When Rep. John A. Boehner, Ohio Republican, takes the gavel from outgoing Speaker Nancy Pelosi next week, the California Democrat won't be the new year's biggest loser. That dubious honor falls on America's big-spending big-city mayors. The Republican resurgence sends a message that municipal partying at taxpayer expense must come to an end. Finally, after an era of indiscipline, 2011 promises to be a year of reckoning.
President Obama and Mrs. Pelosi have provided a backstop for city-hall spending sprees during the Great Recession. So-called "stimulus" spending injected nearly a trillion dollars into "wish list" projects that local governments didn't deem worthy of spending their own money to complete. In August, Congress upped the largesse by approving a $10 billion bailout for local teachers unions. A new House majority that has made fiscal responsibility a priority is unlikely to allow this out-of-control state of affairs to continue.
A staggering 9 percent of Americans work for counties, cities, towns and school districts. The union contracts in many of these jurisdictions yield bloated salaries and unsustainable pension obligations that reach truly absurd levels. In October, California's attorney general opened an investigation into two of the most egregious examples of public employees living it up on the taxpayers' dime. In Vernon, an industrial city of fewer than 100 residents outside Los Angeles, the city manager pocketed $785,000 last year. That was a bargain compared to his predecessor's $1.65 million paycheck. The manager for the city of Bell, Calif., was paid $787,637 and the police chief $457,000.
Overpaid, unnecessary employees contributed to nationwide municipal budget shortfalls projected to reach up to $83 billion by 2012, according to the National League of Cities. Dozens of burgs find themselves on the brink of default and have turned to various budgetary tricks to avoid bankruptcy. Some are withholding payments to pension funds to retain short-term cash at the expense of long-term fiscal disaster. Others are auctioning off infrastructure to foreign companies to avoid confronting difficult budget choices.
There's a good reason why Washington should reject further aid to irresponsible local officials: Taxpayers already are tapped out. The comptroller general of the United States estimated the total liabilities of the U.S. government at $16.4 trillion compared to assets of just $2.9 trillion as of Sept. 30. The solution is the same for federal, state and local governments. They must eliminate all but the most essential services, departments and agencies. They must reform the plush pension plans and union contracts that guarantee lifetime employment for underperforming workers.
Putting government at all levels on a diet is the surest way to avoid the fiscal day of judgment.
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