Yesterday, US News and World Report ran a piece of mine arguing that states don’t need a federal bailout: they’ve been increasing budgets for decades and should focus on cutting government spending, instead of taking more from taxpayers. Today’s Wall Street Journal explains that this latest bailout is even worse than just throwing federal taxpayer money at profligate states, it would limit states’ ability to make need spending cuts in the future:
Maintaining the salaries and generous benefit plans for members of teachers unions is indeed a top Democratic priority. That’s why $10 billion of the bill’s funding is allocated to education, and the money comes with strings that will multiply the benefits for this core Obama constituency.
Specifically, the bill stipulates that federal funds must supplement, not replace, state spending on education. Also, in each state, next year’s spending on elementary and secondary education as a percentage of total state revenues must be equal to or greater than the previous year’s level.
Governor Haley Barbour of Mississippi did the math and figured out his state will be worse off. Mr. Barbour says the bill will force his state “to rewrite its current year [fiscal 2011] budget. Preliminary estimates of the Mississippi Department of Finance and Administration show that we will now have to spend between $50-100 million of state funds-funds that must be taken away from public safety, human services, mental health and other state priorities and given to education-in order for an additional $98 million of federal funds to be granted to education. There is no justification for the federal government hijacking state budgets, but that is exactly what Congress has done.”
This is worse than just stimulus two; it is a commitment to take more not just from taxpayer today but for years in the future.