Friday, February 20, 2009

State Budget Passed

Time to comment on the state budget.

In previous posts, I endorsed raising the gas tax, broadening the sales tax, alcohol taxes and the oil severance tax; and said the first place to cut spending long-term is the out-of-control costs of prisons.

Clearly, no one listens to me. The new budget has plenty of tax increases, but none of the above are included. Education is taking the brunt of spending reductions, and my understanding is that there is no impact on corrections. [Update: The Governor did line-item $400 million from Corrections upon signing the budget.]

Finally, there is an awful lot of borrowing in the plan that isn't getting too much discussion. I anticipate some challenges will arise with this borrowing (and parts of the taxing/spending components), and the legislature will be wrestling with additional cuts and/or tax increases within 6 months.

The upside of the legislature not taking any of my preferred actions is that I won't have to come up with any new recommendations.

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