States faced what seemed like massive shortfalls in 2002 and 2003, but personnel and operating costs weren’t slashed at nearly the same rate that has become common more recently.
Back then, there was a recognition that cutting administrative overhead wasn’t enough. California, for instance, could have laid off every one of its employees in 2003 without erasing its deficit. Most of what states do, after all, is simply write checks to schools, hospitals and other entities that actually provide services. “The vast majority of the state general fund budget is just passed through to locals,” says Marianne O’Malley, a budget expert at the California Legislative Analyst’s Office.
But state officials are looking harder at in-house costs nowadays. For one thing, line items in the personnel budget, like health and pension costs, have exploded. For another, employment prospects have worsened, so furloughs and pay freezes aren’t expected to cost the state as many quality workers as would be the case if the job market weren’t so soft.
States must also now look everywhere they can for savings, down to the last agency car and cellphone calling plan. Administrative overhead may not be a state’s biggest expense, but it wouldn’t do to hold the state’s own operations harmless when having to cut back so much on essential services. That’s why most legislatures, which represent less than 1 percent of any state’s budget, are cutting back on their own costs as well.
Some see the amount of pain inflicted on state workers as part of a larger political pattern. Jon Shure, from the Center on Budget and Policy Priorities, a progressive research organization, points out that many states are now governed by people who favor limited government and have little hesitation in pruning it back however they can. “The success that the [political] right has had in demonizing government and, more specifically, public employees means reductions in their pay and numbers are seen as a more viable approach,” Shure says.
But the fact that states are cutting back so much on spending means fewer state workers are needed to keep an eye on programs run elsewhere, say, by school districts. “When the state does cut back on programs, we oftentimes have to adjust the amount of staffing we have,” O’Malley says.
The result? “There is much more focus on state employee salaries and pensions and benefits than in the early 2000s,” she says.
