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Recession’s lesson: Pay now, or pay much more later

Post by Kim Bradford on July 3, 2010 at 4:14 pm |
July 2, 2010 4:13 pm

This editorial will appear in Sunday’s print edition.

Call them what you will – furloughs, temporary layoffs, reality catching up to state government, the Legislature balancing the budget on the backs of state workers.

By whatever name, the state’s plan to save $73 million by idling a third of its workforce on 10 separate days over the next year is better than the alternatives.

Union leaders may be fighting furloughs in court, but many of their members no doubt realize that staying home Tuesday is a small price to pay for having a job come Wednesday.

Furloughs preserve jobs, and the U.S. economy needs them. Signs that the nation’s economic rebound is stalling – among them a rise in jobless claims – underscore the importance of keeping people employed.

Twenty-two states used furloughs in the last fiscal year. But Reuters reports that the practice is going out of fashion and the more drastic step of laying off workers is becoming a more widespread cost-cutting tool.

The reason: States underestimated the staying power of the recession. Many governments were slow to take decisive and aggressive action to trim expenses. The reckoning is bound to be doubly dramatic – and require twice the sacrifice.

Take Puyallup. City officials there crowed for much of the recession that their financial prudence had allowed them to avoid layoffs.
Now the slow erosion of tax receipts has caught up with the city, and it faces losing nearly one-third of its staff. The longer it waits to act, the more pink slips it could have to hand out.

Pierce Transit has also tried to put off the inevitable. After sales tax revenues took a dive, the agency made only nips and tucks in spending, thus bleeding its reserves into such a hole that now only a 50 percent increase in the transit sales tax – or a 43 percent cut in service – will save it.

Perhaps what state and local government need is more pessimists in charge of the purse strings.

State lawmakers also have been slow to acknowledge the growing financial crisis, hoping against the odds that economic recovery would deliver them from having to make tough calls.

If it hadn’t been in denial, the Democratic majority might have resorted to furloughs sooner. The plan saves $38 million in the general fund and $35 million elsewhere. Legislators went there only after it became clear that they’d be asking for far greater concessions from taxpayers and vulnerable populations.

Making up for lost time will hurt. Unions might rail – and yank endorsements from all but the most loyal Democrats – but don’t look for the next state budget to be any kinder to anyone, state employees included. Furloughs are the least of their worries.

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