This week, the 99th annual Wyoming State Fair hosted a swine show, a performance pork contest and even a “pig ‘n mud” wrestling championship. But the biggest hog of all? The fair itself.

The fair has become a pricey pork barrel project that uses Wyoming state tax dollars to subsidize more than three-quarters of the cost of operating the event each year.

In fact, state lawmakers snatched more than $1.4 million from taxpayers to bankroll this year’s fair, which ends its eight-day run on Saturday.

If the attendance figures hold steady this year, every time someone pays the fair’s $3 admission fee, taxpayers will spend $32.29 to subsidize the rest of the cost of the attendees’ visit to the fair.

So why is the Wyoming State Fair such a budgetary burden?

Part of the problem is that Douglas, where the Wyoming State Fair is held, is just this side of East Jesus. The town has a population of only 6,120 and sits 50 miles from Casper and 125 miles from Cheyenne, the only two cities in the state with a population over 50,000.

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Faced with an $8 billion budget deficit, Ohio Gov. John Kasich (R) is on the verge of signing a bill that would prevent state employees from using collective bargaining to negotiate their health and pension benefits. Wisconsin Gov. Scott Walker (R) has pushed a similar bill, which has drawn national attention, spawned weeks of protests, and sent Democratic lawmakers fleeing the state as a way to stall its passage.

Two other GOP governors facing major budget crises – New Jersey’s Chris Christie and Michigan’s Rick Snyder – have made it clear that they don’t see restricting bargaining rights as the key to more austerity. Texas, North Carolina, and Louisiana face major budget deficits, and in those states public employees don’t have collective bargaining rights.

To what extent is collective bargaining to blame for out-of-control state spending? Is clamping down on the ability of public-employee unions to negotiate an important tactic for closing what may grow to a combined $125 billion gap in state budgets next fiscal year?

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Wisconsin. Ohio. Michigan. New Jersey. New York. Budget-battle showdowns are coming soon to a statehouse near you.

Thousands of angry school teachers, union members, and their sympathizers have descended on capitals to fight against reducing pay and benefits for public employees. The protesters are up against a new crop of governors who are hell-bent on spending cuts to deal with deficits that may rise to combined $125 billion in the next fiscal year.

Gov. Andrew Cuomo (D-N.Y.) is looking for public employees to pay $500 million towards benefits they’re currently receiving for free.

New Jersey’s Chris Christie is proposing public employees pick up 30 percent of their health care premiums. Wisconsin’s Scott Walker wants public employees to pay at least 13 percent of their health care premiums. And he wants state workers to start contributing to their retirements for the first time.

This newfound fiscal discipline comes after a virtually unchecked binge over the past 10 years during which state expenditures exploded by more than  80 percent in inflation-adjusted dollars, including big bumps in overall worker compensation.

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From The Hispanic Conservative:

The year that best summarized Walker’s saga with local labor was probably 2010. As the 2008-2009 Great Recession hit the country, Milwaukee County’s tax base felt the pinch. Walker called for an aggressive strategy of employee wage cuts and increased benefit contributions. AFSCME refused to accept those concessions provoking Walker to order layoffs and furloughs for hundreds of county workers. The exchange typified the continuing narrative that is Scott Walker.

At no point during Walker’s eight year tenure did AFSCME recognize the financial impact the pension scandal had upon Milwaukee County. In short, Milwaukee County’s Pension Board – without so much as a cost study on pension benefits – passed ultra-lucrative pension buy-backs to hundreds of employees. Almost in a day, Milwaukee County government found herself mired in a $60 million hole without a viable exit strategy.

Instead of acknowledging the county’s fiscal woes, AFSCME fought Walker every step of the way.

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As the entire nation confronts the problem of unfunded mandates and bloated government spending, individual states are doing the same.

Republican governors Chris Christie (New Jersey) and Scott Walker (Wisconsin) are letting government unions know that they can no longer expect to receive the kind of benefits and pensions they were falsely promised by union leaders and past state politicians whose campaigns were funded by union coffers. These governors are handling the displaced anger of union members who are only beginning to experience a little of what private sector workers have known for years. They know that increasing taxes will only cause businesses to leave their states and wreak further hardship on taxpayers already reeling from a struggling economy. Governors Christie and Walker are letting union members know that they are not entitled to exceptional treatment when the state is “broke.”

