Looming fight over state job cuts begins to heat up

By: Steve Welker | Morganton News Herald
Published: December 21, 2010

MORGANTON --

The General Assembly doesn’t reconvene until Jan. 26, just over five weeks from today, and it may be months before legislators hammer out the 2011-13 budget, but political forces already are lining up on either side of proposals to cut the size of state government.
Gov. Beverly Perdue has taken the lead in calling for sweeping reorganization of state government, both to reduce the state budget and to improve efficiency. She said she won’t release details of her plan until January, but at a Dec. 9 press conference in Pinehurst, Gov. Perdue said, “Yes, there will be layoffs.”
A significant reduction in the state workforce could hit Burke County hard. The North Carolina Employment Security Commission says one out of every seven jobs in Burke County — 4,262 among some 28,700 non-farm jobs — was on a state payroll in 2009. The largest state employers are the departments of health and human services and public instruction. In all, 19 state agencies had a combined Burke County payroll of $152 million last year — 17 percent of the total wages paid by all employers.
Both the progressive N.C. Budget & Tax Center and the president of the conservative John Locke Foundation weighed in Monday on the effect of state job cuts.
The N.C. Budget & Tax Center said more than 21,000 state employees across North Carolina would lose their jobs if the legislature reduced all departments’ budgets by 15 percent and education by 10 percent.
Spread equally around the state, a 7.4 percent reduction in N.C. government employment would eliminate some 315 jobs in Burke County.
Director Alexandra Forter Sirota, who produced the N.C. Budget & Tax Center report, said such statewide job losses could “could devastate economic recovery” and “cripple the public structures vital for long-term growth.”
Local people in the private sector would lose jobs, too, she predicted, “due to the loss of contracts, as well as the decline in consumer spending resulting from newly unemployed workers reducing their purchases of goods and services.”
“Job creation has to be our leaders’ top priority,” Sirota said in a press release. “Preserving jobs and the vital public structures that support growth is absolutely fundamental to economic recovery.”
But John Hood, president of the John Locke Foundation, argued in a column published Monday that without state job cuts, there will be more private-sector job losses. He believes keeping state government at its present size would demand tax increases that discourage private businesses’ growth.
Hood also says it’s a fact that North Carolina’s state government is too large.
“According to U.S. Census Bureau,” Hood writes, “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.”
Hood says having more people in state jobs in North Carolina hasn’t always produced a higher level of service.
“That’s why it makes sense to downsize the government workforce as part of a comprehensive strategy for closing the budget deficit,” he writes.
Hood said he doesn’t “relish introducing more North Carolinians to the misfortune of unemployment.”
“There’s no doubt that reducing the government’s workforce will impose significant hardship on affected workers,” Hood writes. “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.”
“In the long run, downsizing North Carolina’s government will benefit the vast majority of state residents.”
The N.C. Budget & Tax Center’s report is on the N.C. Justice Center’s website at http://www.ncjustice.org/?q=node/663.
Hood’s column is on the Carolina Journal’s website at http://www.carolinajournal.com/jhdailyjournal/display_jhdailyjournal.html?id=7199.

Looming fight over state job cuts begins to heat up

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