What is the role of unions in the budget woes of states? They are part of the foundation of the state’s crises.  This perfectly understandable when you see how public sector union’s manipulate the political system to get above the market price for their laborers.  Couple the increase in labor costs with job protection and a political bullhorn; you can see the importance of limited government not only on the federal level, but the state level as well.  

There needs to be a restoration of this concept (limited government) and common sense.  The solution involves responsible budgeting, which brings these negotiated labor costs in line with the free market.  That sounds easy… not so much when you have groups of nurses, teachers, and firefighters demonizing leaders who dare to solve the problem, e.g.  N.J. Governor. Chris Christie with the state’s teachers union (http://www.youtube.com/watch?v=yuri7p_9pm4&feature=related).  Manhattan Institute scholar Josh Barro has suggested the consideration of abolishing collective bargaining for state employees http://www.realclearmarkets.com/articles/2010/07/20/of_course_oakland_cant_afford_these_cops_98581.html highlighting the wage increases (labor costs) and inability to fire incompetent employees (accountability). Government services should not be sourced into public works projects that become political kingmakers especially when taxpayers are footing the bill.

 State governments are facing budget crises because they have made this Faustian bargain with unions (i.e. votes for job protection) which inevitably leads to the incumbent’s political ouster, failing institutions and broken contracts.