I read yesterday’s Flashreport with all of the stories in the mainstream media about laying off, and furloughing, state employees, and the negative impact that is having on state employee morale.
But look what is happening in the private sector. Thousands of private sector workers are losing their job, which is having a negative effect on state income and sales tax revenue, and that drop in revenue is resulting in state deficits. These deficits leave the state with the options of cutting spending, raising taxes, or both. Raising taxes will reduce private sector spending, costing more private sector jobs, further reducing income and sales tax revenues, and quite frankly, reducing the effectiveness that any tax increase may have toward increasing state revenue. Quite frankly, raising taxes will make the short term revenue problems worse.
Cutting spending will cost government jobs, for sure, but lots of people are losing their jobs right now. Government workers, and government worker unions, think that somehow they ought to be immune from these economic ups and downs. They always want more spending when revenues are up, and they never want to cut spending when revenues are down. What is worse, many government managers, the people preparing the budgets which are the basis for the demands for these tax increases, give themselves record high salaries, and complain that there is not enough money for the poor they claim to be working for. A recent study in San Diego shows that there are a record number of six figure income city workers right in the middle of a recession. If these folks worked for Citibank, Obama would cut their salaries.
So why not cut their salaries? Why not lay them off? Why are they immune? Why can’t they be subject to the same economic forces that throw the private sector to and fro. It is not hard to argue that these bureaucrats who are demanding that they be immune from the economic downturn are as much responsible for it as any other force. Their regulatory excesses cost the state the revenue. Those same regulatory excesses should cost them their job. Maybe they’ll think twice about their screwball regulations if they know it will cost them their job.