Wednesday, September 20, 2006

A Tiny Victory for Fiscal Restraint

The state legislature finally did it. Yesterday they accomplished in five hours what they failed to accomplish during the entire legislative session earlier this year. They reformed state income taxes and provided the taxpayers with a teensy-weensy $78 million tax cut (see SL Trib article).

What? $78 million teensy-weensy? That’s real money, you say. You’re darn tootin’ it’s real money. But it’s less than 8% of the amount the state overcharged you and your neighbors. They conveniently found places to spend the other 92+% of that overcharge, because government has so many “needs.” And for this we are supposed to be grateful.

And I am grateful. I am grateful that the Governor worked very hard on this issue and worked with legislators to iron out all of the bugs so that it could finally be passed. I’m less happy that it took six months and a special session to do it. And I’m even less happy that the tax cut was only a measly portion of the surplus.

Some have derided this measure as election year pandering. Well, yeah! Our Founders designed the system with regular elections so that the politicians will occasionally do what their constituents want them to do. In this case the system worked. Thank goodness for election year pandering.

And even with this teensy-weensy tax cut we have loads of commentators that shriek at the top of their lungs about the poor schoolchildren being robbed to give unworthy taxpayers a measly $50 (on average) tax cut (see Deseret News article). For these people, not only is government entitled to all of your money that it has already succeeded in overcharging, but government should spend all of that and then charge you more.

Representative Steve Urquhart (R-St. George) points out here that the new tax plan will actually allow taxpayers to choose whether to give the state more money or to keep more of their own money themselves. Some of the comments on Steve’s site make it clear that those that oppose taxpayer choice do so because they fear that people will choose poorly. They are afraid of what people will choose to legally do with their own money.

You’ll excuse me, but this paternal image of government as my parent in a bizarre rerun of Father Knows Best is a hard sell for me. While there is plenty of evidence of individual fiscal irresponsibility, I place far more faith in the ability of individuals to properly decide how to manage their own funds than I am with government deciding how to manage taxpayers’ funds.

Meanwhile, Representative Craig Frank (R-Pleasant Grove) notes here that the state actually has an additional surplus of about $300 million for FY06. He suggests that there will be many competing ideas for what should happen with this surplus. Gee, no kidding. Rep. Frank says that some want to refund it to taxpayers, while others want to find creative ways to circumvent the state’s spending limits. Thank goodness for the wisdom that put those spending caps in place.

So, come January, we’ll be in for another round of the same kind of fun we’ve had this year. I have little hope that much fiscal restraint will be exercised. That pattern has been strangely subdued in our state in recent years. As I’ve said before, boom times do not last forever. We should be preparing now for the inevitable hard times. We should learn from the classic fable of the Grasshopper and the Ant.

That means improving tax structure and resisting the temptation to fatten state programs during prosperous times. Do we really want to have layoffs of state employees or mandatory state employee salary reductions like we have had in the past? I urge our legislators to be wise. But I’m frankly not very confident in widespread legislative application of fiscal restraint in the state legislature. In a few years when the economy goes south, will we be the ant—or the grasshopper?

2 comments:

That One Guy said...

"the politicians will occasionally do what their constituents want them to do. In this case the system worked. Thank goodness for election year pandering."

Correct me if I'm wrong, but I thought polls showed that most of the "constituents" were more interested in helping to fix education rather than getting two tickets to a Jazz game - er... oops... I mean... $67 back.

I think the politicians bowed to election year war-chest needs, rather than what the citizens wanted.

I'm just sayin.

Reach Upward said...

The polls cited were of very dubious quality, as argued here. Now the people will have a choice. Let's see if 60% choose to send that $67 back to the government. You see, most polls of this nature are meaningless. It's how we walk, not how we talk that makes the difference.