RALEIGH – I’ve never liked the political promise to “run government like a business.” It sounds good, but it glosses over the critical truth that government and business are dissimilar institutions based around entirely different incentives.
Still, governments and businesses do interact in important ways. Governments purchase services from businesses and compel them to collect taxes. Businesses receive services from government, albeit of varying quality: public safety, transportation access, educated workers, etc.
And they compete for labor. Traditionally, many state employees with roughly similar skills and experience could make more in the private sector but nevertheless chose public employment because of more attractive non-wage benefits, job security, or other perks. Here in North Carolina, that’s becoming less true.
Years of near-stagnant wages have made state employment less alluring. Rank-and-file employees have further seen their health care benefits become more costly and less generous, while having to face the frustrating fact that schoolteachers, Highway Patrol officers, high-level legislative and executive-branch aides, and a few others have gotten much higher raises.
In the 2005-07 budget likely to be enacted this week by the General Assembly, the shoddy treatment of state employees continues. They will apparently receive only 2 percent average raises, or $850, whichever is greater. On Tuesday, an effort to give them an extra $150 minimum raise, costing about $22 million, fell short after Gov. Mike Easley threatened to veto the state budget if included the amendment.
The veto threat was preposterous. The governor claimed that he opposed the extra money because it would exceed his spending cap, which is tied to personal-income growth and would allow a 5.6 percent increase this year. But the budget, properly accounted for, has already busted Easley’s spending cap to smithereens, either in 2005-06 or, retroactively, in the previous fiscal year as the John Locke Foundation explained Wednesday.
Even if you lend credence to the Easley administration’s Enron-like accounting gymnastics, it still can’t explain his veto threat on the merits. Why not agree to the state-employee raises and then threaten to veto the budget unless $21 million in pork-barrel spending was removed? By some accounts, the 2005-06 plan contains twice that much in pork. Or why not threaten a veto unless the new $20 million grant to the Rural Economic Development Center was transferred to employee raises? Commerce-related spending soars by a staggering 78 percent in the new budget.
It made no sense to argue that a decent pay raise was the one thing that would push the state budget over the fiscal precipice. Money is fungible. Any expenditure of a roughly similar magnitude could be said to have “exceeded” the spending cap. The only thing that does make sense, unfortunately, is that the governor decided to stiff the state employees because the State Employees Association chose not to endorse him in the 2004 election.
Legislative leaders hasten to add that they’ve still done good by workers in the budget because it gives them another week of vacation – and that’s worth more than $150. Sorry, but this won’t fly. Most employees evidently prefer cash. And it is telling that state legislators, unwilling to budget sufficient money for raises, apparently believe that giving state workers a week off imposes no significant cost on taxpayers. Do they really have that low an opinion of the value of the work state employees perform?
I, for one, actually want the state to employ skilled and productive prison guards, mental-hospital workers, and highway engineers, among others. If government is going to perform certain tasks for us, it ought to be sufficiently business-like to set the right priorities and treat its employees as resources to be cultivated, not pests to be swatted away.
Hood is president of the John Locke Foundation.