Signs of a weak economic recovery and two years of tax increases mean states took more out of our pockets than they spent in the first quarter of this year. They're calling it a surplus, but it's not. Virtually every state owes money on hidden debts that have piled up for years and are now coming due.

Keep a hard eye on state and municipal politicians, fellow citizens, or they will squander our struggling economic recovery without paying down trillions of dollars in deficits they’ve hidden.

Don’t let them panic us into swallowing tax increases because they claim a revenue crisis is forcing what they are brazen enough to call drastic spending cuts.

The fact is they are taking more out of our pockets than ever and spending as much as ever without telling taxpayers and public workers about the deferred costs coming due. Those overdue bills will bankrupt some states and many municipalities if we don’t force immediate action.

Don’t buy the big lie about declining tax revenue and ruthless reductions in expenses.

Take a look at the latest data from the U.S. Bureau of Economic Analysis.

In the first quarter of this year, state and local government took an all-time record high of almost $2.1 trillion from citizens and businesses.

They came within only 0.05 percent of the historic spending peak of almost $2.05 trillion set in the third quarter of 2008.

Meanwhile, anemic economic growth over the same period proves the revenue increases result from billions of dollars in tax and fee hikes they already inflicted upon us.

In the first quarter of this year, state and local governments squeezed $372 billion or 22 percent more out of us than they did in the same quarter only five years ago.

But that is not enough. They spent $380 billion or 23 percent more than they did in first quarter 2005.

State and local politicians don’t have a revenue problem; they have a spending problem.

And they are lying about how much they really are spending.

Take for example Republican Gov. Chris Christie of New Jersey. Heralded as a tough, hard-line conservative who is making difficult decisions to balance the budget, Christie forgot to tell taxpayers and state workers he will not pay the $3 billion required pension contribution.

That is equal to more than 10 percent of his proposed $29.3 billion budget. How can he claim a balanced budget with a $3 billion hole in it? That hole is only going to be bigger next year, when taxpayers will have to come up with it, plus interest, plus another $3 billion at least.

Even if he holds all other spending constant, it will equal more than 21 percent of the total state budget.

Let’s not delude ourselves New Jersey and poster states California and Illinois, are the only ones in this kind of trouble.

In state after state, town, city, county and school district, the story is the same to one degree or another.

Joshua Rauh of Northwestern University recently calculated state pensions were $3 trillion in the hole at the end of 2008 even accepting their delusional assumptions. It’s only gotten worse since.

He figured out that even if states make the full yearly required contributions – they are not — and find some risk-free place to invest the money – they cannot – as many as 31 won’t be able to pay promised benefits.

“… Illinois would run out in 2018, followed by Connecticut, New Jersey, and

Indiana in 2019. Five states never run out, including New York and Florida, and 17 other states have a horizon of 2030 or beyond. If all states experience 8% average returns, 20 of the states will have run out of pension money by 2025. If the average returns are 10% then only 11 will have run out by 2025. If returns are 6% then 31 will have run out by 2025.”

 

If they fail to make full contributions and average return is anything like the last two years, all states eventually run out of pension money, the worst the soonest.

 

Do politicians and union bosses who betrayed taxpayers and lied to public workers really think citizens who lost jobs, homes, health insurance, pensions and 401ks are just going to docilely let increased taxes for early retirement benefits push them into the economic abyss?

It’s not going to happen.

 

If recent signs of weak recovery and historically high tax revenue continue, we have to make sure state and local politicians continue real cuts to spending and use what they are now calling an operating surplus to pay down long-term debt.

 

The best place to start is with what they owe public workers on false pension promises.

Frank Keegan is national editor for Franklin Center on Government and Public Integrity and watchdog.org . frank.keegan@franklincenterhq.org