Examiner Editorial: No more federal bailouts for profligate states

Next time President Obama wants to bail out a broke state, members of Congress should look to the Los Angeles Unified School District and see what they're paying for. Facing a $640 million budget shortfall, the district has laid off nearly 3,000 teachers in the past two years. And now, the Washington Post reports, it is unveiling a $578 million school building — the Robert F. Kennedy Community Schools — that features a marble sculpture, a “state-of-the-art” swimming pool and … talking benches. Yes, that's right. Students attending RFK can actually listen to their seats talk, as if on the haunted house ride at Disney World. Maybe the talking benches can tutor enough students to raise the district's 41 percent graduation rate.

RFK represents the city's third such costly project in as many years, all of which were paid for with borrowed money. These three schools, taken together, serve only 8,300 students but cost more than $1 billion plus interest. This extravagance does not correlate with educational performance: Students at the $377 million Edward R. Roybal Learning Center, opened in 2008, tested in the bottom 10th percentile of all schools in California. As L.A. schools binge on pricey architecture, their chief source of funds, the state of California, faces a $20 billion budget shortfall. The state is weeks away from issuing IOUs again.

Obama has now pushed two state government bailout bills through Congress, effectively punishing responsible states for the sins of Los Angeles school administrators and other irresponsible officials. The first bailout was his $862 billion stimulus package, which contained $49 billion for the “State Fiscal Stabilization Fund” and billions more to fund state programs. The second was the $26 billion bill that passed Congress earlier this month. Neither Band-Aid has even begun to solve the problem of extravagant state-level spending, which will soon reach a tipping point in a handful of states, including Illinois and California.

This paradigm must end immediately. We do not need more state bailouts to create moral hazard for reckless state legislators and governors, who are so fond of spending other people's money that they are now stringing themselves out again on federal handouts. If Obama does not have the courage to tell the money-wasters to take a hike, taxpayers will have to count on a Congress, of one party or the other, to do it for him.

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