Governors Begin Reforming Public-Sector Workforce

Published August 13, 2008

State employees have been the unmentioned elephant in the room when it comes to government spending, but with 29 states projected to face ballooning budget deficits next year, some governors are beginning to open their eyes and address the mammoth costs for taxpayers.

Governors across the country are using several tactics to reduce the rapidly increasing burden of government worker salaries and benefits, through hiring freezes, greater transparency through implementation of government payroll Web sites, and even cutting their work week.

With more than 20 million state and local government employees nationwide, lawmakers are finally mustering the courage to rebuff the government worker unions. They realize the need to cut bloated public payrolls is more critical than the campaign cash the unions dispense to candidates who are willing to slide more taxpayer dollars to union members.

The disproportionate growth in the public sector is evident. State and local government employment grew by 242,000 between June 2007 and June 2008, while the private sector lost more than 431,000 jobs. Not only has government been hiring more rapidly than the private sector, but workers in the public sector also cost an average of $13.41 more per hour in pay and benefits.

That’s why California has implemented a hiring freeze, and cut the size of its temporary workforce, and the governors of New York and Washington have called for hard hiring freezes in the past couple weeks. Facing a $15.2 billion deficit, California Gov. Arnold Schwarzenegger signed an executive order slashing more than 10,000 temporary government worker positions and reducing 200,000 workers’ pay to the federal minimum wage.

In total, at least 10 states have implemented hiring freezes this year, and more are expected to cut their government workforces to reduce costs.

States are also implementing Web sites allowing citizens to see government employees’ salaries and agency expenditures so taxpayers can hold agencies accountable. Some state governments–including Kansas, Iowa, and Missouri–have set up easily searchable online financial documents taxpayers can peruse.

Dozens of states have passed budget transparency bills with bipartisan support, though only a handful have set up Web sites revealing government salaries. In states without such sites, newspapers and watchdog groups have used the Freedom of Information Act to gather information to create their own salary book Web sites.

Trying another strategy, this month Utah began a mandatory four-day work week for most government workers. The governor’s office says it will save taxpayers $3 million by reducing utility and fuel costs. While some government offices will be closed on Fridays, it’s unlikely anyone will notice a significant difference in service.

While public-sector workforce reform efforts are gaining steam, additional reform and transparency are crucial for reining-in state budgets. With powerful special interests invested in keeping state payrolls inflated and the government growing, many states will resume ignoring the elephant in the room once the deficits subside.

Taxpayers must remain aware of how much pressure these expensive and excessive government workforces are putting on their wallets. Only then can more permanent fixes be implemented to take control of this unnecessary government spending.

John Nothdurft ([email protected]) is the budget and tax legislative specialist for The Heartland Institute.