Governors Cite U.S. In Fiscal Crises: States Blame Tax Cuts, Congress's Funding Inaction

Washington Post ^ | December 6, 2002 | Jonathan Weisman

[cogitator]

Governors Cite U.S. In Fiscal Crises States Blame Tax Cuts, Congress's Funding Inaction

Excerpts:

"Last month, the National Governors Association (NGA) declared that the states are facing their worst fiscal crisis since World War II, as governors and legislatures struggle to close budget shortfalls totaling $67 billion. Standard & Poor's, a credit rating agency, has warned of a possible downgrade for bonds issued by nine states, including California, Indiana and Arizona."

"A report last month by the Center on Budget and Policy Priorities pointed to a different culprit of the states' own making. The report noted that between 1994 and 2001, 43 states enacted major tax cuts. Those tax cuts are costing the states $40 billion in lost revenue each year, three-fifths of the current shortfall. States also made the choice to expand social programs and the reach of Medicaid, the costs of which are now exploding."

"On the tax side, last year's 10-year, $1.35 trillion tax cut included a little-noticed provision aimed directly at state coffers. Under the tax law, the federal estate tax diminishes at glacial speed over the next decade. But the law makes swift work of a provision that allows states to claim a credit from the federal government for estate taxes paid. The "state death tax credit" has already been cut by 25 percent, and will be gone by 2005, at a cost to the states of $4 billion a year, according to Harley Duncan, executive director of the Federation of Tax Administrators."

[cogitator]

As the saying goes, a billion here, a billion there, and pretty soon you're talking real money... (especially in the states, where they can't have a budget deficit).

[Thane_Banquo]

This is wonderful news. At least some of the governments in the United States finally have to cut back on wasteful spending.

[citizenK]

They blame tax cuts!!

How about laying the blame where it belongs?
Excessive spending when they thought things were going real well with the stock market and windfall from the tobacco settlement.

We elect morons.

[Bommer]

We elect morons

Amen brother~!

[Steve_Seattle]

In Seattle, we face a $50 million deficit caused by a hiring spree that began in the late 90s, and which led to an increase of 1,000 employees in the city work force in just five years. At $50,000 salary and benefits per employee, there's your $50 million deficit. But the City is blaming the recession (Bush). The "diverse" City Council consists of nine liberal Democrats.

[cogitator]

Excessive spending when they thought things were going real well with the stock market and windfall from the tobacco settlement.

It seems like many states did two things wrong: they both increased spending AND cut taxes during the "boom times". I wonder how severe the problem would be if the states had just cut taxes and maintained their spending levels.

[KevinDavis]

In Illinois Lying Ryan spent our money like a drunken sailor. Now that we have Blagocrap our taxes may be going up and spending still go up. Ugh!

[N. Theknow]

States also made the choice to expand social programs and the reach of Medicaid, the costs of which are now exploding."

But somehow this gets lost in the article and it is only tax cuts that are the deficit.

Here in the once-free-from-income-tax state of Connecticut, we had Lowell Whackjob as Governor and he hired about 50,000 new state workers. Now we face deficits and we lay off 2500 of them. But where do the layoffs hit, places and state services where the taxpayer will notice them more. Taxes are raised on the rich and NO CUTS take place in social services.

So the state sends a message that it will punish the rich and reward the parasites. Rich move away and slackards move in to replace them.

[tom paine 2]

Hey Honorable Governors it's time to cut spending!

[cogitator]

Here in the once-free-from-income-tax state of Connecticut, we had Lowell Whackjob as Governor and he hired about 50,000 new state workers. Now we face deficits and we lay off 2500 of them.

Let me ask a dumb but pointed question: most of the states facing these deficits did the same thing, they increased the size of the state government workforce. My question is: what did they hire these people to do? There must have been perceived need(s) for something(s) useful. Anybody?

Down south of me in Virginny, governor Warner is finding some advisory councils and bureaus to cut, but they don't amount to a lot of people. Presumably some of the hiring was for growth in state agencies to assist with a growing population (an example would be new motor vehicle offices in areas that are growing). But I still wonder where all this hiring has been going on.

