Avoiding bad decisions in good times


By Dave Trabert, Kansas Policy Institute.

An associate of mine once said, “Some of the worst decisions are made in the best of times.” His observation pertained to negotiating agreements with labor unions but I was reminded of it by a news report saying local governments may eliminate 500,000 jobs across the country if Congress doesn’t pony up more federal tax dollars. The story was based on a survey released by the National League of Cities, the National Association of Counties and United States Conference of Mayors.

Here’s the taxpayer perspective.

According to the US Census Bureau and the Bureau of Economic Analysis, the country’s population grew 34.4% between 1980 and 2008 but local government employment jumped 51.3%. If local government employment had simply kept pace with population gains, there would be 1.6 million fewer local government jobs today. Instead, we’ve seen runaway property taxes (93% over the last twelve years in Kansas) and higher local sales taxes. Governments chose to add extra employees when revenues were flowing (instead of reducing taxes and improving the economy), and now face the painful task of backing off some of their excess employment.

Local government job growth outpaced population growth in most states but some were extreme, including Kansas, which had 65% local government job growth but only an 18% population increase. In 2008 Kansas had 65.7 local government employees for every thousand residents; that’s 39% above the national average and the second-worst state ratio in the country.

No one wants to see someone lose their job, but using tax dollars to subsidize employment is bad policy to begin with and spending federal dollars on local government employment destroys the Constitutional protections of state sovereignty. Governments have no money of their own; they simply take money from taxpayers and redistribute it. Raising federal taxes to maintain a bloated local government workforce will only make an already weak economy even worse.


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