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Archive for the tag “private sector”

EDUCATION TEXAS- A TOTAL DISASTER

Just when I thought no one could outspend Obama, this article was sent to me by a daughter who gets a newspaper. Living in rural Texas limits ones access to daily newsprint. Can anyone with any common sense explain to me the logic associated with this unbelievable fiasco, other than stupidity? The Texas education program is beyond stupid. Our Governor, legislature and the Texas Education Agency have created so many unfunded programs to require more teachers, then cut the budgets so success is impossible. I am now convinced that Washington D.C. may have more incompetents but Austin Texas has to have more per capita. I hope this reaches as many Texans as possible. CB

Texas Taxpayers Finance Formula One Auto Races as Schools Dismiss Teachers

By Darrell Preston and Aaron Kuriloff

Texas, which may balance its budget by firing thousands of teachers, plans to commit $25 million in state funds to Formula One auto racing each year for a decade.

Four years after motorsports’ most popular series left the U.S., Texas investors including Clear Channel Communications Inc. co-founder B.J. “Red” McCombs are building a 3.4-mile (5.5-kilometer) track to bring the event to Austin. Comptroller Susan Combs has agreed to pay $25 million for races through 2022, a subsidy questioned by critics and lawmakers as the state cuts costs to close an estimated $15 billion two-year deficit.

“I don’t understand why 25 people in Austin could not put up $1 million each if they thought this was a good opportunity instead of the state making a $25 million commitment,” said Senator Dan Patrick, a Houston Republican. “The developers should find the money through private sources.”

As many as 100,000 teachers in Texas may be fired because of spending cuts to cope with the state’s budget crisis, according to Moak Casey & Associates, an Austin-based education consultant. For $25 million a year, the state could pay more than 500 teachers an average salary of $48,000.

“I have to wonder why the state of Texas is all over funding for this racetrack and not the school-funding crisis,” said Ewa Siwak, 44, who teaches German in the Austin Independent School District and whose job at Bowie High School is being cut. “Tax dollars for education should be a higher priority.”

No Traction

Formula One races have failed to gain traction previously in the U.S. Since the 1970s, the series has been hosted by Long Beach, California, as well as Las Vegas, Detroit, Dallas, Phoenix and, most recently, Indianapolis. The races there ended in 2007 on declining attendance.

With 20 million Texans within 250 miles of Austin and a growing Formula One fan base in Mexico, the city’s annual race will be successful, Steve Sexton, president of track developer Circuit of the Americas LLC, said in a telephone interview.

By building the Circuit of the Americas track, backers aim to attract automakers such as Fiat SpA (F)’s Ferrari Group, Renault SA (RNO) and Daimler AG (DAI)’s Mercedes that compete in Catalonia, Shanghai and Istanbul. Racing-team owners include U.K. billionaire Richard Branson and Indian liquor magnate Vijay Mallya. Races from Montreal to Sao Paulo draw thousands of fans, including those paying $1,200 apiece for a seat in Monaco’s grandstands.

Each race in Austin is projected to generate enough tax revenue to recoup the $25 million from a state Event Trust Fund pool, according to Allen Spelce, a spokesman for Combs, a Republican. He said the plan calls for putting the $25 million into a revolving account for paying annual event-related costs.

$250 Million Subsidy

If the financing works as projected, the decision will use $250 million in state tax revenue for the races over 10 years.

“With places struggling, spending that much money on an essentially one-off event is tough to do,” said Michael Cramer, a former president of baseball’s Texas Rangers and hockey’s Dallas Stars who runs the sports and media program at the University of Texas at Austin. “It’s a very high cost of entry.”

Texas, like other states cutting budgets for schools, nursing homes and basic services, uses economic-development spending to bring in jobs and seed growth. That often involves giving up tax revenue generated by a project to pay part of the cost. New Jersey is providing $200 million of tax-increment financing to help develop the American Dream in the Meadowlands, which will be the biggest mall in the U.S. when it opens.

“I’m not sure of the wisdom of using tax dollars to fund a racetrack,” said Siwak, the Austin teacher. “They’re giving so much tax dollars away I don’t think they could make it up with the racetrack.”

Economic Outlook

Combs’s office estimates a Formula One race in Austin next year will spur $300 million of spending, Spelce said in an e- mailed statement. Construction of the $242 million track, which has begun, is projected to add 1,300 temporary jobs and pump $400 million into the economy. The venue will seat 120,000 fans.

