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Tax Increase in the Future?

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By Lowell L. Kalapa

Last week legislative leaders in both the House and the Senate caused a flurry among the capitol press bureau mavens when they participated in a joint press conference to share their prognosis that a revenue enhancement would probably be inevitable, especially if state government cannot get its act together and reform how government does business.
Jaded observers saw this media hype as a way for legislative leaders to whip the troops into voting for two major government reform bills – privatization and consolidation of the public employees’ health coverage into a single fund. Both bills are being touted as ways to reform the way government does business and a way to streamline government services.
Of course, as expected, the public employee unions came out in full force against the measures, calling the measures the most “anti-worker” proposals ever considered by the legislature. And certainly it would seem that anything that upsets the status quo would seem to be anti-worker in the sense that there are some laws and rules which seemingly “protect” the worker in the public sector.
What seemed to be lost in all of this rhetoric between the loss of worker rights and a possible tax increase is the taxpayer. No one was at the table or on the rails at the state capitol saying, “What about the poor beleaguered taxpayers who is being asked to foot the tab for all of these costs?”
And again, the taxpayer seems to have been lost in all the wrangling and hard feelings engendered by the recent strikes in the public education sector. No one seemed to be posing the question of “balance” in the debate. Balance in the sense of just how much can we ask taxpayers to pay for government before everyone ends up working for government – public employees who get their paychecks from government and those working in the private sector who end up sending back a good part of their paychecks to government.
Suggesting that tax increases could be over the horizon may on one hand look like a scare tactic by legislative leaders, but on the other hand, such a prognosis can’t be too far from the truth when one looks at the fact that had public employee unions won all of their demands at the bargaining table this year, the state would certainly have had to raise taxes this year or make severe cuts to state programs.
If the state is to avoid a collision course with disaster, change must come about. Allowing state and county to “privatize” certain services does not necessarily mean that it will put public workers out of their jobs. The proposal does allow for government to put work out to bid, with the lowest bidder who can do the job the best winning the contract. That means that public employees can also bid on the contract to perform those services.
What privatization does mean is that the taxpayer will be able to get the best possible services from the most economical and efficient provider of those services. Measurable benchmarks can be set to insure that the provision of those services meets certain standards – and if they are not met, government can find another provider. This is something that just is not possible under the current system.
If state and county governments are to remain fiscally solvent without an economy damaging hike in the tax burden, then government will have to find new ways to do business. And if labor believes the public policy makers can merely go back to the well and milk the economy and taxpayers for more taxes, they better wake-up. That course of action will only lead to another slump and possible devastating ramifications for the economy, driving workers and businesses away from the state. And if that happens, who will be left to pay those high taxes for an inefficient state and county government?
Finally, all those denials about consolidating the health coverage into one plan flies in the face of every insurance logic known to the industry. Larger pools of participants spread the cost over more premium payers. The incidents of major costs are thus spread over more players which in turn should minimize premiums. Smaller groups mean less people to chip in on paying the cost – unless, of course, you only take those people who aren’t going to have a lot of health problems which is what the current situation is. So the health care reform bill should help to mitigate rising costs, spreading the cost over more participants.
True, change is hard to accept especially if the shoe has become well worn and is comfortable. But if there is to be a shoe at all in the future, then change has to occur.

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