(It’s the Spending, Stupid!
– promoted by Cool Cal)
The left believes that state taxpayers have it easy and that state spending should always take precedence over tax cuts. The problem isn’t the tax cuts of the last decade, a tale spun by liberal think tanks such as the Center on Budget and Policy Priorities. It’s spending. Steve Chapman explains.
We all know the reason for the squeeze: An unexpected, severe national recession has dried up revenues just when states need funds to help out-of-work citizens. That’s true: You would expect the worst downturn in decades to have a negative effect on tax collections. But it’s a long way from the whole truth.
The crisis in state budgets is not an accident, and it wasn’t unforeseeable. For years, most states have spent like there’s no tomorrow, and now tomorrow is here. They bring to mind the lament of Mickey Mantle, who said, “If I knew I was going to live this long, I’d have taken better care of myself.”
If they had known the revenue flood wasn’t a permanent fact of life, governors and legislators might have prepared for drought. Instead, like overstretched homeowners, they took on obligations they could meet only in the best-case scenario-which is not what has come to pass.
Over the last decade, state budgets have expanded rapidly. We have had good times and bad times, including a recession in 2001, but according to the National Association of State Budget Officers, this will be the first year since 1983 that total state outlays have not increased.
The days of wine and roses have been affordable due to a cascade of tax revenue. In state after state, the government’s take has ballooned. Overall, the average person’s state tax burden has risen by 42 percent since 1999-nearly 50 percent beyond what the state would have needed just to keep spending constant, with allowances for inflation.
Even low-tax states like Texas and Nevada have followed the same course. No one has been inclined to say, “Taxpayers don’t need to send us more money. We’ve got plenty.”
As Charlie Baker noted yesterday, the state legislature spent hard-earned dollars on questionable items when revenues were flowing in at record levels.