The state isn’t investing in the track development, Spelce said in the e-mail. He said the Legislature authorized the use of the money from the Major Events Trust Fund in 2009.

“The funding generated by the activity offsets the state’s investment,” Spelce said. “It is important that the state continue to generate new economic activity to ensure that Texas continues to grow.”

Formula One racing attracts the wealthy who sponsor teams and draws fans from around the world, said Zak Brown, chief executive officer of Just Marketing Inc., an agency based in Zionsville, Indiana. JMI, as it’s known, focuses on motorsports.

Sport for Wealthy

“It’s a lifestyle of the rich and famous,” Brown said in a telephone interview. “The whole industry has a lot of wealth around it, a lot of politics.”

The cost of holding races has made it too expensive for sponsors without a public subsidy, said Mark Cipolloni, president of AutoRacing1 Inc. in Robbinsville, New Jersey. The company runs a website that covers motorsports.

“It isn’t cost-effective for an independent race,” Cipolloni said. “Most races in major cities wouldn’t be held without public support.”

The state’s $25 million is being paid to London-based Formula One Management Ltd. to hold the race in Austin, Sexton said. Formula One, owned by London-based CVC Capital Partners Ltd., a private-equity firm, is run by Bernie Ecclestone, the chief executive officer of the series.

“It’s going to Mr. Ecclestone and Formula One to get them to bring the event here,” Sexton said.

Outside Intended Use

Paying such a fee goes beyond the intended use of the state fund, which was set up to support bringing annual events to Texas by rebating increased taxes they generate to cover costs including security and traffic control, said Richard Viktorin, an accountant with Audits in the Public Interest. The Austin- based group opposes government support for the races.

In the past, the event fund has been used to subsidize professional football’s Super Bowl championship game, college basketball’s Final Four tournament and business meetings such as a Chick-fil-A Inc. convention.

“It’s off-balance-sheet financing for a rich man’s sport,” Viktorin said. Combs is “supposed to be a fiscal officer for the state. She’s not controlling that fund.”

Formula One participants and sponsors have wanted to return to the U.S. since 2007, when the last race was run in Indianapolis, Ecclestone said in a telephone interview. Indianapolis began hosting the event in 2000. Interest waned after defective tires led most entrants to withdraw in 2005.

U.S. Venue

“No one wanted to hold it,” Ecclestone said, until the Austin promoters stepped in. “Carmakers and team sponsors are also keen to have a race in the U.S. to help leverage their backing of teams.”

Formula One’s popularity has declined in the U.S., partly because there haven’t been any races in the country in recent years and partly from a lack of successful American drivers since Eddie Cheever and Mario Andretti, JMI’s Brown said.

“It’s moved around,” said Brown, who praised the Austin track’s design. “There was a 10-year period where there was no Grand Prix,” or Formula One race, in the U.S, he said.

The Austin event is expected to benefit from its proximity to Mexico and South America, where the series has grown in popularity, said Ecclestone. Austin’s city government also may invest $4 million a year in tax revenue to facilitate the event, the Austin-American Statesman reported. The city hasn’t been asked to provide any incentives, said Matt Curtis, a spokesman for Mayor Lee Leffingwell.

Tourism ‘Booster’

“It’s going to be a major booster in our convention and tourism industry,” Curtis said. The “return is very significant.”

Formula One races won’t be the track’s only use. Developers have booked international championship motorcycle races, called MotoGP, starting in 2013, Sexton said. He said they’re also trying to bring in concerts, conferences and other events.

Austin and the state are unlikely to recover their investment directly, Cipolloni said. However, the race will expose the city to a wide audience of tourists and executives that could help recruit companies and create jobs, he said.

“They won’t collect tax money equal to the $25 million” from the state, Cipolloni said. “It’s just a way to get exposure for the city.”

Sexton, a former president of Churchill Downs Inc. (CHDN)’s horse track in Louisville, Kentucky, which hosts the Kentucky Derby, agreed that events at the Austin circuit will do more than just generate new tax revenue.

“It will bring in an affluent audience that has never been to the city,” Sexton said. “It should have a substantial economic impact.”

To contact the reporters on this story: Darrell Preston in Dallas at dpreston@bloomberg.net; Aaron Kuriloff in New York at akuriloff@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

Thanks Lisa

EDUCATION TEXAS- A LOCAL ADVANTAGE?

