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BENEFITS: Are they a taxpayer obligation or not?

Letter by Curtis M. Anderson, Tacoma on June 22, 2012 at 12:59 pm with 31 Comments »
June 22, 2012 1:15 pm

Re: “State owes $7 billion in benefits” (TNT, 6-20).

The cost for these retiree health care benefits is not prefunded as pensions are but apparently are funded as part of the general fund budget each year. A atate official says these are not an obligation and will not be required if the general fund budget is to a point where they can’t be afforded.

At the special sessions for budget finalization we were bombarded about the necessary “dramatic,” even “draconian” cuts, “children will starve, health care will be cut off for many” and on and on.

If these subsidies are required by contract they should be paid. If not, why are taxpayers forced to fund bonuses for a benefit when those who have worked years in the private sector must fully pay for their own health care premiums?

Is this an obligation or not? Why not give the taxpayers a much-needed break?

Leave a comment Comments → 31
  1. commoncents says:

    Retiree medical is a thing of the past. It’s quite different than a pension and should be treated as such. Get rid of it.

  2. truthbusterguy says:

    Taxpayers should not be obligated to pay for benefits that where made with unions in exchange for campaign donations. These deals were the democrats and the unions against the taxpayers. Well, good luck getting any $$$$ from me. I will do all I can to legally avoid sending WA State taxes and fees to fund their status quo. We must starve the state into bankruptcy so they will default on the benefit packages.

    Sorry but bankruptcy is the only way out of this mess. Voters won’t stand for tax increases any longer. The gig is up on the democrats and even the libs in King County are refusing to pay more.

    McKenna, please hurry and save us from the bondage that is union contracts.

  3. Fibonacci says:

    And just what do you base your claim on that benefits were traded in exchange for campaign contributions? My guess is that is nothing more than your hatred of unions.

    You are one sick individual if you are willing for the state to go bankrupt just to “get” unions. Gee, do you think that the state spends money on anything other than union wages and benefits? And, if the state were suddenly non union do you think there would be no taxes. I have an idea, why don’t you move out of this state into one that is more to your liking. I doubt that any state in the union is as extreme as you would wish, so that leaves third world countries. They sound like just your cup of soup.

  4. truthyguy is anything but. What a joke or, if you like eggs, jolk.

  5. truthbusterguy says:

    This day of reckoning has convinced policy experts, political observers and some on Capitol Hill that federal legislation allowing states to file bankruptcy might be the only way to avoid a federal bailout of the most fiscally reckless states in the union.

    Many states, including those with the country’s largest population centers, are now on a path to insolvency. This is primarily due to fiscally promiscuous lawmakers, skyrocketing Medicaid costs and unsustainable gold-plated government employee pension plans that most Americans could never dream of.

    These states’ ballooning obligations simply cannot be met without either soaking state taxpayers or federal assistance.
    Permitting state bankruptcy is the best option to avoid a monumental federal bailout of state governments. Letting states file for bankruptcy to shed some of their obligations, could save American taxpayers a great deal of money.

    Bankruptcy as a tool at states’ disposal is likely to be a boon to lawmakers trying to rectify their unsustainable financial plight.
    The mere threat of bankruptcy would put a powerful weapon in the hands of governors and legislatures: They can tell their unions that they have to accept cuts now or face a much more dire fate in bankruptcy court.

    States cannot afford to continue on their current path. Federal taxpayers, who have been hit with more than $350 billion in higher taxes in just the past two years, cannot afford to absorb the $3 trillion in unfunded liabilities run up by state democrats, unions and the corrupt legislators that caused this.

    Passing a law to allow states the option of bankruptcy — an option available to cities for more than 70 years — would protect both federal and state taxpayers and give honest political leaders a tool to reform state spending commitments.

    It’s going to happen so let the cutting begin. The longer we wait to start the more painful it will be for government workers and their families. Face it unions, it’s time for your haircut.

  6. So, truthy seems to think that if suddenly one cannot afford that which they have agreed to especially if it has anything to do with a union, one can say “too bad” I’m not paying.

