Sunday, December 30, 2007

More budget bad news

In the last few days, Governor Beshear has announced that the deficit for the current fiscal year is now about $400 million. That is a big hill to climb and the Gov. is considering options that include a 3% cut across the board, with the exception of K-12 education.

Budget cuts are probably the only way out of this deficit. I have 2 other suggestions for the Governor that I hope he will consider.

1. Hiring freeze. News reports indicate that this is being considered. I applaud that. Say what you will about Governor Fletcher, but he did cut back on state employees by about 2000, resulting in large savings to the taxpayers. Furthermore, state services have not suffered. I hope we do not backslide on this.

2. Repeal the prevailing wage. I doubt the Governor can do this on his own, but if he can he should consider it. If he can't he should push for it in the legislature, even if it is temporary. This would result in hundreds of millions of dollars a year in savings on capital projects for Kentucky citizens.

The prevailing wage, in short, is a system where state government mandates that union scale wages be paid on public projects such as school buildings. This policy artificially inflates the costs of public projects by anywhere from 5-25%, depending on the project and who you talk to about the effect. This policy benefits labor unions and those who work on these projects. The taxpayers as a whole are the losers. I hope the Governor will consider it.