Federal taxpayer bailout eclipses local payroll changes

Federal taxpayer bailout eclipses local payroll changes

Governments in Kansas are slated to receive roughly $3.6 billion to cover for COVID-related losses under the latest federal bailout – AKA Biden’s American Rescue Plan. (That’s in addition to the $1.25 billion collected last year.) However, county, city, and school payroll changes are not only far smaller than the COVID bailout, they don’t the federal package at all.

Congress passed, and President Biden signed a sweeping federal package to provide state and local public organizations with taxpayer funds intended to stem the loss from COVID. The bill outlined spending allocations for every state and local public organization in the nation. For Kansas, here are the expected distributions.

  • State Government: $1.58 billion
  • State Capitol Projects: $143 million
  • County Governments: $565 million
  • City Governments: $423 million
  • School Districts and KSDE: $830 million

Granted, other areas of government spending may be the intended “target” of the federal bailout but employment is a good place to start. Luckily, our work compiling information from Kansas governments on Kansas OpenGov does just that. We compared the 2020 payroll for some of the largest cities and counties to 2019 levels in the table below. County governments roughly maintained the number of positions, but payroll grew by roughly $17 million. City governments reduced positions by 2,325, but payroll rose roughly $10 million. While the number of filled positions can change for a myriad of reasons that have nothing to do with services provided (e.g. changing part-time roles to full-time, or making two hires for the same position in a year).   The vast majority of city reductions last year resulted from not opening swimming pools and other recreational facilities, so far fewer part-time seasonal positions were needed.

However, the fact gross payroll increased at the local levels should cause some concern.  Comparing these organizations with President Biden’s bailout package and the American Relief Plan not only a massive overshadow, but strongly suggests the federal money isn’t needed for local payroll expenses.

 

The federal package being so large can spell trouble for these governments, and ultimately taxpayers, if misused. These federal funds are one-time payments, yet they could increase state and local government employment altogether. Or local governments could “gold plate” existing services or crowd out existing private businesses in their community. Data from the Census Bureau already notes Kansas is the 2nd highest state with local government employees, as seen in our soon-to-be updated Green Book. Suppose localities use federal funds to grow employment even further. In that case, Kansas can easily have the most local government employees in the nation.

Kansas has too much government, and the federal bailout will likely exacerbate this problem instead of solving it. Kansans must ensure their local and school leaders do not use federal funds to maintain their personal wish list of spending initiatives. One-time federal money should pay for one-time federal expenses, or better yet, should be saved for the next emergency.