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Pay no attention to the people behind the curtain

Monday, November 21, 2011

Q: What happens when two key Wisconsin wingnut values clash?

A: The more hateful one wins, of course

by folkbum

Today's topic: "double-dipping." The competing Wisconsin wingnut values: reflexive anti-tax advocacy vs. personal animus against gubmint workers.

Back in the olden days, when I used to be more involved in my union, we hated what the folks are now calling "double-dipping." This is when my (or any) school district would hire a retired individual to fill a job opening. The union's position was that this was artificially limiting opportunities for active union members and artificially keeping potential new union members out of a job. It worked out for the employees, though, because they could draw both a paycheck and their pension, and that was pretty sweet.

Republicans have finally come around to believe in this union-supported position, with legislators trying to ban the practice. Righty talk-show babblers--notably, Mark Belling--have been apoplectic over the issue for weeks. And the wingnut commentariat are out for blood against double-dippers.

There are two reasons why a school--and it's always schools, people, at least in the wingnut imagination--would hire a retiree to fill an open position. One is if there are no qualified applicants to fill the open spot. Better to have a retiree who knows what she's doing than a substitute (for classroom spots) or a novice administrator who would take too long to get up to speed.

The second is to save taxpayer money. It goes like this:

Say we have a teacher, let's call her Employee A. She's ready to retire. For the ease of math, let's say the cost of employing her is $100,000. She's got a $65,000 salary, with $35,000 in benefits, including a $20,000 health insurance package, pension (12% of salary), payroll taxes (8% of salary), and some other stuff like dental and life insurance. If she retires, she's eligible for retiree health insurance that covers, say, 2/3 of the cost of the plan, but that's the only taxpayer cost upon her retirement. (If she's old enough to qualify for Medicare, that cost may not even be there.)

Don't taxpayers pay her pension?, I hear you asking. True, we do, but we pay for her pension while she's working. No new tax dollars are required to pay her pension upon her retirement. It's already paid for; the money is there in the award-winning Wisconsin Retirement System, and she is paid from those funds already collected. (In their defense of double-dipping at the daily paper the other day, William J. Holahan and Charles O. Kroncke did a really crappy job explaining this, which is why you get letters to the editor from the wingnut contingent who insist that the pension payouts cost taxpayers in real time.)

So, cost of Employee A as she works: $100,000. Cost of Employee A when she retires: $13,000, for that retiree health insurance. There are two possible scenarios, and I'll call them, for the sake of convenience, Scenario 1 and Scenario 2.

In Scenario 1, Employee A retires and the district hires Employee B to take her place. B is likely younger and less experienced, so his cost to taxpayers is less. Let's say a salary of just $45,000 and benefits proportionally reduced to about $30,000. So his cost to taxpayers is $75,000. Throw in the cost of A's retirement health insurance, and the total cost now is up to $88,000. Yippee! The district is saving $12,000 over the cost of paying just A while she was working.

In Scenario 2, Employee A retires but gets hired back at her old salary. That's $65,000, plus some payroll taxes (about $5,000) and the retiree health insurance. But nothing else--because she's retired, she gets none of the other benefits of being an employee--no pension contributions, no sick days, no dental or life insurance. That's a grand total of $83,000--for a savings of $17,000 over pre-retirement, and an additional savings over hiring a new guy as her replacement. Yippee times two!

Indeed, when you look at an actual case, not just numbers made up for the sake of easy math, this is what you get--savings. North Lake, a subject of that article, is one district Belling was on about lately, yet the administrators of the district note that the one "double-dipper" saves money: Her "compensation package--$58,746 in all--was less expensive than a new teacher's would have been"--and $16,000 less than what North Lake says a new hire would cost. The same is true for the spark that lit this thing, the administrator up in Green Bay. Unless the person they hired to replace him got 2/3 or less of the first guy's salary--unlikely, let's be honest there--paying him his salary but not any bennies saves UW-GB money.

Now in Used-to-be-Land, Republicans and wingnuts liked saving taxpayer money. Word is they still do. But you know what impulse is stronger? Hating public employees. So rather than embrace the position that saves money, they look at the situation and all they see is public employees--those god-damned teachers--taking both a salary and a pension at the same time and they can't stand it. It is much better, in wingnut-land Wisconsin, to hate on the public employee than to celebrate the tax savings.

Remember, opposing this double-dipping is a union position from way back. If Republicans are coming around to it, it can only be because their spite is so strong.

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