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Yearning for Higher Estimates Can Only Mean Trouble

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By Lowell L. Kalapa

Now that the Council on Revenues has dropped the other shoe with a THUD, elected officials are scrambling to find ways to further trim state costs. As for the administration, it is not a matter of how to further downsize state spending as much as wishing it could find other revenues.

That has led the Governor to challenge the estimates made by the constitutionally mandated Council on Revenues. Actually this could have been expected, for despite all the rhetoric and the theater about state spending cuts in the past two years, lawmakers, as well as administration officials, have only nibbled around the edges of the state budget. When one thinks of cutting spending, one would believe that the number of dollars being spent has been reduced from the number that was spent the previous year.

Well, that is not exactly what lawmakers did in the past few years. Instead of reducing the number of dollars, all they did was to lessen the percentage growth in state spending. Thus, the number of dollars did not go down from the previous biennium, rather the percentage growth slowed.

How did they do this and still have a substantial surplus at the end of the last fiscal year? Well, one slight of hand was the taking of dollars from a number of special funds. While in most cases this strategy is justifiable given many of these special funds were created with general fund dollars in the later 1980’s and early 1990’s as a way to hide the huge general fund surplus, there were other taking of special funds that should not have occurred. For example, this past year the administration took $19 million out of the highway fund, call that amount “surplus” to the needs of the highway program.

While that may have seemed like a pretty smart thing to do in order to balance the budget, it merely allowed administration officials and lawmakers to evade dealing with the real problem of an oversized budget that this economy cannot support. It allowed them to avoid the nasty task of laying off public employees and closing down programs. And administration officials are back again this year asking for another $22 million out of the highway fund to further put off having to deal with the spending problem.

Another way officials have found around having to truly down size state government has been to generate new revenue. Note well, that the term tax is not being used. And indeed the attitude is one of pride that many departments have imposed new and higher fees and user charges for the “public services” they provide. For example, the director of the department of commerce and consumer affairs proudly announced that near 80% of her operation was being paid out of user fees and charges.

While it sounds great that “those who are getting special benefits or special services” from public agencies are paying for that service, let’s be honest with ourselves here! Those services used to be paid for by taxes we all paid in the past. So, those tax dollars were shifted to some other program while those who are regulated by the department are paying higher fees for that regulation. New moneys? Well, isn’t that the same thing as raising taxes?

So they raise fees, uh…taxes, uh…fees so that money that use to pay for that department is now paying for some other program so those people don’t have to be laid off, government can continue to be just as large as ever.

So instead of crawling back into their world of make-believe, elected officials should recognize the reality of the situation, that the roaring economy of the late 1980’s just is not going to come back and that it is about time that a sincere effort be make to reshape government into a size that we as taxpayers can afford.

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