For those who have children or grand children in K-12 schools, let me encourage you to find out if your if this described advantage exist where you live. It is obvious to me that the Texas Legislature uses politics to provide educational variables to pacify themselves and the appointed and elected Boards to favor certain school districts. Nationally the US Department of Education uses 90% of their billions to provide social justice for the minorities and aliens. Just read the itemized 92 page budget if you doubt my words. If the states and the federal governments would admit that a local program like the one described below would find the right path for aligning children’s capability with a mixture of academics and vocational programs necessary to prepare them for their place in society. We may all be created equally but we all do not fit into society equally. It is time for the people to stop this waste of money and demand change. CB

Article

“First let me apologize to Dr. Lana Comeaux, whose name I misspelled in the last article. I have lived in Sabine county, very close to Louisiana, for nearly 20 years. When Dr. Pearson suggested I meet Ms. Como, my age drove me to associate the name to Perry when I took notes.”

I had the pleasure to visit with Dr. Comeaux on Monday April 11th at the Sabine Area Career Center in Pineland, Texas. I had no conception of what a great advantage was available to the citizens of Sabine and San Augustine counties.

The center has several specialized classrooms to conduct classes and a welding facility with modern equipment and seven individually vented weld stations. The computer classroom is well equipped and is available for students use in searching the internet for assignments. Classrooms are available to permit students to participate and interact by video with some specialty classes being conducted at Angelina College in Lufkin.

The Career Center also has a large meeting room that is available for community meetings and special events. Currently this room is utilized for programs like Dance, Taekwondo, Photography, Flower Arranging and Computer classes. Another program available is support meetings for parents with autistic children.

In addition to the Angelina campus, some of the classes are conducted at Hemphill ISD and Jasper ISD where science labs or other specialty facilities exist. I have another meeting scheduled this April 21st with Dr. Pearson and Dr. Comeaux to view the Hemphill laboratories and other specialized facilities.

Some of the two year college credit courses are; English, World History, US History, Texas History, Sociology, Algebra, Chemistry, Biology etc. The Career Center also provides Community Service Programs that include; Phlebotomy, Certified Nurse Asst., Medical Asst., GED Preparation, and Welding. Future planning includes courses for EMT, LVN, Police and Fire careers, Automotive and A/C & Repair.

All of the programs are available to students at Hemphill, West Sabine, Brookland, Broadus and San Augustine school districts.

Citizens of the area are fortunate to have this facility. It does require the five school districts to work closely with Dr. Comeaux. This includes a student’s needs assessment and scheduling classes to permit the students to be able to take the Angelina programs. Each of the five school districts provide either the superintendent or a principal to serve on the on the Board of Directors.

The program is totally funded by grants, donations and private foundations. Currently the Beaumont and TLL Foundations provide significant funding for the Center. No state or local taxes are appropriated for the center. This is an unusual advantage for both the students and parents of Sabine and San Augustine counties.

A student can take up to twenty classes which can result in roughly 60 credit hours if they take full advantage of the program. Students are eligible after their sophomore year to start in that summer and can take 2 courses each semester. There are two summer sessions in addition to the regular fall and spring school semesters. This means that if a student is academically driven, they can start their college or university education as a junior. For those families with funding limitations, a high school student can obtain an Associate’s Degree in the summer after they graduate from high school.

Every parent should be aware of this advantage. The economic distress and the mystery of what the politicians in Austin and Washington D.C. will dream up next, demands that we prepare today’s students who will have to pay for the debacle.

Clyde Brewer

PUBLIC SERVICE UNIONS & DEMOCRATS

 

I created this blog for people who rely upon the main stream media for news on current events. The lack of honest reporting by the media is a shame because an afflicted moron understands you can’t keep printing more money to fund programs that are disasters. Sharing facts and history will hopefully wake up enough voters to stop the runaway train wreck.   

Wisconsin’s looming $3.6 billion 2012/13 budget deficit has thankfully generated nationwide concerns for why we have unionized tax paid employees. It is a fact that private sector taxpayers who fund these unions are demanding that Washington operate with a “balanced Budget”, just like the States have to do by law. 

Wisconsin appears close to imposing economic common sense on the state’s public employee unions by capping their wages, increasing contributions to healthcare/pension plans and eliminating collective bargaining.

