LA Times: Public Employee Unions are not the problem

June 21, 2010 Uncategorized 1

George Skelton’s column in today’s Los Angele Times shatters some of the myths about the impact of public employees’ unions in California on the annual budget crisis. 

Skelton writes: “In truth, California’s budget nightmare stems from a devil’s brew of sins: lack of discipline on both spending and tax-cutting in the past; an outdated and unreliable tax system too susceptible to economic booms and busts; the unhealthy dependence of local governments on Sacramento; and a dysfunctional state budgeting process that requires a gridlock-generating two-thirds majority vote….

….

And those pension costs? The governor has budgeted $3.8 billion in state contributions for the next fiscal year. But only $2.1 billion of that would burden the bleeding $83-billion general fund. The rest would come from self-sustaining special funds.

So even if employee pensions didn’t cost the state a cent — an impossibility — the savings would fill only 11% of the general fund deficit hole.”

This sort of blows the premise of Steven Greenhut’s book out of the water, doesn’t it?

1 Comment

  1. George Skelton of the LA Times is delusional.
    (1) If it weren’t for the 2/3 vote requirement spending and borrowing would of been greater and California would of defaulted on its debt obligations years or decades ago.
    (2)”…An outdated and unreliable tax system that is too susceptible to economic booms and busts…” Spending should remain the same during economic bubbles, Derivatives Bubble, Dot-Com Bubble, Sub-prime Mortgage Bubble, and the increase in State revenue during the economic bubble should be saved for the period after the bubble’s pop. Politicians that can’t recognize a bubble should resign.
    (3) “…An unhealthy dependence of local government on Sacramento…” An example: (A) The State requires local governments to build affordable housing. (B) The State takes Redevelopment Funds from the local governments. (C) Local governments are blamed for their unhealthy dependence on Sacramento.
    (4) “…self-sustaining funds..” to cover Pension costs? Please, please tell us more – we all want to buy stock in these “self-sustaining funds”. The $numbers sound like a half-truth at best.

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