Interesting Editorial I came Across -- "No Relief for the States"

Amused

Elite Member
Apr 14, 2001
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No Relief for the States
By RWGodwin

By now, we've all read the headlines: the states are in their worst fiscal condition since World War II. Anemic economic growth has caused the states to run out of cash. And in order to close their huge budget deficits, the states must either cut essential services or raise taxes.

President Bush and the Republican Congress had initially refused a state bailout package. However, in order to get their tax cut passed, they have now agreed to $20 billion to help the supposedly cash-strapped states.

This is how the news media usually portrays the story. But is it true? Are the states really starving for cash? Are essential services really being cut? And are the Republicans big meanies for not wanting to help the states out?

Nope.

The fact is that the states overspent dramatically throughout the '90s, and they still are, if not by as much. According to USA Today, one of the few news publications to tell the other side of this story, state spending actually went up 4.9 percent last year. You read that correctly. The states are complaining that they don't have enough money, but they were somehow able to increase spending more than twice the rate of inflation.

Still not appalled? OK. From 1992 to 2001, state spending went up over 50 percent, even after accounting for inflation. Education spending grew 85 percent without anyone checking to see if this new money was actually improving education, or if it was just a gift to the teachers' unions. Need-based spending (Medicaid, for example) grew 35 percent in the late '90s, even though such spending should go down during an economic boom because fewer people need to use such programs. State employment has gone up as well.

The state budget "crises" clearly could have been avoided. A Club for Growth study found that if the states had kept spending increases to the rate of inflation plus population growth, they would be nearly $100 billion in the black today.

So when you hear politicians claim they have made "tough budget cuts," all they mean is that they haven't increased spending on a program by as much as they wanted.

And it's unlikely that any real spending cuts will be achieved this year. State revenues grew 5.4 percent in the first three months of 2003 over the same period last year. However, that doesn't mean the politicians will stop claiming that their states are cash-strapped.

Given these facts, do you think the federal government should bail out the states for their fiscal irresponsibility? If you don't, you should write a letter to your congressman and senators because Congress is likely to approve $20 billion in aid to the states. [Editor's note: On Thursday night, the Senate passed a tax cut plan that includes $20 billion in spending for Medicaid and other programs for financially ailing states. The House and Senate must now work out a final compromise on the bill.]

If you still disagree with me, consider this: if you had spent as extravagantly as the states had and were all of a sudden broke, would Congress bail you out?

This state-aid package will only lead to more of the same policies that caused the budget "crises" in the first place. It will encourage the states to continue overspending, rather than practice fiscal responsibility.
 

sandorski

No Lifer
Oct 10, 1999
69,422
4,805
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Pretty weak. The author throws out a bunch of numbers, but not much info. Could the 4.9% increase be due to increased costs from the Recession? Maybe, maybe not, the author doesn't seem to care as long as the numbers seem big.
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
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www.ShawCAD.com
Originally posted by: sandorski
Pretty weak. The author throws out a bunch of numbers, but not much info. Could the 4.9% increase be due to increased costs from the Recession? Maybe, maybe not, the author doesn't seem to care as long as the numbers seem big.
I agree that the author is weak on sources/details, but I've read similar articles and there is data to back this guys statements. I'll try to dig them up again;) or maybe someone else has them handy:)

CkG
 

Bowfinger

Lifer
Nov 17, 2002
15,776
392
126
Originally posted by: Amused
No Relief for the States
By RWGodwin

By now, we've all read the headlines: the states are in their worst fiscal condition since World War II. Anemic economic growth has caused the states to run out of cash. And in order to close their huge budget deficits, the states must either cut essential services or raise taxes.

President Bush and the Republican Congress had initially refused a state bailout package. However, in order to get their tax cut passed, they have now agreed to $20 billion to help the supposedly cash-strapped states.

This is how the news media usually portrays the story. But is it true? Are the states really starving for cash? Are essential services really being cut? And are the Republicans big meanies for not wanting to help the states out?

Nope.

The fact is that the states overspent dramatically throughout the '90s, and they still are, if not by as much. According to USA Today, one of the few news publications to tell the other side of this story, state spending actually went up 4.9 percent last year. You read that correctly. The states are complaining that they don't have enough money, but they were somehow able to increase spending more than twice the rate of inflation.
[ ... ]
I don't know who RWGodwin is or what his agenda is, but his editorial is extremely one-sided. Godwin sidesteps any attempt to examine where state money is going and why spending is up. Instead, he launches a dishonest attack claiming that the states are irresponsible and implying that Congress is somehow the voice of fiscal moderation. What a total crock. While I'm sure many states spend way more than they need to, they are rank amateurs compared to the pork kings in D.C.