Democratic governor Andrew Cuomo (New York) wants to cut his state’s budget for the first time in 17 years. He proposes to fire nearly 10,000 state workers unless they agree to $450 million of savings, and plans to close a $10 billion deficit without raising taxes or borrowing. His proposed cuts include Medicaid spending and aid to schools. Cuomo’s message is clear: the state of New York can no longer spend beyond its means.

On Wednesday, Connecticut’s new governor, Democrat Dannel Malloy, presented his first budget, one that includes a $1.5 billion tax hike in the first year and only slightly less in the second year of the two-year cycle. The tax increase is one of the largest in the state’s history, and one that will hit, primarily, middle class families. The governor hopes to raise income taxes, the state sales tax, and taxes on cigarettes, gasoline, alcohol, and estates. Malloy’s budget would eliminate a $500 property tax credit, a “tax-free” shopping week prior to school’s opening, and a sales tax exemption for clothing, haircuts, pet grooming, non-prescription drugs, car washes, and many other items and services. The governor and his advisers are referring to this tax hike as “shared sacrifice” in a state that is already one of the highest taxed in the nation.

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Governor Scott Walker is making the tough choices needed to avoid financial ruin in Wisconsin. Like most states, Wisconsin is facing a budget deficit caused in part by excessive pay and benefits for public employees. Governor Walker is tackling this problem head on, rightly proposing to bring public employees’ compensation in line with the private sector.

In response, President Obama, national Democrats and their union allies have gone on the attack, helping organize protests that have flooded the Wisconsin capitol and shutdown public schools in Milwaukee and Madison. They’re even lending moral support to the state Democratic lawmakers who fled the state to avoid a vote.

The nation’s governors don’t need a lecture from a President who has never balanced a budget. On both the federal and state level, we need leaders who will make the tough decisions and stand up to the public employees unions.

As a conservative governor in a liberal state, I regularly battled with the public employees union and am familiar with the sort of tactics we’re seeing in Madison. When I proposed reforms to public employees’ benefits, we had protests and one of the longest transit strikes in American history. But we won in Minnesota because average taxpayers supported the reforms – and I’m confident that Governor Walker will win in Wisconsin.

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From The Washington Times:

The big issue in Wisconsin today is whether or not public sector workers should have collective bargaining rights. In an Aug. 16, 1937 letter to Luther Steward, the president of the National Federation of Public Employees, President Franklin Delano Roosevelt had something to say about that:

[M]eticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the Government.

All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Roosevelt would have absolutely rejected the mass demonstrations aimed at blocking access or regress from the state’s legislative building, and at keeping children out of school:

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of government employees.

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As countless states across the country face budget shortfalls prompting calls for tax increases to ward off deep spending cuts, legislators in three states are taking a novel approach.  In New Jersey, New Hampshire and Rhode Island, Capitol Confidential has learned that bills have been filed to reduce, not raise, cigarette taxes.

In New Jersey, where a previous increase in the state’s cigarette tax ultimately resulted in a loss of revenue as against the pre-hike figure, the proposal is to cut the state’s cigarette tax by 30 cents, from $2.70 per pack to $2.40 per pack.

In New Hampshire, several Republican legislators in the House want to take 10 cents off the tax applied to each pack of cigarettes, and cut the tax applicable to other tobacco products from 65 percent to 48 percent of the wholesale price.

And in Rhode Island, a House bill aims to cut cigarette taxes by a full $1 per pack.

The approach favored by the legislators behind the bills stands in stark contrast to that favored by some of their colleagues: In a full nine states to-date, bills to increase cigarette taxes have been filed.  Anti-tax advocates remain wary of proposals to hike cigarette taxes in states including Illinois, Massachusetts, and even more conservative Idaho and Georgia.

Backers of the tax-cutting bills however continue to make their case that cigarette tax hikes operate like tax cuts– when taxes go up, revenue decreases, because smokers cut back, buy smuggled cigarettes illegally, or cross state lines to purchase cigarettes in cheaper jurisdictions.  On the flip side, they say cutting cigarette taxes will bring in more revenue.

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That’s the way Winston Churchill, whose 1939 words we borrowed for our headline this week, were he asked about America, might answer that question today.  In foreign affairs we have spent much of the past two years trying to reset our relationships with the rest, or much of the rest, of the world.  So far we have little, perhaps nothing, to show for it other than the alienation of some old friends and no new friends.

