Chafee Tax Critics Don’t Have Realistic Alternatives
Tuesday, April 05, 2011
Over the past couple of weeks, each morning in my newspaper, I read another op-ed or quote from yet another person who wants me to know that the taxes that Governor Chafee has proposed for next year will be a disaster for our state. In vividly apocalyptic terms, these writers paint a picture of economic collapse: unpaved streets, shuttered businesses, and financially strapped schools.
Oh, wait, that's what we've got now.
Just look at today's sample: Here's Donna Perry, part of the RI Statewide Coalition of anti-tax activists, writing in GoLocalProv.com, that Chafee "ignores other options---including finding possibly tens of millions more in savings through public sector concessions and tighter spending controls." She provides no details but simply claims the proposed taxes will "choke out the customer base from the already struggling Main Street businesses." It sounds dire, but why should I believe someone who doesn't seem to be aware of all the public employee concessions made in the past three years?
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTJohn Robitaille writes in the Providence Journal with what appears to be a long list of proposals. But when you look closely at them, he too is only talking about personnel cuts and cuts to welfare. What's wrong with that, you might ask? Only that welfare costs us $10.3 million each year in state tax dollars, less than a third of a percent of the taxes we'll collect next year. Including the federal dollars that pay for it, welfare payments and child care cost $89 million, 1.1% of the budget. And personnel costs are only 23% of the total state budget. Trimming these expenses isn't going to get to $295 million.
Robitaille also inveighs against that old standby, the "waste, redundancies and inefficiencies" of our government. He, however, was part of that very government for quite a while. Over that time, you'd think he might have accumulated a specific list of those inefficiencies long enough to impress an op-ed reader, but apparently not.
Budget cuts actually cost money up front
But I know why he can't produce that list. There are lots of inefficiencies in government, but all the juicy targets I know about cost money to fix. For example, we could save tens of millions at DOT by cutting borrowing, but we'd have to appropriate more money up front to save a bundle down the road. (Addressing this is on Governor Chafee's agenda.) Robitaille is interested in welfare; we could save money by streamlining the application process, but there's no one to do that work. Everyone in that department has seen their caseloads soar as we try to "do more with less" year after year.
What do we learn from these screeds? I've learned that Robitaille either doesn't know about, or doesn't want you to know about, the actual development of welfare since Bill Clinton ended "welfare as we know it" almost 15 years ago. I've learned that Donna Perry and RISC have little or nothing to add to the debate in the way of suggestions about what to cut, beyond the usual complaints about public employees. I've learned the same about a number of other writers and groups, but it's nothing new. This is what complainers do: complain.
The truth is that over the past 20 years, by systematically depriving the state of revenue while at the same time refusing to consider and support practical and significant reductions in state and local governments' responsibilities, the complainers have created a situation where state taxes have plunged while local property taxes have gone up. They want all the same services, they just want them cheaper. So do I, but simply wanting something doesn't make it possible.
‘Complainers’ part of the problem
In other words, the result of the pressure from the complainers has been a heavier burden on local businesses and residents, while we've also seen declining levels of state services. So our roads and bridges are in terrible condition, our school districts get little help from the state, our debt burden has risen dramatically, and any call for addressing new problems is met with a shrug of resignation.
This is a disgrace, but here's the real issue. There is a responsibility one assumes when engaging in debate over public policy. After all, people might believe what you write and the policies you advocate might actually be enacted. The laws of our state are not playthings. People's lives are changed in profound ways by the acts of our legislature. It is not unknown for people to die because of bad law. The responsibility of the advocate, it seems to me, is to allow oneself to be guided by the actual world -- the laws of physics, the realities of economics and human nature, the requirements of existing law, and so on. To that end, it is imperative for all of us to be humble about our conclusions.
Chafee: A realistic spending plan
What does humble mean in this context? It means not just to consider alternate explanations for our state of affairs, but to seek them. It means being serious about the intellectual consistency of the policies you recommend. It means answering the question about how to balance the budget in a principled and disciplined way before you pen the op-ed screeching about the Governor's tax proposals.
I happen to think there are fairer ways to raise revenue that are simpler to administer than Governor Chafee's tax plan. I especially worry that a two-tier sales tax will be a bookkeeping hassle for some businesses. I also think that Cranston's Mayor Fung makes an important point when he says that the cities and towns will feel the stick of the proposed pension funding requirements much more than they'll enjoy the few carrots. But I applaud Chafee's willingness to put forward a more intellectually consistent and realistic spending plan for our government than we've seen for a very long time.
Tom Sgouros is the editor of the Rhode Island Policy Reporter, at whatcheer.net. He can be reached at [email protected].
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