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"Each of us must come to care about everyone else's children. We must recognize that the well being of our own children is intimately linked to the well being of all other people's children. After all, when one of our children needs life-saving surgery, someone else's child will perform it. When one of our children is harmed by violence, someone else's child will commit it. The good life for our own children can be secured only if it is also secured for all other people's children. But to work for the well being of all children is not just a practical matter-- it is also right!" - Lilian G. Katz, Phd.

Saturday, February 21, 2009

Spending is not the Problem

Everyday I open my inbox to another list of draconian cuts that will assist our economy in its precipitious fall.  As I speak to people about the issues at hand, I find that I am frequently told that this is the toll for spending so much in the past 5, 10, 20 years.  The analysis does not support this.

"Spending is not the problem: Be prepared for responses from some legislators of standard talking points about how the state has a huge budget deficit approaching $3 billion dollars and how these cuts are necessary.  Excessive spending did not cause this problem. This is incorrect.  As study about ASU economists indicates and we quote below:
1.       “The tax reductions of the last 15 years have been the main cause of the structural deficit, which also is the result of an outdated tax code that creates large cyclical swings in revenue and that causes revenue to grow more slowly than the pace of the overall economy. Many of the changes to the tax code during the last 15 years exacerbated these problems.
2.        “Thus, the existing state general fund budget deficit as well as the underlying structural deficit cannot be blamed on excessive spending. Instead, very aggressive tax cuts are the primary cause, with other shortcomings in the revenue system — increasingly cyclical revenues and revenue growth not keeping pace with economic growth — also contributing to the deficit.”
3.       “Tax law changes since 1993 cumulate to a decline in general fund revenues of about $1.63 billion on a nominal basis and $2.58 billion after adjusting for inflation.” (Hoffman-Rex ASU Report.)  

As these cuts go forward, we must put a human face on all these numbers for this is about real people suffering real consequences of the Legislature’s public policy decisions.
These cuts will cascade through the system and clearly have impacts like an increased foster care caseload, homelessness, child abuse, family disruption, hospitalizations, lose of jobs and the consequences will just keep coming. Please begin to document and share the impacts as they occur."

From a PAFCO legislative update.

The Arizona Tax Structure is very poorly designed, and every time I turn around taxes are being cut again.  Taxes are a necessary part of the human condition.  We pay taxes to advance society and all enjoy the benefits of a secure system.  Just something to think about.

Meanwhile, I will continue to be thankful every day that I still have a job.