3% wage cut for unionzed state employees

Just another brick in his wall (0.00 / 0)

pushing public salaries lower

Douglas said the agreement should set a new precedent for all public-sector salaries as school districts and municipal governments look to shave costs from their operating budgets in difficult economic times.

Salomon celebrates raises in his department will Douglas party on the occasion of precedent setting salary reductions?

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by: BP @ Fri Dec 04, 2009 at 06:24:17 AM CST

Their own special tax plan (4.00 / 2)

In hard times, I guess you could say Jim=Jobs just levied a 3% short term tax on the Vermonter who mops the floor, in order to solve his budget problem.  Having been so anti Snelling temporary tax adjustment for the big payroll folks that are Jim's friends (the people who will move across the river if taxes go up) he is happy to hit the families who can least afford it.  The sad part is that if you look at the history of the discussions, the VSEA folks had offered adjustments over the last year that would have made fulfilling Jims agenda unnecessary.  This was about gutting wages and health care for Jim, just as it seems to be about gutting healthcare and retirement benefits for the Spaulding Commission.  

Is that really the type of Democratic/Republican agenda sharring we need??  

State services are necessary to us all and are more global than the "welfare state" that most right wingers will cry about.  So, the burden of providing those services should be on the plate of ALL Vermonters.  

Jim just doesnt seem to be about fairness.

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by: hoopmeister @ Fri Dec 04, 2009 at 08:02:33 AM CST

Lunderville certainly sends a message to future schoolteachers (0.00 / 0)

to choose a different profession.  Education isn't valued here.

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by: Sue Prent @ Fri Dec 04, 2009 at 14:29:29 PM CST

By some (4.00 / 1)

I'm pretty sure we're in sympathy, Sue, but blanket statements like "Education isn't valued here" ring about as true as "Vermont is not business-friendly."

Education is valued here - just not by Jim Doesless, his protégé Neale Blunderville (didn't he run the Transportation Department while the Champlain Bridge's condition was being ignored?), and a significant proportion of Republicans and a double handful of conservative Democrats.

Did anyone catch Taxman Richie Westman on VPR's Vermont Edition? Paul Cillo also came on the line to  offer some counterpoint to the Taxman's idea of cutting income sensitivity and raising rates.

It's clear to me that the majority of Democratic legislators in Vermont value education, and are unlikely to agree to make the lower middle class pay for the increases.

NanuqFC
Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference. ~ Franklin D. Roosevelt

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by: NanuqFC @ Fri Dec 04, 2009 at 15:41:09 PM CST

[ Parent ]

Very true! (4.00 / 1)

I just meant that Lunderville's own words send that message for himself and the governor.

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by: Sue Prent @ Fri Dec 04, 2009 at 16:15:35 PM CST

[ Parent ]

I also wonder if... (0.00 / 0)

...the non-unionized state employees are getting the same cut. And the contractors, for that matter. Will the vaunted EBay contract be cut to $48,500?

Just askin'.  

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by: jvwalt @ Fri Dec 04, 2009 at 15:48:36 PM CST

How's Lunderville's own take-home looking? (0.00 / 0)

Anybody know?

Never mind the economic effects of the pay-cuts,   I really HATE that "send a message" business.  It is so unnecessarily hostile and superior coming from someone who draws his own salary from the people's pocket.

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by: Sue Prent @ Fri Dec 04, 2009 at 16:42:37 PM CST

[ Parent ]

share the pain (0.00 / 0)

Gov. D is great at saying that it's hard times and we all need to chip in to help.

Well, if that's what he really felt there is an easy way to do it - - raise the income tax.

Instead of distributing the pain (to those rather immune to such things) he'd rather have the hard working people shoulder the burden and leave the wealthy unscathed.

Its amazing that this is the way things are done in a country that's supposed to be a democracy.  In Vermont we need to let our legislators know in no uncertain terms that this reverse Robin Hoodism is unacceptable!

PJ

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by: Peter Joes @ Fri Dec 04, 2009 at 22:10:40 PM CST

Just Asking (0.00 / 0)

Putting politics aside for the moment, if the private sector is cutting expenses and is dealing with pay reductions or worse, and it is this same private sector that has to pay for the public sector, why is it so over-the-top unreasonable to expect the public sector to do the same?

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by: GreenMtBoy @ Sat Dec 05, 2009 at 05:25:20 AM CST

You will note... (0.00 / 0)

...that the union bargainers agreed to these cuts.

That said, I'd like to know why, when the state is making pay cuts, we even have someone like Lunderville in employment at all.  He doesn't provide any service to the state.  He's the Governor's spokesperson.  Is that a necessary job?  If we're cutting wages of public sector employees, why not start by cutting the jobs of administrators who provide no service to the public?