Domestically (according to the non-partisan Congressional Budget Office) we’ll overspend to the tune of $1.5 trillion this year, on top of the $1.3 trillion we overspent last year.  At the rate we’re going, we’ll add more to our debt during President Obama’s first term than all the debt accumulated by all of his predecessors combined, according to Michael Boskin, professor of economics at Stanford University.

Does the Administration want to see real economic growth in the country?  Of course.  Obama can’t retain the White House without a strong economic turnaround. Has he been pursuing policies to achieve that goal? Hardly. Quite the contrary.  His Administration is spending much more effort stoking the fiscal fire than dousing it. The President has largely ignored the recommendations of his own Debt and Deficit Commission, making it easy for those Republicans and Democrats who oppose the commission’s recommendations to have rendered the report dead on arrival.  There is a growing expectation among analysts and economists including Douglas Holtz-Eakin, the former director of the Congressional Budget Office that U.S. debt will lose its AAA credit rating within the next three years.

And while we have written, at great length, about the sad state of the federal fisc, the financial condition of the many states is worse.  At least the federal government can, in a pinch, print money to meet its obligations.  The states, collectively, seem to be a train wreck waiting to happen.

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The federal government has identified a new opportunity in its quest to endlessly push dubious spending initiatives supposedly tied to advancing “the greater good.”  According to the New York Post, federal copy-editors are forcing New York state to spend $27.6 million to eradicate the apparently major threat of… all-capital-letter street signs:

Federal copy editors are demanding the city change its 250,900 street signs — such as these for Perry Avenue in The Bronx — from the all-caps style used for more than a century to ones that capitalize only the first letters.

[...]

At $110 per sign, it will also cost the state $27.6 million, city officials said.

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The Highway Administration acknowledged that New York and other states “opposed the change, and suggested that the use of all upper-case letters remain an option,” noting that “while the mixed-case words might be easier to read, the amount of improvement in legibility did not justify the cost.”

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The CATO Institute has released its 2010 Fiscal Policy Report Card on America’s Governors, offering praise for some and criticism for many.

At the front of the pack are three Republicans and one Democrat: Gov. Mark Sanford (R-S.C.), Gov. Bobby Jindal (R-La.), Gov. Tim Pawlenty (R-Minn.) and Gov. Joe Manchin (D-W.Va.).  Each of the four earned an “A” rating from CATO, besting their fellow governors by as much as 55 points according to CATO’s scoring mechanism.

Sanford, once considered a top GOP 2012 presidential prospect, led the A-grade recipients.  CATO notes that Sanford has proposed implementing a flat tax in South Carolina, phasing out the state’s corporate tax, and adopting a firm spending cap.  The report card write-up also called Sanford’s budgets “very frugal.”

Jindal, who many Republican insiders expect to consider a run for the presidency in 2016 has “a solid record on both his tax and his spending policies” according to CATO.

Meanwhile, Pawlenty, the subject of much media speculation regarding a possible presidential bid of his own, earned praise from CATO for his record on spending, and holding down general fund expenditures in particular.

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Unless you’ve been pulling a Rip Van Winkle for the past few years, you know that your state is more busted than Larry Craig in an airport toilet. The only possible exception is the state of Denial, and it closed its borders to new arrivals sometime in late 2008.

One of the main drivers of this sorry state of affairs is the massive disparity between public-sector and private-sector compensation, especially when it comes to benefits such as pensions. Various studies have found anywhere between a 70 percent and a 34 percent differential in total compensation, with public-sector employees getting not just more pay and benefits but near-absolute job security and early retirement. Consider California:

A bipartisan bill…passed virtually without debate unleashed the odious “3 percent at 50” retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, “3 percent at 50” and the forces behind it have only become more entrenched.

In the midst of California’s 2008–09 fiscal meltdown, with the impact of deluxe public pensions making daily headlines, the city of Fullerton nevertheless sought to retroactively increase the defined-benefit retirement plan for its city employees by a jaw-dropping 25 percent. What’s more, the Fullerton City Council negotiated the increase in closed session, outside public view.

More on that here.

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Once again Democrats with the help of a few soft minded Republicans have passed a massive spending bill to help keep state and local governments from having to make the tough decisions it will take to balance their budgets.

According to the Associated Press:

The $26 billion measure would help states ease their severe budget problems and – advocates said – stop the layoffs of nearly 300,000 teachers, firefighters, police and other public employees.

