Thursday, November 10, 2011

Do taxes pay for anything?

Earlier this week the Massachusetts legislature's Water Infrastructure Finance Commission issued a series of recommendations "calling for at least $200 million a year in new revenues to be raised" to deal with the "water and waste-water crisis" created by years of "neglected infrastructure." Possible sources of this revenue "include an expanded bottle-redemption law, new fees on fertilizers and pesticides, assessments on building permits or port fees, and a statewide water surcharge."

Just in case you've been under a rock for the past couple of years, "new revenues" is the universally preferred euphemism for tax increases and fee hikes. According to the Massachusetts Water Resources Advisory Board, that "statewide water surcharge" floated (heh) by our legislative watermeisters would increase consumer water rates by roughly ten percent.  And that's on the low end.  Check out these figures, reported in the State House News
Jennifer Pederson, executive director of the Massachusetts Water Works Association, said water utilities are concerned about fairness, equity and bureaucratic issues that would result if a water surcharge were assessed locally and deposited into a state fund. The association, in a letter to the commission, wrote that a "millage surcharge" of one tenth of 1 cent per gallon would lead to rate hikes of 17.8 percent in Attleboro, 23 percent in Worcester, 25 percent in Leominster, and 20 percent in Concord.
We've been hearing a lot about "new revenues" lately.  Replace "water" with "transportation" in the commission's argument for its "new revenues" and you pretty much have the Patrick/Murray Administration's periodic argument for a gas tax hike.  Always it is about the "crisis" engendered by neglected infrastructure.  Always the proposal is for "new revenues" to be "dedicated" to that infrastructure, as if the promise that the additional dollars pulled from our wallets will be put in a different state government pocket ought to make any difference whatsoever to the taxpayer already struggling under the cumulative burden of the Commonwealth's high cost of living.

Of course the notion of "dedicated revenues" is completely bogus.  Money is fungible.  Even if (against all precedent) "dedicated" funds are in fact used solely for their stated purpose, that only means that a bit of pressure is relieved on the state budget.  General fund money that would otherwise be spent on infrastructure goes somewhere else.  Overall spending continues to climb, along with the overall cost of living in the Bay State.

Which brings me to my main question: don't taxes pay for anything anymore?

We have a sales tax, and an income tax.  God knows we have property taxes.  We have any number of fees, surcharges and assessments.  And yet somehow government at the state and local levels manage to find other uses for those "revenues" than addressing our supposedly "critical" infrastructure needs.

Water infrastructure.  Roads and bridges.  Schools.  First responders.  Why is it that these are the things for which government is always asking for more money, rather than the things that get funded right off the top, before our elected officials start worrying about whether government employees can possibly withstand the shift from retirement at 55 to retirement at 57? 

Why?  Simple.  Because it is easier - much easier - for elected officials to come with their hands out, asking for yet more money to pay for "infrastructure" (or for the children) than it is for them to ask for the very same money to fund pension obligations that have been wildly unrealistic from the day they were assumed, or to cover the budgetary gulf left by three years of reliance on one-time federal transfers.  

If we have crumbling infrastructure - water, transportation or otherwise - then that unfortunate situation is a direct result of the choices made by the people we keep electing.  Eventually we're going to have to start insisting that they make different choices.  Or better, start electing people who make better choices.

1 comment:

  1. I recently found this site:

    Apparently the cause of our crumbling infrastructure and the accompanying tax burden is a result of our choices 30-70 years ago. We erected an infrastructure that we never forecasted costs for, and that we cannot afford in any realistic scenario. We sustained ourselves on growth, but growth is finite, and now the hole has been dug.

    If you accept strongtowns' analysis, then the only long-term solution to these problems is for many people to change their way of life.


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