Friday, March 12, 2010

State budget hysteria

Confronted with declining revenue as the recession grinds on, New Jersey Gov. Chris Christie and the Virginia legislature have opted for what politicians in the nation's capital would consider a radical and novel idea in order to balance their books: spending cuts. Covering the Virginia budget battle, where proposed reductions would take spending levels all the way back to the dark days of 2006, the Washington Post predictably waxes apocalyptic:
Regardless of the final tinkering, lawmakers from both parties say the unprecedented contraction of state spending is sure to be felt from Leesburg to Lee County. Hospital wings could close. Schools would probably reduce teaching staff. Criminal defendants who cannot afford an attorney could appear in court without one. Private hospitals and nursing homes would pay more to provide health services to the poor and elderly. Funding for the arts might be left entirely to the private sector for the first time.
Basically it's all the worst parts of a Dickens tale. Democrats, who consistently equate fiscal responsibility with tax increases, are none too pleased:
"That's my biggest concern -- that these cuts are never going to come back, and we're just going to leave these people basically helpless," said Del. Robin A. Abbott (Newport News).
Noting similar teeth-gnashing over proposed spending cuts in New York, Matt Welch explains how the game is played:
Here is how the system works, ladies and germs: First, during the good times, when people are (rightly) paying attention to concerns outside the dreary slog of politics and public policy, go ahead and double the cost of state government, in like five years, without a shred of detectable increase in the quality of services. Next, when times get bad, complain bitterly about "savage" and "annihilating" budget cuts, threaten to eliminate the very favoritest of all public services (say, access to the gorgeous state parks in California), and then cut your payroll by all of ... a quarter of one percent. After all, why fire a single teacher when the stimulus package will pay for all of them? Finally, when all else fails, raise taxes, to "close the budget deficit" and "restore our education budget to current levels."
Indeed, shifting our attention back to Virginia we discover that the state has actually enjoyed surging tax revenue over the past ten years, well in excess of inflation and population growth. As the Associated Press noted last November:
Virginia spent 74 percent more money overall in its most recent budget than it did 10 years earlier, the result of the economy, population growth and decisions by the General Assembly, according to the legislature's watchdog agency. Monday's report to the Joint Legislative Audit and Review Commission, the legislature's watchdog agency, shows a state spending jump of 28 percent when adjusted to account for inflation and population growth from fiscal 2000 to fiscal 2009.
After one considers such surging budgets, the kicking and screaming we now hear rings hollow. The good times are over, we need to cut back.

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