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Tuesday, November 24, 2009
11:05 AM EST
Joseph E. Moser

Big Labor, Big Budgets

This year 45 states spent $215.5 billion more than they raised in tax collections The reason: they dramatically increased spending beyond their means, with little regard to the nation’s economic climate. ATR’s newly released report “2009 State Tax Trends”shows that while GDP grew at an annual pace of 2.6% over the past ten years, state budgets outpaced production by 36.6%. It was this kind of staggering fiscal irresponsibility that caused current budget crunches, not supposed tax cuts, as claimed by those who advocated for tax increases in 2009.

Spending cuts, therefore, are drastically needed: furloughs, layoffs of state workers, and budget cuts are the first place to start. However, public sector labor unions hate cuts, period -- regardless of the long-term consequences for taxpayers if concessions are not made. And they have expressed their outrage at state capitols around the country.  So far at least 21 states have forced 728,500 state employees to take furloughs.
 
For example, The Seattle Times reports that lawmakers in Oregon did not raise taxes to help close the $9 billion budget deficit, eliminated pay increases for teachers and state employees, and cut health care, education and other state services. As a result, the Washington State Labor Council, the SEIU, and teacher and state worker unions have it out for Democrats. They’ve already reduced donations to Democratic caucuses and have threatened to defeat incumbents if they do not support big labor issues next legislative session.
 
New York, too, is facing opposition from labor groups over Gov. Paterson’s proposed spending cuts. Currently, state lawmakers and the governor have yet to reach a deal to address a $3.2 billion deficit for the remaining months of the fiscal year – a deficit that is set to drastically increase to over $50 billion over the next three years. Why? Mostly because of generous health care and education spending which are higher in New York than any other state. These are the largest parts of the state’s budget and require serious structural reform to stave off years of unfunded obligations and the prospect of further tax increases, debt and federal “stimulus.” However, powerful labor unions are opposed to any cuts.
 
Their refusal to make concessions is at the detriment of the taxpayer.
 
Photo Credit: AMagill
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