Most vocal among Wisconsin’s 300,000 public employee union members are protesters from the 98,000-member teacher’s union. They are now paid, on average, more than $75,000 in wages and benefits. Wisconsin parents should be protesting against these teachers, who are motivated more by tenured job security, than improving student performance.

The latest federal education data reveals less than 40 percent of 8th grade students in the state’s government schools meet basic requirements for math and reading performance. The fact is the state spends more per student ($10,791) than any other Midwest state. In Milwaukee, the average teacher compensation package exceeds $100,000, the graduation rate is under 50 percent and for black children it is below 35 percent. I can’t find a plan to improve this dismal performance to evaluate.

Please read the next sentence slowly.” Government unions face no competition, so there is no impetus to produce or perform at a higher level. To call government union negotiations “bargaining” is insane! 

[Public-sector] unions are government organized as an interest group to lobby itself to grow. Unions use dues extracted from members to elect politicians who favor the unions. Governments are not expected to make a profit, but they need to understand the process. Government sits on both sides of the table in cozy ‘negotiations’ with unions. I assume that you are aware that the politicians I refer to are 99% democrats.

During the 2010 election cycle, the American Federation of State, County and Municipal Employees spent $87.5 million in union dues for the sole purpose of electing Democrats. More millions more went to “advocacy campaigns” that skirt the law to promote Leftist candidates. I don’t get a warm fuzzy feeling this helped the taxpayer.

Our business genius, Barack Hussein Obama, whose most vociferous support comes from unions, offered this predictable partisanship: “Some of what I’ve heard coming out of Wisconsin, where they are just making it harder for public employees to collectively bargain, generally, seems like more of an assault on unions.” The federal prisons are full of individuals convicted of fraud but Congress, over the years, has legalized graft for themselves and the union supporters.

The government union game hasn’t always been rigged. Government unions didn’t even exist until 1959, when the state of Wisconsin granted public employees “collective bargaining rights.”  Even Franklin Roosevelt understood that permitting government employees to establish unions constituted a corruption of public trust.

Since 1960 the Democrat Party has supported government unions with even more vigor than its support for non-government unions, and consequently, ignored the best interest of the people with their own self-interests. Today 24 states grant “collective bargaining rights” to government employee unions, and the resulting breach of public trust is evident in each of those states, particularly in education. My state, Texas, is a “Right to Work” state where union membership is not mandated. A future blog will explain how Texas teachers contribute to and run their own retirement system. 

In 1979, Jimmy Carter re-established the U.S. Department of Education. The department’s mission was, ostensibly, to promote student achievement in preparation for global competitiveness. Yet, since its formation 32 years ago, student achievement compared to other nations has declined.  In fact, the Department of Education reported that American students when rated with the 32 largest industrial nations ranked 17th in math, 21st in science and 32nd in reading. Wow, what an improvement.

Unions understand the strategic impact of the battle now underway in Wisconsin. “If we lose in Wisconsin, it’s going to be a domino effect,” proclaimed Teamster John Hennelly. “This is just the opening salvo in a war.” Democrats also know this battle is critical to the perpetuation of political dynasties.

Rep. Michael Capuano (D-MA), who decried our nation’s heated political rhetoric in the wake of the Tucson shootings, had this advice for the union protesters, “I’m proud to be here with people who understand that it’s more than just sending an email to get you going. Every once and awhile you need to get out on the streets and get a little bloody when necessary.” I guess Obama’s plea for civility was only directed to the tea party?

Hopefully the new House majority in Washington and all 24 States without right-to-work laws will take a cue from happenings in Wisconsin and stop the flow of money to maintain government employee union benefit programs.

Everyone take a deep look at who actually benefits from Obama/Reid/Polosi “shovel ready” projects.

TEACHER/UNION FACTS-WISCONSIN

WISCONSIN-TEACHER-UNION FACTS

When you suspect that something smells a little funny in any union activity, just follow the money. Unions preach that trusts and monopolies are a by-product of big business and must be evil and bad. It would be wonderful to get the Wisconsin Education Association Council (WEAC) to explain the facts that should be interesting to every American taxpayer. WEAC is a “union” that is affiliated with National Education Association (NEA) and their website says they represent 98,000 educators in the State of Wisconsin.

