Monday, February 2, 2009

State Budget

I haven't commented on the state budget in 2.5 months. The reason is that basically nothing has changed, despite all the drama. My view hasn't changed much since this post 2.5 months ago, but my view of the players (legislature, Governor, unions) has decreased.

In short, I'm willing to support a lot of the smaller tax increase proposals that have some long-term policy merit. These include broadening the sales tax base (even beyond the short list of services and amusements proposed by the the Governor), increasing alcohol taxes, imposing an oil severance tax, and modest increases to vehicle license fees and gasoline taxes.

I oppose the temporary or permanent increases in the sales tax rate or income taxes. These are the larger revenue generators that individually would probably do more than the list I have endorsed above.

Thus, there needs to be some significant spending cuts too. The costs of the prison system are out of control, and I am not an expert on how to do this but something drastic is in order. K-12 education should be protected as much as possible, but I think some deeper cuts to community colleges offset by increased tuition is reasonable. Overall state payroll costs must come down somehow. I support the 2 day per month furlough for now (the unions have not won my sympathy with their actions), although I would prefer more targeted cuts to specific programs. The furloughs should end earlier than planned (or at least be be reduced) if some real cost-saving alternatives are implemented.

Of course, this isn't the whole solution (and the exact amount of help in the federal stimulus is uncertain as well.) It sounds as if all sides are digging in their heels, an outcome which is bad for the state and will only make the eventual adjustment more painful.

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