Godwin ignores the simple truth that state spending is greatly driven by federal mandates. Congress and the President have a nasty habit of implementing programs that require state funding, but NOT providng any money for these programs. They're called "unfunded manadates", and they've gotten worse over the last twenty years.

The biggest recent culprits are so-called "homeland security" mandates. They cost states billions of dollars, yet Bush and the Congress did not provide the money they promised after September 11. Other big money sinks have included federal changes in health care, e.g., Medicaid and Medicare, educational initiatives, other public safety programs, and social services.

For example, while Bush attacks others for not supporting the military, he cuts VA health benefits and won't pay our soldiers a living wage. The states are forced to pick up much of the difference, e.g., by providing food stamps to military families.

Godwin also ignores the effect of our shell-shocked economy on state spending. While he concedes that this decreases state revenue - jobless people don't pay income tax and pay less sales tax - he overlooks the effect on spending. When unemployment is up, the states must pay more in jobless benefits. Further, unemployed people usually lose their health insurance, increasing states' costs even more.

In short, the federal government masks the true cost of its programs by passing costs to state and local governments. When Bush "cuts" federal taxes, he actually increases state taxes. When Congress "cuts" this program or that program, more often than not, they're merely transferring the costs down the ladder. Congress and the President get sound bites about how well they manage our money; states get a budget crisis.

Pay no attention to the men behind the beltway - they're picking your pockets via your local state capitol.

 

UltraQuiet

Banned
Sep 22, 2001
5,755
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won't pay our soldiers a living wage. The states are forced to pick up much of the difference, e.g., by providing food stamps to military families.
Wrong. Targeted pay raises and special programs both here and abroad are keeping military personnel off of food stamps.

BTW when some E-3 decides he wants to have 6 kids on E-3 pay it's not the goverments fault he's eligible for foodstamps. It's the servicemembers.
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
In short, the federal government masks the true cost of its programs by passing costs to state and local governments. When Bush "cuts" federal taxes, he actually increases state taxes. When Congress "cuts" this program or that program, more often than not, they're merely transferring the costs down the ladder. Congress and the President get sound bites about how well they manage our money; states get a budget crisis.

That sums it up. The fed is forcing the states to determine if these a programs are really needed. The states do not have to fund cut federal programs. IF they do fund the the cut programs, it is at the descretion of that states legislature and franky I do not see the problem with this.
 

BDawg

Lifer
Oct 31, 2000
11,631
2
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Any editorial based on Club for Growth numbers is not worth reading. I will never get that 2 minutes of my life back. :)
 

Amused

Elite Member
Apr 14, 2001
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I don't know who RWGodwin is or what his agenda is, but his editorial is extremely one-sided.
That's why it's called an "editorial" and not a news article. It's the author's OPINION.
 

charrison

Lifer
Oct 13, 1999
17,033
1
81
Originally posted by: BDawg
Any editorial based on Club for Growth numbers is not worth reading. I will never get that 2 minutes of my life back. :)
I guess you prefer to only read articles that you agree with?
 

BDawg

Lifer
Oct 31, 2000
11,631
2
0
Originally posted by: charrison
Originally posted by: BDawg
Any editorial based on Club for Growth numbers is not worth reading. I will never get that 2 minutes of my life back. :)
I guess you prefer to only read articles that you agree with?
I read that article, I just don't think I've ever agreed with anything Club for Growth has said.
 

Bowfinger

Lifer
Nov 17, 2002
15,776
392
126
Originally posted by: Amused
I don't know who RWGodwin is or what his agenda is, but his editorial is extremely one-sided.
That's why it's called an "editorial" and not a news article. It's the author's OPINION.
Sure, but there's a difference between an informed opinion and a one-sided rant. This is a rant, in my informed opinion. :)
 

Moonbeam

Elite Member
Nov 24, 1999
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If you compare the US budget today to 1776 you can easily see how the feds are wasting money by the bucket. We should have had a constitutional amendment that the budget has to be a dollar. That should be enough to run stuff.
 

Bowfinger

Lifer
Nov 17, 2002
15,776
392
126
Originally posted by: charrison
In short, the federal government masks the true cost of its programs by passing costs to state and local governments. When Bush "cuts" federal taxes, he actually increases state taxes. When Congress "cuts" this program or that program, more often than not, they're merely transferring the costs down the ladder. Congress and the President get sound bites about how well they manage our money; states get a budget crisis.
That sums it up. The fed is forcing the states to determine if these a programs are really needed. The states do not have to fund cut federal programs. IF they do fund the the cut programs, it is at the descretion of that states legislature and franky I do not see the problem with this.
Sorry, that's usually not the case. These programs are mandated by the federal government, they just are dumped on the states for funding.