WEAC has a vested interest in fighting the proposal to strip the unions from collective bargaining rights. In 2009 WEAC collected over $25,000,000.00 from teachers. If the proposed changes are passed by the legislature, the state will no longer have to deduct the union dues from the teacher’s paychecks. Also union members will not be obligated to pay union dues.

If you dig a little deeper the primary reason WEAC is so distressed is more obvious. The proposed legislation will have a negative financial impact on the WEA trust. The WEA Trust is owned and managed by WEAC. This trust is responsible for managing teacher’s benefits and provides the insurance for each school district. These benefits are contracted with individual school districts. The pressure from the teachers, who own the trust, is so intense it is nearly impossible for the school board to buy cheaper insurance on the competitive market.

WEA has a net worth of $316,000,000.00 and a team of twelve administrators all receiving total compensation exceeding six figures per year.

Once they pressure a school district to buy their insurance, it becomes nearly impossible to refuse to renew regardless of rates. If the district tries to change, WEAC takes it to arbitration and with their political power seldom lose a case.

The WEA business practices also prohibit any competitor from reviewing prior claims which makes it impossible for a competitor to estimate accurate costs history.

Some 15 school districts have severed buying from the WEA Trust and it was reported that the savings were over six figures in the first year. But even here there was another pressure that emerged. To reduce the resistance they were forced to share the insurance savings they made with their local union officials, usually in the form of salary increases.

Now you might know why the teachers and unions are so distressed in fighting the Wisconsin Governor and the brave Representatives/Senators. These folks are trying to bring common sense changes to help the taxpayer.

It is a shame that “Teachers” have placed themselves above the children of Wisconsin. Using “Near Bribery Tactics” to fatten their own pockets is sad. More to follow tomorrow.

C Brewer

UNION DISASTERS

 

 Before the Wisconsin debacle that has dominated the recent news, my interest and knowledge about “Unions” was limited to the private business sector. I am fully aware that “Unions” have created the loss of manufacturing jobs that plague the country and why we have to import most of the consumer product we buy today. When you couple “Union” pressured trade barriers with the regulatory pressure of the “Tree huggers”, we have made conducting business in America nearly impossible. I have created businesses in Canada and the United States and without a doubt the Canadian government is far more business friendly. They actually help you get started and survive.

The “Wisconsin Disaster” unveiled another “Union” situation that has been off the radar since Reagan fired the air traffic controllers a long time ago. Unionization of government employees is one of the dumbest things I have seen evolve in my 80 years as an American. Can you just imagine that as this practice expands, we could see the “Unionization” of Congress, the Judicial and Executive branches of American government?

 We have some union type demands already in place like the lifetime terms for Federal Judges and the Supreme Court (tenure). There are no measurements of performance and they can’t be terminated. Congress uses seniority (tenure) as the basis for power and committee appointments. Thank God they can be terminated as we witnessed last November.

 With Obama’s passion for European style Socialism, visualize the potential of “Unionizing” the Executive branch of government. The President and his army of czars could go on strike for better pay and fringe benefits. Who could stop them? What would happen if the Supreme Court decided to strike? If Congress went on strike and refused to function, who could stop them? I could drive you insane with the possibilities of what an uncontrolled government could do. If you wish to see what idiots who mesmerize the populace can do, read what Chavez has done in Venezuela. See how he used the unions to get elected and gain dictatorial powers. Why can’t this happen here? 

Before you accuse me of insanity, look at what is happening in the real world today. All democratic State Senators in Wisconsin left the State to avoid doing state business. The Governor has not been able to get them to return. The media legal eagles have stated that there is no law being broken and no one has the power to arrest them for anything.  

I would like to say that if a quorum of Congress were to do the same thing, it would be tragic. Unfortunately it could probably be an improvement over the idiotic regulations and Obamacare they raced to impose before the last election. Congress has allowed the Executive branch to run wild for over two years. If the Environmental Protection Agency (EPA) alone is not abolished soon, we just think energy prices are high today. Locally the price for gasoline has jumped about 9% in the last week. Coupled with out of control spending, we are watching America destroyed from within. Our current government in action at all levels is like watching cartoons. 

I am now compiling data and facts of what “Unionization” of the teachers in Wisconsin has cost the citizens. The questionable legality of how they are provided insurance alone will amaze you. The teachers own the insurance company and collective bargaining is how they have screwed the taxpayer. Stay tuned for a series on public service unions nation-wide.

