Hold onto your wallets, folks.
While the public focuses their attention on the man-made disaster in the Gulf of Mexico, the man-made disaster of profligate government spending across the country is getting worse.
At the MacIver Institute, we’ve discussed the funding cliff facing many school districts across Wisconsin. We’ve also chronicled the mismanagement of the state’s finances and the reckless budgeting of the Doyle Administration and their allies in Madison. Finally, we’ve run several news and analysis pieces on the dubious stimulative affects of the American Reinvestment and Recovery Act boondoggle.
Now, all three storylines are converging into another ‘perfect storm,’ that would gouge the taxpayers, delay any economic recovery and jeopardize the entire U.S. economy.
School districts across Wisconsin have set their budgets for the next year and in many cases have moved to layoff employees, including teachers. As municipalities look at their finances, in many cases they see declining state aid. And the state, well everyone is aware that the well has run dry and that despite increased taxes and fees on individuals and businesses, we’re running a several billion-dollar deficit. There can be no doubt that governments at every level are in a bind.
There are two ways to address these shortfalls, one hard, one easy.
The hard way would be to take advantage of this crisis as a necessary opportunity to examine the role, scope and mission of each unit of government that is facing dire financial times. Such an examination would include, but would not be limited to:
- Comparing the pay scales of their employees with any similar private sector workers
- Looking at the benefit costs and ways in which they could be reduced
- Prioritizing and recommitting to the core mission and determining what functions could be outsourced, privatized or outright discontinued
- Collaborating with peer entities in the public and private sector to provide the same service at reduced cost
- Cracking down on waste, fraud and abuse
- Understanding that resources are limited and reducing services to meet the taxpayers ability to pay
The easy way is to receive a bailout from the federal government.
Last month Congress rejected President Obama’s request for a $24 billion bailout of state and local governments. The president’s request for $23 billion for school districts similarly has failed to gain the necessary support…so far.
Now, President Obama is turning up the heat in his quest for the nearly $50 Billion state and local government bailout. He has written Congressional leadership, imploring them to act, quickly, on this matter and has dispatched his top advisers to the talk show circuit to reinforce the plea.
The Obama Administration and the would-be benefactors of this new ‘Stimulus’ package hope to avoid the tea-party fueled outrage of the last 15 months by attaching this bailout to some non-related piece of legislation that is close to a final vote. They can not let this boondoggle be examined on its merits. The longer this sits out in the public domain for inspection, the less likely its passage becomes.
By now even the most isolated government insider understands the taxpayer revolt another Stimulus plan would cause. “Sure the first one didn’t work, but if we don’t spend $50 Billion more things are going to be real bad,” is hardly a winning sales pitch.
The state and local government bailout isn’t about saving our nation’s schools…or our roads…or keeping cops on the street. Instead, it is merely a bailout of local and state governmental bodies who refuse to break free from the stranglehold of the public employee unions whose work rules, pay and benefit levels are simply unsustainable.
Bailing out those units of government who fail to exercise fiscal discipline is not a one time act. If these school districts, cities and states are not forced to fix the problems now, they never will. They will continue to reach out the feds for more ‘one time’ money. Whether the tax dollars come from the right pocket or the left pocket, it is still your money they are after.
Many see November as an opportunity to change the spend-happy course of governments from Madison to Washington, yet the situation could be made monumentally worse in a matter of days.
The ‘Son of Stimulus’ has gone largely unreported.
Many congressmen and senators who may have to vote on the proposal don’t want you to know that yet another bailout is in the offing.
We do. Pass this on.
By Brett Healy
A MacIver Institute Perspective
Healy is President of the John K. MacIver Institute for Public Policy, the free market voice for Wisconsin.