State Workers Pay Taxes Too

During a discussion the other day, a SPEA staff member made a point that seems to be lost in the contending, highly ideological arguments about the standoff in Wisconsin. She noted that public employees are also taxpayers, and that the Governor’s insistence that he is acting in the “interests of the taxpayers” didn’t seem to include the interests of that particular subset of taxpayers.

Her observation has just been quantified and amplified by Robert Russell, a Wisconsin state economic analyst, who pointed out that state workers are not only taxpayers, but consumers.

According to Russell, if public employee salaries are cut through increased withholdings as Walker is proposing, by an amount large enough to fill the $137 million budget gap, the resulting drop in consumer spending will lead to: 1) a loss of over 1,200 nongovernment jobs; 2) a loss of about $100 million in business sales statewide; 3) a loss of nearly $35 million in personal incomes of nongovernment employee households; and 4)  a loss of nearly $10 million in state tax revenues.

This is not about economics. (Indeed,  Governor Walker seems blissfully ignorant of basic economics.) It’s about ideology, hubris, and political payback.


  1. If the pension cuts and health care premiums amount to 8% for the public employees, isn’t that about the same as imposing an 8% tax increase on them? I wonder if the other good citizens of Wisconsin would be willing to pay their 8% in order to balance their budget?

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