachers ... "MAY POSSIBLY" ... get laid-off and
(2) How many Government school buildings ... "MAY POSSIBLY" ... be closed and
(3) How many Government School students ... "MAY POSSIBLY" ... be ruined for life ... .
PLEASE compare this CRY BABY BEHAVIOR with the HEROIC BEHAVIOR of our PRIVATE SCHOOL employees ... . I have NOT heard one SOB STORY from our Private School employees, and they are living in the same depressed economy."
"Our GOVERNMENT SCHOOLS have been giving us non-stop ... SOB STORIES ... about their ... IMMINENT BUDGET CUTS ... . I thought they were administered by Professionals who got the BIG BUCKS to make the tough decisions ... ???
EVERY DAY the public is told:
(1) How many Government School teachers ... "MAY POSSIBLY" ... get laid-off and
(2) How many Government school buildings ... "MAY POSSIBLY" ... be closed and
(3) How many Government School students ... "MAY POSSIBLY" ... be ruined for life ... .
PLEASE compare this CRY BABY BEHAVIOR with the HEROIC BEHAVIOR of our PRIVATE SCHOOL employees ... . I have NOT heard one SOB STORY from our Private School employees, and they are living in the same depressed economy."
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