As states wind up their budget making for the next fiscal year, it’s time to issue a “Conventional Wisdom Alert”: A balanced budget does not require a tax increase – or deep cuts to cherished programs.
Can someone tell that to the states? For FY 2005, some 26 governors have proposed tax hikes, says the National Association of State Budget Officers. Ten have proposed spending cuts. Some examples:
- Virginia passed a $1.3 billion tax hike.
- Alabama is looking at tax hikes, to the tune of about $100 million.
- Colorado voters passed a limit on spending based on population growth and inflation in 1992. But the Legislature also passed a measure, in 2000, exempting education from those limits.
But some governors are bucking the conventional wisdom.
Washington Gov. Gary Locke, a Democrat, faced a $2.4 billion budget gap in 2002. And rather than go through the usual pain, he took a page from the Founding Fathers and started a revolution.
Calling it “Priorities in Government,” he required all state agencies to rate their programs in terms of need: high, moderate and low. He then came up with 10 core functions of government that he thought the people wanted.
Putting the two lists together let him balance the budget without deep cuts to valued programs – and more importantly – without tax hikes (although Locke has since proposed a supplemental spending bill that undermines the whole concept).
A handful of other states are following suit. Los Angeles has adopted Locke’s example, and countries in the British Commonwealth are pursuing it as well.
“Figure out what government should do then how much money it has to do it.” If only THAT were the conventional wisdom.