ON-Lion Letter
Across the United States, state and local governments face skyrocketing costs for the pensions and health care of their current and retired teachers, firefighters, police, and other employees.  The most-common response to these rising costs is to cut services.  When tackling these difficult fiscal questions, government officials must consider the constituents they will be hurting the most:  people in middle- and lower-income range who depend heavily on these essential services.

Governments increasingly spend more and more to do less and less.  The very functions that people rely the heaviest on in their day-to-day lives governments are spending less on such as schools, roads, public transport, libraries, and assistance for the poor.

A recent report from the Center for State and Local Leadership at the Manhattan Institute for Policy Research in New York City, Government Crowded Out:  How Employee Compensation Costs Are Reshaping State and Local Government, analyzes these issues.  By Manhattan Institute senior fellow Daniel DiSalvo, a City University of New York political-science professor, the report stresses that pensions are not the only concern. 

Most local governments lack any long-term strategy for funding their health-care commitments to employees.  As of 2009, according to Government Crowded Out, the 61 American cities with a population greater than 500,000 collectively had $118 billion in liabilities for employee and retiree health care, and had only set aside enough money to cover six percent of this.  Meanwhile, U.S. states' health-care liabilities increased by $22 billion (four percent) in just one year (2009–10).

We need reformers who recognize that the mathematics of crowding out cannot be evaded with gimmicks, new debt, or endless tax increases.  If we are to keep our schools, libraries, bridges, and parks -- to say nothing of our national faith in democratic self-government -- this situation cannot continue.

The Lynde and Harry Bradley Foundation in Milwaukee substantially supports the Manhattan Institute's Center for State and Local Leadership.
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