Thursday, January 06, 2011

Speeches from both coasts

California and New York are two of the most reliably Democratic states in the union, home to high taxes, high spending and heavy regulation. It's therefore worth noting speeches recent days from the governors of both states that indicate just how much economic reality is beginning to hit home. New York Gov. Andrew Cuomo's state of the state address is particularly eye-opening:
We have the worst business tax climate in the nation, period. Our taxes are 66% higher than the national average.

...The State of New York spends too much money, it is that blunt and it is that simple. Our spending has far exceeded the rate of inflation. From 1994-2009, inflation was about 2.7% per year; medicaid when up over 5% per year and education went up over 6% per year. We just can’t afford those rates of increase. State spending actually outpaced income growth. State spending increased just under 6%, personal income growth was only 3.8%.

...What made New York the Empire State was a not a large government complex, it was a vibrant private sector that was creating great jobs in the State of New York that’s what made us the Empire State once and that’s what’s going to make us the Empire State again.

...We are going to have to confront the tax situation in our State. The property taxes in New York are killing New Yorkers. Thirteen of the sixteen highest tax counties are in New York when asset by home value. In absolute dollars, Westchester County the highest property taxes in the United States of America. Nassau County the second highest property taxes in the United State of America. It has to end, it has to end this year. We have to hold the line on taxes for now and reduce taxes in the future. New York has no future as the tax capital of the nation. Our young people will not stay. Our business will not come. This has to change.

Put it simply the people of this state simply cannot afford to pay any more taxes, period.
Meanwhile, out on the left coast newly installed Gov. Jerry Brown made the following points in his inaugural address:
In seeking the Office of Governor, I said I would be guided by three principles.

First, speak the truth. No more smoke and mirrors on the budget. No empty promises.

Second, no new taxes unless the people vote for them.

Third, return—as much as possible—decisions and authority to cities, counties and schools, closer to the people.

With your help, that is exactly what I intend to do. The budget I present next week will be painful, but it will be an honest budget. The items of spending will be matched with available tax revenues and specific proposals will be offered to realign key functions that are currently spread between state and local government in ways that are complex, confusing and inefficient.
Cuomo properly noted the role of taxes in his state's economic ills and the burden of out of control spending, while Brown has vowed to decentralize power, present an honest budget and hold the line on taxes. Even if mere rhetoric, admitting the problem is the first step towards recovery.

I remain optimistic that the country will get on back on the path towards fiscal sanity, if only because we have no other choice. All other options have been exhausted.

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