Wednesday, June 21, 2006

State Employee Growth

Paul Nelson of NJ Fiscal Folly pointed out a great resource yesterday in NJ Government Employee Data. I spent a couple of hours last night going through the reports, and one thing I can tell you is that our structural problem in New Jersey has been brewing for an awfully long time.

New Jersey, like most other Northeastern states, has been growing at a decelerating rate through much of the 20th century. The linear growth trend suggests we may reach zero population growth in about sixteen years.
[editorial note: the vertical scale on the following chart should read "Growth Rate" rather than "Cumulative Growth"]

Even though the population growth is decelerating, the numbers add up significantly over a long period of time. I chose 1920 as a base year because it was the earliest readily accessible data point at the US Census website. From 1920 to 2005, New Jersey's population grew by 176%.

As noted by Enlighten-New Jersey, growth in state employment has, on average, been much higher than population growth, but with significantly more variability.

The only bright spot on this chart is the slight dip during the 80s (19%) and 90s (-5%), when state employee growth was held to more reasonable levels. Overall employment change for that period (13.3%) was actually less than population growth (14.2%). Governor McGreevey undid those gains and then some; by 2005 we had 26% more employees than in 1980, but only 18% more people in the state.

As Enlighten says, "government is becoming less productive and more costly with each passing year." How much more? Take a look at one final chart, showing the cumulative growth of the state's population versus the cumulative growth in state employees.

These numbers are truly staggering. The state employs nearly 1% of our population, and wants to add more. Governor Corzine's 2007 budget adds another 1,300 employees to the payroll. Contrast that with the US military. It had less than 0.5% of the population on active duty in 2005 (page 166), and will decrease by nearly 4% by 2007.

Tags: New Jersey, Taxes, Corzine, State Budget