Thursday, October 16, 2008

The Budget Axe is Falling, Blunt

The Gov's going to cut 1,000 jobs from state government.

There's no lying about the economic situation: it's dire. Cuts are certainly necessary. But put Ryan's Take on the list of blogs that think the Governor especially, and state government in general, is going a little overboard with the cuts. As I said on BMG, there is no one solution to solving a crisis of this magnitude. State government must take a measured approach.
  • Per Stomv, a five cent a gallon gas tax increase would clear 10% of this entire deficit ($150 million), at a cost of less than $60 per person, per year.
  • Also per Stomv, the Massachusetts tax on alcohol is extremely low, 6x lower than the tax on cigarettes. A small increase to the alcohol tax would raise $50-90 million dollars.

Those two steps would take a big bite out of the deficit, without being burdensome on Massachusetts taxpayers. However, it won't get Massachusetts to the $1.4 billion it needs to reach the black. Luckily, there's already a few other measures on the table.

  • The Governor's plan already calls for using $200 million of the $1.6 billion in rainy day funds. It hasn't rained like this since 1929, so using - but not abusing - rainy day funds is both necessary and proper.
  • The Governor's also lucky that he closed the telephone poll loophole. Towns will eventually see that money, but not this year. That's nearly $200 million closer to the magic number.
  • State agencies also volunteered approximately $250 million in cuts.

All told, both the small tax increases and the actions the governor has already planned would amount to somewhere between $850-900 million dollars. Cutting $600 million off the top of state government would be painful, but much better than cutting hundreds of millions more.


Anonymous said...

California and New York to name just 2 states, bit the bullet early on. New taxes won't fly.

Anonymous said...

We're headed into an unprecedented economic mess, we'll be cutting services severly and revenues will fall for a while. I know on a personal level belt tightening will be important. Have any of our elected leaders, state or national, volunteered to take maybe a 10% pay cut to show us how they'll personally sacrifice also.

About Ryan's Take