IMPROVE FUNDING FOR QUALITY PUBLIC SERVICES

The current economic crisis that began in late 2007 has had a devastating impact on the fiscal health of state and local governments. The combined budget deficits for all states—the gap between spending and revenue—for fiscal years 2009 and 2010 is $300 billion dollars. States will confront a $180 billion budget gap for fiscal year 2011 and continuing deficits in 2012 and 2013.

Americans deserve and demand efficient and effective government services to protect our democracy, strengthen our communities and maintain our way of life. Yet, the tax and budget system set up to fund these services has serious flaws, requiring the attention and action of our union.

The American Federation of Teachers worked hard for the adoption of the American Recovery and Reinvestment Act (ARRA) of 2009, which provided $787 billion in much-needed economic stimulus funding. This allocation includes $140 billion in federal grants to the states for 2009-11 to help pay for ongoing state and local government programs, maintain public services and help prevent massive job cuts. However, this funding is only a temporary bridge to help carry state and local government programs through the economic downturn. Clearly, it has not been sufficient to maintain public services at necessary levels and will not be enough to protect quality services over the longer term.

This year, the AFT has worked for enactment of two programs to help state and local governments. We are fighting to extend the federal match for Medicaid funding (FMAP) that would provide federally funded state budget relief of $23 billion nationwide. More than 24 states have already included this FMAP money in their budgets and enactment is essential. In addition, we are working to continue the $23 billion state stabilization fund that will provide funding to save more than 250,000 K-12 and higher education personnel.

State and local budget deficits have had a dramatic impact on public employees and the services they provide. In dealing with these deficits, our union has often faced terrible choices. Where there is no collective bargaining, politicians have chosen layoffs, furloughs, program cuts and pension attacks rather than responsible revenue reforms to maintain and enhance services during this critical period and beyond. Where employees have collective bargaining representation, the impact of cuts can be negotiated, but the choices are still regressive.

The recession has also brought about an increase in poverty and unemployment with a substantial increase in demand for social services by individuals and communities all across the country. Service cuts by state and local government have undermined the capacity of public employees to deal with these demands; they have challenged the well-being of our communities and have threatened our values as a nation. With furloughs, layoffs and ever-increasing numbers of vacant positions, there are fewer and fewer workers to ensure that vulnerable members of our society are protected, our children are educated, our environment is protected and our neighborhoods are safe.

Budget gaps have strained the ability of our communities to provide quality healthcare, schools, colleges, public safety and transportation that people often take for granted— this is work that matters for our society. Now, in order to pull our nation out of recession, these services have become even more essential.

According to the Center on Budget and Policy Priorities (CBPP), between August 2008 and March 2010, 192,000 state and local government jobs were eliminated. At least 42 states plus the District of Columbia have reduced overall wages paid to state workers through layoffs, furloughs, hiring freezes or similar actions.

The public sector is always slower to recover from a recession than the private sector and typically takes two to four years for a full recovery once the broader economy returns to prerecession levels. But even the return of good economic times does not guarantee adequate funding for the delivery of quality services. Our state revenue systems often do a poor job of defending against deficits created by the expected economic cycles, and the burden of our tax system is too often placed on those who can least afford it. Corporations and those who benefit most from the economy are rarely required to shoulder their proportionate share and are more likely to be delinquent.

In 2009, the AFT published its own research report on state revenue and taxation called "State Revenue Systems: Options for the Current Fiscal Crisis." This report outlines options for improving revenue sources and explains that each state has its own unique legislative history in dealing with tax policy. The AFT report offers an array of proposals to improve the efficiency and effectiveness of state revenue systems:

RESOLVED, that as stated in the American Federation of Teachers' mission statement, in part, "we will work to improve the lives of our members and their families, to give voice to their legitimate professional, economic and social aspirations, to strengthen the institutions in which we work, to improve the quality of the services we provide." We must continue to explore effective options to improve funding for quality public services and promote the work of public employees—the work that matters—for an effective recovery; and

RESOLVED, we must mobilize around necessary reforms to improve future funding and establish revenue systems that anticipate the inevitable cycles and crises of our economy; and

RESOLVED, effective mobilization requires us to organize our members and potential members around these issues, expand communications both within our union and with the general public, strengthen our political action capacity at every level of the union and advance a legislative agenda that provides meaningful tax and revenue reforms to protect quality public services. This effort must include an extension of stimulus funding to the states as we work toward long-term solutions; and

RESOLVED, as with the AFT report "State Revenue Systems," the AFT continue to provide research and analysis on the current problems facing state and local government budgets across the country and provide recommendations to our affiliates to improve tax fairness and budget stability; and

RESOLVED, that the AFT work with its state and local affiliates to prevent cuts in government programs, explore alternative funding options, improve tax fairness, promote progressive tax policies, propose enhanced methods of tax collection and offer reform ideas to improve long-term funding of public services; and

RESOLVED, that the AFT provide opportunities for AFT leaders and activists to learn more about tax and revenue policy and become involved in the effort to bring about meaningful revenue reform for the funding of quality public services.