C Brewer

 

 

 

WHY US MANUFACTURING HAS VANISHED

I HOPE EVERYONE IN AMERICA WATCHES THIS VIDEO THAT WAS MADE BY AMERICANS IN BRAZIL. THE DEMOCRATS AND UNIONS BLAME IT ON BUSINESS. THE GOVERNMENT IS THE ONLY BUSINESS THAT DOES NOT HAVE TO MAKE A PROFIT. FOLKS THIS IS NOT ROCKET SCIENCE, IT’S CALLED COMMON SENSE 101.  C. BREWER
 
  This is fascinating. If you watch, listen closly to the very last couple of sentences.   
 
This is a short video of a new Ford plant in  Brazil . One look at this and you will be able to understand why there will probably never be another assembly plant built in the USA
It will also point out why more assembly plants will go offshore
Listen to the ending and you will see why auto-making is destined to fail in the US .
 
Thank you UAW…
 
    

PUBLIC VS PRIVATE RETIREMENTS

 

Rather than try to paraphrase this article I have included the entire thing. I wish to call your attention to the third paragraph that provides a way to let you see what your benefits you would be entitled to if you had worked for the government. I have encouraged every member of my family, and anyone else that will listen, to seek employment by a government agency as fast as they can because the “Royalty” class has now reached every level of our government. Employment by the government is the safest way to survive for the next 100 years. It will take that long to adjust the system.  C Brewer 
 
 
“Defenders of public employee pension systems often make the case that pension benefits are not all that generous. The outrageous cases you see on the news — Long Island police retiring in their 40s with pensions in excess of base pay, administrators “retiring” with six-figure pensions and then going back to work with another government agency, one ex-FDNY firefighter running marathons on his $86,000 “disability” pension — are the exceptions, they say.

The data, however, tells a different story. According to the Census Bureau, the average New York retiree receiving a corporate or union pension — a retiree from the private sector — was receiving an annual benefit of $13,100 in 2009. For state and local government retirees, that figure was more than twice as high: $27,600. And that average figure includes retirees who were part-time workers or only spent part of their careers in government; full-career retirees often do far better.

To understand what sort of public pension you might be eligible for, the Empire Center for New York State Policy has created a Pension Calculator, available at nypensionbomb.org. Simply enter your age at retirement, years worked and final average salary — typically, the average of your wage earnings in your last three years worked — and you can see what benefit you would be entitled to, if you were lucky enough to work for the government.

You can also find out that pension’s present value — how much cash you would need on hand to buy an annuity making payments equal to the pension. But sit down before you read it — in many cases, that’s an amount well into the seven figures.

What the calculator will show you is that New York pension benefits can be extremely rich for typical employees. Consider a teacher in Albany County, retiring at 59 after a 37-year career, with a final average salary of $89,000. That teacher is eligible for a pension benefit starting at $62,745 (70.5% of final average salary) with an annual cost-of-living adjustment.

Is your 401(k) as rich as that? Consider that a private-sector worker seeking an equivalent annuity would need a whopping $1.25 million on hand at retirement to buy it.

The richness of benefits is even more astounding in some downstate communities. A Yonkers teacher with a master’s degree and some additional coursework could expect a final average salary just over $110,000 after 37 years worked. That translates into an annual pension of $78,255 — exempt from state and local income tax — with a present value of more than $1.5 million, assuming retirement at 59. Police and firefighters, famously, get to retire earlier with even more generous benefits.

These calculations don’t include the value of retiree health-care benefits. While health benefits for retirees are nearly unheard of in the private sector, New York public employees may keep their same health insurance in retirement nearly for free — or absolutely for free in many cases, as workers can use accumulated sick time to pay their share of the premiums. This is a benefit worth approximately $14,000 per year for family coverage.

And the benefit doesn’t stop at 65. Once retirees become eligible for Medicare, taxpayers generously pick up their Medicare Part B premiums and pay for high-quality Medigap coverage.

These benefits are almost entirely funded by taxpayers. Public employees in New York state do make pension contributions of 3% of their salary, but only for their first 10 years of work.

Last year’s “Tier V” pension reform will force most new employees to make 3% contributions throughout their careers — maybe. The state enacted a similar reform in the 1980s, and then undid it at the unions’ behest when the stock market performed well.

