September 21, 2010

State Budgets, Easy to Grow....

Marc Comtois

Matthew Mitchell at George Mason University's Mercatus Center has done research showing that States will have to increase their 2009 budget cuts (average of 6.8%) to 12.3% and sustain that level of spending to pay off their debts. Rhode Island is one example he cites:

[T]he entire budget gap could have been eliminated had the state maintained 1987 inflation-adjusted per capita spending levels. Rhode Island's 2009 expenditures were $7.6 billion. If held to real 1987 per capita levels, however, the budget would have been less than half this amount: $3.3 billion. This would have been more than enough to close the state's $872 million gap. But as with other states, spending restraint needn't have begun in 1987 for the state to have avoided its budget gap. If held to real 1995 per capita spending levels, I estimate that the state would have spent $5.1 billion in 2009. Assuming revenue would have followed its same course, the difference is still enough to have avoided the state's entire gap.
There are also some charts to help illustrate the point. It's basically a confirmation of data we've presented before. When times were good, government explodes, when bad, it shrinks just a little. The truth is that a regular COLA-like increase for government budgets should be MORE than enough to "provide the services that the public demands and expects." (To sorta paraphrase a mantra we regularly hear from the "more gov't" types).

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They'll just cut more local aid, forcing property tax hikes. Then will say "we didn't raise state taxes".
By the way the Caprio family and their hangers on have been engaging in a whisper campaign, going to the unions promising "no pension cuts" for cops, firemen and municipal workers.
The retire `at 41 with a Who wants To Be A Millionaire pension scams will continue.

Posted by: Tommy Cranston at September 21, 2010 7:11 PM

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