Unless you live in California, you may not have heard the announcement today that the state is currently facing a $16 billion shortfall in revenues for the next fiscal year. Tax revenues fell short of rosy politically motivated estimates, and spending has increased above expectations. The budget deadline is in June, and several of the Governor’s proposals to cut spending have been thwarted by fellow Democrats in the state legislature, while proposals to increase taxes have been lampooned by Republicans and money flowing in from right wing groups. A similar story is playing out across this great land of ours. The failure of the people to accept tax increases, corporate defiance to invest capital, government’s rejection of job training efforts, and the petulant reluctance of the Congress to step in and buoy state coffers is causing massive layoffs and reductions in public services.
Unlike the New Deal programs that followed the Great Depression, during this period of extreme economic trauma, both the federal government and the states have instead reacted to shrinking tax revenues and mass unemployment by shrinking government programs and firing workers. At the federal level, the appetite for renewed borrowing to fund programs, assist states, and help the middle class and the poor is minuscule. At the state level, due to requirements of budgetary balance, massive layoffs have accompanied drastic cuts in public services. Parks have closed. Hospitals have closed. Transportation, improvement, and infrastructure projects have been canceled altogether or have been substituted with patchwork fixes and band-aid repairs. Public sentiment is perceived by Washington to favor deep cuts and curtailments in borrowing and spending. Not only is Washington wrong on the policy, it is wrong on its taking of the pulse of Americans.
It was recently revealed that another 15,000 public sector jobs were lost in April 2012. Since the depression began in 2008, the public sector has lost–conservatively–more than 600,000 jobs. 600,000 folks who once provided you with the services that you took for granted as a birthright. People who educated your children, removed your trash, maintained your public spaces, filed your deed transfers, inspected your homes, monitored clean air and clean water standards, and on and on. Democrats and Republicans each favor varying degrees of continued austerity, with Democrats favoring small tax increases on the wealthy and corporations, and fewer cuts to government programs, and Republicans favoring huge tax cuts for the wealthy and corporations, with massive cuts to spending, defense outlays left untouched.
To listen to stump speeches and congressional soliloquies, one might come away with the impression that the public favors some mixture of the two approaches, with wide agreement that taxes should be kept in check and government spending cuts imperative. The data suggests that neither side is properly reflecting the position of the vast majority of Americans. For example, 56% of Americans believe that higher taxes and increased spending is needed to remedy our faltering economy. 68% of Americans believe that the current tax system benefits the wealthy at the expense of the rest of us, and a majority of Americans would be willing to pay more taxes to maintain Social Security and Medicare, as well as government programs that assist the poor.
As stimulus monies run dry, it is nearly impossible to open a local paper anywhere in the nation and not find a story or two concerning budget shortfalls and potential layoffs. School Board meetings far and wide have become contentious events. Property owners have been asked to pay more to support local schools, yet staff reductions and benefit give-backs remain unavoidable. Teachers are slated to be laid off, municipal services are being scaled back, and programs that offer help to young children and the poor are being eliminated altogether. State programs to offer incentives to people to install energy reducing technologies are being dispensed with, and along with the incentives, the jobs of those who install solar panels, geothermal systems, and energy efficient building materials and upgrades are lost. With each unnecessary cut, the ripple effects are felt beyond the public sector.
With budget cuts to education, we are destroying our own future. Enrollment is down at some of our most prestigious public university systems in response to higher out-of-pocket costs and staffing restrictions. At a time when technical education is becoming the very key to obtaining a good paying job, we are making it increasingly difficult to obtain, even for those who have excelled academically. This is a recipe for disaster. Last year alone, the federal government cut more than $5 billion in funding from education programs, the bulk of which was slated to pay for state programs and direct state grants. As the states struggle to balance budgets, education becomes a large juicy target. New York State alone will be eliminating more than 5,000 teaching positions, even after increasing tax levies.
As federal money fails to reach states, so too does state money fail to reach localities. These localities are forced to cut back on services such as fire and rescue, as well as police. Local government offices cut back on building inspections, shrink hours of operation, close public libraries, and even darken street lights. The Federal Reserve Bank of San Francisco, hardly an arm of the socialist movement, has predicted lasting consequences should the economy remain stagnant and federal aid to states remain damned. Because state governments are constrained by a requirement to balance their budgets, revenue shortfalls require offsetting cuts and debt offerings. Many states are already burdened by high debt loads and are loathed to increase bond offerings for fears of credit downgrades that increase borrowing costs. The states are left with the option of cutting spending and increasing taxes. Increasing taxes–while necessary–is politically unappealing during an economic recession, therefore most states opt for spending and services cuts.
The only entity available to step in and curtail the bloodletting of state and municipal jobs and cuts to public services is the federal government. Unfortunately, President Obama has not been willing to expend any political capital on efforts to assist the states, and Republicans are hell bent on ensuring that the economic emergency continue through election day. This situation creates immeasurable suffering in local communities. Taxpayers are asked to bear the burden of funding depleted schools and local services at increasingly unsustainable levels. Many people have lost their homes over an inability to meet property tax and other municipal burdens. Allowing this to continue during a period of high unemployment is particularly devastating, and sets in motion a cavalcade of events that only drags the local economy down further.
It is time for the federal government to step up and offer assistance to states and localities in order to maintain a basic level of public services and avert further layoffs of public employees. While the private sector continues to report modest job creation in 2012, the public sector continues to lose jobs. Lost in the debate over funding of government and government services is the fact that it is the public sector that allows the private sector to flourish, and it has done so since WWII. The public sector helps educate its employees, it maintains the bridges and roads on which the private sector transports its goods and personnel, it maintains the safety of air travel so that the private sector may travel to meetings and business events, it oversees the ports through which the private sector exports its goods and imports its supplies, it manages the tax boards and the IRS, it provides fire, police, and ambulance services to private sector business and its employees, it pumps clean water in and carries sewage and waste water out of private sector facilities, it has ensured efficient markets and regulation that has allowed private sector American business to attract capital from around the globe and enjoy some of the largest stock trading premiums in the modern world, it administers the courts through which the private sector settles its disputes, it handles patents, copyrights, and trademarks in order to allow private business to profit from its own creative product free of exploitation and theft. Essentially, without a robust and functional public sector, the United States of America and its business and financial dominance would not exist.
It is time to provide the public sector with the short term assistance it needs in order to ensure our collective long term survival. Teachers and public employees are not the reason that the government is broke–wage inequality, poor and dis-courageous governance, and corporate greed is. Please join us in focusing the anger, vitriol, and more importantly the constructive solutions, on those actually to blame for the current circumstances of state and municipal budgets. Those who provide us with the invaluable services that distinguish a modern functional society from one of chaos and dysfunction in return for substandard wages and a secure retirement are not the enemy. Don’t allow yourself to be convinced otherwise.