Where have we seen this before? Oh yeah… the Stimulus Bill. Remember that massive spending program that was supposed to stimulate the economy and create jobs? But what it mostly did was plug holes in state and local government budgets.

For example, in California stimulus spending was reported to have saved around 100,000 jobs. But a closer analysis found that 90% of those were government jobs; this at a time when the Golden State has actually increased the number of government jobs.

The sad part is that because the funding was for only one year, many of those jobs are on the chopping block this year. Not so fast! Here come the liberals to the rescue.

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From The Hill:

Speaker Nancy Pelosi threw lawmakers’ summer plans into chaos Wednesday, announcing the House will interrupt its six-week recess and return to Washington next week to act on Medicaid and education funding for states.

Pelosi (D-Calif.) announced the news via Twitter, saying, “I will be calling the House back into session early next week to save teachers’ jobs and help seniors & children.”

Pelosi made the decision in consultation with congressional leaders following the Senate’s morning vote to move forward on the $26.1 billion aid package. The Senate is expected to pass the bill Thursday.

A K Street lobbyist said the American Federation of State, County and Municipal Employees (AFSCME) pushed Pelosi to call back the House for the vote. States would have to lay off thousands of teachers if Congress doesn’t approve the money by the end of August.

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This week, Pennsylvania Gov. Ed Rendell will sign his eighth and final state budget (term limits prevent him from seeking re-election).  The budget passed with no tax increase, and represents $1 billion less than Gov. Rendell requested.  However, the budget merely passes the bill onto future years, and future generations, through accounting tricks and borrowing for egregious pork projects.

The budget relies on $2.7 billion in federal aid, including $850 million in Medicaid funds (FMAP) that has yet to pass Congress.  Indeed, no one believes Pennsylvania will get that much, if any, as the legislation doesn’t have enough support in the US Senate.  Gov. Rendell, along with Michigan Gov. Jennifer Granholm, New York Gov. David Paterson and others were in Washington last week to lobby for more federal aid.

The state will use $121 million from Tobacco Settlement Funds for teachers’ pensions, which will then be backfilled, and another $35 million from other one-time sources to balance the budget.   Still unresolved are a projected $4 billion annual pension contribution hike and a $3 billion Unemployment Compensation Fund deficit.

Finally, the budget deal includes increasing the debt ceiling for the Redevelopment Assistance Capital Program (RACP) by $600 million.

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Like a relentlessly advancing cancer, the news about the US fiscal deficit and the accumulated debt, which is its result, keeps getting worse.  Every week the press discloses some supposedly “new” information about either the federal budget, economic failure, projections of economic growth, the effects of the so-called “doc fix” (about which we have written several times), the sorry fiscal condition of state and municipal finances, or some further jobs stimulus proposal, all of which pile more costs on this nation that, if it were a private business, would be considered broke.

Before looking at the most recent spate of deficit and debt related news, let us start with the CBO’s updated March 2010 report which estimated that the cumulative effects of the Administration’s budget proposals would add $9.7 trillion to our current deficit of $14 trillion (an amount equal to approximately ninety percent of our annual GDP and clearly approaching the danger zone).  This amount does not include any spending for enacting climate legislation or the effect of rising interest rates to service our debt or spending for contingencies from unplanned events which will inevitably occur.

Moreover, it projects economic growth every year at four percent when we have had only two quarters of growth at four percent or higher in the past five years and, at least since 1982, have never had four consecutive years of growth as high as four percent per annum.  That overly optimistic CBO assumption if not realized will raise the deficit and the accumulated debt, perhaps by trillions of dollars.

In recent days we see once again the fantasy of the most recent budget the president presented.  After just a few months it is outdated.  Mr. Obama has just asked Congress for an additional $50 billion in aid to state governments.  It is uncontested that state and local governments are in terrible fiscal condition and, of course, they can’t print money to inflate away their accumulated debts.  Cumulative state shortfalls in 2009 and 2010 alone are approximately $310 billion and projections for 2011 and 2012 combined are for an additional $300 billion.

State governments have in the past few years either borrowed with abandon or resorted to accounting gimmickry to approach balancing their budgets.  They have consistently looked for new sources of tax revenue or raised taxes on existing sources, making a reality of Ronald Reagan’s statement about government: “if it moves, tax it.”

