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« An Interview With Huckabee's Campaign Chairman | Main | Thoughs on the Nursing Home Crisis... » December 13, 2007It's the Spending, Stupid
While it's not clear how much new revenue the state expects for next budget year, the revenue slowdown is expected to give the Bredesen administration a harder time putting together its budget proposal.Cutting out wasteful spending would make it easier. Do we really need a $12 million underground ballroom at the Governor's Mansion? Andy Sher at the Chattanooga Times-Free Press, reports that one economist - Middle Tennessee State University economist Albert DePrince Jr. - told the State Funding Board he expects the "revenue shortfall" could reach $330 million this fiscal year. The economists and Goetz blame a "slowing" economy, but the economy - and revenue - continue to grow. To borrow a phrase, It's not the economy, stupid, it's the spending. I keep putting the phrase "revenue shortfall" in quotes because, in reality, there is no revenue shortfall, merely excessive spending. And that's not an ideological statement. It's math. The "revenue shortfall" is artificial, created not by a decline in tax revenues - which continue to rise and will be higher this fiscal year than in any previous fiscal year in the state's history. The "shortfall" is driven by the Bredesen administration's decision to spend $723 million more this year than the state constitution's budget growth formula permits. That formula, called the Copeland Cap, says state spending can not grow faster than the rate of growth of the state's economy, measured by the growth of incomes of the people of Tennessee. The goal is to keep spending growth at a level where the people's income growth can afford it without a tax increase. This current fiscal year budget includes $723 million in spending over the Copeland Cap. The Bredesen administration hid most of that excessive spending - some of it financed by a tax increase on cigarettes - by deliberately ignoring the constitution and state law on how the cap number is to be calculated. The administration's own attorney general issued an opinion indicating the administration did not follow the law. (The administration calculated the growth cap number based on the previous year's revenue, rather than based on the previous year's spending, as state law and the constitution clearly specify. The state had a huge revenue surplus last year, so using revenue rather than spending allowed the administration to set a higher baseline for calculating the cap.) Subtract that $723 million in excessive spending from the budget and even if the most dire of the economists' revenue forecasts comes true, Tennessee would still end this fiscal year with a $393 million revenue surplus. Resources Posted in Tennessee Government News
Comments
It's the same old song and dance. They sing about revenue calamity and shortfalls and bad economic times while the citizenry has to dance to the tune of new or higher taxes. They know the average Vol has no concept that the legislature is violating the state constitution every year in the way they create budgets. And only until they are called into court for violating the law will they be held accountable. So what is the basis to bring suit against the state for violating the law of the Constitution? And knowing that the judiciary is lockstep in protecting the revenue stream to the state, would a jurist even hear such a case or dismiss it without merit? They just refuse to get it, don't they, Bill? Times get fat for a year or so, and here come new expensive programs. Then things get leaner, and...ooops! Nanny State Bredesen is finding out his budgets can't be balanced on the backs of the smoking minority, not that 25% of the state population should get soaked to benefit the "it's not my ox being gored" 75% anyway. Meanwhile, where is the new prison space we've needed since the overcrowding orders of the 1980's. The legislature has had 20 years to fix this now; but they've left the "emergency," let-'em-out-quicker legislation they passed back then on the books. And we as individuals are paying for their cowardice thorugh increased and quite logical fears of increased and more vicious crime. Posted by: Wintermute at December 13, 2007 8:45 PMWhat is really depressing is that the state legislature puts the only controls that we have on the actions of the county and city governments. There is actually a limit to how much debt a county can incur compared with the value of property! Maybe after worrying so much about every other government in Tennessee they are just too exhausted to take care of the state as a whole. Posted by: Danny L. Newton at December 14, 2007 1:13 PMPost a comment
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Various news media are reporting that Tennessee Finance Commissioner Dave Goetz is predicting the state will have a "revenue shortfall" of about $200 million this year, a fgure he arrived at by averaging the revenue projections from various economists who testified before the State Funding Board yesterday. From the City Paper