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Mon, 01 Oct 2007
Are state taxes your biggest problem?
[Appeared last week in RIMG papers all over Rhode Island. If this wasn't in your local paper, complain to the editor.]
It's hardly news to anyone that the state is in a terrible fiscal situation this year. It will be very surprising if we end this fiscal year without a deficit, and the deficit anticipated in *next* year's budget looks immense. Numbers north of $400 million are being discussed around the state house. For some perspective, this is over 10% of the state's entire budget.
The Governor spent a little time last week trying to prepare the ground for the upcoming budget season. He put out a press release saying how hard he was pushing the heads of state departments to find cuts to make, and sat for press interviews. He promises deep cuts in services, and wants to lay off 1,000 state employees. (When he said something similar last spring, it turned out that no member of his administration had actually identified 1,000 employees whose services could be dispensed with. Instead it appeared his office had simply picked a number from a hat, and then complained when no one in the legislature took the proposal seriously.)
As he frequently does, the Governor took some time to claim that the blame for the budget situation belongs to the legislature, who rewrites the budgets he submits. In a newspaper interview last week, he is quoted as saying, "I can propose some things, but the General Assembly has to enact it and they enacted a budget that... is not a budget that works."
The Assembly is far from blameless for the current disaster of a state budget, but he is far too modest. Without his able leadership, we wouldn't be in nearly as serious a crisis. To hear him speak, you'd think that the budgets he submitted were models of fiscal responsibility, vandalized by evil legislators, but that just isn't true, and it hasn't been since the day he was sworn in.
Rhode Island is constitutionally forbidden from running a deficit in the current year. But there is nothing that says we can't write a budget that will create a deficit in the following year, and we do that all the time. Budget folks call this the "structural deficit". The Governor's first budget proposal, for the 2004 fiscal year predicted that, if enacted exactly as proposed, it would create a deficit of $23.8 million in 2005. For 2005, his own budget office predicted his budget would create a $68.9 million deficit in 2006. In 2006, they predicted a $98.5 million deficit in 2007, in 2007, they guessed $134.6 million in 2008, and in 2008 (the fiscal year we're currently in) they predicted a deficit of $379.2 million in 2009. That's a jumble of numbers, but here's the bottom line: the structural deficit was $23 million in Governor Carcieri's first year, and it's $380 million now. The situation is sixteen times worse than it was when he took office.
These are not numbers passed by the Assembly. These are numbers created by the Governor's own budget office about his own proposals for a state budget. No one forced him to propose a budget with a structural deficit. He owns these numbers, and what they say is that every year of his term, he has presented a budget that has led us further down the abyss we're in. They say that his administration is fully aware of the problems we face, and yet for five years has chosen to do approximately nothing to address them. This is leadership?
The fact is that Rhode Island faces a number of serious challenges, only one of which is the cost of our government. The cost of housing is too high, the wages to low-end jobs are too low. The cost of health care is way too high, and the support we give to public education is way too low. The price of gas is going up and up, and the buses can't handle the new demand. What has the Governor done -- or proposed to do -- about any of these problems? A zeal to cut taxes has driven almost every policy decision he's made, and in doing so, he's completely punted on addressing anything else.
You tell me that high taxes are the number one priority? I'll reply that a typical family in Rhode Island is paying around $1,500 more for gas in a year than they were five years ago. They and their employers are paying 35% more for health insurance than they were in 2001, after discounting for inflation. Rents are up so much that more than one household in six pays half their income for housing. Tuitions are up for our public colleges, and the cost of child care has increased, too. These are all problems that our government could address if it chose to. But instead our "leaders" worry about where to cut more. We are on schedule to cut the income taxes of our wealthiest citizens yet again this coming year. Which of these problems will that address?
(Some references are available here: Gas prices Also see PADD 1A here. Health insurance.)
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