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Spending continues unabated - for now

It's not just New York state government that has spent itself into a deep hole filled with red ink. It seems state and local governments across the nation have been living beyond their means, according to this story in USA Today.

Even as the economy slides into recession, many state and local governments continue to spend freely and expand their workforces.

State and local spending jumped 7.4% in the third quarter compared with a year earlier, the U.S. Bureau of Economic Analysis reports. Hiring increased faster than in any sector except health care.

Total state and local revenue grew just 2.6% in the third quarter. Sales tax collections fell 0.6% as consumers cut spending.

New York's fiscal crunch - we're looking at $14 billion deficit over the balance of this budget year and next - means belt tightening not only at the state level, but in cities, towns, villages and school districts. Painful on one hand, but arguably long overdue.

State aid has enabled localities to keep spending in the style they're accustomed to. Consider this post and this post on how school districts this year used a record increase in state aid, and this post on how city government in Buffalo has intentionally made itself more and more reliant on state largess.

Without a sugar daddy in Albany, perhaps City Hall would bargain labor contracts that end the practice of employees gaming the pension system so retirement payments don't approach, and sometimes surpass, the paychecks of people when they were working. So far as I can tell, the recent settlement with the fire union that Byron Brown wants the Control Board to approve allows the abuse to continue.

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Local Government | State government
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