Thursday, April 13, 2006

Bye-Bye, Tax Cut

In the face of the largest budget surplus in the history of the state, our ‘conservative’ legislature chose to push income tax cuts to one of the rearmost burners of the legislative stove, with the result that they were unable to arrive at a compromise on how to get it done during the regular session. The only thing they did agree on was that it would amount to a paltry 7% of the budget surplus. Everyone agreed that they would get together and hammer it out in a special session this spring.

Now, due to an “unfortunate oversight,” as Governor Huntsman phrases it (here), half of that amount has evaporated. The upshot is that there will be no special session to reduce the amount Utah taxpayers are being overcharged.

I fully accept the premise that wisely investing much of the budget surplus to address significant infrastructure needs was important and necessary, although; I am dubious about how well this money will be spent. Government does not have the best track record in this area. However, I was chagrined that our legislators gave cutting income tax such a low priority. In my opinion, this should have been the top priority with other funding issues being managed out of the remainder.

There is a fundamental problem here. Our legislators had the wrong focus. I was highly disappointed in the number of ‘conservative’ legislators that found it necessary to fund all kinds of governmental “needs” that have been “under funded” for so long. One legislator stood in a meeting I attended and told us how many budget requests went unfulfilled. I wanted to scream, “Don’t you get it, man? Government bureaucracies have unlimited desires. The two things they know how to do better than anything else are to spend their budgets and to prepare budget requests.”

It seems interesting to me that perpetually “under funded” programs continue to survive without significant negative impact. Perhaps the reason for this is that the services provided are less than worthwhile or else are ill placed in government. I don’t subscribe to the wait-until-it’s-broken-to-fix-it theory, but we should have an honest discussion about whether the state has any business providing some of the services it provides.

I discussed here my disappointment that we threw more money at the education bureaucracy without exacting any kind of meaningful reform. As noted in this WSJ article, “You don't make a bureaucracy better by throwing money at it; you make it compete.” Perhaps someday the rising tide in favor of educational competition will overcome the bureaucrats’ and unions’ efforts to thwart it.

I can’t say that I’m surprised that our politicians found no real money in the $1 billion surplus to reduce the amount we pay in income taxes, but I am disappointed. However, I have to wonder if many of my fellow citizens are similarly disappointed, or even care about it. Many of those I have spoken with simply shrug it off. I have to wonder if any of our politicians will pay a price at their conventions or at the polls. If not, we can expect more of the same.

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