Friday, April 21, 2006

folkbum fumbles on the TPA

You know, I think Jay Bullock is a smart and thoughtful, albeit wrongheaded, commentator. He recently went mano-a-mano with Patrick McIhleran over the TPA. He claims victory, but I think he comes up short.

The problem with tax limitation measures he says is that government has these oh-so-unique costs that cannot be cabined by anything so prosaic as the rate of inflation or personal income growth. Government, you see, has to pay for ... people, while every other entity in the economy is paying for, I don't know, robots or something.

The cost of employing people (i.e., government workers) grows like corn in July, although please don't suggest that these people (i.e., government workers) are anything but underpaid and overworked.

Jay writes:

Whether that cost comes from unfunded pension obligations, the staggeringly expensive health care market in Southeast Wisconsin, or the need to pay better to attract better workers, there is no question that the price of keeping a steady workforce increases faster than any of the numbers a TABOR-like amendment would allow Milwaukee County to follow.

Here's a tip to liberals who want to argue for more government spending in Wisconsin. Ix-nay on the ounty-cay ension-pay. No good can come from mentioning that. It is exhibit A for a TPA. The reason that the pension is underfunded is that the County made promises it could never afford. It is in financial shambles today because of that, not because Scott Walker is a big meanie.

I know that health care costs are skyrocketing. I am a member of the senior management team of a corporation that sees the same higher costs. But you know what? We don't get to respond to that by allocating ourselves more money. We have to ask the employees to contribute more or take it out of something else. Life is hard sometimes.

The fact is that every private employer is limited by something external to itself. It can't raise prices much higher than the rate of inflation. Absent some innovation or extraordinary effort on its own behalf, it can't expect to raise revenues at a rate that exceeds the growth in the economy.

The argument that government spending cannot be kept within some larger metric because of labor costs eventually collapses into an argument that government can't control its labor costs.

Why would that be? One possibilty is that the system of determining what those costs will be is dominated by those interest groups who have a unique interest in the outcome, i.e., public employee unions.

And that is precisely the argument for something like the TPA.

I think I know what Jay's response would be, but I think I'll let him, if he wishes, make it before I respond.

11 comments:

Jay Bullock said...

The argument that government spending cannot be kept within some larger metric because of labor costs eventually collapses into an argument that government can't control its labor costs.

No. (Was that what you guessed? Do I win a prize? Do you?)

The point of my post(s) is that the TP amendment or TABOR or whatever is the wrong way to control costs because, in fact, it does nothing to do so. That's what makes it an ass-backwards approach to the problem of high taxes.

The rate of growth in government spending can be constrained in several ways. The Republican-approved approach is to set arbitrary limits. From where I sit, this looks more like the slow, strangulation death of givernment services, not tax relief.

The approach I would favor is a combination of targeted cost reductions (such as finding ways to limit health care cost increases--which, by the way, would help your business, too) and changes in tax policy to find ways to ease the burden on the property and income tax payers.

Dad29 said...

Jay misses the picture twice.

First, he misses the fact that spending is the idirect cause of taxation. ALL spending, not just some.

Next, he misses the point that the Cost of Gummint (tax, regs) is, in fact, a cost, no matter whether it's in income tax, proptax, or sales tax.

Myopia, thy name is public employee.

Rick Esenberg said...

Jay

In the spirit of public education, we both win prizes. What the TPA does is control the cost of government (was "givernment d Freudian slip?)to the taxpayers and thereby "incenting" (I hate that word; incentive is a noun) government to control its costs.

Jay Bullock said...

What the TPA does is control the cost of government (was "givernment" a Freudian slip?)to the taxpayers and thereby "incenting" (I hate that word; incentive is a noun) government to control its costs.

Much agreement on incenting, Rick. And givernment is an accident I blame on C.L. Sholes.

It just seems to me the role of the legislature here should not be that of sadist ("You WILL control your costs!" >whip!<) but rather that of coach and advisor ("Let's work together to find ways to keep your costs down"). That may just be the difference between the conservative and liberal philosophies, I suppose, but it's what makes sense to me. If my family lost income and needed to control costs, I would appreciate help doing so, not just "incentives."

Part of the problem, as evidenced by Dad29's comment, may also be a difference in definition of cost. I am thinking of the "cost" of providing services; he is thinking of the "cost" to his wallet.

Billiam said...

Jay, ultimately, that's what it's about. At least, in my view, Giverment has no buisiness taking care of people to the extent it does. As we've seen with education as well as other areas, it's NEVER enough. They keep inventing fee's instead of more property taxes. No matter how you get it, or what label you stick on it, it's still more of money I earned that goes to things it shouldn't. Government will NEVER control itself. It's up to us to make them be responsible.

elliot said...

Just wanted to point out that Jay owes me a $1 for using "From where i sit" in a sentence. ;)

Melinda said...

Billiam said "As we've seen with education as well as other areas, it's NEVER enough. No matter ... what label you stick on it, it's still more of money I earned that goes to things it shouldn't. Government will NEVER control itself."

And this is a surprise? Government will never control itself because they're playing with someone else's money.

It's always too easy to spend money when it isn't your own.

Melinda said...

Billiam said "As we've seen with education as well as other areas, it's NEVER enough. No matter ... what label you stick on it, it's still more of money I earned that goes to things it shouldn't. Government will NEVER control itself."

And this is a surprise? Government will never control itself because they're playing with someone else's money.

It's always too easy to spend money when it isn't your own.

Melinda said...

One more note...

Jay said "That may just be the difference between the conservative and liberal philosophies."

No Jay - The difference is that Liberals believe the money government has is their own money and that there's always more where it came from. While conservatives know it someone elses money and there isn't more without increasing hardship.

Jay Bullock said...

Thank you, Melinda, for clarifying what I think for me.

And, Elliot, your money is under the mat on the front porch. Which from porch, I'm not saying.

elliot said...

I'm not falling for that again. Got arrested twice last time.