As the debate heats up over budget proposals, the legislators and public must be reminded that the current budget is not a “cuts only” budget. The budget deal passed in February and designed to deal with this year and next year’s budgets included a whopping $12-billion worth of new taxes. Since the tax increases implemented so far have not brought in anticipated revenue, more tax increases to solve the immediate crisis is futile.
As the majority party brings its budget plan up for a vote, arguments ring through the capitol that some of the deficit must be closed with taxes…that cuts cannot do the job alone. Increased sales taxes and vehicle license fees are already paying for the current budget. The sales tax increase kicked in April, VLF in mid-May.
Raising any taxes now would not produce the revenue needed to balance the budget before the state runs out of cash the end of July.
And, whether the state even gets the money expected from a tax increase is a fair question. Here are some rough budget numbers that should set off warnings.
The sales tax increase began on April 1. A one-cent sales tax increase is supposed to bring in roughly $5 billion over the course of a year. Over the first two months of the new tax, approximately $800 million should have hit the state coffers, maybe a little less.
What’s happened? About ten days ago the state controller said the state revenue was more than $800 million BELOW anticipated revenue for April and May.
Tax increases are not going to solve this budget problem; cuts will balance the budget.
The old saying that “Elections Have Consequences,” is playing out in this current budget drama. The result of the May 19 special election has strengthened Republicans’ resolve not to vote for any more taxes. The voters are behind them.
When public employees opposed some or all of the special election measures they lost any standing to combat the budget cuts and promote tax increases. Even Democratic lawmakers have little sympathy for the unions’ tax increase campaign.
Hopes to convince legislators that the voters really want taxes by circulating a post election poll that purports to support the tax argument bangs up against the reality of the voters track record on taxes. Not only did they bat away the continued temporary tax increases proposed in the special election, they have brushed off specific tax increases in recent elections. Both the oil severance tax and cigarette taxes proposed in the Democratic budget plan were offered to voters via ballot initiatives in 2006 and the voters said No. Including similar tax increases in the current Democratic budget package is a mistake.
It’s time to face the music conducted by the voters in recent elections. No more taxes; cut spending to balance the budget.