State legislatures and governors are busy preparing their budgets for the next fiscal year (which for most states, begins July 1). The favored approach to reducing near-term deficits seems to be a mix of spending cuts and tax increases.
For example, in California, newly inaugurated Gov. Jerry Brown (D) yesterday unveiled his plan to bridge the state’s $25 billion deficit. Brown’s plan calls for $12.5 billion in spending cuts and a tax increase Brown says will generate $12 billion by extending temporary sales and income tax increases for five more years.
Not all governors are taking the same approach. Today The Wall Street Journal columnist William McGurn looks at two other large states: Illinois and New York. McGurn contrasts Gov. Andrew Cuomo (D-NY) – who will let a temporary income tax increase expire even though the state faces a $10 billion deficit – with his colleague Gov. Pat Quinn (D-IL), who needs to fill a $13 billion gap. McGurn applauds Cuomo for focusing on market-oriented reforms and concludes, “Mr. Quinn appears oblivious to the market-oriented policies next door (privatization of roads, the end of collective bargaining for state workers, etc.) that have helped Indiana Gov. Mitch Daniels turn his state [Indiana] around.”
In addition to gaping holes in their budgets, each of these states faces high unemployment rates (California’s is 12.4%; in Illinois it is 9.6%; and New York’s is 8.3%). How these governors choose to tackle their deficits could have an important impact to this indicator, so, stay tuned.
Cutting benefits, including health care benefits, which is where the private sector business had to go long ago to keep themselves within budget, should be a first step. Next should be all pensions for those elected to office, no elected office was to be a job with pensions, you got elected for a short period of time then went back to your regular job and earned a pension. Having had a time when there was excess money in a lot of coffers did not changes the rules, it was to be set aside for times like this! unfortunately it wasn’t.
Next, if needed, should go a lot of benefits that used to be given out by churches and other private organizations, the biggest reason churches were always given a tax-free status was so they could facilitate the movement of goods from taxable institutions to people who had the needs of those goods (since most people belonged to a church at the time the Constitution was written) now that mommy government (known in the Bible as mammon) has taken the churches role in society no one needs go and society has lost its balance.
yeah!! Get rid of the pension/Golden parachute for Congress! you are right that elected officials were not supposed to become career politics! I love that suggestion!
Look at Washington state which faces a 4.6billion deficit…Gregoire is proposing to cut 2.2billion from education from a state that currently ranks 48th in educational funding per pupil