RALEIGH – There’s some natural tension between the interests of fiscal conservatives and public employees. I won’t deny that.
Most of the taxes collected by North Carolina state and local governments are spent to pay the salaries and benefits of state and local employees. If, as most conservatives believe, our governments are too big and cost too much, then that inescapably means either that our governments employ too many people, or pay them too much, or both.
I happen to think it’s mostly the former, that North Carolina has too many public employees. It’s not an idle speculation. According to the latest U.S. Census data, state and local workers add up to 6.1 percent of North Carolina’s population, compared with 5.5 percent for the nation as a whole. Adjusting the size of the state’s public workforce to the national average would save North Carolina taxpayers hundreds of millions of dollars a year, at the very least.
What that means, in turn, is that while I and other fiscal conservatives do believe that some current public employees should find more productive places in which to apply their knowledge and skills, those who work in core public services could benefit from rightsizing government. Some of the savings we realize from limiting government to its core functions ought to be used to increase the compensation of public employees in areas where North Carolina has traditionally had trouble attracting and retaining talent.
Moreover, there are plenty of state and local government workers who are themselves fiscal conservatives. I’ve met many of them. They want North Carolina lawmakers to get rid of waste, fraud, and low-priority spending so that they won’t have to shoulder a growing tax burden.
To public employees of all persuasions who are watching the 2010 election cycle with interest, I’d offer this piece of advice: don’t evaluate candidates on the basis of their general, gauzy promises. Ask for details and evaluate them accordingly.
For example, ask them what they are going to do to fix North Carolina’s expensive, woefully mismanaged health plan for current and retired public employees. There is both a short-term problem and a long-term problem. The first is getting the most attention. In recent years, the General Assembly has had to put hundreds of millions of dollars into the health plan just to keep it solvent, even while jacking up premiums.
Tough problem. There are potential solutions.
But what’s even scarier is the long-term issue. According to recent actuarial analysis, North Carolina has promised current public employees about $30 billion in health benefits when they retire that the state has made no preparations whatsoever to finance. Having complained about this problem for years – back when it wasn’t so much of a problem, actually, because the unfunded liability was only about $5 billion in the late 1990s – I have seen very few state politicians pay any attention to it.
Most either don’t understand it or don’t care, figuring that they’ll be out of office, and maybe even out of their terrestrial existence, by the time the bill comes due. Of the remaining policymakers, a few argue that the problem is exaggerated – I’d be curious to see their high-school math grades – and a few argue that the legislature needs to start taking action now.
Rep. Dale Folwell, a Republican from Forsyth County, is the current lawmaker with the greatest demonstrated interest in solving the problem. In fact, virtually all the lawmakers I’ve ever met who care about North Carolina’s unfunded liability for retiree health care are Republicans.
Yet the myth persists that public employees and Republicans never see eye to eye. Not true. They do sometimes, and might more often if the two groups looked in each other’s direction a bit more often.
Hood is president of the John Locke Foundation