Four Governors On How To Cut Spending
WSJ op-ed from Schwarzenegger, Patrick, McDonnell and Rendell.
What about massive cuts to defense allocation. What say you, neocons!
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Source: WSJ
Pension Reform Is Key
By Arnold Schwarzenegger
For years now, I have been trying to get lawmakers to reform public employee pensions in order to benefit private-sector job growth. The problem is stark: Over the last decade in California, spending on state employees' compensation rose nearly three times faster than state revenues. This has squeezed resources for programs, such as higher education and job training, that benefit private-sector workers.
This year, for the first time ever, our state was forced to spend more on retirement costs ($6.5 billion) than on higher education. This prevented us from, among other things, investing in more transportation and other infrastructure projects that are needed to accommodate the world's fastest-growing and most innovative companies.
Last week we finally got some good news: The state legislature agreed to pass my pension reforms as part of a hard-fought budget deal. These reforms cut spending in significant ways:
• Current employees will now be required to contribute more toward their pensions, saving nearly $800 million this year alone.
• For new employees, we will create a two-tier system that rolls pension levels back to pre-1999 levels. This will reduce pension costs by $100 billion over time.
• We ended the ugly practice of pension "spiking," where employees manipulated their compensation in their final year at work in order to boost their lifetime retirement benefits.
• We brought transparency to the system by exposing the deceptive pension fund accounting practices that were hiding hundreds of billions in pension debt from the taxpayers.
These reforms are creating a pension system that is fair to both state workers and to the private-sector workers who pay their salaries and benefits. It will free up more money for investing in critical programs like higher education and infrastructure, and help reduce tax burdens on the private sector.
It saddens me to see Democrats and some Republicans who seem intent on raising business taxes and reducing infrastructure investment in order to protect spending on public-employee compensation and retirement benefits. We believe that, on the contrary, private-sector job growth will be enhanced if public-sector retirement benefits are brought under control. All it takes is some lawmakers who are willing to stand up to the special interests and do what's right.
Mr. Schwarzenegger, a Republican, is the governor of California.
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Ever-Higher Budgets Can't Be the Norm
By Bob McDonnell
When I took office in January, we faced two massive budget shortfalls. The first was $1.8 billion in the fiscal year 2010 budget. To get this under control we cut spending and provided a financial reward for state workers to generate savings and not spend their entire agency budgets by the end of the fiscal year. Six months later we announced a $403 million surplus.
The second shortfall was $4.2 billion in the current biennial budget. Again, we cut a wide variety of programs (including in education and health), reducing state spending to 2006 levels. As a result we closed that shortfall without a tax increase—indeed we threatened a veto if the legislature passed the previous governor's proposed $2 billion tax increase. The legislature rejected the tax unanimously.
Virginia's state budget grew by 73.4% from 2000 to 2009, much faster than the rate of growth in population plus inflation. This is unsustainable and unacceptable, and the budget cannot be seriously restrained without addressing its two primary drivers: personnel and programs.
As a result, we supported a significant overhaul of Virginia's pension system. All state employees hired after July 1 of this year will now, for the first time in a generation, contribute to their own pensions. With pension-system reform, we will save an estimated $3 billion over the next 10 years. Actuaries estimate that in the long run, our reforms will reduce the total cost of Virginia's pension system by 10%.
Our second major reform was an immediate, statewide hiring freeze. We obtained enhanced authority from the legislature for the governor to order a freeze that covers all noncritical areas of state government, not just a select few agencies. This strict freeze, together with reductions in full-time positions, will save over $20 million a year.
Looking forward, we've also created a commission on government reform that is evaluating over a thousand ideas to save tax dollars, by doing everything from cutting and consolidating boards and agencies to creating a one-stop shop where businesses can access every license, permit and registration they need to operate. For too long, state governments have operated on the assumption that ever-higher budgets are the norm. We intend to redo the way government operates.
Mr. McDonnell, a Republican, is the governor of Virginia.
Here's my response:
And watch this:
Oct 13, 2010 at 5:03 PM
Reader Comments (4)
http://www.kentucky.com/2010/09/16/1438158/schwarzenegger-plan-to-borrow.html
Ahnold backed off this time, but state pensions have been raided for years. Voters reward the thefts by re electing their favorite herd animals.
'This is the consequence of writing against the government,' my captors said.
http://online.wsj.com/article/SB10001424052748703794104575545914180906100.html?mod=WSJ_newsreel_opinion
The old bad words have lost much of their meaning.
http://online.wsj.com/article/SB10001424052748703794104575545553828507786.html?mod=WSJ_newsreel_opinion
The Wisconsin senator boasts of his strong support for gun rights even though the NRA gave him failing grades during his last two re-election bids.
http://online.wsj.com/article/SB10001424052748703673604575550323442266964.html?mod=WSJ_newsreel_opinion