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Local Leviathans and Subsidiarity Print E-mail
By George J. Marlin   
Wednesday, 23 February 2011

There has been plenty of tension in state capitals, city halls, and county seats throughout the nation as elected officials struggle to contain fiscal problems. In Wisconsin, for instance, fourteen Democratic state senators have fled the state to prevent the legislature from enacting Governor Scott Walker’s budget proposals, which would compel public employees to pay a small percentage of their health and pension benefits and to limit their collective bargaining powers to wage increases. Governor Walker is attempting to carry out his campaign promises to restore the state’s financial integrity by eliminating a $2-billion deficit. Fifty-two percent of Wisconsin voters supported him at the ballot box last November. But other actors have recently attacked him. President Obama and union leaders see him as a union buster. New York Times columnist Paul Krugman has made the wild-eyed accusation that Mr. Walker and his supporters are using the crisis “to make Wisconsin – and eventually, America – less of a functioning democracy and more of a third-world-style oligarchy.”

Unfortunately, many politicians and the special interest groups that fund their campaigns believe government is their private preserve and have refused to accept the reality that government spending cannot outpace revenue growth for years on end without there eventually being a day of reckoning. The Democratic Party formula of spend and tax and the Republican Party formula of spend and borrow have proven to be unsustainable. As a result, many states, local governments, agencies and special districts are being forced to curtail essential services to meet skyrocketing debt, pension, and healthcare obligations and overburdened taxpayers are joining in protests against the local leviathan’s abuse of spending and administrative power.

In traditional American and Catholic perspectives, it was not supposed to work this way. Federalism in the American context and subsidiarity in the Catholic view say that it’s best when decisions that can be made locally are in fact decided there, where people are closer to the facts on the ground. But this assumes that there’s real democratic oversight and control. In the name of localism, however, there has been a proliferation of municipal districts that possess tax, spending, and borrowing authority. In the United States there are over 80,000 local governments that contain a half million elected officials and over 20 million appointed officials. These largely unsupervised, under-the-radar municipal entities oversee every conceivable function, including aquatic plant-growth control, disposal of duck waste, and even building of fallout shelters. Pace Mr. Krugman, if you’re looking for something resembling a third-world oligarchy and corrupt cronyism in America, this is it.

None of this remotely conforms to subsidiarity, properly understood, which should preserve local freedoms and flexibility. Instead, we’ve gotten the exact opposite. Clint Bolick of the Institute for Justice has correctly pointed out that as the power of these local governments has expanded, “so has the tendency to use that power to restrict economic opportunities and bestow favoritism. In areas ranging from government-imposed taxicab monopolies to minimum milk price regulations to cable television franchising, local governments have imposed protectionist restrictions to benefit some . . . to the detriment of others. Those anticompetitive acts are insulated from corrective market forces because they are enforced by government.”

 
     Leo XIII: (Holy) Father of subsidiarity

In my home state of New York, there are over 6,000 such governmental districts. My own Nassau County tax statement includes taxes for eighteen special districts. These shadow governments are shielded by political bosses because they serve as patronage mills for the party faithful. Many have highly paid executive directors, legal counsel, and an abundance of staff members. Hence, perpetuating their existence is in the best interest of pols, not taxpayers.

Uncontrolled costs, especially salaries and benefits, and the inability to realize efficiencies of scale are now killing taxpayers. Public employees have better wages, retirement benefits, medical and sick benefits than private sector workers. A recent study by the Manhattan Institute, a fiscal policy think tank, estimates that the unfunded retiree healthcare liabilities of the state of New York and its local governments are an astounding $205 billion. Most municipalities pay 100 percent of retiree health premiums and when a sixty-five-year-old enrolls in Medicare, the former government employer generally reimburses those premiums.

Thanks to these local leviathans, New Yorkers have the highest state and local tax burden, highest taxes per capita, and worst business tax climate in the nation. Oppressive taxes and regulations have forced people and industries to flee New York. Over 1 million people have left since 2000 for greener economic and tax pastures. Vast areas in Western and Central New York have emptied out. Scores of farms and manufacturing plants have been abandoned. Once thriving population centers have become ghost towns. A majority of upstate jobs are now government and health-care related. It’s quite a trick when local actors are so corrupt that they drive away their tax base and constituents.

In this time of economic ills and budget crisis, it’s time to home in on the hidden power and costs of sham municipal entities. We are quite aware of the way that national governments can usurp power, spend vast sums, and still do little good. We need to turn the same critical eye on subsidiary levels of government. Taxpayers who feel alienated from local structures that appear distant and unresponsive should unite and employ the principles of subsidiarity themselves by demanding accountability and transparency in all public offices – plus power at the ballot box to minimize bureaucracy, maximize efficiency, and put an end to special deals for individuals and groups favored by politicians. Contrary to media reports, such a movement would be a corrective step toward restoring the proper practice of subsidiarity and taming neighborhood leviathans who are eating up local wealth and freedoms.

