I feel like I live in two different worlds. Much of the time I'm in the world where the economy is in deep recession. Sales and revenue are down and corporations are cutting budgets back to the bone. The unemployment rate is up to 8.5% and 600,000+ people are losing their jobs every month, a total of more than 5 million since the recession began.

Those of us who still have jobs are afraid we won't be able to keep them. Our salaries have been frozen or cut. We are doing extra work to compensate for those who are gone. We have cut back on our spending, keeping our homes colder in the winter and warmer in the summer. We aren't taking vacations and we're paying down our debt.

Then there is the other world, the one I come home to each night. This one, just 15 miles west of Manhattan, is on what I call Planet Montclair. Don't get me wrong, Montclair, New Jersey is a very nice place to live. In fact, it is well known as one of the more desirable places to live in the whole USA. But the people who run it seem to exist in an alternate reality.

A recent headline in the Montclair Times announced the approval of a record $113 million public school budget for the 2009-2010 school year. This budget, which works out to $17,385 for each of Montclair's 6,500 students, requires a 4.1% increase in the property tax assessment for the schools. This is at a time when inflation is running at zero. The School Board, by the way, is insufferably proud of itself at "holding" the increase to "only" 4.1%. That's because it first submitted a preliminary budget that was even higher.

At last report the township itself was planning on a $70.4 million municipal budget, a 5.5% increase over the prior year. It is not clear what kind of a property tax increase this will require but a similar budget increase last year cost taxpayers more than 7% on their assessment. And then there is Essex County. The county government got in the mix early, proposing a tax increase of about 5%.

Since I live there, Montclair is an easy target. But this situation is happening in communities of all sizes in every state of the Union. Tax revenue is way down due to the lower level of economic activity, but governments are still spending. And while the Federal government can both borrow and print cash to pay the bills, state and local governments cannot. For them, there are only two choices, raise taxes or cut spending. Guess which one they're choosing?

To be fair, it is true that state and local governments must battle with a large number of unfunded mandates, passed down to them from governments above. And most are required by law to have balanced budgets. But it is equally true that waste, as well as a lack of transparency and accountability, abounds at this level.

Consider the wasteful duplication of resources. I'm out walking my Scottish terrier in the park, on a leash, and we are set upon by a bull mastiff, off the leash. I do my best to shield my dog from the mastiff, which is jumping and scratching. A guy comes up and pulls him away and when I remind him that all dogs in Montclair are required to be on a leash he pulls a knife and asks me what I'm going to do about it. What I do is run. At the edge of the park, sitting enjoying the nice weather in his squad car is a Montclair policeman. I ask for help. The officer says sorry, we don't do parks. For parks he says, you have to call the country Sherriff. I do. They come one hour later, long after the mastiff, the mastiff's owner and the knife have disappeared. I call the governor's office to ask for advice. I'm told if I want to complain I should call the State Police. You can't make this stuff up.

So everyone has a police department. They also have a streets department. I know because if I complain about the potholes and broken curbs on the street in front of my house I am told it is a county road and I have to call the county. If I want to complain about the potholes and broken curbs on the street on the side of my house I am told that is a township road and I must call the township. Of course it doesn't matter; the potholes and broken curbs are still there.

The take-away here is that every elected official wants his little fiefdom. He measures his success based on how many people he has working for him. So just try to cut the size of local government payrolls. You'd have better luck winning the state lottery. No one can howl louder than the leaders of municipal employee unions at budget time. And these no days other employees are treated as well.

Show me an employee who gets automatic wage increases without regard for inflation, performance, or any other metric and I'll show you a government employee. Do you still have a defined benefit pension plan? If you do, you're probably a government employee. How about health insurance? Just about every year my premium goes up, my co-pay goes up, my deductible goes up and my benefits go down. If yours don't, you're probably a government employee.

I'd like to be able to report that there is a taxpayer revolt massing and state and local leaders who don't come down to planet Earth will be voted out of office. I'd like to, but I have no evidence to back up such a claim. New Jersey Governor Jon Corzine, a former CEO of Goldman Sachs (yes, they are everywhere), ran in 2005 on a pledge to cut New Jersey's highest in the nation property taxes. But over the last 4 years these taxes have gone up. Still opinion polls indicate he is favored to win reelection.

In the end we have no one but ourselves to blame for this. Most state and local officials are reelected over and over again. This in spite of the endless flow of local tax increases. You get what you vote for.