RALEIGH – North Carolina government is too large and too costly. It also employs too many people, which is one reason why Gov. Beverly Perdue and the new Republican-led General Assembly should eliminate thousands of positions as they seek to close a 16 percent hole in next year’s state budget.
I don’t say that because I think most public employees are lazy or incompetent. Nor do I say it because I relish introducing more North Carolinians to the misfortune of unemployment. I say it because our elected leaders have a responsibility to accept our fiscal and economic realities, not indulge the bizarre fantasies or unreasonable demands of government-spending lobbies.
Here’s one bracing reality that lawmakers can’t escape: the only alternative to reducing public employment in North Carolina would be to reduce private employment in the state via higher taxes. The best-available evidence suggests, however, that it is in public employment where North Carolina is out of step with regional and national averages.
According to U.S. Census Bureau, North Carolina has about 600 full-time equivalent state and local employees for every 10,000 residents. That’s about 10 percent higher than the national average. It’s also higher than the public-employee ratio in each of our neighboring states.
The disparity is present in many categories of government service, including education. North Carolina’s workforce of teachers, administrators, professors, support staff, and other educational personnel is about 11 percent above the national average.
The differences in public employment are not consistently correlated with differences in service quality or policy outcomes. That’s why it makes sense to downsize the government workforce as part of a comprehensive strategy for closing the budget deficit. That doesn’t mean that it ought to be done across the board, however.
As much as possible, the Perdue administration should put unfilled jobs and non-teaching positions across the state’s schools, colleges, and universities on the list for elimination in the coming fiscal year. But given the magnitude of the budget gap to be closed, there will likely be some effect on classroom positions, as well.
The least-disruptive way to proceed would be to eliminate teacher-assistant slots, which don’t appear to make much of a measurable impact on student performance, and increase class sizes in secondary and higher education, where the quality of instructional personnel is clearly more important than the number of students in the room.
There’s no doubt that reducing the government’s workforce will impose significant hardship on affected workers. It would have been better if past governors and lawmakers had exercised greater restraint during boom times, capping budget growth and accumulating larger savings reserves. But they didn’t. Now policymakers have a limited range of options. None is painless.
Liberals and special-interest groups prefer a different option. They want lawmakers to raise taxes to preserve government jobs. Perhaps they deny that taxes transfer resources from the private sector to the public sector, in which case they are simpletons. Perhaps they admit that saving government jobs with higher taxes means reducing private employment, and simply believe that public workers are more deserving of jobs than are those in the private sector, in which case they are deeply misguided.
In the long run, downsizing North Carolina’s government will benefit the vast majority of state residents. As the economy recovers and revenues return to normal levels, state and local officials will be working from a lower spending base. They can devote revenue growth to restoring some positions, raising compensation for the public employees that remain, and reducing marginal tax rates to induce still-greater economic growth.
In the short run, however, there is no doubt that downsizing government will be difficult. Not only will special-interest groups and left-wing ideologues scream bloody murder, but laid-off workers will face major challenges in an economy where high jobless rates have persisted for years.
The point is that there is no free lunch here. The alternative to public-sector layoffs would be more private-sector layoffs. So far, the recession has cut far deeper into business and nonprofit workforces than into government ones. Perpetuating this trend would make sense only in political terms, not economic ones.
Hood is president of the John Locke Foundation.