Wisconsin and other states are much in the news these days for their attempts to straighten out their budgets. One of the questions which has come up is why the states (our own state of South Dakota is not exempt) are cutting education instead of or in addition to other areas of funding. In short, why can’t we just leave education alone?
Well, here is one reason. In the most recent year for which I could find the figures (FY 2009) education spending accounted for just a hair under 30% of all state and local government spending. Thirty percent. Is it any wonder that states cannot ignore something which is costing them 30 cents of every public dollar when it comes time to get spending under control?
And, when it comes to public spending, which includes public education, here’s a little more data:
State and local governments employ some 20 million people nationwide. Employee compensation costs represent the largest set of expenditures in every state budget. Analyzing the fiscal dynamics of the civil service system reveals some of the most significant constraints and opportunities legislators confront in balancing state budgets.
Total state expenditures exceeded $2.2 trillion last year, of which wages and benefits amounted to $1.1 trillion. Consequently, budgeting decisions related to at least 50 percent of all state budgets are driven by the wage provisions of civil service contracts and funding obligations for state workers’ health care and pension plans.
If one half of all public spending is for public employee compensation, is it any wonder that states must pay attention to situations where public compensation is completely out of sync with compensation for the same work in the private sector?