George J. Marlin is an editor of The Quotable Fulton Sheen and the author of The American Catholic Voter.

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Comments (6)Add Comment
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written by Catholic Tide, February 22, 2011
Thank you so much for articulating the Catholic point of view on this divisive issue. In a time when so many are using this dispute to drive people further apart for their own ends it is good to read that the principles of subsidiarity can bring us closer to our neighbors.
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written by Joe, February 23, 2011
Well done, George. A couple of minor fixes. As a Wisconsinite, allow me to point out that the current budget shortfall for the fiscal year ending June 30 is $137 million. For the next biennial budget it is $3.6 billion, not $2 billion, as you state.

Further, what is largely lost in this battle (especially by the mass media) is the notion of cloaking "collective bargaining rights" as a non-fiscal matter, rather portraying it as a fundamental "right" -- enter Jesse Jackson.

Two things: This "right" is instead a privilege, not enjoyed by the vast majority of working men and women who are either not government union employees or don't have such leverage when attempting to secure fringe benefits such as overtime, days off, sick leave, vacation, etc., which translate to hard cash.
As Gov. Walker has pointed out, the fiscal impact is startling. Examples abound, including the well-publicized "free Viagra" for Milwaukee teachers ($768,000 a year), but paltry when compared to the $68 million that school districts would save if they were not required to buy health care insurance through the WEA (school teacher union) trust, which "collective bargaining" had mandated.
Many other savings would be accomplished by limiting collective bargaining to wages only, and then capped at the inflation rate. As Walker said, "a lot of workers would love to have this deal," including asking for a meager 5.8% contribution toward pensions and paying 12.6% toward health care premiums -- "modest" proposals, indeed, when contrasted to the much higher contributions that most workers must make. Another stat: Top Wisconsin teachers average $100,000 a year (with benefits) for 9 months' work, compared to the national average of $65,000. Yet 66% of our 8th graders can't read proficiently. We sure are getting our money's worth, aren't we? Here, as elsewhere, the curricula include classes on self-esteem and how to use condoms but are sadly lacking in science, math and the arts.
It should also be noted that WEAC spent more than $1.5 million on lobbying in 2009, the most in the state, which is now paying dividends by ensuring the 14 MIA Senate Democrats enjoy their extended vacation in Illinois while their Assembly brethren, clad in orange T-shirts, are filibustering. The stalling will only prove to be disastrous for government workers, however, as Walker has vowed to lay off as many as 12,000 by July if his budget repair bill fails. The unions' response: We don't care.
I will leave the last words to James Madison, the fourth president of the United States and for whom our great capital has been named:
"A pure democracy is a society consisting of a small number of citizens, who assemble and administer the government IN PERSON."
(emphasis added)
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written by Achilles, February 23, 2011
Excellent article Mr Marlin! I don't think it has sunk in to most americans that we have squandered our forefather's moral capital and the bubble is bursting. It will be hell to pay and an awful lot of people will be surprised becuase it is difficult to see through sand.
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written by Nick Palmer, February 23, 2011
And, what this situation spawns is favoritism and abuse of power. A simple example: many years ago, in the late 80s I was doing a project in central upstate NY, about half an hour north of Syracuse. My consulting team had taken to staying in a pleasant B&B that had been opened a year or so earlier by an older couple who had invested their life savings in converting a large old house into a B&B with a nice restaurant. Now, this area had very few lodging options, principally an ugly, side-of-the-highway motel where the female consultant on my team refused to stay (rightly so!). There were equally few decent-dining establishments, "fine dining" being wholly absent in the area.

Shortly after we became regular guests, the owners were visited by the local health inspector. He managed to dredge up over 40 "violations," each of which entailed a $2,000 fine. These fines would have sunk the owners. An example of a violation was (literally) a light bulb in the food pantry that had blown (one of several lights in that pantry, by the way). It sure smacked of an attempt to drive them out. Meanwhile, they had endured over a year of delays trying to get their B&B onto one of the blue interstate highway signs pitching local food and lodging establishments. Each delay was more baffling than the last.

Well, our out-of-town team of consultants would have none of this. We pushed them into hiring an attorney with experience in these matters. When the health inspector merely heard of the owners retaining this lawyer, the fines magically plummeted to less than $2,000, IN TOTAL.

Leviathan is crushing us.
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written by Bill McCormick, February 24, 2011
This article does a fine job of showing how the debate over the significance of "subsidiarity" is a microcosm for the Church's social teaching in general. Is subsidiarity about "freedom" and "autonomy" in a hopelessly Kantian sense (yet shared by so many Catholics), or is it about the participation of every person in achieving the common good? If we don't have a good answer to this question, then all the oversight and closeness-to-the-ground in the world will count for nothing, and it won't really matter what level of government is enacting the abuse.
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written by Michael PS, February 24, 2011
Politicians fall into two categories: those who seek to profit from corruption directly and those who seek to profit from the disaffection that corruption naturally excited.

The symbiotic relationship between these two groups is obvious enough and is guaranteed to stifle any genuine reform

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