“I am sorry that I’m the guy that has to be here at the time when the party’s over.” That’s a quote from Governor Chris Christie in response to a state employed police officer who was angry at potentially losing future raises as well as being asked to contribute more to his health benefits in order to close huge budget deficits in New Jersey. The truth is, liking the budget cuts is irrelevant to the reality of its necessity, or as Gov. Christie likes to say, “Math is math.” More than ever, that math is spelling huge trouble, and the source of it is increasingly found in the entitlement mentality of government employees like the one that vented to Christie.
But this is far from a problem that New Jersey alone is dealing with.
Newly inaugurated Governor Rick Snyder (R) of Michigan released a report this week on the state’s fiscal crisis. In it, he clearly shows where the “party” has been and where all the good jobs have gone: State & Local government employees as well as teachers who have seen annual compensation increased by 19 percent over the last decade outpacing the private sector they serve by over 6 percentage points. But even those numbers fail to capture the extent of the imbalance.
In Michigan, the 2009 average compensation of a state employee was $85 thousand. Compensation for teachers was a close second at $75 thousand with local government employees bringing in an average of $57 thousand.
And what of the private sector you may ask? Well they came in last at a mere $40 thousand in annual compensation.
And how has Michigan been paying for these incredible salaries? Why, on the back of the tax payer of course! But even that isn’t enough. Luckily for the big spenders, the last decade was a free-for-all in deficit spending resulting in only three of the last ten years having more tax revenue than expenditures. The result is a staggering $1.5 billion deficit and a mind blowing $70 billion debt without even counting the $55 billion in additional unfunded liabilities for state pension and healthcare benefits.
Michigan’s problems only begin there. For a true understanding of just how bad it is, take a look at the charts included in the report.
And Michigan & New Jersey are just the tip of the iceberg. Behold the projected state budget shortfalls for 2012 totaling $124.7 billion.
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