Budget & Tax
Brandon Dutcher | February 1, 2009
State Government's Overhead Overload
"My sister-in-law came to visit me last week from her new home in Silver Spring, Maryland," World magazine essayist Andrée Seu wrote in November. "When the economy threatened, she left a good job in the private sector in Florida for the greater security of a job with the Department of Veterans Affairs."
And it's not just the feds who are hiring. USA Today reported in November that "even as the economy slides into recession, many state and local governments continue to spend freely and expand their workforces. ... State and local governments added 160,000 workers in the past year, when the private sector cut 1.38 million jobs."
The Wall Street Journal reported January 10 that "the worsening U.S. economy hit the nation's work force hard in December, as the unemployment rate climbed to 7.2 percent and brought the total number of jobs lost last year to just over 2.5 million-the most since 1945. Job losses spared no region or sector, except for small increases in education and health-care services and government employment."
"Health care and state and local governments are the only sectors of the economy growing," USA Today reported January 13. "States added 6,000 workers in December; the private sector cut 531,000, the Bureau of Labor Statistics says."
Here at home, even as the politicians at 23rd and Lincoln will have about $600 million less of your money to spend in next year's state budget, the Associated Press reported January 16 that Governor Brad Henry is "hoping to avoid layoffs or furloughs for the state's 37,000 workers."
Hmmm. Why should that be the case?
It would be one thing if the government were already operating with a skeleton crew. But in fact, the opposite is true. As OCPA's economists pointed out on the previous page, "state and local government" is the largest industry classification in Oklahoma.
The latest figures from the federal Bureau of Economic Analysis (BEA) also make it painfully clear that we have way too many government employees in this state. Oklahoma's ratio of government employment to private-sector employment is a disturbing fifth-highest in the country. Bringing that ratio in line with the national average would have saved Oklahoma taxpayers $2.8 billion last year alone. Talk about a stimulus package: How would you like to see an additional $2.8 billion in private investment and spending in our economy?
Slice and dice the BEA data any way you like. Disaggregate the state-government workers and the local-government workers. The results are the same: Government employment in Oklahoma is off the charts. See for yourself in the article "Overcrowding on the Government Gravy Train," which appeared in the December 2008 issue of Perspective.
Nearly every year state employees ask for a raise, and a sympathetic Capitol press corps steps up to provide the agenda journalism necessary to frame the discussion.
It's time for the story formula to change. Policymakers need to step up and say: "Look, we agree that many (not all) state employees deserve a raise. But we can't have that discussion until we have a more fundamental discussion: We're a relatively poor state, and we simply cannot afford all this overhead. We can't expect Oklahoma's taxpayers-who themselves wouldn't mind a pay raise-to support this many government workers."
There is reason for optimism. The new leader in the state Senate, President Pro Tem Glenn Coffee, recently pointed out that "in the next decade, we're going to have a large percentage of state employees who are going to retire. If there is a way to make agencies more efficient and not have to replace those positions, we can save taxpayers a lot of money."
Indeed. And in all likelihood, leadership on this issue will need to come from Coffee and from House Speaker Chris Benge. For it's difficult to imagine Governor Henry saying what Jeb Bush, the former governor of Florida, said so beautifully in his 2003 inaugural address: "There would be no greater tribute to our maturity as a society than if we can make these buildings around us empty of workers-silent monuments to the time when government played a larger role than it deserved or could adequately fill."
Senior Vice President
Brandon Dutcher is OCPA’s senior vice president. Originally an OCPA board member, he joined the staff in 1995. Dutcher received his bachelor’s degree in political science from the University of Oklahoma. He received a master’s degree in journalism and a master’s degree in public policy from Regent University. Dutcher is listed in the Heritage Foundation Guide to Public Policy Experts, and is editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His award-winning articles have appeared in Investor’s Business Daily, WORLD magazine, Forbes.com, Mises.org, The Oklahoman, the Tulsa World, and 200 newspapers throughout Oklahoma and the U.S. He and his wife, Susie, have six children and live in Edmond.