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Yen To Spend Will Be Irresistible

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By Lowell L. Kalapa

You can almost see the drool cascading down the chins of lawmakers as they eye the forecasted general fund surplus estimated to be more than $600 million by the end of fiscal year 2007.

Meanwhile, some taxpayers don’t care that they may not get any money back when they recall that lawmakers chose to refund only one dollar when directed to do so by a constitutional provision. Instead, some of these taxpayers believe the surplus should be spent on more pressing needs such as deferred maintenance of school facilities or for that matter improving the educational system.

Of course lawmakers will have their own pet ideas and projects to promote. In many cases there will be a push for new and more programs or added services to satisfy some constituent group. The focal point for elected officials will be to satisfy as many of their constituent groups as they can so that they can be reelected in November.

The problem with sanctioning the spending of these surplus funds is that it assumes government is already delivering services in an efficient and effective manner. So why would taxpayers be willing to throw good money after bad? No amount of money is necessarily going to insure that the delivery of public services will improve. If, on the other hand, there was a game plan, a strategy for reform for which there is “buy-in” by both the legislature and the administration, then having the available resources to make that game plan succeed would make sense.

But merely spending more money without a clue as to whether or not those dollars will effect change is being less than honest with those hard-earned taxpayer dollars. And it isn’t like there is no track record on the failure of more money equaling improvement. Take, for example, how the legislature in the late 1990’s earmarked $90 million of general excise taxes for building and repairing educational facilities.

Although the legislative intent was really to hide the money from becoming a part of the general fund and therefore a growing surplus of tax dollars, lawmakers declared, at the time, that it was their “commitment” to education. However, in the years that followed what taxpayers learned was that there was no way the department of education and the department of accounting and general services could accomplish more than $45 million every year in school construction and maintenance. So eventually the legislature reduced the amount by half to $45 million a year.

Thus, it was not the amount of money the legislature spent on school construction and maintenance but how much could actually be accomplished in any one year. So while lawmakers bemoan the fact that there is millions and millions of dollars in backlogged schools repairs and maintenance, it is the system and not the money which begets that backlog.

Thus, merely spending money on a problem will not necessarily solve the problem.

And lest lawmakers forget recent history, taxpayers need to be cognizant that the economic ebullience cannot last forever. 

This was the fallacy (or fantasy) the legislature fell into back in the early 1990’s when they truly believed that the good days were here to stay allowing them to spend freely, throwing caution to the wind. Some of that forecasted surplus should be set aside for a truly rainy day. To a large degree this is what the legislature did in the early 1990’s when they were faced with looming surpluses.

But instead of putting the money away where everyone could see it, they chose to hide the surplus dollars in special funds misleading taxpayers into believing that there was no surplus and funding services for which there was absolutely no relationship to the source of the funding. But later, as the economy went into a tailspin, lawmakers ransacked these special funds to keep government operating.

Hopefully, this time lawmakers will be held accountable for using the surplus funds wisely. And while there are certainly some unmet needs for which the money could be spent, lawmakers should also recall how they squirmed just a few years ago in the efforts to effect tax cuts to help kick-start the economy. Spending a part of the surplus on a reduction in the state tax burden should also be viewed as a way to invest in the future of the state’s economy.

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