April 28, 2011 - let's face budget realities

Let me make my position clear at the outset: I think everybody else is crazy, and I'm not too sure about myself.

I do know that the current budget discussions at the national, state, and even local levels are really about the purpose of government. But that never seems to get directly addressed.

At the federal level, Paul Ryan's budget seems incoherent to me. He claims that we are in such dire economic shape that we must cut programs that benefit the elderly, the sick, and the poorest among us.

Yet, he continues, we must also cut taxes for the wealthiest among us. If the combination of these two is "revenue neutral," as Ryan claims, then we haven't solved a budget problem, have we?

Meanwhile, Forbes magazine reports that GE and Exxon, who owed a combined $25 billion in taxes last year, paid no federal income taxes at all, mostly by transferring assets overseas.

Perhaps Ryan believes in "trickle down economics." But that has now been thoroughly tested in both the Reagan and George W. Bush administrations. It has one wholly predictable and reliable result: a transfer of wealth from the poor and middle class to the wealthy. Today, the top 1% of U.S. society has more money than the combined total wealth of 95% of the bottom.

If it's bad, if it's "socialism," to redistribute wealth from the rich to the poor, then why is it good when redistributed in the other direction?

At the state level, Speaker of the House Frank McNulty calls for more sacrifices from state employees. These are the same state employees who (a) haven't gotten a raise in three years, (b) have in fact had their salaries reduced through forced furloughs, and (c) have had their salaries reduced again through forced increases in their retirement contributions.

When McNulty points out, truthfully, that many businesses have made even more drastic cuts, he ignores a crucial fact: businesses make cuts because they aren't as busy as they used to be.

But precisely that same set of circumstances means that state government is busier than ever, particularly in health care and human services.

Asking state employees to "share in the sacrifice" of a recession caused not by the public sector but the private, when demand for public services is increasing, not decreasing, when mega companies get generous tax breaks and subsidies is, if I may be so bold, asking the wrong people.

The purpose of government is not to promote business; it is, to quote the preamble of the Colorado State Constitution, to "promote the general welfare." They're not always the same.

Are all government programs worthy of increased funding, without end? No.

Are taxes too high for some businesses? They are, although clearly not for the big companies. In Colorado, the problem is something called the Gallagher Amendment. It adjusts tax rates between business (29% tax rate) and residences (7.96%) to give homeowners a disproportionately low rate.

We can fix that. All we have to do is vote, statewide, to even things out. We could raise our residential taxes to lower the taxes of local businesses. It would be more fair. It would improve our economic environment. Of course, by itself, it wouldn't generate any more money, either, just change who pays it. To raise money will take even more tax increases.

Is the electorate willing to do that? Are you?

If not, demonizing and further punishing the state's beleaguered employees - at a time when the demand for their services is greatest - won't be enough to solve the state's budget crunch. We will, instead, cut the only place that remains to be cut in the state budget: K-12 education.

It's either wishful or deceptive thinking - or just plain crazy - to pretend otherwise.
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LaRue's Views are his own.