State governments had to learn to make do with less because of the recession, but now that incoming Republicans in Congress have pledged to uphold a moratorium on earmarks, state leaders will have an even greater impetus to reform their budgets. There is no better time than the present, given the electoral mandate to cut the fat in government at every level.
Lame-duck governors such as Iowa Democrat Chet Culver have done all they can to avoid facing the music. On his way out the door, and before his Republican successor could take office, Culver struck a deal with American Federation of State, County and Municipal Employees that locks in $200 million in additional pay for union members. Add to this the free health insurance the state provides to all government employees and their families. (Iowa is one of only six states that does that, according to The Des Moines Register.)
Such irresponsible bargaining illustrates the problem that Republican governors must now fix in several states. It certainly contravenes the voters’ intentions — Gov.-elect Terry Branstad won a resounding victory after promising to make public employees pay health insurance premiums like everyone else.
Many incoming governors have pledged to protect taxpayers from increasingly ineffective and expensive state governments. In Ohio, Gov.-elect John Kasich asked incumbent Gov. Ted Strickland to terminate all contracts related to Ohio’s passenger-rail project because it is not the state’s most pressing infrastructure concern at this time. New Jersey Gov. Chris Christie axed an already expensive commuter-rail project that was likely to exceed its initial $8.7 billion price tag, leaving the state on the hook for any overage.
Michigan Gov.-elect Rick Snyder has pledged to phase down a state program that has provided $282 million to attract the film industry since 2008. According to a state agency, each job created by this program cost the state about $193,000 in 2009.
The new governors should not feel confined to reining in state budgets. They have very inexpensive tools for unleashing their states’ economies. Tort reform would reduce the uncertain legal environment and reduce costs for doctors and businesses. Union transparency and Right to Work laws would protect workers from coercion and abuse while creating a more attractive environment for manufacturing. Voucher and charter school programs would reduce education costs.
By implementing such policies and resisting the temptation to throw money at every problem, the new governors can succeed where the federal government has failed, and set an example for members of Congress.