Commentary: Too Big to Fail?

~~~By Amy Edmonds on November 30, 2012~~~

(Amy Edmonds is a former Wyoming legislator, and now a member of the conservative think tank, The Wyoming Libery Group. She appears each Friday on KGAB's Morning Zone at 8:07AM MST along with Economist Sven Larson in our special segment, "Wyoming Perspectives".)

“Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation…” Henry Hazlitt, Economics in One Lesson

What does it take to cut the size and scope of state government?  Wyoming may well be on its way to finding out.  Thanks to sharp increases in energy revenues over the past decade, a lack of focused prioritization of government functions, and the ever increasing cost of federal mandates, Wyoming’s budget has doubled from $4 billion to well over $8 billion. This revenue windfall has led to an overgrown state government that is simply unsustainable given the impending economic crisis and hostile energy environment back east. This mixture of a looming fiscal cliff combined with an overgrown, unsustainable state government makes for a very troubling tax climate for the citizens of Wyoming.

And yet the recent quest to simply cut spending increases in Wyoming’s budget – yes, I said cutting spending increases – has proven to be an odyssey of Homer-sized proportions. For some lawmakers, cutting the state budget is like going through the five stages of grief.  There is anger, there is denial, there is bargaining, there is depression and finally, there is acceptance.  Sadly it would seem the denial and bargaining stages have merged together and are now revealed in the urgent desire to raise more revenues as an alternative to focusing in on the real problem – overspending.

Instead of concentrating on and finding solutions for chronic overspending, many legislators are in denial and looking for other pockets to raid.  From the proposed ten cent gas tax increase, to a long discussed one cent statewide sales tax increase, to a whispered rumor of an increase in the severance tax, taxes seem to be on the minds of some policymakers.  And that means the pocketbooks of Wyoming’s citizens are in jeopardy when the Wyoming Legislature convenes this January.

The overgrowth in government manifests itself in a number of areas. For example, in an article by Wyoming Liberty Group’s Sven Larson entitled Payroll Parity: Government Containment That Boosts Private Jobs, he points out that in 2011 Wyoming government, both state and local, employed 309 government workers for every 1,000 private sector workers in the state, the highest in the nation.  He also points out that government employee compensation from 2008 to 2010 has seen a 10.7 percent increase while Wyoming’s private sector employees’ compensation has decreased by 6.7 percent.  Wyoming cannot afford to continue this kind of steep increase in government at the expense, ultimately, of our private sector.

So what does it take to make the much needed cuts to government instead of raiding the taxpayers’ pocketbooks? Well, it takes real leadership within both chambers of the legislature and in the Governor’s office, it takes real cooperation across the political aisle, and it takes real discipline within the bureaucratic halls of state government.