Its Time for Tough Love
By Peggy Venable & John Roach
Texas Insider Report: AUSTIN Texas The notion of bailing out hundreds of state & local governments has many taxpayers justifiably up in arms. Years of spendthrift government policies have put state & local governments across the country not to mention the federal government deep in debt. Now according to some policymakers in Washington the only possible solution to the looming crises in state governments is more taxpayer bailouts.
Its not like bailout dollars grow on trees. We must constantly remind policymakers that bailout funds are simply money taken directly from the pockets of hard-working Americans and business-owners and giving them as a handout to spendthrift corporations and in this case governments.
States with projected budget shortfalls over 25 (well beyond the crisis point) include:
- California
- Minnesota
- Mississippi
- New York and
- South Carolina.
Illinois a model for big government spending has a whopping 52 budget shortfall.
Countless other states find themselves confronting massive budget shortfalls with few remaining tricks or gimmicks left to hide the consequences of their runaway spending.
While state shortfalls are estimated at $100 billion local governments in Texas alone are a total of $175 billion in debt with long-term bond obligations. And if we add all the pension and other post employment benefits - the often overlooked debts incurred by state and local governments the amount becomes unbearable.
According to the
National Association of State Retirement Administrators retiree pension payments from state and local government pension programs exceeds the personal income derived from the nations farming fishing logging and hotel/lodging industries combined. Yet these
and all other private sector workers are responsible for supporting the bloated pension systems of the nations state and local governments through their tax contributions.
For their part Senior House Republicans say they will oppose any state requests for money.
If we bail out one state then all of the debt of all of the states is almost explicitly put on the books of the federal government House Budget Committee Chairman Paul Ryan was quoted as saying in the WSJ earlier this month.
Federal Reserve Chairman Ben Bernanke recently ruled out a central bank bailout of state and local governments strapped with big municipal debt burdens saying the Fed had limited legal authority to help and little will to use that authority.
A bailout should be off the table. After all why should Texans help pay for Californias economic malfeasance?
Now is the time to seek real reforms to curb government spending rather than simply demanding yet another taxpayer funded bailout. Its time to end the stranglehold public service union bosses have on the fiscal future of our nations state and local governments.
Its time to reform the state pension systems by converting state and local programs to defined contribution plans a better deal for taxpayers and government employees alike.
Also taxpayers should demand an open complete and honest audit of their states pension obligations. Letting the beneficiaries of profligate pension spending handle the accounting is like the proverbial fox watching the henhouse.
Its time to end the growth of state and local governments by privatizing more government work and drawing clear lines in the sand to restrict the growth of government spending and taxation at all levels of government.
Lets stop kicking the can down the road.
Todays leaders will need the moral fortitude their predecessors lacked. Todays leaders must do the right thing by saying no" to more spending.
Bailing out the states is just increasing the bill to all taxpayers and future generations.
We are leaving our children a legacy of unmanageable debt not the legacy most Americans want to be remembered for.
John D. Roach is the CEO of Stonegate International. Peggy Venable is the Texas Director for Americans for Prosperity.
