Tag Archives: taxes

Waste not, want not

My mom said this often when I was a kid.   It’s simple and logical.

Over the holidays, we visited with family and I listened to arguments about why government should raise taxes.  Apparently we don’t have enough money to pay for stuff government wants to do.

Really?

From an audit by the Treasury Inspector General: Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits.  “The payment of Federal funds through [the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families] appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.”

From a Congressional Research Service Report: Through FY2009, Congress has provided approximately $2.5 billion for the Joint Strike Fighter alternate engine program. [GE/Rolls-Royce continued to receive funding to develop a jet engine, even though they lost the contract to Pratt-Whitney.  They finally abandoned attempts to secure additional funds of $1.9 – $2.9 Billion to complete it.]

From a Government Accountability Office report: Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services. [The report did not give an aggregate amount of potential savings, but Sen. Coburn’s office estimated at least $100 Billion in savings and notes that only a fraction of the federal budget fell under the scope of this study.]

Citizens Against Government Waste publishes an annual “Pig Book,” which highlights earmarks in the federal budget.  For 2010, the “Pig Book” identified 9,129 projects at a cost of $16.5 Billion.

Politicians need angry voters, so they threaten and cut direct services such as law enforcement and teachers.  Look at the efforts to avoid the automatic defense cuts that would have been triggered by the “sequestration” agreement.  Politicians on both sides of the aisle were scrambling to piece together any deal to “save the Department of Defense from ruin.”  How can they keep a straight face to threaten taking armor away from front-line troops while they authorize spending on a jet engine the Pentagon doesn’t want or need?

It seems to me that the federal government does not lack for funding, but for a lack of will to spend it efficiently and for the true general welfare, not just the benefit of their direct constituents.  I wish the Occupy folks would recognize that our country’s financial situation is not the fault of people in the private sector who earn money, but the elected officials who waste it.  The Tea Party understands this.  They waste, so we want.

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p.s. Just after I posted this Tuesday morning, a caller on the Davis and Emmer show said that his son’s unit, currently deployed, has not been issued any armor: “why isn’t there money to pay for it?”  At a cost of $400 each (according to the caller), the money wasted on the alternative JSF engine ($2.5bn) would have purchased 6,250,000 pieces of personal armor.  wow.  just wow.

It’s a Spending Problem (and here’s proof)

Need proof that state government has a spending problem?  MPR provided yet another example in a recent story on Lutsen Mountain violating a permit on water sourcing:

[Rep.] Dill and [Sen.] Bakk say if Lutsen is forced to take water from the lake [Superior] instead of the Poplar River, they will ask taxpayers to underwrite the cost.

It is a fact (and an economic principle) that resources are limited.  State government collects tax money and then chooses how to spend it according to the requirements and powers granted by the Constitution.  The problem is that lawmakers discovered that they could spend your money on other things.  Throw in the power of taxation and there’s no need for prioritizing or making a hard decision.

Minnesota will have an additional $4 billion in revenue during the biennium to spend through the general fund.  That’s a 12% increase from the last budget!  There is plenty of money to spend.

Lawmakers don’t want to tell constituents (or donors or patrons) that they can’t have something.  It usually isn’t good for them personally (think: re-election) even though it’s good for every one else.

Why are we cutting allowances for traumatic brain injury patients but paving a bicycle trail from Saint Bonifacius to Mayer?

Why are the budgets shrinking for the courts, the third and equal branch of government, but we bailed out the Buffalo Regional Railroad for almost $3 million?

Why do we sit in a bottleneck traffic jam on I-494 in Plymouth but spend almost $6 million on prairie restoration?

What is the next Constitutionally mandated state service that will suffer because Rep. Dill and Sen. Bakk want to subsidize a private business in their area?

I wrote about this last October.  Our state’s budget problem will not be solved with class warfare, but with fiscal responsibility and the courage to prioritize.  The state Legislature did its job and passed a balanced budget that spends within the means of the state.  It’s time for Governor Dayton to sign those finance bills or he will bear the responsibility for shutting down state government.

Tax v. spend – the wrong conflict

The Cato Institute released its tenth biennial survey that gives grades to governors based on their taxing and spending records.  Our governor received an “A.”

Additionally, the Wall Street Journal editorialized:
“One Governor who deserves particular credit is Republican Tim Pawlenty of Minnesota, who vetoed four sep
arate income and other tax hikes that Democrats in the legislature sent him during the financial panic and recession.”

I am pleased that Governor Pawlenty held the line on income tax increases.  I don’t think you improve the state’s economy by taking more money away from people when they are facing a difficult financial situation.

However, that is only half of the story.  What happened to the increases in state spending during that time?  Nothing – because it is politically unpopular to tell voters they can’t have something.

On the campaign trail, I explain to voters that I want to hold state government accountable for not honestly balancing the budget – they accepted phantom federal dollars, borrowed against the tobacco fund and shifted almost $2 billion in education funding into the next biennium in order to “balance” the budget on paper.

My opponent said to me this week, “that was your governor’s budget.”

Sort of.  That was our governor’s budget proposal.  It is the duty of the legislature to write the final budget.  The leaders of that body talked about the need for “zero-based budgeting” as early as December 2008.   But that’s not what we ended up with.  The end of the 2009 legislative session ended with massive tax increases rushed through both chambers at the last minute.  So much for Senate Majority Leader Pogemiller’s offer to “examine your current spending and see if there aren’t efficiencies that you can find, and perhaps make some cuts that you didn’t think were wise five or 10 years ago. ”

As I continue to research and learn more about the state budget, I am overwhelmed by the amount of money that is spent as well as borrowed through bonding for non-Constitutional and non-essential projects: trails, ice rinks, lighting, sports centers, fountains, landscaping, purchasing more public land when the Department of Natural Resources can’t take care of the five-million-plus acres of current holdings, statues, Viking ships… the list goes on.

These are just a few examples but they are representative that our state budget deficit is not a product of too little revenue but too much spending.  Yes, many of these items contribute to our quality of life and I enjoy them too.  But common sense says that you don’t put your wants in front of your needs.  That’s the real conflict in this state: spending on wants versus spending on needs.

Politicians want to take away your “needs” – police, fire, teachers, even pothole repair – because they want you going to the polls angry.  But they also lack the political courage to reduce spending on the “wants.”  Is a paved bike trail of greater value than repairing derelict bridges?  Does a sports center serve our children better than a classroom teacher?

Voters in the district ask me ‘why can’t the state budget like a family or a business: if you have less income, you must reduce expenses.’  It’s common sense.  And I’ll take it with me to Saint Paul.