So, how do private sector retirement benefits look in comparison? Even if you’re one of the lucky few private-sector workers who gets a defined benefit pension (just 16% of workers in private industry do, as of 2009) your benefit is likely about half as generous as a government worker’s. And in New York, you must pay state and local income tax on pensions over $20,000, while public workers are entirely exempt.

The vast majority of private sector workers receive their retirement benefits in the form of a defined contribution plan, such as a 401(k) with employer match. These benefits are, on average, significantly less generous than the pensions provided to government workers.

The average American private sector worker receives 99 cents per hour worked in retirement benefits, mostly in the form of an employer-paid 401(k) contribution. The average state and local government worker gets $3.26, mostly in the form of pension benefits, according to the Bureau of Labor Statistics. But those figures actually understate the public-private gap.

You may have read that public pension plans use rosy accounting rules that understate the size of their true liabilities. These same rules also understate the value of benefits accrued by workers. One study from the American Enterprise Institute found that, in the case of California workers, official estimates understated the value of pensions by nearly half — that is, California workers receive pension benefits worth 16% of their salaries, not the official 8.2%.

So, the average government worker is receiving retirement benefits several times richer than his or her counterparts in the private sector. This fact — not abusive practices like “pension spiking” and “double-dipping” — is the reason that public pension costs have become unsustainable.

Over the next five years, state and local governments’ payments to New York state pension systems will nearly triple. For school districts, they will more than quadruple, driving an 18% increase in school property taxes just to pay for rising pension costs. New York City has already seen this explosion — pension costs have grown tenfold in the last decade — and pension costs in the city will continue to rise going forward.

State lawmakers will only get a handle on this problem when they admit that public employee pensions have not simply been mismanaged and abused. The root driver of exploding costs is legislators’ willingness to make unsustainable promises to be paid by future taxpayers — a proclivity as fundamental to a legislator’s brain as the will to breathe is to yours or mine.

The only way to protect New York taxpayers is to make it impossible for the legislature to give away the farm. That will require abandoning the defined benefit model and adopting 401(k) — and bringing the value of public sector retirement benefits closer into line with the private sector”.

Josh Barro is the Walter B. Wriston Fellow at the Manhattan Institute, where E.J. McMahon is a Senior Fellow.

SEE IF YOU FEEL STIMULATED WITH THESE FACTS?

Who Got Stimulated? (A review of this weeks activities by our Chief Executive)

Barack Hussein Obama, is intent on increasing the federal  taxes, of everyone who actually pay them, (about 47 percent of the population) in January, by way of letting the Bush-era tax reductions expire. 

His administration has announced several “band-aid’s” to help reduce our growing debt.

First, President Obama ordered a freeze on bonuses for some 3,000 of his high-paid political appointees. Then he announced a freeze on the wages of all federal workers for the next two years.

One Social Security administrator summed up the reaction of her fellow federal union workers: “That’s why Obama’s ratings are below Bush’s, and that’s hard to be unless you’re Osama bin Laden. I can’t wait until I retire.”

Well, given the fact that federal bureaucrats are now endowed with grossly disproportionate wages and benefits, one can understand why retirement remains attractive for them. On the other hand, millions of private sector citizens will be working well beyond retirement age in order to make ends meet, especially given the increased tax burdens they’ll likely incur in the future to pay off Obama’s deficit.

Let’s review the most recent comparison’s of statistical data: 

Compared to more productive private sector employees, whose income is confiscated to pay government wages and benefits, hourly government workers are paid 57 percent more than those in the private sector for comparable jobs ($28.64/hour vs. $18.27/hour).

Salaried bureaucrats enjoy average annual wages of $78,901, while those in the private sector average $50,111, and the number of bureaucrats collecting more than $150,000 a year has doubled since Obama took office.  (That’s you my son.)

When benefits such as taxpayer-funded contributions to pensions are included, government bureaucrats end up with 85 percent more compensation than their private sector comparables.

On top of that disparity, bureaucrat jobs are virtually tenured, both recession proof and unaffected by a dearth of productivity. Benjamin Franklin once famously said, “Nothing can be said to be certain, except death and taxes.” Today, however, you can add government jobs to the short list of guarantees.

