“Teachers’ pay, benefits take hit” (Wisconsin State Journal, Matthew DeFour)
The Wisconsin State Journal, which ran this story on August 9, leads with the following statement: “Statewide increases in teacher compensation contracts are on track to be the lowest in more than a decade following last year’s changes in state school district financing.”

I read it quickly, and not very closely, while drinking my morning coffee and eating breakfast. I’m not a morning person, so I probably read it while still waking up. My first thought was, “What a shame, teachers are also getting a paycut – and cut to the lowest wages in ten years.”

Who among us wants to see that happen? After all, we love our teachers.

But then I took a few more sips of coffee, got up, took the dog out, waking up bit by bit. More alert, I came back inside finished my coffee and read the next paragraph. The next paragraph changed everything.

Teachers aren’t getting their pay cut. No, they are getting raises! Ok, good for them. Most of them probably deserve it. Heck, most of us probably deserve it. I also think I deserve a new car with less than 100,000 miles on it, one where the check engine light isn’t on all the time even though the last two mechanics say nothing is wrong.

But what we want, and yes, sometimes what we deserve, doesn’t always work out. It’s part of reality, and part of being an adult. I try to teach my children this. At times, I’m still learning this. After all, why not replace my car since I feel I deserve it? Why not give these teachers raises which I’m certain most of them deserve?

The increase in compensation packages come with a cost, a cost to you and me.

President Obama just signed an aid package doling out 10 billion dollars to states for teachers. In other words, he and congress appeased the demands made by powerful teachers’ unions by reaching further into empty pockets and giving teachers another annual raise. Do congress and the president need to be reminded of the mounting debt crisis: 13 trillion in debt and a 1.5 trillion federal deficit?

Then there is the all too familiar state and local money paid out to teachers. Guess how that will get funded. Either the states go more into the red or they reach their hands out to to the rest of us. In other words, as taxpayers, we get double-whammied with this financial burden.

So while Wisconsin teachers are whining about a modest 3.75% compensation increase (salary and benefits), I’m wondering how many of you, how many tax payers, received a raise this year? How many of you have had your benefits cut? How many of you had hours cut? And how many are still employed?

From my vantage point, that 3.75% raise looks pretty good during these times. It looks down right generous considering its funded by people who haven’t seen a raise in the past few years.

But 3.75% isn’t good enough for teachers. It was less than last year. Less than the year before, probably less than the year before that. Sounds bad when it’s stated like that, doesn’t it?

How about if I take out the spin and give a more accurate presentation of their compensation packages. Here is my version of their compensation: “As part of their regular annual raise, Wisconsin teachers will receive a 3.75% increase in salary. Wisconsin teachers have received an average of 4.13% since 1993 according to the State Journal article. Due to a down-turned economy, the pay increase is the lower than it has been in the past 10 years.”

If I were a teacher I wouldn’t complain to someone living in Janesville or Milwaukee about a pay increase — a pay increase that is likely funded by someone who is out of work.

Wisconsin, like most states is hurting badly. Our state is in the red. Either we cut spending across the board or we come up with a way to finance what we spend. The next line of attack is to increase local taxes. How much more can you tax people? At some point, the government is going to run out of people to tax as more people lose jobs or just watch their income dwindle and their houses foreclose.

Unemployment, pay cuts, and pay freezes have hit families hard. Income has dwindled while costs have increased.

Now time for some more bad news: Net incomes will drop again if the Bush tax cuts are allowed to expire.

Who will pay?
News surrounding these tax cuts has always focused on the highest earners ($250,000 and above.). In fact, repealing the Bush tax cuts impacts all families with children.

We are facing “the largest tax hikes in the history of America” according to the group, Americans for Tax Reform, The child tax credit would be reduced from $1000 to $500 per child. Middle income earners will pay a 3% increase in taxes. Families’ earning as little as $17,000 per year, would jump from a 10% to 15% tax bracket.

Grandparents also will feel the pinch. Retirees depending on investment income can expect a large drop in their net income. Capital gains taxes increase from 15% to 20%. Dividend taxes will more than double, jumping from 15% to 39.6%.

These aren’t tiny ripples that will go unnoticed. Instead we can expect a series of tidal waves that will wreak havoc on personal income and the overall standard of living.

Find out more
Complete news coverage has been sparse in this area. I’ve heard various sound bites offering vague promises that were short on facts. I’m still waiting to hear coverage of specific, written proposals instead of campaign rhetoric.

Forbes, however, has recently put out a good article summarizing the major parts of the tax cuts as they stand.

For first hand knowledge, The Joint Committee on Taxation, a congressional body involved with tax legislation, has pdf files with updated information. I used this site to verify and research the facts. It’s not the most exciting summer read but it takes you right to the source of some of the most current and likely proposals that will make it to the floor. (Of course, this does not include proposals from members of congress not on the committee.)

A variety of proposals is likely to come to the table, including suggestions from the White House. The Wall Street Journal discusses positions taken by Speaker Pelosi and Treasury Secretary Geithner. Many lawmakers and White House officials are taking a partial position that would eliminate tax cuts for higher earners. How this will actually play out remains to be seen.

Can anything be done?
We could speculate over which party will vote to extend the tax cuts, which tax cuts will be extended – if any, and whether or not President Obama will support the extension. But it amounts to nothing but mere speculation.

Before a decision is made, doors will shut, deals will be made. With the impending November elections, our best bet is to urge our senators and representatives to extend the Bush tax cuts.

Then, pray that they listen.