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Finding the Money Proves to be a Challenge

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By Lowell L. Kalapa

As the 2000 legislature heads into the homestretch, it appears that lawmakers are finally beginning to comprehend the reality that the state just does not have any money to splurge on new programs or projects.

Lawmakers spent a good part of this session dawdling with tax breaks to this or that industry be it high technology or ethanol production or making the energy tax credits permanent. At the same time, they have been tempted with a variety of ways to raise new funds like the tax on domestic water or the surcharge on tires or batteries. On the whole, they have tended to shy away from tax increases, for after all, it is an election year.

With adjournment just around the corner, the hard reality that there is no money is sinking into lawmakers’ heads. On the other hand, lawmakers need to be sensitive to the fact that if prudence is not exercised, there will be no money to spend. The next few legislative sessions will be come increasingly more difficult because lawmakers did not do what should have been done. That is – to rein in spending.

Instead, lawmakers have been holding their breath, hoping that the economy will turn around and that visitors will flock back to our shores. And indeed, in recent months it would seem that hotel occupancies are up and room rates have begun to come back to their previous levels. But tax collections continue to painfully plug along. Expenditures are growing faster than tax collections.

Thus, it is not a matter that there aren’t enough taxes as much as a problem that spending is outpacing revenues. Given that situation and given the fact that taxpayers are not going to tolerate tax increases and now recognize that user fees are nothing more than hidden taxes, lawmakers must acknowledge that the only way out of this dilemma is to pare the size of government.

So where do lawmakers begin this arduous task? Obviously no one wants to give up their favorite program or project. But let’s face the facts here, not everything can be funded. Given the limitations on the public purse, priorities have to be set. Lawmakers and administration officials who “go outside the box” in finding ways to finance their particular pet program from other sources really are not helping the situation. For example, state bureaucrats who would like to impose new programs and duties on the environmental response fund are merely looking for ways to fund a program that is not a high priority for taxpayers.

On the other hand, other lawmakers have attempted to fund programs like Healthy Start out of tobacco settlement moneys believing that this will guarantee funding for the program. What these lawmakers fail to realize is that once the program has a dedicated source of funding, it is out of sight and out of mind. If the dedicated source of funding dries up and disappears, it will no longer be a priority for state tax dollars.

The long and the short of it is that lawmakers need to bring all programs back to the general fund table and ask themselves which of these programs are critical to the health and safety of our community. If it is education, health care, welfare of those less fortunate or whatever, lawmakers need to decide what is of greatest concern to the community. Once lawmakers decide the declining priorities, they must understand that those at the top need to be funded adequately so that the quality of service will not be compromised.

For example, if the top issue is education, then the funds that are necessary to deliver a quality education in the state should be appropriated. That is not to say that education should be given everything that is requested. Lawmakers also need to ask the hard questions of whether or not the taxpayer’s dollar is being spent wisely on education and if it is not, then educators need to be held accountable.

As each priority area is funded, there will come a point when the money runs out. It is at that point that lawmakers need to say no. That is the level that the taxpayer and the economy can reasonably afford to support in the way of tax dollars. Programs beyond the taxpayer’s ability to pay need to be provided in other ways, either by being privatized or through community efforts.

The hard lesson that was hopefully learned during this past decade of tight budgets and scavenging for money is that government cannot be all things to all people, that there is a limit as to how much taxpayers are willing to pay for government. And for taxpayers, the critical lesson has been to hold elected officials accountable for how they spend those hard-earned tax dollars.

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