Friday, October 23, 2009

Drowning In The Bathtub

I’m old enough to remember $700 toilet seats at the Pentagon and Reagan-era calls to “cut government waste.” In fact, “cutting government waste” has become such a part of the American lexicon that no budget conversation, from the county dog catcher’s office to the massive federal budget, can take place without hearing the “government waste” mantra repeated ad nauseum.

That’s all very well and good but after nearly 30 years of hearing that canard, and with an economic downturn cutting revenue at all levels of government, we’re seeing the effects of those shorn-to-the-bone government budgets. It’s pouring out there, a deluge, and no one has a rainy day fund.

I won’t even bring up the sorry State of California, where the budget crisis is its own weird brand of wackadoodle. The people keep voting for all sorts of unfunded programs (like a $3 billion bond for stem cell research) while also voting to restrict taxation. Grow up already, people. Sooner or later you’re going to have to start paying for this stuff.

And that’s my message to people here in Tennessee (and everywhere else). After years of “cutting the fat” we’ve started cutting some pretty alarming stuff. On the local level, my 2009 Davidson County property tax statement came with this aviso:
“Due to budget restraints, we will not be mailing a courtesy reminder as we have in the past in the month of February. This will be the only statement you will receive for the 2009 tax year.”

Really? That’s the “fat” we’re trimming from the budget--sending a second property tax bill? This is on top of Metro Public Works cutting their mowing program this summer. And let me say, trying to cross Granny White Pike at Gale Lane has been a dangerous proposition when the grass is knee-high.

Even more alarmingly, Putnam County, TN, is in such dire straights it has considered doing away with county primary elections:

COOKEVILLE, Tenn. -- Putnam County is looking at the prospect of eliminating primary elections in hopes of saving $60,000.

On Monday night, the county commission voted 14 to 9 to ask the county parties to forgo primary elections and select candidates through private caucuses.

Primary elections are historically low-turnout, but nonetheless canceling an election for fiscal reasons sets off alarm bells with me. You tea party folks yammering about your loss of freedoms might want to consider what it means to cancel an election because the county doesn’t have the funds to stage it.

Then again, will our moribund electorate even notice?

It’s only a matter of time before this fiscal starvation starts costing people in other ways. Up in Michigan, the state budget situation is so sorry, they’ve had to stop safety inspections of school buses:

"It's not a good thing, but it's a budget reality," LeBlanc said. "I'm not sure there are viable alternatives."

I guess the free hand of the market is supposed to protect Michigan kids on their way to school from now on.

Could this happen in Tennessee? We’ve already dumped another 84,000 people from TennCare. Now the state legislature says it will permanently slash $1 billion from Tennessee’s state budget. The reason is lower revenue, but the Republican legislature thinks this is a good way to operate state government:

“I really think you need to expect and can treat these $1 billion to $1.1 billion in base reductions ... as permanent,” said Jim White, executive director of the legislature’s Fiscal Review Committee, told House leaders on Thursday. “State government is going to be smaller and different after we complete this budget year.”

Well, that’s a great talking point and it sure looks good in the press release, but how does that look in practice? Not so good, it seems:

After more than two hours of grim assessments Thursday, House Speaker Emeritus Jimmy Naifeh, D-Covington, had enough. He predicted the state’s Rainy Day Fund, once at $750 million and projected to fall to $323 million in 2010-11, “is probably going to go down to zero.”

He called the removal of some TennCare recipients “heartbreaking” and said lawmakers are to blame. He also urged colleagues to look at a tax increase.

“No one has got the backbone or the guts to talk about revenue enhancement,” Rep. Naifeh complained. “That’s what we need to at least explore.”

Nope, no one has the guts or backbone, not the Republicans and not the Democrats. But it’s pretty irresponsible to view your “rainy day fund” as budgetary fat.

People are so disconnected from the services that government provides that no one notices the hypocrisy of fiscal conservatives calling for ballot initiatives over stuff like English Only and do we need a new convention center. You know, that's all very well and good but it costs money to open up the polling places and count all of those votes. Who’s gonna pay for it?

Conventional wisdom holds that tax increases during a recession are a sure way to prolong the misery. Maybe now isn't the time, but eventually we're going to have to repeal those Bush tax cuts which helped no one but the super wealthy. Didn't see any of that trickle down over the past eight years, either.

Yesterday I heard Thom Hartmann advocate a 50% tax on people making $3 million+. Rather than hurt “small businesses,” he said, it would actually grow the middle class because business owners would funnel their profits back into their businesses instead of taking home big salaries to be spent on European vacations and yachts.

Here's a handy-dandy chart of Top U.S. Federal marginal income tax rate from 1913 to 2009:

Our tax rates are among the lowest they've been in the past 100 years. Are people better off? No. Has the "Laffer Curve" fulfilled its promise of increasing revenue? No it has not. Instead we're cutting safety inspections of school buses, using up our rainy day funds, and talking about cancelling elections because governments can't afford them.

It's time for someone to be a grown up and talk about what it means to operate a state budget without a safety net.