Legislatures in our Northwest neighborhood and across the country are getting down to business this month. All of ‘em … every one … is face-to-face with a common problem: red ink by the barrel.
What each of the 50 groups will eventually find is there will be no one-size-fits-all answer to overcoming massive deficits and no common plug to stop the hemorrhaging. Each will have to tear its own budget apart and restructure based on its own unique set of problems.
Governors in most states will give …. or have already given … budget messages with phrases like “holding the line” or coming up with “new solutions to old problems” or “using a difficult time to re-evaluate what we’ve been doing.” Fine rhetoric. But meaningless in most cases.
In the end all …repeat all … will be left with the most difficult choice in politics since the first meeting of the first neanderthal legislature: raising taxes. Which ones? On whom? On what? How much?
The State of Illinois was the first of 2011 to make a decision on the inevitable tax increase issue, passing a 66% hike charged on personal income. Sixty-six percent! I doubt your state or mine will match that number. But when one group of elected folks goes to that extreme to deal with a deficit, knowing they have to go home and face their neighbors, it is a major indicator of how bad the problem is and how extreme the solutions will have to be.
Makes no difference if a state is trying to raise nearly $7 billion to reduce a $15 billion problem as Illinois is. On a per-capita basis, the size of economic solutions will be immense no matter where we live.
There are things beyond the control of any legislature to make those solutions even harder to find. In Idaho, for example, normal income to the state from the IRS on taxes collected has not yet been received because people have not paid their taxes to the IRS for the year. So the state budget is in the red by $10 million to start just for that and legislators can’t do anything about it. As all states wrestle with their unique situations, more such “beyond-our-control” issues will surface to compound the local problems.
Raising taxes or fees has always been considered political suicide and most elected will go to any length to keep from it. In Southwest Oregon recently, an electrical co-op board wouldn’t face the inevitable and, for years, kept absorbing rate increases from its supplier but not passing the higher costs along to customers. Board members thought of themselves as “protecting folks at home.” Soon the co-op was in real debt to the supplier … in this case the federal government … and was finally told to pay the bill or the power would be cut off. Rates suddenly went up.
Nobody in Salem, Olympia, Boise or any state capitol wants to raise taxes. Legislators will look at every other income possibility first. As they should. But the usual “cut the fat” or “reduce the size of government” sloganeering of recent years is more meaningless now than ever. And those that cling to those falsities will be part of the problem; not the solution.
I don’t envy any state legislator the job. This is a tough time. It will likely be worse next year. And the next. So they’ll have to do some tough things. Many of them will have to bite the bullet and take actions that may run directly counter to their own philosophies. Those that don’t … or won’t … help bail out the debt water in our boat should be ignored by their peers.
And we at home … the ones who’ll have to pay the higher taxes and/or more fees … we need to understand those folks who made the fee and tax decisions did so after considering all the evidence.
That puts yet another burden on our legislative friends. Not only will they have to make the tough decisions, they’ll need to be very, very sure they explain to those of us who elected them that they made the best decisions possible after openly examining every option.
I think those who do that successfully won’t have a problem at the polls next year. Those who can’t … or won’t … should probably figure on watching more daytime television after the 2012 election.