Unlike the U.S. Government, most state governments have a balanced budget amendment, except … the feds are bailing out some states, thus enabling unhealthy spending patterns.
Writing in the Wall Street Journal, Meredith Whitney says that 30 percent of the bonds issued by California this year, 40 percent of Nevada’s new debt since 2009, and 30 percent of Illinois’ debt is partially underwritten by a federal program known as “Build America Bonds.” Whitney says that without this program, states could not afford the spending levels they have undertaken. Overall, 28 percent of all spending by states comes from the U.S. Government, which-given the latter’s financial situation-means it come from the printing press and bonds that must be repaid by today’s children.
Whitney never mentions Minnesota, but she does have one comment that is worth remembering here: “Until now, the states have been able to evade the need to rein in spending largely because the federal government enabled them to do so through record high federal allocations, and by creative accounting that put off funding well over a trillion dollars of state-employee pension and other retirement obligations.” (Emphasis added).
Fore on the problem of public employee pensions, see our Pension Reform Project.
“Public-Employee’s Union Now Leads All Groups in Independent Election Outlays”
Here is the “other” side of the Citizens United decision Bradley Smith will talk about on October 26th (the Supreme Court ruling that lifted spending restrictions for corporations and unions): The lead story in the Wall Street Journal (link below) and elsewhere today, is the AFSCME’s 1.6 million-member union of public employees is spending $87.5 million -and taking out a $2 million dollar loan—to support Democrats in the fall campaign.
http://online.wsj.com/article/SB10001424052702303339504575566481761790288.html?mod=WSJ_hp_LEFTTopStories
And here is my take on this: there is nothing free about this speech. Its virtue is destroyed by the fact that this is taxpayer supported speech. Public sector unions should be banned for the simple reason that taxpayers funds are used against the taxpayer. Taxpayers who do not agree with the unions are forced to support the speech of others and political positions they oppose.
And what about the public employee? Beck v. Communication Workers of America held that unions could not force workers to pay dues to support political causes and matters unrelated to the normal union duties of collective bargaining and union representation. The court ruled that political contributions must be voluntary but the Beck decision has not been enforced consistently-so even public employees are forced to subsidize political speech they oppose.
We can discuss this next week with Bradley Smith at our event on election law and free speech. We have plenty of seats left-please join us!!