Thomas Donlan, in an editorial comment (link) on the woeful state of state finances in today’s Barron’s Magazine, offers, from a Pew Center report, comparative state data on an interesting metric of state insolvency: compared to the state’s amount of “spending necessary to continue all services and give expected salary and benefit increases,” what is that state’s projected revenue shortfall [for I presume this fiscal year]? California takes the gold medal at a 49% shortfall, but the hardy Illinoisans, led by the big spending pols from the Second City, grabbed the Silver medal in a close second place finish with 47%. Arizona, surprisingly at least to me, placed with 41%, and those big-shot easterners from New York and New Jersey were relative pikers at 32% and 29% respectively. It isn’t easy designing a spending plan twice the size of your income, but Illinois pols managed to do it and outshine New York in the process. Kudos.
And just the other day we received more data on just how much government workers cost us taxpayers. For years it was an accepted truth that government workers were paid less than their private sector counterparts in return for less threat of job loss from layoffs and a solid, if not better, retirement package. And we now know that this is no longer true, and hasn’t been for a while. USA Today just released a report (link), based on its own detailed analysis of federal data, on how much more federal workers make relative to the private sector: they make more in wages, more in benefits, and have a much better retirement deal, all with practically no threat of workforce downsizing. Anyone surprised? State and local workers also have higher total benefit packages than private workers in comparable jobs.
In response to my post (link) the other day on the wreak that is the Illinois state balance sheet, friend and reader The Good Doctor, a political independent, comments:
Mr. Greco and I agree. [T]here [sh]ould be no support for any politician who is not working to cut spending, including cutting the "off limits" existing pension programs for current employees. Yes, of course they will say it is impossible because you have to change laws, but what kind of government says to citizens that we are going to tax you more for [excessive] incomes for [retirees]? [T]he greater-than-private-sector salaries and benefits have not resulted in more efficiency or productivity [in state government], so what do we have for [the gold-plated state benefit packages]? My belief is, and one could probably argue from data, that productivity is hurt by such a give away.
I agree that these politicians (of all stripes) have ruined government finances to the detriment of all except those who receive the largess and who get the votes. In other words, not the citizens of the state.John M Greco