With a government budget in massive, structural deficit, a frantic struggle is underway to find new sources of revenue. Notwithstanding an historic economic downturn, in recent years the public payroll has continued to grow, and efforts to make even modest reductions in staffing and benefits are met with fierce opposition from public employee unions.
Dover, February 2010? Sure.
Athens, Greece? Right again.
Greece invented democracy and Delaware can fairly be said to have helped perfect it as the first state in the world’s oldest democratic nation. But years of unchecked spending and bloated government workforces have now created another unfortunate and much less appealing connection between the two.
Greece’s national finances are in free fall and now pose a threat to the EU itself. Delaware’s budget woes stem in large part from the same fundamental issue: too many government employees with too few tax dollars to pay for them.
Katherine Kersten in the Minneapolis Star-Tribune observed:
Greece’s plight is due largely to the fact that one in three Greeks is employed by the government and is guaranteed lifetime employment. According to the New York Times, public wages and pension payments make up fully 51 percent of the country’s budget — a huge drag on the economy. Over the last decade, Greek public-sector workers’ pay has doubled and their numbers have exploded, thanks to union muscle.
The result? Greece is heading off a financial cliff. The country’s annual deficit is now almost 13 percent of GDP — four times greater than the European Union’s cap of 3 percent of GDP. This back-breaking debt has raised the specter of a Third World-style bailout from the European Union or IMF, or even the unthinkable: default.
You read that right. One. In. Three.
So it isn’t hard to imagine that many in Greece aren’t too eager to get on board with any new “austerity measures:”
Public sector workers in Greece clashed with police during a nationwide one-day strike on Wednesday to protest at government measures to try to tackle the country’s enormous budget deficit. Riot police fired tear gas at demonstrators in Athens after dustmen attempted to join other workers by driving their dustcarts through a police cordon.
Many schools were closed, flights into and out of the country were seriously disrupted and hospitals were operating an emergency-only service. The socialist government of George Papandreou – which has already faced down a three-week protest by farmers asking for more subsidies – has said it will have to cut pay and pensions as well as put up taxes. On Tuesday the Prime Minister announced plans to freeze public sector recruitment, raise the retirement age and put up petrol prices to raise more revenue.
Mr Papandreou has always been close to the unions, but they criticised his plans saying it was the lowest paid workers who would suffer while the wealthiest citizens would continue to evade income tax with impunity.
Sound familiar?
Today, 62,000 people in Delaware are employed by state, county or local government. That’s north of 14 percent of all those working. The second or third highest percentage in the country. Not Greece, perhaps, but the creeping effects of such an imbalance in public sector employment are increasingly apparent: a state legislature conflicted by its own double-dipping (the Senate’s top three Democrats all have a second paycheck thanks to the taxpayers) and beholden to the pressures of AFSCME et al, and public spending crowding out the private investment that is so badly needed.
As with our Mediterranean cousins, this is unsustainable, and, in the original Greek (“hypocrisy, deception…feigned ignorance”), ironic.
Once again, Resolute Determination does the easy part, leaving the heavy thinking to others. Another post about how many state employees we have, yet not a word about who should be fired. Where the excess is. What the fix is. Just vague complaints that it’s all too much, we are heading towards doom. Elect me I am anti-bloat.
So, next post about bloat and excess please tell us if we have too many police, too many in corrections, too many in judicial, too many teachers, too many at DMV or the Post Office. too many staffing the State Hospital, too many at transportation clearing snow – where are the too many that need to go? Is it at Health Human Services?
The Attorney Generals office is the biggest “law firm” in Delaware. Is that bad because it’s big? We just added to the forensics lab so DNA testing is can be expedited. Twenty years ago there was no DNA lab. We added DNA experts to the payroll is that bloat? Twenty years ago we had no internet or IT workers. We added people and services the public wants. You pay taxes online now. Get business license online. Shall we scrap that? Go back back to 1980 small? We doubled our prison beds to lower the crime rate. You get my drift.
The number of people working in the public sector depends on demand for public services. Fight waste? Yes. Fight progress? No.
How about a little meat on those anti-government bones? Who should go?
Question… how do you write an article about what’s happening in Greece without mentioning Goldman Sachs?
GS helped Greece cheat their way into the EU.
GS did not force Greece to run up unsustainable defficits year after year.
(looks like the left is lining up to make Goldman Sachs this decade’s Haliburton)
Multiple specific proposals/ideas have been offered on this blog (here) and elsewhere (here and, on the local level here) about how to smartly reduce government spending and headcount. This past December Auditor Tom Wagner showed Delaware could save $50 million through school district consolidation and that doesn’t even involve the Dept. of Education which on top of the 19 districts does what exactly? Etc.
