Curmudgeon's Corner

Budgets Awash in Red

Posted by Al Campbell on June 8, 2010

Economy, Political, Quality of Life, Taxes

Budgets in the public sector are in atrocious condition.  Our school systems fight to maintain balanced budgets without jeopardizing the quality of their product.  Our state will begin its next budget cycle with a $2.3 Billion deficit.

We are in “deep doo-doo” as an old saying goes.  The low-hanging fruit of budget cutbacks is virtually nonexistent today.  The maintenance of balanced budgets is going to cause anguish because the places where the cuts will have to occur are in the costs of people.  And cuts will have to occur; the idea that more tax money can be gathered is, from my perspective, dead on arrival given the state of our local economies.

Public employee unions are going to have targets painted on their backs since they represent a very significant part of every budget.  Our local schools spend some 85% of every dollar on people, for example.  The remaining 15% covers all the other costs associated with providing a good education.

This is made more apparent by the use of TARP funding that saw increases in the hiring of state employees, or the maintenance of existing employees using found money, over the past many months rather than the creation of real, lasting jobs in the private sector.  We saw national employment figures last week that had temporary national census employees as something approaching 90% of all the 400,000+ jobs filled in that period.  That’s not going to work well for very long unless we decide to conduct a perpetual census.

We have robbed Peter to pay Paul about as much as Peter can tolerate and keep himself alive and afloat financially.  There is about to come a day of reckoning for Paul.  There just isn’t any more money available to feed the beast that we’ve permitted to be created that is our government.  The national schools cheerleader, Arne Duncan, is today pleading for the prompt passage of another federal bailout that will keep teachers employed.  Without that, he opines, there will be carnage (my term) amongst the ranks of teachers since there simply won’t be the dollars available with which they would be paid.

Our current governor has raided just about every fund he can find, and taxed just about everything he can think of, to avoid the tough choices that will now confront the next governor.  Whoever is fortunate (or unfortunate) enough to win that position is going to be figuratively tarred and feathered by public sector union officials because that is precisely where the biggest cuts have to occur.  The cumulative effect of high current wages coupled with the growing impact of funding pensions and health care costs for public sector retirees, further exacerbated by even more hiring of more public employees, is simply the perfect storm.

This perfect storm has been brewing for many years and the current recession has likely brought it to a head more quickly, but it is here.  The feds cannot continue to issue money like it was meaningless paper (or maybe that is what they’re sending out these days).  There must come an end to the largess.

New Jersey’s Governor Christie has taken on the juggernaut that is the public employees’ unions.  He is sticking to his guns and he is not at all held in high esteem by the unions; but, he is doing what he said he’d do during his campaign, and the people who voted for him are ecstatic that he is keeping his promises.

Wisconsin needs its own Governor Christie and that seems more likely to be a Scott Walker than a Tom Barrett.  (The omission of Mark Neumann was not by error.)  Additionally, Wisconsin is going to need true statesmanship from its Senate and Assembly members.  A conservative base in both those bodies will be darn handy come the budget debates.