Local Governments Spending More To Provide Less



As public employee pension and benefit costs continue to rise, local governments are delivering fewer and fewer services to constituents. A new study found that local governments spending more to provide less is becoming a pretty widespread problem.

Local governments are spending less on public services because public employee retirement costs are eating up an ever-greater chunk of their budgets, according to a new study by the Manhattan Institute.

“As governments pay more and more for these benefits… policymakers find that governments have less and less to spend on the services that citizens need and expect,” the study’s author, Daniel DiSalvo, wrote. “Call it the “crowding-out” effect: skyrocketing spending on public employees reduces government’s ability to do anything else.”

In Washington, public pensions cost more than half the state budget. Chicago is closing 11 percent of its elementary schools. And New York City Mayor Michael Bloomberg said in March 2012 that  every penny collected this year in personal income tax will go toward the city’s pension bill.

Los Angeles spends 91 percent of its general fund revenues on salaries and benefits, according to the Manhattan Institute. The city’s pension costs have jumped in the last decade from 3 percent of the entire budget to 18 percent, and the city’s oversight agency predicts that could rise to 37 percent by 2015. (Read More)

The worst part is that almost no private sector workers get benefits like government workers do, and the politicians are all afraid of standing up to the loud unions. Instead they just cut services for those picking up the tab.

H/T Fox Nation