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Tuesday, November 27, 2012

Tough Economy? Not If You Work for the Government...

Fresh from reading Professor Reynolds' interesting assumption that we're living in "The Hunger Games" comes this story out of , you guessed it, Massachusetts:

Top Mass. lawmakers handing out raises to staffers
BOSTON (AP) -- Massachusetts' two top lawmakers are handing out raises to hundreds of staffers even as the state faces declining revenues that could force budget cuts.
House Speaker Robert DeLeo and Senate President Therese Murray agreed to the 3 percent raises last week.
The Democratic leaders have the authority to dole out raises. House employees haven't seen an increase since 2008.
Okay, now, they've been working without raises for four years now, so that's something - of course, they also have jobs, unlike a good number of folks in this economy. And 3% isn't exactly gangbusters - the way inflation is rising, it's barely covering the rising cost of living. But it is quite interesting to see that - in this time of talks of budget cuts and declining revenues - they're in a position to be handing out raises.

And, not for nothing, but it is interesting to see that there are, in fact, declining revenues in Massachusetts. We recently had a sales tax increase which was supposed to address this discrepancy, and, as expected, it had exactly the opposite effect, as people were either going without disposable items or purchasing them in states that don't have sales tax (or have lower sales tax on hard goods). Much like the voluntary higher tax rate - that no one, not even John effin' Kerry, uses - higher sales taxes are one of those things that make a great soundbite - it only costs more if you consume more! - but in practice just gets routed around.

Then again, for the fastest employment sector - public government - when you get a raise whether or not you perform, what's the incentive to do well?

That is all.

3 comments:

Robb Allen said...

There's a problem here. When state revenues decline, raising taxes rarely works (and if it does, it's for a short period of time). You can lower taxes and gain more revenue, which is generally what's pointed out by those more on the right side of the spectrum.

However, the response shouldn't be either one of these. It should be "Good. Let revenues decline". The state doesn't need the money. All legitimate governments should be cash starved. Why is it always discussed in terms of "raising" revenue rather than limiting the scope of government to match what is available?

New Jovian Thunderbolt said...

Don't worry Jay. Maryland is gonna raise taxes big time. That'll teach the gummint workers that prefer to live in the state bordering DC that have decent roads. They'll have to take the bite or move to Virginia and sit in traffic.

Stan said...

I noticed a lack of any mention of what the current pay rate was for those employees that's what I'm really interesting in knowing.