Next month’s special legislative session can be boiled down to this: Gov. Jim Gibbons and lawmakers will consider putting taxpayers into debt to make sure state employees keep their jobs and the 4 percent pay raises they received just five months ago.
The Legislature will meet in Carson City on Dec. 8 and 9 to address the state’s ever-growing revenue shortfall, which has grown from just a few hundred million dollars a year ago to about $1.5 billion for the biennium ending June 30. This time, lawmakers will have to offset at least $330 million in spending to balance the budget.
State Treasurer Kate Marshall has proposed securing a $150 million line of credit from the Local Government Investment Pool to make lawmakers’ task easier. Any funds borrowed from the credit line would have to be repaid at an interest rate of about 2.5 percent.
For the moment, let’s set aside the legitimate question of whether Ms. Marshall’s plan is constitutional. The state’s founding document requires a balanced budget, and borrowing from a line of credit sure sounds like deficit spending.
But the Legislature wouldn’t have to consider such a policy leap if it had acted responsibly during June’s budget-cutting special session. Lawmakers decided to preserve 4 percent “cost-of-living” pay raises for all state workers, including public school employees, at a price to taxpayers of $130 million.
They did so even though most state workers already were in line to receive a “step” raise of between 3 and 5 percent simply for sticking around another year. This increase, combined with the separate 4 percent hike, gave many state employees a raise of between 7 and 10 percent when private-sector companies were shedding workers, slashing schedules and freezing wages — or closing up shop altogether.
Lawmakers have squealed for more than a year about the severity of the state’s budget woes, declaring each subsequent trim more painful and impossible than the one before. But thus far, they’ve managed to preserve nearly every one of the state’s full-time jobs and the generous salaries and benefits packages attached to them.
No one wants to see anyone lose his job. And certainly, pay cuts should be a last resort in any sector of the economy. But the fact that Ms. Marshall’s plan already has gained such favor among lawmakers lays bare the Legislature’s true priorities.
First, foremost and always, lawmakers will seek to guarantee government workers a higher standard of living than the taxpayers who fund their salaries and retirements. They’ll even ask you to pay interest on a loan to make sure no pain is inflicted on the public sector.
This is unacceptable.
The state’s revenue projections for 2009-11 could be even bleaker than what the Legislature is dealing with right now, and yet lawmakers appear willing to set aside a slice of that pie to cover this year’s expenses?
Now is no time for the state to be running up a credit card.