RALEIGH – Market forces may be moving textile and furniture employment overseas, but according to a new report from the John Locke Foundation there’s no mistaking a major growth industry in North Carolina: state and local government.
Joe Coletti, a fiscal policy analyst for the Raleigh-based think tank, examined recent growth in government employment in a Spotlight briefing paper released this week. He analyzed employment figures for North Carolina state and local governments and found significant growth – nearly 50,000 new jobs since 2000.
“That 8.2 percent growth in state and local government is faster than the overall growth in population,” Coletti said. “Only 15 states in the country posted a faster rate of growth in government jobs than North Carolina did.”
Coletti also computed North Carolina’s ratio of government workers to population and compared it to that of other Southeastern states, finding that only South Carolina’s ratio was higher. He also contrasted it to the ratios of states with comparable populations.
“No other state with a similar population has more public employees per resident than North Carolina does – not even Massachusetts,” Coletti said.
He noted that growth in government employment comes with a cost: a drag on the private sector.
“Larger payrolls entail higher spending and taxes,” Coletti said. “All of this pulls resources from the private sector now and into the future.”
He pointed out that in just the past year, many localities have either imposed double-digit tax hikes or increased the likelihood of doing so through large debt increases. The new state budget will also contain hundreds of millions of dollars in higher taxes – continuing a trend of rising state taxes that began in 2001.
By failing to control the growth of government employment, state and local officials have made it difficult to shoulder other rapidly growing costs or compensate existing government employees better for good performance, Coletti said.
“State and local governments can clearly find room for improved performance without harming basic services,” he concluded. “The Locke Foundation’s Freedom Budget 2005 finds $1 billion in savings while increasing average pay for state employees by 4 percent.”
You can find Coletti’s new Spotlight paper, “They Can’t All Be Teachers,” by visiting the main JLF website. For more information, contact Joe Coletti (jcoletti@johnlocke.org) or Summer Hood (shood@johnlocke.org) at 919-828-3876.