[FreedomPoster]

In Atlanta, new mayor Shirley Franklin (I live outside the city, as does most of the metro area) cut several hundred jobs in last year's budget, and is cutting 300 more in this year's. Though she's a Democrat, she seems to "get" it, though it has been forced upon her.

Much of the reason for the budget shortfall is that former mayor Bill Campbell, and his predecessors Maynard Jackson and Andy Young, ran the city as a jobs program for Democratic Socialist voters. Those chickens are coming home to roost, and money is extremely tight. And, oh, yeah, another of the Campbell administration's high-ups went to jail last week on corruption charges. Billy boy can't be far behind, if the prosecutors are doing their jobs.

[FreedomPoster]

M>>y question is: what did they hire these people to do? There must have been perceived need(s) for something(s) useful. Anybody?

Vote Democratic.

[N. Theknow]

Let me ask a dumb but pointed question: most of the states facing these deficits did the same thing, they increased the size of the state government workforce. My question is: what did they hire these people to do? There must have been perceived need(s) for something(s) useful. Anybody?

Well, I am not sure about the other states, but here in the state that used to laugh at Taxachusetts and has now surpassed them as being more taxed, Lowell Whackjob hired all the new state workers to secure the state for professional politicians in perpetuity. 50,000 new state workers, a state income tax to guarantee social services for an ever increasing slackard-class populace, Indian casinos given non-competition agreements in return for Millions of dollars given to the state out of slot machine revenues ONLY, all these were the formula for a socialist Utopia in Connecticut.

However, Lowell did not count on one thing. That the taxpayers of the state would get so pissed off.

Mrs. Know and I took our children to the state capitol for a protest (Weicker was actually spat upon when he dared to show his face)and told them all the way there and back that it was our way of doing the same thing that was done at the Boston Tea Party. We later took the children with us to the neighborhoods of the RINO's who voted with Weicker to pass the income tax to campaign against him & them. We helped defeat all three.

Things are not much better now. We do have a RINO governor in Rowland, a Democratic legislature fueled by too many union voters and a flaming, nitwit, liberal for Attorney General. But we are slowly getting better. Rowland laid off 2500 state workers. Couldn't lay off the full 50,000 because that would be too many votes to try and make up, so he had to raise taxes on the rich and drive them away to make room for more slackards to come in and suckle the state teat.

[Bill Davis FR]

its money back into the pockets of the taxpayers...if the state doesn't collect then the old boys can't spend it...

[Clemenza]

Here in New York, Patakifeller is simply mandating budget priorities for localities, who are subsequently forced to hike property taxes. Of course, Patakifeller can then claim that he is against "new taxes" from Albany.

Unfortunatly, too many sheeple, including some on this website, believe that a--hole.

[citizenK]

I wonder how severe the problem would be if the states had just cut taxes and maintained their spending levels.

Check into the situation in Colorado. They have limited the growth of their state government (I think through their state Constitution, but at least by law), and their state is one of the only ones in the union doing well.

I live in NY, can't say much good about the situation here. In fact, the Erie county (home of Buffalo, the state's 2nd largest city) executive put out a proposal today to raise the state sales tax by one-percent. Counties across the entire state are in dire straits because they cannot afford to pay the medicaid bills. The proposal put forth today would coincide with a reduction in property taxes (by law) and with the increased revenue from sales tax receipts, the state would pick up the medicaid bill. An interesting proposal to shift the costs of the mandated program back to the state - but I am left wondering why no one is proposing a roll back of the medicaid benefit. With the exception of NYC, the rest of the state is lagging in economic growth and development. All of the spending on social welfare programs, in my view anyway, is akin to giving a child dessert without first making sure they have received the nutrition that comes with a proper dinner.

I would like to see NY state impose a fiscal policy and limitations on the growth of government similar to Colorado. Politicians are the worst where it comes to over-extending their resources when times are good, then making others pay for their foolhardiness in the future. The back of the rampant socialism that grips our country must be broken.