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Across the country, states big and small are facing significant budget gaps.  In California, the worst case by far, candidates for state office are debating how to close a $19 billion budget deficit.  In Florida, meanwhile, another multi-billion dollar budget hole is on the cards, and looks set to grow with oil drilling off the Florida coast now off the table.  Still other states are facing similar situations, if on a less disastrous scale.  While many serving in statehouses nationwide will advocate for spending cuts, as opposed to tax increases, in some states, tax hikes are already being put on the table, with so-called “sin taxes” demonstrating renewed appeal.

Washington State recently increased taxes on beer and cigarettes in an effort to stop its own fiscal bleeding (though left-leaning figures in the state have also been arguing for a state income tax).

In Illinois, a proposal to increase cigarette taxes that went nowhere last year has now been resuscitated.

In Florida, where ongoing budget woes are anticipated, concern exists that legislators could jack up cigarette taxes again.  Last year, the State Senate—including its Republican members, led by Senate President Jeff Atwater and budget committee chief J.D. Alexander—unanimously voted to increase cigarette taxes by $1 a pack.  The House ultimately played ball, too, and Gov. Charlie Crist gave a thumbs up to the tax hike, which was expected to bring in anything from $700 million to $1 billion.

In New York, where cigarettes are already extensively taxed and can sell for as much as $9 per pack, further increases could be on the agenda, too.

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The political process often resembles an unseemly racket as politicians take money from people who earn it and give it to another group in exchange for campaign cash and political support. The modern bureaucracy is a good example. Government workers have now become a cosseted elite, with generous pay, extravagent benefits, lavish pensions, and ironclad job security. In exchange for this privileged status, they reward the politicians with millions of dollars of support and a host of in-kind contributions.  I have documented many of these outrages in my “Taxpayers vs. Bureaucrats” series at the International Liberty blog. Well, now we have a video detailing how the government workforce has morphed into a fiscal nightmare for taxpayers.

There are three things in the video that deserve special emphasis. First, bureaucrats are vastly overpaid. The government data cited in the video show that total compensation for the federal civil service is twice as high, on average, as it is for workers in the productive sector of the economy. There are some bureaucrats who deserve above-average pay, such as scientists dealing with nuclear weapons, but it is outrageous that the average drone in the federal bureaucracy is getting twice as much compensation as the taxpayers (serfs) who pay their salaries.

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I’m thinking SEIU may need to hire itself a new communications consulting firm.  Am I the only one confused by this messaging conflict?

To protest Illinois state budget cuts, thousands (which in lefty stats must mean 10, as in ten people) took to the steps of Illinois’ state capitol building, demanding the Governor shut down the state house.  They chanted, “Shut it Down Now. Shut it Down Now”.

Then, at the same protest, they marched and chanted outside, “Save Our State.  Save Our Schools.”

I don’t know which it is they’d like the Governor to do – shut down the state, or save it?

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By Tom McGillvray, Cary Smith, and Gary MacLaren

As state legislators, we are used to the federal government treating the states like its red-headed stepchild. Washington dictates, and we are expected to follow. Whether it’s transportation, health care, or education, federal money comes with federal strings—and more often than not, the strings outlast the money and the states end up picking up the tab. And the current debate over health care reform is no exception.

We were willing to give President Obama the benefit of the doubt when he called for more discussion and debate. He certainly seemed willing to reach across the aisle to include his political opponents in his recent health care summit. But, given just how much of any health care reform bill is bound to fall on the shoulders of the states to implement and fund, he should have included us—a point which House Minority Leader John Boehner made in a letter to Rahm Emanuel.

But this new era of “bipartisanship” was short lived indeed. Just ask Congressional leaders like Jon Tester and Max Baucus if they support the so-called nuclear option of passing a health care bill Americans don’t want through a questionable legislative maneuver. If Congress does manage to pass the President’s health care reform proposal it is sure to include a mandate for individuals to purchase health insurance.

However, being forced to buy health insurance, or being forced to buy a particular health plan, just doesn’t sit right with independent-minded Montanans, or the rest of Americans judging by recent polls. This is why we plan to introduce the American Legislative Exchange Council’s (ALEC) Freedom of Choice in Health Care Act, a state constitutional amendment that protects individuals, employers, and health care providers from being forced to participate in any health care system and preserves individuals’ right to pay directly for care.

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