What to do with $9 billion?

March 11, 2022
By Dale Kovar

The nice problem our state government leaders are discussing is what to do about the budget surplus of more than $9 billion.

There is a simple answer that many would choose: go to the casino and try to double it.

Seriously though, this is a topic that deserves attention from our legislature without political wrangling.

State budget forecasting is an inexact science. Both surpluses and shortages occur as the economy reacts to government policies and other variables.

If any of us personally received a major windfall, there is the temptation to blow a lot of it. It wouldn’t be unreasonable to make a major purchase or take an extravagant trip that we normally wouldn’t be able to, but it would be wise to use most of the unanticipated funds to position ourselves for future success and stability.

We should expect the same from our leaders.

If we were handling it personally, one of the first things to consider would be paying off any debt that would then result in a better cash flow position going forward.

I would grant that the state may have some glaring needs where perhaps 5 to 10% of the surplus could be used to avoid other financial pinches.

After that though, let’s think.

Government only exists by taking money from its citizens through numerous taxes and fees. It would be only fair to return most of the surplus to where it came from.

That’s where politics gets messy, as we will see.

Some will try to make payments to everybody, which will be seen as an attempt to buy votes for this year’s election.

I question that the expense of the logistics to make individual payments would unnecessarily consume too much of the money available.

Instead, I propose moderate reductions in the income tax, sales tax, and gas tax rates that could be sustained for some time before having to be adjusted again.

Keeping in mind that the surplus came from taxpayers, a mix of reductions in those common taxes would translate quite well to those who paid it in the first place.

The worst thing our state leaders could do is put the money into several new programs. Then when the surplus is gone, guess what? Those programs will need more funding to continue, and that means even higher taxes permanently.

Step one is to give back the surplus in a simple but moderate method.

Then we need to address the systemic problem that our government is just way too large.

We can agree that we need government for the basics – safety, infrastructure, and generally keeping things in order.

So, after the $9 billion is spent, redistributed, or wasted, I put forth to all our government units . . .

A challenge:

Call it by any fancy name you wish such as the Citizens No-Increase Challenge, Government Reality Project, or Lower Government Budgets (that one has a nice acronym).

For anyone running for office this year, here is a campaign opportunity for you.

This challenge is made to every level of government – state, counties, cities, school districts, townships, and any other entity that has taxing authority – to have absolutely no increase in total spending for two years, 2023 and 2024.

If there’s a major project that’s necessary, you can borrow to do it, but the payment goes into the operating budget which cannot increase.

No games with saying there’s no tax increase because costs were spread out over more people. You have to actually limit total spending.

If you have to spend more on anything, something else has to get reduced or eliminated. That’s how real people have to live. Our government which is supposed to work on our behalf, must learn to do the same as inflation attacks all of us.

Accept the challenge, government. I know you can do it if you try.

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