American Forum

ILLINOIS EDITORIAL FORUM

By Woods Bowman

The Illinois state budget is like the Nightmare on Elm Street movies – progressively more horrific sequels that seemingly never end. Maybe this time it will have a happy ending, but I doubt it.

The 2010 crisis is the result of a chronic budget imbalance. Spending has been growing faster than revenue, so slash-and-burn spending cuts that don't lower growth in spending and tax increases that don't increase growth of tax receipts will provide but temporary relief.

There are three things citizens should know about the state budget.

MISSISSIPPI FORUM

By Ed Sivak

The governor’s office projects that state revenue estimates will fall $1.2 billion short of what the state needs this year. This means that Mississippi will have significantly less money than in past years to educate children, train the workforce and maintain the roads and infrastructure that foster economic development.

The magnitude of the crisis requires a balanced approach that includes raising revenue to keep the state from moving backwards. Three revenue raising recommendations offer a starting point for helping to solve this problem. The recommendations would produce much needed funds while allowing Mississippi’s tax structure to keep pace with advancements in the global economy.

First, modernize Mississippi’s sales tax to reflect today’s purchasing habits. The sales tax was designed during the Great Depression to provide the state with revenue based on what people bought. Back then, people spent most of their money on things, rather than services. In recent decades, however, the share of spending that households devote to goods has declined. And what households spend on services -- many of which didn’t even exist during the Depression -- has increased. The shift not only costs the state money, it also sets up some imbalances that work against middle-income people. For example, if one buys a lawnmower in Mississippi to cut his or her grass, they pay sales tax on the purchase. If one pays a lawn service, he or she does not pay the tax.

By K.A. Owens

It would be easy to throw up our hands in frustration at the failure of the Kentucky legislature to settle our tax and budget issues. Easy, but wrong.

Change is so desperately needed around tax and budget issues that it is completely rational for us to put forth a mighty effort to create a revenue stream to make our state function properly. The benefits from all of us working together to make the needed changes are so great that we can’t take the easy route of giving in to frustration. We must keep the pressure on for positive change in Kentucky.

Here’s one reason why. Kentucky bridges are supposed to be inspected every two years. It should go without saying, but bridge inspections are necessary to prevent the kind of travesty that happened in Minnesota in 2007. A recent state auditor’s report, though, said of 40 bridge inspection reports, 19 bridges went longer than two years without the required inspection. Why? Because the Transportation Cabinet hasn’t been able to hire the staff it needs because of budget cuts.

By Brian Miller

On New Year's Day the estate tax, an essential part of the U.S. tax system for nearly 100 years, will disappear because Congress failed to act in December. Congressional leaders now are pledging to act in early 2010 to reinstate the federal estate tax retroactive to Jan. 1. In the meantime, rhetoric over the estate tax will heat up while Congress grapples with what to do now.

This crazy situation is the result of the Bush tax cuts for the super-rich, tax cuts that were supposed to lead to “trickle-down” prosperity for the rest of us. What we have seen instead is stagnation of wages for most Americans, while those at the very top have become extraordinarily rich. In fact, disparities of wealth and income are now at the highest level since the Gilded Age just before the stock market crash of 1929.

With so much wealth in so few hands, our economy has begun to operate more like a casino, with high-risk speculation fueling boom-and-bust cycles that have wrecked communities across our country. The gilded yachts of the super-rich have left in their wake capsized rafts of the unemployed and whole communities drowning in foreclosures. That’s not what America should be about.

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