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GUEST COMMENTARY: Budget cuts shouldn't overshadow investing for our future

Monday, February 7, 2011 | 12:14 p.m. CST; updated 2:55 p.m. CST, Sunday, February 13, 2011

Across the country, state legislatures are grappling with billion-dollar deficits. The prevailing narrative among Republicans — and many Democrats — is cut, cut, cut. But in some of the nation's most populous states, a few legislators are pushing back.

Although these leaders acknowledge some cuts are inevitable, they argue we can't just rely on cuts to provide for our country's future. We have to raise new revenue to pay for the things we believe in: good schools, safe roads, adequate police and fire protection, and so on.

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Some of the hardest-hit states are also among the largest: California, Illinois, and New York.

In California, Gov. Jerry Brown declared a budget emergency. On the one hand, he called for cutting spending on higher education by $1 billion and slashing health and welfare programs. On the other hand, he's considering pushing for a special election to extend needed revenue increases and proposed closing corporate tax loopholes.

In Illinois, state lawmakers voted in January for responsible revenue measures to stave off horrific cuts to social services and an equally horrific threat to the state's bond rating. To pay for the state's most pressing needs, they raised the personal income tax from 3 to 5 percent and the corporate rate from 4.8 percent to 8.4 percent.

The tough vote in Illinois didn't happen by accident. A group called the Responsible Budget Coalition — led in part by Citizen Action/Illinois and made up of teachers, human service providers, public sector and labor union workers, advocates for children, and others — made the difference. The coalition led a multi-year campaign to put a human face on the state's budget crisis, effectively changing the narrative from "there's too much fat in government" to "which of these people do you want to hurt?"

Similarly, Citizen Action of New York launched an "Every Street, Not Wall Street!" campaign that ties health care, education, taxes, jobs, and campaign finance together. "Bad policies have helped the rich get richer, while leaving everyone else behind," explains the group's website. "Our state and federal governments can raise the money for better schools, quality health care and human services by asking the richest people to pay their fair share through fair taxes."

We face the same choices on the national level. Even while calling for a five-year cap on most federal spending, President Barack Obama recognized the choices we face. Raising the specter of a rapidly growing China and India during last month's State of The Union address, he called for more investment in research and technology. "This is our Sputnik moment," he said.

What binds us as a community, a state, or a nation in the face of budget challenges? It's the knowledge that planning for the future requires more than simple austerity. It requires investments. Dollars spent on public education now mean dollars saved on prison beds later. Dollars spent on infrastructure now mean less costly repairs in the future. As an added benefit, these investments create jobs.

The next time you hear "cut, cut, cut" as the prevailing narrative for addressing budget shortfalls, challenge that assumption. Ask what are we sacrificing and at what cost?

David Elliot is communications director for USAction, a grassroots advocacy group with affiliates and partners in 24 states. This column was distributed through OtherWords.org, a project for the Institute of Policy Studies.


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Comments

Allan Sharrock February 7, 2011 | 8:31 p.m.

It is interesting to note that the writer talks about the hardest hit states. NY, IL, and CA. I think people should look at what party they voted for in the last 4 elections. I give you a hint is starts with the letter D. Why one earth would you adopt policies that these states have?

http://en.wikipedia.org/wiki/Red_states_...

(Report Comment)
Paul Allaire February 7, 2011 | 8:46 p.m.

I can't spell terminator with a D.

(Report Comment)
Jimmy Bearfield February 8, 2011 | 12:19 p.m.

"Our state and federal governments can raise the money for better schools, quality health care and human services by asking the richest people to pay their fair share through fair taxes."

What a tired shibboleth. The top 5% already pay roughly 50% of all federal income taxes. Meanwhile, roughly 47% of the lower brackets pay zero federal income tax. The latter group is the one not paying its fair share.

On a local level, here's a timely exercise for those of us who 1) pay Boone county property taxes and 2) have one or more kids in a Columbia public school:

1) From your property tax statement, add up the amount that you're paying for schools.

2) Go to http://dese.mo.gov/planning/profile/arsd..., find data set No. 16 and get the CPS figure for 2010.

3) Multiply the figure from step No. 2 by the number of children you have in a Columbia public school.

4) Subtract the figure from step No. 1 from the figure in step No. 3.

5) Ask yourself whether the figure from step No. 4 shows you are paying your fair share.

(Report Comment)
Christopher Foote February 8, 2011 | 4:38 p.m.

@Mr. Bearfield,

With respect to one's pocketbook it doesn't really matter how a tax is classified. What matters is the total amount of taxes. It is true that a sizable minority pay zero federal income tax, they do however still pay the payroll tax, which incidentally is capped at about $100,000. If one looks at the overall tax rate per income level, that is include all taxes, everybody pays about the same, over a wide range of incomes. That rate is around 40% (+/-5%) for incomes between $10,000 - $500,000. Here's a study illustrating that point: http://people.bu.edu/kotlikoff/Does%20It...
Here's a summary of the above article: http://articles.moneycentral.msn.com/Tax...

Though the federal income tax rate is somewhat progressive, the overall tax rate is decidedly not, it is in effect fairly flat. Now you could certainly make the argument that regardless of income everyone should pay the same rate. But to argue that 50% of the country pays for everyone is not based in reality. Note that in 2008, 45% of federal revenue came from the income tax and 36% came from the payroll tax.

(Report Comment)
Jimmy Bearfield February 8, 2011 | 5:33 p.m.

Chris, as you note, those payroll taxes aren't enough to fund all of the government programs; just 36%. That's why it's time for the "47 percenters" to start paying their fair share, especially when so many use a disproportionate amount of social services.

(Report Comment)

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