Sunday, March 8, 2009

Economist Shari Lyman calculates the impact of the Governor's budget on CSN faculty

CSN Economics Professor and CSN-NFA chapter president Shari Lyman has argued repeatedly that the Governor's proposed budget represents a "targeted, regressive tax" on public service workers in the state of Nevada. To support this argument, she offers the following data points on the hard-dollar reduction in take-home pay, calculated for the median salary on the CSN salary schedule for 2008-2009, of $ 58,620.

In adition to the loss of COLA's and MERIT which averages to 2.5%. The Governor's budget proposes

(1) lose 6% salary

- $3517.

(2) lose 1% takehome (it will go into RPA accounts but does affect takehome)

- $586

(3) lose on average because increase in PEBP costs (for insured worker, not counting family members on worker's insurance plan)

- $1975

In addition, there are as-yet uncalculated out of pocket costs resulting from

• Losses of 40 % - 50 % in personal retirement accounts, since most higher education instructors do not have PERS.

• Lost salary will represent an additional loss in lost future earnings over a career.

• Loss or even elimination of the promised PEBP subsidy upon retirement.

• Without taking into account the fact that many of us are not eligible for social security and medicare.

Thus, the person at the median of our salary schedule on average will see his or her payroll (after removing tax-sheltered retirement investment) go

from 2008-2009. $ 52,758 (10% tax sheltered retirement removed)

to 2009-2010. $46,717 (11% tax sheltered retirement removed)

This looks like more than an 11% loss for this scenario. So the employees in the System will be paying a tax of 11% that no one other than state employees have to pay directly. This translates into a targeted, regressive tax that is relative to CURRENT EARNINGS not to PROJECTED EARNINGS.

This is a real impact on higher education and its employees.

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