Reduce Bloated Bureaucracies to Solve New Mexico’s Budget Deficit

New Mexico’s Legislature and local governments are busy attempting to close budget deficits. While the Rio Grande Foundation has already proposed several spending programs that could be eliminated including those outlined in our 2008 Piglet Book.
Fortunately, there is more than enough spending statewide to reduce deficits. This fact is made crystal clear in a new Rio Grande Foundation study, “The Government ‘Gravy Train’: An Analysis of New Mexico’s Private versus Public Sector Employment and Compensation” which was released today. The study is available here.
Among the study’s findings:

* In 2007, state and local government employed 24.5 people for every 100 people employed by the private sector, far above the national average of 16.22. Thus, New Mexico’s state and local government employment ratio is 51 percent higher and is the 3rd highest ratio in the country;

* Not only does New Mexico hire more government workers than almost any other state, but those employees those employees are more highly compensated than average New Mexico workers. In 2007, state and local government compensation was $45,516 per job while private sector compensation was $41,669 per job. As a result, the average state and local government job paid 9.2 percent higher than the average private sector job;

* The budgetary savings to the state by aligning New Mexico’s state and local government employment and compensation ratios to the national average would be astounding. In 2007 alone, such an adjustment would have saved taxpayers up to $2,931,228,000.

There is no doubt that even in the best of times that New Mexico’s economy is held back by the presence of bloated state and local bureaucracies. With tax revenues plummeting and budget deficits looming, now is the time to prune state and local government with an eye towards saving taxpayer dollars.

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