Hence, this blurb in the State House News this morning:
REPORT: REVENUE CHOICES COMPOUNDING BUDGET WOES | Beacon Hill leaders frequently point to the steep economic downturn nationally and globally as the reason for the state’s deep budget problems, but a report out Wednesday morning says another factor has contributed to the red ink: revenue choices. The Massachusetts Budget and Policy Center report says the short-term causes of the state budget crisis are largely issues outside of the control of state policy makers, but concludes that permanent state tax cuts enacted in the late 1990s left Beacon Hill with structurally unbalanced budgets after the 2001 recession. "While the economy was growing the past five years, the state's fiscal condition was never truly strong," said MassBudget Executive Director Noah Berger. "After cutting taxes deeply in the late 1990s, the state suffered in the 2001 recession and then spent the subsequent years delaying needed investments in infrastructure and in people, and not being able to build the reserves needed to weather the next recession." The report found that from 1998 to 2008, net state spending declined modestly as a share of the economy, while state revenues declined sharply as a share of the economy. The report’s authors estimate the fiscal 2010 budget gap at more than $3 billion and take a stab at explaining how state government went from posting surpluses ten years ago to today’s fiscal shambles. Bipartisan proponents of the tax cuts targeted in the report billed those efforts as economic stimulators that would create jobs even as state officials built up one of the largest rainy day funds in the nation.
This is just another go-round in a time-honored dance among fiscal liberals. Having behaved badly for much of the past decade, they reach back over ten years to find the cause of the damage they have done. Surprise! Instead of wondering "how state government went from posting surpluses ten years ago to today's fiscal shambles," how about explaining how state government went from posting a BILLION DOLLAR surplus TWO years ago to today's fiscal shambles?
The answers are not difficult. With the exception of the 2000 recession, until this year the state budget grew every year between the Weld tax cuts (which, by the way, propelled us out of the Dukakis recession) and now. Both "revenues" and spending grew. Guess which grew faster? We also DID build up one of the largest rainy day funds in the nation - and our legislature dipped into it liberally to balance the budget, even when it was not "raining" by anyone's estimation. They repeatedly and casually overrode budget line item vetoes by Republican Governors intended to keep spending in check. They blithely ignored the fact that much of their spending relied upon one-time revenue items. They continued to underfund local services even as the state generated revenue surpluses year after year.
It is easy to look at a crushing credit card bill and blame one's employer for not paying enough. I can't buy a Ferrari and then turn to my law firm and demand that they increase my salary so that I can make the payments. This, essentially, is what this "study" does: it ignores a decade of excessive spending and says, "oh, if only we'd raised taxes higher, we could have afforded all of this great stuff we bought." Sadly, we residents of the Commonwealth don't even get to enjoy the state government equivalent of a Ferrari (and no, I cannot imagine what that would be). Our overspending gave us such baubles as wildly excessive pensions for workers at all levels of government, a transportation system drowning under layers of redundancy, patronage and waste, a legislature that spends freely to please everyone, and feels accountable to no one.
I'd rather a Ferrari.