Saturday, March 6, 2010

Hard Times and Hard Choices

Now, it isn't necessarily the intent of MAC to talk about Missouri a lot... it just happens to be a place we like a lot. AND it is a state which could reasonably be considered as a good cross-section of America, which, until the last presidential election (when McCain won the state by a slim 4,000 votes), had been one of the most accurate bell-weathers for the county's political outcomes.

Missouri is also, not surprisingly, dealing with many of the same budget-crunching problems as most other states in the union. And being as I live here, I tend to notice more of the goings-on that occur as a result of the budget problems, and some of the proposed "solutions." MAC is all about trying to look at problems affecting ALL OF US, and talking about responsible ways of dealing with them, rather than clinging to ideology. Missouri's budgetary troubles and the solutions being bandied about are a perfect example of how competing ideologies are at loggerheads... and how at the end of the day it is the people who suffer.

Currently, the state has undergone a series of budget cuts, with more sure to be on the way. Money is tight, services are being slashed, state employees are being laid-off while seeing their benefits cut right and left. All the while, the state's Republican dominated senate is looking at experimenting with a complete tax overhaul, which would replace the state's income tax system with a heightened sales-tax, including taxes on services which are not currently taxed (such as child-care, and legal work).

It isn't just the state-budget which is feeling the squeeze -- Kansas City and St. Louis have been the center of continual crises, including a plan to close 26 schools due to education funding shortfalls, all while a multi-millionaire Rex Sinquefield (a retired investment banker) crusades against the Kansas City and St. Louis "earnings tax," claiming it drives people out of Missouri's most populated cities and across the borders to find work outside of the state.

It doesn't seem to matter to Sinquefield that the earnings tax is a significant source of both cities' budgetary incomes, and that a number of services are funded through the tax (40% of which is paid for by non-residents -- such as rich professional baseball and football players!) A handful of Missourians have made it a point to take on Sinquefield, as if he alone is the source of the state's troubles.

Sinquefield's charge against the tax is purely ideological. The state government refuses to look at ways of generating revenue in order to close the budget gap, relying purely opon cuts to services and state-employees' pay and benefits, despite having a multitude of options available at raising revenue. This is also purely ideological. It is estimated that by simply catching up with the times, Missouri could raise an additional $200 million by collecting sales taxes on internet purchases.

The one thing that is certain in all of this is that Missouri residents pay. Whether the state government takes away funding for essential services OR residents continue to pay an earning tax and a state income tax -- PEOPLE pay. If we eliminate the earnings tax in KC and St. Louis -- that revenue will be replaced by some other tax (most likely an increased property tax, BRILLIANT!!), which defeats the entire purpose of eliminating it to begin with, and probably hurts more than it helps.

Who pays for it when the state cuts state employee benefits, and state employees leave for greener pastures? Who pays for it when our schools consolidate into larger class-sizes because cities and school districts can't afford to hire more teachers? Answer: WE DO.

Hard times force us to make hard choices... but too often the ones who are making the hard choices aren't the ones feeling the effects. Rex Sinquefield doesn't feel a thing when a city is forced to make huge budget cuts... Governor Nixon and the state legislature don't feel a thing when the state employees are asked to take a hit to their pension plan or their 401k contributions... or do without a holiday. But we do.

The hard choice affects the people the most... because the people are the ones who pay for it one way or another. I don't know about you, but it seems to me that there is a middle road. Let's make cuts when it makes sense, but lets not close the book on looking for ways to raise revenue when it makes sense to do so. Let's not end an earnings tax without thinking about the consequences of doing so.

Simply taking the ideological stance of being against a tax for the sake of being against a tax doesn't solve anybody's problems. It doesn't address the issue of the NEED for funding police departments and fire departments and other essential public services. Simply making cuts without looking at raising revenue as an alternative smacks of short-sightedness and ideological rigidness.

This kind of decision-making does nothing to help solve a problem, and really isn't even decision-making. It simply says to Missouri's residents that we are going to pay for it by way of decreased services... whether that makes sense or not. The hard choice SHOULD be a choice, not some proscribed "solution" put forth by an ideology. Whatever happened to taking a look at EVERY possible solution, and weighing those options equally? THAT is a choice. It is a hard choice, but at least its a choice. So far, we've seen nothing but the short-sighted slashing of budgets, which equates to nothing more than a knee-jerk reaction to budget short-falls.

Hard times call for hard choices. Missouri deserves a real choice in the matter.

5 comments:

Ken Hall said...

Andrew, good points about finding a middle ground to attempt to remedy some of the serious problems with budget short falls. Unfortunately, I don't think that is really possible, given the anti-tax crowd has found their strategy to be so successful. Sorry to sound so cynical but the hard choices we are confronted with as a result of the financial crisis are not the unfortunate and unintended consequences many think they are; this is what the anti-tax ideologues have been praying for. How do I know that? Because it's what they said they were praying for (thank you David Cross for that line).
Groups like Grover Norquist's Americans for Tax Reform have advocated for tax policy that would reduce public coffers so that, when crisis hits, the people will have to choose between fireman and food stamps, police and parks etc... They want to "starve the beast" and the only way to do that is to reduce revenue and then let us fight over what's left. (Google Grover Norquist and starve the beast)
Knowing this makes negotiations with these folks based on the "right thing" a non-starter. This is going to come down to pure real-politic and power dynamics.

AfWilliams said...

http://www.post-gazette.com/pg/10054/1037783-109.stm

A Paul Krugman article highlighting just what you speak of...

Ken Hall said...

Article that discusses the history, principles and possible unintended consequences of the Starve the Beast theory.

http://www.independent.org/pdf/tir/tir_12_01_01_bartlett.pdf

AfWilliams said...

Kevin... err... Ken :), excellent link. I really had no idea that these ideologues had actually said as much as wanting to kill government through tax cuts.

Why isn't this spoken of more openly?! Unbelievable... it's in writing that these folks don't even believe in supply-side economics, but are instead trying to kill government... and nobody talks about it. Craziness. When will Democrats grow a spine?

Ken Hall said...

There was a ton of hubris coming from the Chicago Boys during the Bush I/Clinton era and they were not afraid to put this out there. Many politicians were scared out of their minds to cross Norquist or even get on his radar. If you did, odds are you were toast. Extremely effective at maintaining inner-party discipline and scaring off detractors.
My first instinct re:Dems is that they are not smart enough to fight effectively but that is counter-intuitive; if these folks are, at least half the time, smart enough to gain control of the most powerful nation left on the planet, one would think they could figure this stuff out. As a friend of mine says "I'm not the smartest guy around so if I can figure it out, surely someone who has several ivy league degrees has already thought about it."

We need to develop the ability to get third parties into elections. The problem with that is you have to rely on the people who benefit from their exclusion to give third parties the ability to participate.