And, as I asked before-- why did Salmon's people get a raise while other employees are being cut 3%?

juliewaters.com

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by: JulieWaters @ Sat Dec 05, 2009 at 06:00:53 AM CST

[ Parent ]

the state (0.00 / 0)

is not a for-profit company (or a family)
it provides services that we need regardless of the business cycle; businesses cut expenses because demand for their products is down; the demand (need) for public services increases in hard times

moreover, you're assertion that the "private sector" is paying for the public sector has a lot of baggage in it

first, you assume we need to cut without considering new revenue; this is important because cutting means less money for workers who spend it (which sustains demand for private sector goods & services); and cutting will not save appreciable sums for regular working VT'ers because state income taxes for low- and moderate-income VT'ers are quite low; any savings will go to the wealthy, who have done rather well over the last 25 years

second, corp. taxes represent only 4% of all General Fund revenue; so if by "private sector" you meant businesses, they don't pay very much as it is

third, the state has already made very deep cuts; it's not as if the Leg. has refused to make adjustments

fourth, if your point is that the burden must be shared, why not consider asking the wealthy to help out as Gov. Snelling did almost 20 years ago?

the $2m reportedly saved by cutting wages is equal to 1.6% of the taxes paid by the top 0.5% of all tax filers in VT (those earning $500k or more); those 1,571 families earned $2.3 billion in 2007 (avg. $1.4m); on avg., those filers paid $77,836 in state income taxes (5.4% of their income); in order to raise the $2m needed to avoid these wage cuts, those 1,571 families would have to pay $79,081, an increase of $1,245, which is equal to one tenth of 1% of their income (ten cents for $100 in income); I doubt seriously if this would change their vacation plans

so let's talk some more about sharing the burden
cutting wages for workers rather than asking those with resources for help is incredibly mean-spirited; but this is what Republicans have been doing since Reagan (with the aid of some Democrats); it's shameful and VT should do better

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by: Doug Hoffer @ Sat Dec 05, 2009 at 07:18:45 AM CST

[ Parent ]

Great point, Doug (0.00 / 0)

As the Democratic candidates speak, either here or around the state, we should all push back against the conventional wisdom that we have no more taxing capacity left. Snelling raised taxes when we faced serious revenue problems in his last term. There is no reason not to do the same thing now.

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by: Jack McCullough @ Sat Dec 05, 2009 at 17:22:36 PM CST

[ Parent ]

jeesum (0.00 / 0)

yes, what he said...greenMT Boy???  your response??

As we said last legislative session; and to be completely fair, the DEMS didnt act upon-the battery was apparently dead in Luke's lightsabre- Snelling had it right...

Maybe we can pick up on this next session....  There still is that hole to fill.   But now it is an election year...

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by: hoopmeister @ Sat Dec 05, 2009 at 18:45:23 PM CST

[ Parent ]

I'm back (0.00 / 0)

I did not suggest that any other course, which I may or may not agree with on a policy level, is unreasonable or offered in bad faith.  I think folks can have a wide variety of good-faith proposals for how best to address this fiscal crisis.  But, in that vein, I don't think it can fairly be considered per se evil to ask that government tighten its belt when those who pay the taxes are tightening theirs.  That is one of many legitimate views that need to be in the mix and taken into account.

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by: GreenMtBoy @ Tue Dec 08, 2009 at 07:39:42 AM CST

[ Parent ]

It will be interesting to see the 2008 statistics (0.00 / 0)

Doug, if I found your statistics source correctly (VT tax department) it uses Adjusted Gross Income, which includes business income to individuals in an "S" corp or LLC.  The numbers you cite, correctly of course, are from 2007.

Business income will be down substantially for 2008.  The .5% of families you single out paid, in 2007, 22% of Vermont's income taxes (The 0.1% over $1M in income paid over 15%).  I predict the total number will be down AND the % they paid will be down due to credits, etc., they'll be able to take for business and capital losses.  Most doctors will see a minor income drop; many lawyers will see a major one...and the kinds of bonuses paid to bankers and insurance executives that push them into the $500k+ range were not paid out last year.  

This does not change your overall point (the people who ARE in this income category can afford a surcharge) but I bet it will materially change the amount needed.

BTW, if Obama and the congress-dems don't cave for 2011, the capital gains rate will go back up, leaving Vermont a bit of a windfall that will be primarily taken from the income brackets you're focused on.

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by: Tom C @ Sun Dec 06, 2009 at 12:14:46 PM CST

[ Parent ]

correct (0.00 / 0)

but we don't know how much income in that top group is from S corps and partnerships (another area where the Tax Dept. does not collect and report important information); in any case, there will certainly be a decline

here is data from the last recession (all figures unadjusted for inflation)
1.  the number of filers reporting over $500k in AGI was 829 in 2000; in 2003, there were only 691
2.  AGI for that group was $1.1b in 2000 and it dropped to $763m in 2003
3.  net taxes paid by that group were $57.7m in 2000 and $44.7m in 2003 (this is one reason why the revenue forecasts are down)

it is noteworthy, however, that the number reporting AGI  >$500k more than doubled in four short years to 1,571
and their income tripled to $2.3b (as did their taxes paid)

the point is that - unlike working stiffs whose wages barely keep up with inflation, the income for this group is likely to grow enormously (again) after the recession; so I'm not terribly concerned about asking them to pony up for a few years since they will rebound soon enough

as for the feds and cap gains, I think you're partly right, especially since the Leg. eliminated (most of) the 40% cap gains exclusion; however, they also reduced the top marginal rates and it's likely to be a near-wash

BTW - re. your point about how the top group paid 22% of all personal income taxes in 2007: I realize you meant only to point out our vulnerability from the concentration, but 1) they "earned" 13.6% of total income; and 2) the Right uses the 22% figure to suggest that the wealthy are overburdened; I remind people that 1) we have a progressive tax and they have a significant % of the money (thus, 22% doesn't look so bad when you learn that had almost 14% of all income); 2) this group paid only 5.4% of their income in state income taxes; this is considerably less than the supposedly off-putting top marginal rate (was 9.5%, now 8.95%)

in any case, your point is well taken and argues for adding a surcharge on incomes lower than $500k (I suggest down to about $200k)

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by: Doug Hoffer @ Sun Dec 06, 2009 at 14:05:04 PM CST

[ Parent ]