Civil Servants Make Us Tax Slaves

Our government employees used to be called civil servants. Heard that term lately? Today, they’ve become a privileged class, and taxpayers are expected to be their servants.

Those are strong words from someone whose parents were, and proud of the term, civil servants. They chose civil service in return for reasonable compensation and benefits: though lower than available in the private sector they were more secure even in the days before mass private sector layoffs.

Today, as USA Today reports from the Bureau of Labor Statistics, the approximately 15% of the workforce in state and local government earn on average 50% more than the average in the private sector, benefits being a major contributor to the gap that is widening as the private sector shows competitively necessary fiscal restraint and the public sector doesn’t. Indeed, even during current economic troubles, public hiring rises while the private payroll doesn’t.

One can point at three primary reasons for this growing imbalance:

First, with the majority of Americans either paying no or little income taxes while receiving government funneled benefits, there is little incentive or competitive pressure on most’s incomes to demand government restraint.

Second, public employee unions comprise over 35% of government workers, compared to about 7% unionized in the private sector. The political power of these public employee unions is massive, spending hundreds of millions each year to elect friendly politicians and defeat ballot measures for restraint.

Third, the methods by which government benefits are measured are “cooked books.” As the Washington Post’s analysis points out, “Public pensions have broad leeway in their accounting methods because, unlike their counterparts in the private sector, they have no federal oversight.”

An illustration in today’s New York Times:

Lawmakers have cited Mr. Schwartz’s analysis on hundreds of bills in recent years, with billions of dollars worth of potential costs. His projections were used to fulfill a legal requirement that every piece of legislation be accompanied by a “fiscal note” that examines its impact on spending. Mr. Schwartz’s consultant work for the unions was discovered during a review of Department of Labor documents by The New York Times this week.

Mr. Schwartz, a former city actuary, said that he routinely skewed his projections to favor the unions — he called his job “a step above voodoo” — and admitted that he had knowingly overreached on the pension bill by claiming that it cost nothing, either now or in future years. “I got a little bit carried away in my formulation,” he explained.

Even with stretched assumptions, there’s still an over $1-trillion deficit in the ability to fund the retirement benefits promised to state and local government workers. As the number of retirees grows, in many cases, more is budgeted for retirees than for current workers.

Consequently, with tens of billions of dollars in states’ budget deficits, as Pew’s Stateline project says, “That means if tax revenues fall short of what a state had projected, then it either has to cut programs or find other sources of revenue.”

The politicians’ ritual is to threaten cuts in the most liked programs, then in the face of public opposition to say there is no alternative but more taxes and more borrowing to indebt future generations for today’s spending.

Either way, today and tomorrow’s taxpayers are the ones on the hook for unaffordable government workers’ high compensation.

Current and future taxpayers have become the servants to government workers reaping uncivil largesse.