Sorry, No Band For You

My local school board wants the county supervisors to raise taxes -- not to pay for increased student costs, but to pay for teacher pensions...

Fairfax County officials are about to run head-on into the same public sector pension funding crisis that is spreading across the entire country, as detailed by the Pew Center on the States' recent report about the "trillion-dollar funding gap."

The issue is being drawn with razor-sharpness in Fairfax in the choice now facing local school board officials: They can either ask the Fairfax County Board of Supervisors to raise taxes to fund lavish teacher pensions and other retirement benefits properly, or they can reduce current teacher and administrator salaries by eight percent and use the money saved instead.

I understand why current teachers wouldn't want an 8% cut, and why retired ones may not consider their pensions lavish. As a taxpayer, though, I could care less. I always enjoy seeing when they threaten to cut band and sports if they don't get a tax hike --that's not a bluff taxpayers won't call. Plus, my memory of high school sports teams and band is that they did end up raising some money for themselves anyway. However, back on the point regarding pensions, Nick Gillespie explains that this is just the beginning of a trend...

As we've noted here, this is a story that is only going to gain in regularity as the gap between public-sector and private-sector compensation grows (public-sector already has a 70 percent advantage!) and as private-sector workers increasingly fund their own retirements via 401(k)s.

The basic bargain about public-sector work, hammered out decades ago in a very different world, is supposed to be: You give up status, upward possibility, and compensation now for job security and payoffs later in retirement. That has never really been true and is certainly less so now. Yes, public-sector jobs ofer more security than their private-sector counterparts, but compensation is also higher on average and the benefits, especially in retirement are gold-plated to the nines. That bargain, which is unsustainable economically, is going to hit the rocks. The only question is: Who is going to pay? Taxpayers or the public-sector workers?

My guess is that the public eventually revolts against big pensions for the public sector, because the tax hikes will be massive otherwise. We can only borrow so much money (although the federal government seems determined to test that point).

A Good Start, Mr. McDonnell

My new governor takes on some sacred cows in his first budget proposal...

Virginia Gov. Robert F. McDonnell (R) has privately recommended cutting $730 million from K-12 education and $300 million from health programs, as well as changing the state retirement system and requiring 10 days of furloughs for state employees, all to help offset a $2.2 billion budget shortfall over two years, according to sources familiar with the plan.

The K-12 reductions would loosen the state's basic educational standards while reducing funds for support staff, supplemental salaries for coaches and teachers who serve as club sponsors, and health insurance for teachers.

The health cuts would reduce mental-health treatment beds by 232, take 5 percent in funds from community service boards that offer substance abuse and mental health treatment programs, and freeze enrollment for a program that provides insurance to low-income children.

The governor is also recommending millions of dollars in trims to public libraries, shuttering some state parks and phasing out all public broadcasting support over four years.

My biggest complaint is that he isn't cutting enough, but this is hopefully just a start. The actual budget is slightly different than those reported cust, but it's still a better than decent start. And McDonnell's rhetoric, while sympathetic, is a lot better than the woe-is-me stuff from the other side...

"All the cuts gave me heartburn,'' McDonnell said. "All of them were difficult because I know that behind every cut there is a Virginian -- somebody in this room or somebody out of the 7.8 million people we have -- that might be affected by that."

Reponse to the proposed reductions was swift.

"We're really throwing kids in the poorest districts under the bus,'' said Robley S. Jones, director of government affairs for the Virginia Education Association, which represents teachers. ''Honestly, I don't know what school systems like Lee and Petersburg are going to do."

"Governor McDonnell, state legislators, and other officials must be aware that cutting funding to community mental health services, reducing Medicaid provider reimbursement rates, and eliminating acute inpatient beds puts extraordinary pressure on an already overburdened system," said Mira Signer, executive director of NAMI Virginia. "Individuals with serious mental illness need to be able to access treatment and services at the time when they go looking for them; if they aren't available due to waiting lists or too few providers, there are consequences."

"Virginia ranks 48th among the states for Medicaid spending per capita and 45th in Medicaid spending as a share of the state budget," says Laurens Sartoris, president of the Virginia Hospital & Healthcare Association. "Virginia's Medicaid program already is extraordinarily lean. There comes a point when cuts of this magnitude will hurt all Virginians and cause long-term damage to Virginia's health care delivery system."

You know what, guys? Make do with less. The money funding these budgets comes out the pockets of people who have to do that in the midst of a recession. They lose their jobs, take pay cuts, and work harder for less. Unlike the federal government, states can't print money, and raising taxes drives people (and jobs with tax revenue) out of state. Kudos, Governor. Now let's cut some more.