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Scott Mooneyham: A disconnect between public, private sectors

RALEIGH ó State legislators face a pretty big problem as they try to come up with a solution to a $4 billion budget gap.
As big as it is, another gap may be a bigger problem.
It’s a gap between state government and the rest of the world, a disconnect between a public sector economy so far largely insulated from economic shock by tax streams, reserve funds and federal borrowing, and a private sector economy already ravaged by declining demand and limited capital.
The shock to the public sector economy is on its way. It will hit in force in the next fiscal year, which begins July 1. And so, the insulation just delays the pain.
State employees and others who rely on the public sector economy might tell you that there is no disconnect, that they get it.
Signs abound that they don’t.
The state Banking Commission had originally set aside $200,000 earlier this year to provide bonuses to its employees after paying out nearly $500,000 in bonuses last year. After the bonuses were publicly disclosed, commission officials decided to back away from any plans to provide them this year.
Over in the state Treasurer’s office, the state’s chief investment officer, Patricia Gerrick, received a $51,746 bonus last October after her salary was doubled to $340,000. New Treasurer Janet Cowell says she plans no bonuses this year.
In the Department of Commerce, new Secretary Keith Crisco and four others in his office plan to go ahead with a two-week business-recruiting trip to Europe. The agency plans to economize, keeping costs down to $137,000. And this trip is about jobs, you know.
At N.C. State University, former provost Larry Neilsen continues to collect the same $298,700 salary even though he resigned his administrative position because of questions surrounding the hiring of Mary Easley, wife of former Gov. Mike Easley.
Eliminating these expenses wouldn’t do a lot to close a $4 billion budget gap. But the episodes leave the general public scratching its collective head, wondering whether state government couldn’t stand for a good scrubbing.
Even among rank-and-file state employees, the disconnect can be seen. A paltry 0.5 percent pay cut causes public school teachers to complain as if they’ve been hit in the head by rotten apple tossed by an unruly student.
Legislators, with their penchant for eye-catching pork, have also helped to create the disconnect.
Now, though, they’re trapped by it..
The Democrats who control the legislature know that, despite past pork binges and despite well-publicized excesses, the budget cutting that they’re considering will mean real pain, real loss of services, real contraction in the public sector economy.
They know that a beaten-up public with its own economic struggles has little use for talk of tax hikes, and it’s that public that they depend on to win swing legislative districts.
They know that their core constituencies ó some of them public sector employees ó want and even demand to be shielded from the pain.
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Scott Mooneyham is a columnist for Capitol Press Association.

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