Op-Ed re: Janesville benefits

Rapid rise in benefits slows negotiations
Janesville Gazettee Editorial
(Published Wednesday, September 26, 2007 11:42:43 AM CST)

Yet another new study by the nonpartisan Wisconsin Taxpayers Alliance
sheds light on a key aspect of negotiations at the Governor's Mansion
and between the Janesville School Board and the local teachers union.

The study says benefits paid to public employees, on the state and
local levels, cost 50 percent more than those paid to workers at
private businesses.

State and local government employees in Wisconsin got an average of
$12,171 in fringe benefits in 2005. That compares to $8,109 for those
in the private sector.

The total taxpayer bill for public employee benefits stood at $4.62
billion in 2005, or more than $800 per person.

Ouch. No wonder taxes seem to pinch you more and more each year.

Of course, public benefits are higher than those in the private sector
in every state. But Wisconsin's gap was much larger than the national
average of 35 percent. And it was larger than in every Badger State
neighbor.

Rising costs of benefits for state employees make it tougher to
balance a state budget.

Likewise, dealing with rising benefits, particularly health care, is
typically the key issue in contract talks between the school board and
teachers in Janesville and in school districts across our region.

Teachers argue that in recent years they've swallowed small pay
increases to maintain their generous benefits. The WTA analysis
acknowledges this.

From 2001 through 2005, total compensation rose at similar rates for
all workers, 4 percent per year in the public sector and 3.8 percent
annually in the private sector. However, benefits for government
workers rose 9.1 percent per year, compared to 7.8 percent for other
workers. The faster growth in public benefits led to slower increases
in public wages and salaries. These people got increases of just 2.4
percent per year, compared to 3.0 in the private sector.

"Researchers noted that rising health insurance costs have had a
negative effect on Wisconsin teacher salaries," the alliance said in a
news release. "State law requires school districts to increase total
compensation at least 3.8 percent annually. When benefit costs rise 9
percent or more, there is little room left for salary growth."

Studies have shown that workers who pay greater shares of costs use
health care more prudently. So if teachers and other government
workers were forced to pay more, they would help hold the line on
rising costs. That might not hold down school funding costs if
districts still boost total compensation 3.8 percent each year, but it
would afford teachers better wages. And having other government
workers pay more toward their health care should ease the escalation
of taxes needed for their benefits.

Taxpayers should not have to continue paying higher taxes for rising
public employee benefits while their own employers nick them for more
out-of-pocket costs for benefits each year. Public employees need a
reality check. They must start paying meaningful amounts to bring
their benefits in line with those paying the bills and to make them
better health care consumers.

The WTA deserves more kudos for providing perspective on this crucial issue.