    Wow! Truthy has his own version of contract law; one which invalidates any contract just because……..he’s against it.

    A three year old has better sense than truthy.

  7. philichi says:

    bandito: you seem to care about contracts. When Obama robbed the GM bond holders and gave their equity to the unions, were you concerned then?

    The real sad thing about all of these forecasts is that state planners are counting on an 8% return on the current state funds. For future needs. The 10 year treasury is now yielding 1.6%. Other interest rates are also very low. 8% is out of the question. This means that our budgets are even worse than we think.

    Too bad, all of those union dues spent on getting democrats elected. Perhaps you all should have kept the dues for your own retirement. The state’s future looks a little bleak.

  8. Phil – Couple points of fact. If GM had gone through anything other than the government supported bankruptcy the bond holders would have still got nothing and we would have been even further in the hole for jobs. And the union workers and retirees took significant haircuts up to 35%.

    As to the state the article points out that Washington has one of the best managed pension systems in the country. The health care benefit is viewed by those in the state as optional. Maybe you should try reading the original article and put down the cocktail of gloom and doom.

  9. philichi says:

    afret the GM loans that I am talking about were senior loans. That means that they had first position on all equity and labor. Investors get a very small interest rate to invest in these. If the company would have been able to go bankrupt, GM could have started over, gotten rid of the UAW and been competitive with the other car companies. It would have been a great American success story. Instead, it is a temporary fix. Billions of US tax dollars were waisted. The stock price has gone from $35 to in the $20s. Obama simply delayed the inevitable.

    I am very happy that the Washington plan is one of the best. However, these are all simply unsustainable…That is my point.

  10. I will do all I can to legally avoid sending WA State taxes and fees to fund their status quo.

    Very easy way to legally avoid paying any WA taxes: Relocate to another state. I haven’t paid any WA taxes since I moved to ID…..but then I have paid an awful lot of ID taxes.

  11. Single payer system.

  12. Here is the way it works when government employee unions can engage in collective bargaining.
    • Step 1. Unions pour money, sometimes millions of dollars, into the campaigns of favored politicians.
    • Step 2. Unions then negotiate with the very politicians they managed to get elected with their money for increased pay and benefits.
    • Step3. Taxpayers foot the bill for the increased pay and benefits while the politicians pull down campaign donations from the unions that will help to keep them in office.

  13. LeePHill says:

    “truthbusterguy says:
    June 22, 2012 at 2:57 pm Taxpayers should not be obligated to pay for benefits that where made with unions in exchange for campaign donations.”

    So…what about labor agreements made with Republican governors.

    Your schtick is wearing out.

    dracer – So take your same 3 steps and apply them to private businesses seeking financial gain from tax cuts or business with the government, unless it’s too difficult to compute.

    What is really funny about you clowns is how you talk about union labor makes up such a small amount of the citizenry, and yet you claim that they win elections. Only conservatives can win elections with a minority of the voters.

    philichi hasn’t said anything that doesn’t come from a right wing copy and paste website.

  14. philichi says:

    Leephill: what many of us are upset about is that we can chose to not buy from a unionize car company or fly on a unionized airline. However, we are stuck paying property taxes and sales taxes to a corrupt system that simply takes our money and filters it to unions that gives campaign contributions to people and issues that we disagree with.

  15. billybushey says:

    Speaking as a government employee, truthbusterguy is a clueless idiot if he thinks government pensions are “gold plated”. We rely on FERS, a low benefit defined plan, we still pay healthcare premiums, we invest in the TSP with a very modest agency matching contribution(gee, that’s the private sector on Wall Street handling the money, so they have plenty of opportunity to steal it from us) and Social Security, same as all other working Americans. if I am lucky, with 40 years service and no thievery from Wall street, I’ll be able to draw a total of 75% of my income for a pension, 3/4 of which will come from the Wall Street management of my retirement fund and the same Social Security that all other working Americans get. My health insurance is a secondary medi-gap type plan that enhances Medicare.
    Gold plated? Not hardly

  16. billybushey says:

    A for collective bargaining, unions do not negotiate with politicians. They are transitory. They negotiate with agency management teams, career civil servants who have been in place over a long history of administrations. They get no “marching orders” from the pols. Unions support politicians for policy decisions that hinge on social impact, economy and community. What is spoken of above is urban legend, liberally mixed with BS.

