In the first three parts of this series, I showed that the example of government fiscal starvation Jeff Rosenberg used in his plaintive plea for more Local Government Aid (LGA) – Brainerd shutting off some of its streetlights – was not borne out by the numbers. I also showed that the DFL’s claim that cities are raising property taxes to make up for LGA cuts isn’t even half the truth – indeed, it’s more like 1/7th the truth, as property tax levy increases have outstripped LGA cuts by a factor of 7.5 to 1 – and that’s after Governor Pawlenty’s “unallotment”, without which the disparity would have been more like 16 to 1.
On Tuesday, we’ll be looking at LGA in Greater Minnesota – on the many, many cities that get no LGA, and on one city that receives it, but has run its fiscal shop much more responsibly than the DFL-clogged Big Three cities.
That’s next week.
For today, though, I just want to answer some questions.
A couple of people, on blogs and in the comment sections, sniffed “but you’re not controlling for inflation”, with one suggesting if I didn’t use constant dollars the whole exercise was moot.
Inflation is a factor, and as I noted people need to take it into account when considering the numbers.
But as I noted the other day, property tax levies have risen 59% in the past eight years. Even with the cuts to LGA, the total amount of LGA plus levies has risen 34%.
Inflation during the same period was 21.94%.
“But the government inflation rate is higher!”
Well, that’s part of the problem, isn’t it? Government is more expensive than most things – mostly due to labor. The median government job pays much better than the median private sector job; add in benefits, and the fact that government is the most-unionized sector of the economy (thus immune to the salary contraction that we in the private sector have dealt with in recent years. and “government inflation is higher” is a key reason to cut, not raise, the amount we spend on them.
And it brings up a key question that ties into liberals and conservatives’ views on what government really is: should government be immune to hard times in the private sector? More to the point – should the taxpayer be required to keep government immune at all costs, when they themselves are suffering in a way that government employees are not?
This will be an especially important question next year, when the current “recovery” grinds to a halt under the avalanche of new Obama administration taxes; indeed, stagnancy or a double-dip recession will likely be tied directly to the growth and voracity of government.
So not only is the complaint about inflation numbers wrong, but it completely avoids the real point; government should not be immune to hard times in the rest of the economy. Government is not a family member that we are obligated to support; it is at best an employee. Not much different than the millions that are getting laid off, although the worst government can expect is that they’ll get a pay cut, and it’ll be temporary, and that when things do turn around (when the grownups are in control again), they’ll bounce back just fine.
More next week.