Spending isn't the problem" (Business Week Barf Alert)

For the third straight year, state and local governments across the country are dealing with weak revenues, rising expenses, and the prospect of enormous budget deficits. In some cases, the problem has grown to a staggering size: Texas had to wrestle with a $10 billion deficit, while California is still struggling with a shortfall as large as $29 billion.

MY LETTER TO BW:

NOTE: Do not edit this letter in any way, shape, or form for publication.

Dear BW:

Your analysis of the budget situations of state and local governments is way off-base, to the point that it's hard to know where to begin.

First, state spending per capita did increase in real terms in many states from the mid-90s through 2002, particularly here in Ohio.

Second, measuring increased employment in state and local jobs vs. the private sector ignores the privatization of many services that has occurred during this period.

Third, even ignoring privatization, state employment should not have increased at all if there were any kind of meaningful increase in productivity. Even a 1.5% per year improvement, which is significantly less than the private sector routinely achieves, should have meant stable employment, even considering population increases.

States and localities have done the nearly impossible by squandering billions in gambling and tobacco-suit windfalls and still coming up broke. They have failed to make any concessions to economic reality for years. Now that the chickens are finally coming home to roost, they think increasing taxes further will solve their problems. Baloney.

++++++++++

I should have added, "the only way to force productivity gains is to starve the public sector into giving in," but I want the letter to have a chance of being printed.

Here in Georgia the State, County, and City governments spent like a bunch of drunk sailors during the 1990's- it was fueled by Lotto money, raising up the sales taxes obscenely, and of course there were tobacco tax revenues, permit fee increases- the usual stuff. And the dot-bomb bubble, too.

Then it all imploded and they "just aren't getting enough money anymore" to fund the level of services to which nearly-infinite layers of bureaucrats, sycophants, and hangers-on have grown used to.

Any family, or small business faced with this situation would cut spending to the bone...

...they won't even talk about it...

...state and local sector outside of public schools and the criminal justice system...

Here is the root of the problem. I actually beleive this. We are spending absurd amounts of money on schools that do not improve the education of children. Are there really that many more garbage collectors, dog catchers, road crews, etc. If you look at any town budget the majority of the money goes to "education".

It was awfully dishonest of the article writer to take schools off the table in the discussion, since such a large % of state/local spending is on education (as you noted).

You want to talk productivity? How about plotting SAT scores (declining or holding steady at an absurdly low level) against number of teachers and administrators per student (rising all the time)? Productivity and results in the public education sector have been NEGATIVE for so long that way too many people are just assuming that's the way it will always be.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.