The saga of why parts of New York remained inescapably covered in snow days after this weekend’s blizzard got a strange twist this morning when The New York Post reported City Councilman Dan Halloran’s claims that sanitation workers had admitted to him that the slow clean up was part of an intentional protest by the unions over budget cuts.

Public sector unions are out of control. For far to long they have abused the taxpayers, and this story is just another example how far unions will go.

Suggested reading regarding this topic:

Book of the Month – Nov. 2010: Shakedown – The Continuing Conspiracy Against the American Taxpayer

The New Elite: Public Servants Become Public Masters

In 2010, the Diversity Committee of the Society of Professional Journalists (SPJ) began a quest to get American journalists to stop using the terms “illegal aliens” or “illegal immigrants” and instead use “undocumented immigrant.” Is this really the purview of the SPJ?

Congressman King’s point follows what our guest this past weekend (Dec. 26, 2010) Andrew McCarthy stated.  We must be prepared to have an open, honest debate on Islamist, or we will continued to be ill-prepared for the actions of these extremist.

Christian Bale was ready to leave anyway…..”Ka-pow!”

Charlie Arlinghaus, pretty much the smartest person in the room when it comes to the NH budget process, and a frequent guest on my show, offers another insight look at the issues with the current shape of NH’s financial future.  New NH House Speaker O’Brien has mentioned Charlie as one of the people he would seek advise from  as the new NH House shapes the upcoming budgets.  That would be a great first step to solving NH’s budget crisis.

Don’t let N.H. history repeat itself

By Charlie Arlinghaus

Original Post – @ Foster’s: Don’t let N.H. history repeat itself
Sometimes we can learn a lot about our budget troubles by looking back at the past fiscal history of the state. The state ran a deficit for the first time in 1968. It was looked on at the time as an aberration but the causes of the problem then have become a fixture of modern state fiscal policy.

The immediate causes of the current budget crisis are well known. Essentially, from four years ago, we increased spending in the operating budget by $600 million while revenues declined. Borrowing and one-time federal bailouts that supported the spending will go away and leave us a gigantic hole forcing dramatic reductions in spending.

The late 1960s were a very different budget time but some problems were the same. Spending increases were not supported by available revenue. The governor was forced to make mid-year changes because revenue estimates were too high. The result then was not emergency spending cuts but instead an emergency tax increase that never really did solve the problem of rapid spending increases.

For decades, the legislature and governor had budgeted cautiously and produced small surpluses at the end of each year that carried forward to give them a cushion. The rainy-day fund would not be established until the Sununu administration in the 1980s so carrying forward a surplus was important.

The fiscal report of the state department of Administration and Control warned in 1968 that “for the first time in the state’s fiscal history, the appropriations authorized by the 1967 Laws produced an $18,486 general fund deficit.” Just two years before, the state’s reserves had been $4 million, about 11% of the state’s unrestricted revenue or the equivalent of $240 million in today’s budget.

Yet, very large spending increases had eaten away at that surplus. The two-year operating budget had skyrocketed to $125 million, more than double its level just six years before. By the way, if you adjust for inflation that bloated two-year budget is the equivalent of $723 million today but our two-year general and education fund budget is actually $5 billion.

The legislature was naturally distraught over its inability to budget sensibly. But what had gone wrong? In March, the governor was forced to revise the revenue estimates down by $3.4 million, about 6% of the total. Since the change was made while the budget was under consideration, you’d think they might have pared back their spending requests.

Instead they decided to make a big change to the tax structure. At the time liquor, beer, tobacco, and horse racing made up 69% of state regular revenues. Today they account for only about 20% with tobacco at three-quarters of that. The legislature wanted a new, broader-based tax so they created a sales tax on Meals and Rooms.

That new tax didn’t change the world — it was only about 6% of the state budget. However it saved them from worrying about how they had just drained the state’s reserves to nothing.

Interestingly, some things aren’t all that different. The university wanted a much larger contribution that the state was willing to give them. The state contribution for UNH was $6 million, the equivalent of $35 million today. Actually, the state contribution has more than kept pace with inflation as we budgeted $53 million last year for UNH.

Also legislators were worried about the increasing debt. In five short years, state debt had increased by 60%. Today, we worry about general fund debt that has increased by 30% in the last five years. Back then, they worried about debt that was 20% higher than the national average. Today, we’re trying to keep from going down that road.

In 1968, the total number of state employees was climbing rapidly and had reached 6,232 at a payroll of $42 million, the equivalent of $250 million today. Today, the state reports that we have 12,764 employees at a payroll closer to $600 million before you add in benefits and retirement.

The problems of 1968 are the problems of today. The comptroller recognized that “there is tendency to approve authorization by bond issues without the same careful consideration given to the operating budget.” In addition, significant increases in appropriations created budget pressures which far outpaced the growth in revenue.

The draining of state reserve funds, the large increase in debt, the increase in appropriations beyond available revenue all created budget instability. The more things change, the more they stay the same.

Charlie Arlinghaus is President of the Josiah Bartlett Center for Public Policy, a free-market think tank based in Concord.

Speculate amongst yourselves.