Let Musk loose on state budgets next. Even Florida needs a DOGE. | Opinion
My analysis shows that more government employees translates into more mandates. Every three bureaucrats are associated with two more regulations.
The federal bureaucracy is already trembling at President-elect Donald Trump’s new Department of Government Efficiency. Trump has charged the initiative, led by Elon Musk and Vivek Ramaswamy, with shrinking federal agencies and reducing the hordes of unelected paper pushers who raise costs on families, kill jobs and stifle entrepreneurship.
But Washington, D.C., doesn’t have the only bureaucracy that should be cut down to size. The roughly 3 million federal employees pale in comparison with the 19.6 million state and local government workers nationwide. They, too, are often a direct threat to Americans’ wallets and our economy’s growth.
That’s my conclusion in a new paper, which shows just how large and harmful bureaucracy has become in all 50 states. All told, states employ about 5.4 million government workers, and local governments account for 14.2 million.
This army of taxpayer-funded mandarins hoovers up more than $1.2 trillion in wages, with billions more going to benefits. On average, state and local government employees are compensated about 40% higher than private-sector workers. But the latter grow the economy while public-sector workers frequently shrink it.
Every dollar that goes into the pockets of government workers necessarily comes out of the pockets of taxpayers. That’s the most obvious way that state and local bureaucrats hold back America.
The generous nature of their compensation necessitates higher taxes than would otherwise be required, killing jobs and slowing growth.
States struggle with unfunded pension liabilities
Even then, so many government employees make so much money that high taxes still can’t fully cover the resulting obligations.
Case in point: State governments' unfunded pension liability, which in 2021 was $836 billion. That’s equal to about 50% of states’ annual revenue.
The unaffordable spending is reason enough to slim down government nationwide; it could spark a new wave of tax cuts that would boost wages and spark job creation.
Adding bureaucrats leads to increase in regulations
But it’s also the case that state and local bureaucrats generally devote their time to making life more difficult for everyone else. My analysis shows that more government employees translates into more mandates. Every three bureaucrats are associated with the addition of two regulations, which quickly add up in states with hundreds of thousands of government workers.
I also found that implementing new regulations often requires hiring more bureaucrats, leading to a never-ending cycle of bigger government and less freedom.
State and local bureaucracies, like their federal counterparts, generally grow on autopilot, but elected officials should hit the brakes. They don’t have to go as far as Trump’s new government efficiency department, although they can if they want to. Instead, they could consider the model of states like Mississippi and Nebraska.
Mississippi has made it easier to fire unnecessary or poor performing bureaucrats by letting government agencies petition the legislature for temporary exemptions from state civil service laws. This commonsense system empowers reform-minded governors to reorganize entire departments, quickly and affordably.
Nebraska requires the governor’s office to evaluate jobs that have been open for more than 90 days, with the option of eliminating them. Earlier this year, Gov. Jim Pillen used this tool to eliminate almost 500 jobs and save taxpayers more than $26 million in state and federal funds. In bigger states, the numbers could be dramatically higher.
The states that need reform the most are least likely to get on board − think the high-tax, low-freedom, big-government utopias of California, New York and Illinois. But that shouldn’t stop states that already have smaller governments from going further, making them even more attractive to families and businesses.
For instance, Florida is a small-government state that has grown quickly in recent years. But it still has bureaucrats who try to pass pointless policies like Styrofoam bans. If the Sunshine State shrank its 987,000-strong state and local government workforce, it would surely experience even more of the wage and job growth that draws new residents and entrepreneurs.
That vision of a stronger economy that benefits all is exactly what motivated Trump to create his Department of Government Efficiency. So does the promise of massive taxpayer savings and a federal government that works for the people, not against them.
That same leadership is needed at every level of government. Now, which state or city will be the first to follow Trump’s lead, bringing efficiency and accountability to government and hope to Americans laboring under so many bureaucratic burdens?
Liesel Crocker is senior research fellow at the Foundation for Government Accountability.