I worked for a state law enforcement agency back in the 80's; we saw this a lot. There were a lot of law-and-order mandates from the federal government that states had to fund. The fed would sometimes offer matching funds or partial grants, but the bulk of the cost fell to state treasuries. As you might expect, the "war on drugs" was the biggest source of these mandates for us. Other state departments had similar challenges.

While this was always a complaint of state government, Reaganomics really got the ball rolling with its "trickle-down" tax cut philosophy. Many of his "cuts" were really just dumped on state and local governments to fund. I'm long gone from government. but I'm told it has gotten much worse.


 

ElFenix

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Mar 20, 2000
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a nice constitutional amendment stating that any federal initiatives have to be 100% funded by the feds would make the accounting easier
 

JellyBaby

Diamond Member
Apr 21, 2000
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When regular (and reasonable) people who earn their money are tight on it, they stop buying things they don't need. And it's not, "well I'll skip one restaurant trip per week", it's "no restaurants until things pick up." Cannot the States be asked to do the same? Instead of reducing funding to some programs, drop them. Restart them when things improve. Kinda makes sense doesn't it?

It's been reported Cali, for instance, gayly spent in excess during the dotcom orgy, far beyond what was reasonable. Surely some of the littler States are crunched a bit more than others but certainly they can cut as well. Sometimes I wonder if they don't spend money on marketing/PR firms in order to better sell the need for more money.

Anyway, as an infamous AT personage once said, "everybody wants to suckle on the federal teat."
 

Alistar7

Lifer
May 13, 2002
11,983
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This is exaclty what you should expect from a republican controlled govt. They favor states rights over federal intervention. The last election shoud have reminded you of that resolve, even if they need to have a federal court force the states to understand as well, they are unwavering in this belief.....
 

Moonbeam

Elite Member
Nov 24, 1999
69,704
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I thought they were working on a 20 billion dollar package for the states. Hasn't most of the state expenditure increases most of the tax increases gone to medical care and schools and maybe prisons? There ought to be something there for everybody.
 

Vic

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Jun 12, 2001
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Whatever you do, make sure that your states pay for schools and police first, not last. That's what happened here in Oregon, where the problem is NOT a decrease in revenue, but chronic rampant spending. The state devised a clever plan: pay for all non-essential services first, then cry to the people and beg for more tax dollars when schools and police ran short. So far, it's worked. But I have a feeling that if the economy doesn't boom really soon, we're gonna be due for an ugly mass exodus and a collapse in home values.

Oh yeah, Moonbeam... higher taxes are not always the answer. Given the current high percentage of their income that regular middle class people spend on taxes, do you really think it is too much for us to ask our governments to be responsible with our money??
 

JellyBaby

Diamond Member
Apr 21, 2000
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The state devised a clever plan: pay for all non-essential services first, then cry to the people and beg for more tax dollars when schools and police ran short.
That's sick.
do you really think it is too much for us to ask our governments to be responsible with our money
It's not too much to ask and that's a key point. Too many people don't dig deeper and see the waste, fraud and mismanagement of public funds and simply say, "the programs have to be funded so give them the money they need".
 

jahawkin

Golden Member
Aug 24, 2000
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Interesting article on who is doing this spending:
State spending increased most with GOP control.

Republicans, who pride themselves on being frugal with taxpayers' money, were bigger spenders than Democrats in state legislatures over the past five years, a USA TODAY analysis shows.
State legislatures controlled by Republicans increased spending an average of 6.54% per year from 1997-2002, compared with 6.17% for legislatures controlled by Democrats. State spending rose slowest ? 6% annually ? when legislatures were split, with each party controlling one chamber. Inflation averaged 2.55% annually from 1997-2002.
Its the tax cut and spend conservatives!! They're everywhere!!!
 

Bowfinger

Lifer
Nov 17, 2002
15,776
392
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Originally posted by: Vic
Whatever you do, make sure that your states pay for schools and police first, not last. That's what happened here in Oregon, where the problem is NOT a decrease in revenue, but chronic rampant spending. The state devised a clever plan: pay for all non-essential services first, then cry to the people and beg for more tax dollars when schools and police ran short. So far, it's worked. But I have a feeling that if the economy doesn't boom really soon, we're gonna be due for an ugly mass exodus and a collapse in home values.
That's the "firemen first" tactic - when you're pushed to cut your budget, cut something vital that will get people excited. Claim that you have no choice, that there's nothing else left to cut, and often the government agency will get some, even most of the money back. Schools can do this too - cutting teachers as a first resort instead of administrators and support staff and other, optional programs.



 

ElFenix

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Mar 20, 2000
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Originally posted by: Vic

Oh yeah, Moonbeam... higher taxes are not always the answer. Given the current high percentage of their income that regular middle class people spend on taxes, do you really think it is too much for us to ask our governments to be responsible with our money??
how dare you say its our money! you and they know its their money!
 

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