My recall is that both Gov. Markell and County Executive Coons have publicly acknowledged the unsustainable size of government payrolls and the need to consolidate services and eliminate duplication /maximize efficiencies. Indeed, Gov. Markell eliminated the Dept. of Finance with a press release saying:
“Following through on his commitment to make Delaware’s government smaller and more efficient, Governor Jack Markell today announced a proposal to eliminate the state’s Department of Finance and consolidate its functions into other state agencies…
We know what happened there.
And I challenge your premise that we have a big government payroll because people are demanding the services. First, to point out the obvious, there are lots of things folks may “want” but fewer things we can afford. More importantly, as with Greece we have a serious problem with a public sector that is now so large that it has become a massively influential self-perpetuating stakeholder that – as with most large interest groups – seeks to strengthen and sustain its power at all costs. That is not in the public’s best interest. Government staff is supposed to be accountable to our elected officials, not the other way around and with so many legislators themselves with state funded jobs the conflicts of interest are inevitable. Are Delawareans really clamoring for the critical service we’re getting from the legislators working in the Dept. of Labor? Come on.
Ultimately, we pay our elected leaders to make these specific decisions and the point of the post is that they are simply not optional.
Interestingly, the Wall Street Journal points out a similar connection with California & New York.
On our blog we mentioned the sad state of Goldman, http://delawarerepublican.wordpress.com/2010/02/15/the-sad-state-of-goldman/
As for Greece I have visited the country over 100 times in the last 20 years and the economic slide has been continuous and steady. The continual growth of the public sector has been a negative force but the utter disregard for the need to have sustainable economic growth did them in. Yes, you can have a public sector but it has to be paid for by somebody.
Greece got an extension because of the Euro which allowed strong economies like Germany to provide monetary stability to the EU and to weak sisters like Greece. Now, you have the Club Med countries of Greece, Italy, Portugal and Spain to be trapped by the unified monetary policy (no devaluation of currency) but individual fiscal policies which have been woefully weak and destined for failure.
Delaware has been on a track of suspended animation where budgets have grown much faster than the economy. The government has grown which extends the transfer of wealth at the expense of creating wealth.
You have to ask what benefit has Delaware received from this growth in government?
Mike Protack
Would a little optimism be in order? Unsustainable Delaware. Are we really doomed? The growth of government kills the creation of wealth. Don’t panic.
If it was not for government there would be no wealth, so don’t get carried away with the government negates wealth junk theory.
Delaware, has a population around 900,000, 410,000 non-farm jobs, 31,000 state employees. State employees account for around 3.5% of the population, 7.5% of the workforce.
You can squeeze every last bit of waste out of the public sector eliminate double dipping, those percentages won’t change much. Private and public sector are shaped by supply and demand. Demand for services is the main factor driving the number of public service employees. Hard to say if 3.5% employed providing State services is too many or too little. The question is do we get the jobs done that have to get done?
Delaware a very smooth running little state, good roads, good police, state of the art business services. Good all around infrastructure. Every year, the State is getting a bit more modernized. That stuff counts a lot when it comes to bringing business here. Is State government too expensive, or are we too cheap to pay for what we demand?
Make it even more efficient. Make it even smarter. Make it lean. But don’t make it sound like having a well staffed public sector providing smooth service for the people of Delaware is not a good thing. Drive around Mississippi, you’ll see how we benefit from a well funded public sector. Don’t forget Delaware belongs to a very elite group – among the richest states in the Nation. Let’s stay first class.
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“But don’t make it sound like having a well staffed public sector providing smooth service for the people of Delaware is not a good thing.”
Are you saying that a “well staffed public sector providing smooth service for the people of Delaware” exists, or for that matter ever has or will?
Man. Don’t be so negatory. Last couple of times I called for business license stuff, got my car inspected, went online to pay taxes, got labor statistics everything was state o de art. Smooth as silk. When Al Quaeda hits Delaware with an underpants bomb, that new Emergency Response Center on Route 1 looks ready to for action. So all in all I am a satisfied customer of Delaware public services. My street got plowed. The major streets hardly missed a beat. The house across the street got burglarized last week the cops were all over it. Delaware. These guys are good! You can tell a lot about a State by getting your car inspected.
Inspect cars? Great.
Education system? Not so great.
Economy prepared for future? Not so much.
Environment? Not so clean.
Open government? Not so fast.
At least they don’t spend a lot of money.
Dave, the glass is not always half empty.
Optimists, entrepreneurs, creators of stuff, effective leaders believe the glass is alway half full, heading toward brimming. The credo of the free marketeer, the good public servant – things are good and going to get better.
Environment. Cleaner than ever.
Open Government. More open than ever.
Economy prepared for future? If we could predict the future, we wouldn’t be blogging.
Education system? Better than ever.
That’s just not optimism, happens to be the facts we can all be proud of. Every item on the list is better than thirty years ago.
Now if you ask me what’s the best way to make voters sick about the world they live in, so we can get elected, that’s a whole different subject.
Reality: Look it up. It’s neat. You should spend some time there.