Ripping the Band-Aid off budget gaps

No easy solution is available in the state budget office’s toolbox to prevent legislators from having to make some difficult and unpopular decisions this year. Across the country, state legislators blame decreased tax revenues as the cause of their budget woes, but in fact the recession has illuminated the underlying problem of state spending increases funded by debt and accounting gimmicks rather than real revenue.

This habit harms taxpayers just as irresponsible personal finance harms individuals—consumers can finance personal spending with debt; however, a large portion of their future income will be dedicated toward paying it off, plus interest. The American taxpayer will be doing the same for years to come, because state lawmakers have spent beyond their means. For example, Oregon voters recently elected to increase taxes rather than cut education funding—they now pay more money for the same level of services, because such a large portion of their tax dollars are financing the state’s debt.

Many states have reduced spending with government employee furloughs and widely publicized layoffs in the last year. This is only a short-term strategy, and it comes at a high cost to taxpayers who face sharply reduced public services. By minimizing redundancy and waste within state bureaucracies, legislators can find ways to ease their budget shortfalls without cutting valuable services.

This problem is not a Democrat issue or a Republican issue—regardless of party politics, state leaders want to give their constituents more than they pay for. Unfortunately, national headlines reveal: the tipping point is here.

Since the 1990s, states have been expanding their service provisions while attempting to avoid tax increases. As with any other bank account, outflow cannot continually exceed inflow in state coffers. Bills from past spending are coming due, and taxpayers will pay for these mistakes.

Each state, excluding Vermont, has a constitutionally mandated balanced budget. For decades, states have been avoiding this constraint with fiscal gimmickry by making their budgets appear balanced when they are not. The worst offenses include: rolling payments over into future fiscal years, borrowing from trust funds such as pensions, and making rosy predictions about revenue growth that cause budgets to deceptively appear balanced.

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  • Jfortune

    The economic woes are due to both parties. The democratic party has been in “power”(in terms of holding the highest office) for 10 years out of the last 30 years. You cannot say that the dems are to blame for everything, if you do you are not bieng a realist. The “blame game” does not lead to solutions, it only leads to a polorized political landscape. The congress and the constituencies are to “blame”(so basicly everyone). We as the constituents of the government need to become more knowledgeable of the problems at hand before we pass judgement on any party. The infinite “want” and the finite “resources” can not be either giving in to the “want” (the welfare state that the GOP says the dems want) or by the illusion that the “free market” can create more “resources” because the “free market” itself suffers from th same recussive issue. We are currently in a battle between too much altruism vs. to much selfishness, neither is right, they just need to strike the right balance. I believe there are only three possible possible solution, cut budgets and raise taxes(which we would need the dems an the GOP to work together, which would them lead to a toxic election eviroment are the constituents are to “dumb” to realize that it’s the only way) or to inflate the currency in order to pay thing off (which would not be benificial to any one), or combination of all the above in which people would still be mad and would moan and groan about that also.

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  • lamecherry

    I disagree that this is indeed a Republican and Democrat issue, as it is the liberal patricians who non stop are buying votes via the Democratic party using tax money for jobs and services.

    The Post Office in measure cut out thousands of jobs which were unnecessary, but only kept for liberal votes. They raised rates not in real short falls, but to keep the bulk of mail down so they wouldn’t have to work as hard.

    My state took Obama kickbacks and this winter, my newly surfaced road already has holes worn into it by shoddy paving, which is at the heart of this.

    Affirmative Action laws state that minorities must be hired by construction companies. My state hires road work done, but the minorities show up and sleep under a bridge all day to collect their salary as it is written into the budget and cost estimates.
    My county tried to raise taxes as no cuts could be made. When it went to a vote and the taxes were froze, cuts were made immediately. The only people who voted for the tax hike were teachers and public employees.

    Until the cancer of the Democrats employing more people and paying them higher wages than the public sector is ended, there is not going to be any fixing any of this.
    For the record, the government could shut all welfare, public services and retirement departments, and then just pay people directly, and the government would save money as it is the government which is siphoning off funding.

    In the federal government billions go to stealth programs and in states it is like Nancy Pelosi having the military buy her 200 dollar a bottle booze.

    I would bet, that if this government gave each employee 1 million dollars on a credit card, and were told that out of the Obama trillions if they could save as much of their million as they could, that they could keep it, that by 2011 everyone one of these employees would have a million dollars yet and the country would still be running.

    There has to be an incentive to save. Either put the onus on states that if they save money the feds spend, the states get to keep it. Only then will this Democratic issue be ended in bankrupting America.
    This is not a Glenn Beck propaganda of blaming both parties Ms. Washington, the culprits are Democrats.