Notably, Obama did not order a freeze on government hiring, and I can assure you that the number of exemptions for government agency wage freezes will eventually equal the number of government agencies. Additionally, Obama didn’t freeze promotions, meaning that any federal worker can receive a de facto pay raise by “promotion” into the next incremental GSA scale.

Since the beginning of the current recession, private sector employment is down 6.8 percent. On the other hand, Obama has used taxpayer funds and debt on future generations, his so-called “recovery program,” to grow the ranks of central government bureaucrats by more than 10 percent in the same time period.

Of course, Obama’s wage-freeze fails to put any noticeable dent into his accumulating $1,000,000,000,000-plus deficits. Taxes, he says, must be increased to do that.

Once again, let’s review.

Like any devoted Socialist, Obama’s objective is to break the back of free enterprise, in this case, with unbearable deficits. When challenged about his motives, Obama invariably claims that he “inherited this mess” from the Bush administration.

However, the Executive Branch does not set the budget. Congress does. And from the ’09 budget forward, budget deficits have increased greatly. 

I realize this is not new information but it bears repeating.  

 Democrats have controlled Congress since January 2007, about the time the housing market collapse began. Thus, Democrats controlled the budgets for FY2008 and FY2009 as they did with FY2010 and FY2011.

Obama Deficits Chart

For FY2008 Democrats compromised with President Bush on spending. However, for FY2009, Nancy Pelosi and Harry Reid bypassed the Bush administration by way of continuing resolutions until Barack Obama took office.

Again, for the record, Obama was a member of the Senate majority in 2007 and 2008, and he voted for those spending bills.

The last budget deficit that Democrats “inherited” was FY 2007, the last of the Republican congressional budgets. That deficit was the lowest in five years, and it was the fourth straight decline in deficit spending. Thus, the only deficit Obama has inherited is that which he and his Democrat majorities generated.

Those pesky facts notwithstanding, a Republican majority is about to take over the House, and Republicans in the Senate seem to have found a spine,as indicated by Sen McConnel’s letter to Harry Reid regarding action on any legislation that doesn’t deal with the budget and the expiring taxation rates. 

If Republicans are serious about budget and deficit control, they should start by cutting their own bloated salaries and budgets. There is no greater sweetheart deal than being elected to our national legislature, where members of Congress are paid exorbitantly, and are eligible for lifetime benefits after “serving” for just five years — one term for Senators. If they are perpetually elected, as is the case with many members, they are eligible for almost 80 percent of their salary as a guaranteed annual pension.

Membership certainly has its privileges and term limit’s are sorely needed to remove those Un-professional politicians. 

If members of Congress don’t like the pay cuts, perhaps we can cut their time accordingly. Send them home more often, and see if a little of the reality outside the Beltway sinks in.

As Cal Thomas opined this week, “The Founders were keenly aware of the danger of a Congress divorced from the realities of the rest of the country. During the Constitutional Convention in 1787, Roger Sherman of Connecticut wrote, ‘Representatives ought to return home and mix with the people. By remaining at the seat of government, they would acquire the habits of the place, which might differ from those of their constituents.'”

If Republicans are really serious about the constitutional role of government, they should identify any and all taxes and expenditures not expressly authorized by our Constitution, and schedule them for termination. While they are at it, they should revoke congressional exemptions, and make themselves subject to the same laws and regulations they impose upon the rest of us. (Oh, and Mr. Speaker-to-be, sell Pelosi’s opulent Boeing 757, and refund the treasury.)

For his part, President  Obama lamented this week that he might have to delay his “holiday vacation” to Hawaii in order to get his tax-and-spend agenda through Congress. (How many golf outings and exotic vacations must this man take?)

Perhaps the President should take a tax lesson from John Kennedy, the father of the modern Democrat party: “A tax cut means higher family income and higher business profits and a balanced federal budget…. As the national income grows, the federal government will ultimately end up with more revenues. Prosperity is the real way to balance our budget. By lowering tax rates, by increasing jobs and income, we can expand tax revenues and finally bring our budget into balance.”

Indeed, tax reductions in each of the last five administrations have resulted in tax revenue increases to the fed’s coffers.

It’s past time to put Keynesain economic’s out to pasture and clean thr Donkey do off our boots.

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This was forwarded by a friend, Ron, this morning and I felt obligated to put it on the blog ASAP. I do not know who wrote this but hopefully it wakes up more people to demand that Washington be cleaned out before we have to borrow from Chavez.  CWB

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