  17. the3rdpigshouse says:

    The unions and the politician sleep together and have an incestuous relationship!!! The unions force members to pay for the socialist democrat politileans and they in turn pay them back with overly beneficial benefits at the further expense of the taxpayer!! This relationship must stop!!!

  18. Afret- in 2011 the unions renegotiated with GM, and got paid back for any ‘consessions’ they took in the financial mess. Bush already bailed them out, BHO made sure the unions got their ‘fair share’.

  19. alindasue says:

    CT7 – if the unions renegotiated with GM, then it was GM – not President Obama – that chose to pay back the concessions.

  20. You misread my comment.

    I pointed out A) BHO screwed debt holder as payback to unions B) the unions got back any monies lost in the bankruptcy, C) Bush had already acted to bail the company out.

    In the end of the day it is a sad state of affairs. Due to big govt intervention the company is forced to make money losing cars (it makes it’s money on light trucks and SUVs, Volt is a dud). They have been forced to retool time and again, and labor costs are business killing compared to other auto makers.

  21. And the tax payer got the shaft. Not only did we bail them out, we own shares likely to be sold at a loss, on top of $50bil in forgiven taxes.

  22. CT7 – any evidence that the government is forcing the manufacture of Volt?

  23. alindasue says:

    I worked for a major car rental company for many years up until less than two years ago. Early on, the trucks and SUVs were very popular to rent. We couldn’t keep them in stock enough. However, when gas started topping $4 per gallon (during President Bush’s term), suddenly everyone wanted to rent a gas efficient car or a hybrid. They only took SUVs when we ran out of more fuel efficient choices.

    The point is that GM’s decision to make fewer SUVs could have more to with market forces than you think. As beerBoy asked, do you have any evidence that the government is forcing them to manufacture the Volt?

    By the way… As you people are so fond of pointing out, only a small portion of the American workforce belongs to unions. Yet, for some reason you same people seem to ascribe almost magical influencing peddling abilities to that small population. You keep claiming that President Obama et al. are “paying back” the unions for putting them in office. However, the numbers just don’t support it. When compared to the Koch brothers, the money isn’t there and clearly the majority population votes aren’t there either.

    But, hey, the workers and their unions make nice scapegoats, don’t they?

  24. alindasue says:

    That should be “influence peddling”, not “influencing peddling”. We really need an edit function here…

  25. aislander says:

    alindasue: GM’s “decision” to concentrate on building luxury vehicles (mostly SUVs) was made FOR the company by the fact that it was losing about $1500 on every vehicle it sold that wasn’t of that type.

    GM was in that position because of contracts made by previous generations of managers with the UAW, which agreements were mathematically untenable but were agreed to in the interest of gaining peace with the union.

    I don’t blame the union for asking for the most it could get, but management should have done its job, weathered the strikes and other disruptions, and put the company in a better financial condition.

    Management also lost focus on products and their relationship to each other, but as long as GM could sell SUVs, that didn’t hurt either…

  26. Aislander,
    Too bad the unions were willing to give up far more of those untenable contracts and agreements than management, which stayed focus on their pay, benefits, and bonuses.

  27. aislander says:

    I would be very interested, xring, in seeing your exposition on the cost of pensions and medical care for retirees and active workers versus compensation for management…

  28. Individually, active and retired managers get a much larger benefit package than a worker.

    Collectively, the retired mangers fund is much larger that the retired workers fund.

    Mangers (active or retired) rarely see their benefits cut or their required contributions increased, while union benefits have been slashed and their contributions increased.

  29. aislander says:

    Citations, please…(I’m interested in totals, not in numbers for individuals, which are useful only for class-warfare demagoguery…)

  30. You asked for my opinions. I’ll submit citatins when you and 3pig do.

  31. for now let’s just go with ‘personal knowledge and experince of the author’

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