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The
state of
California
, home to the movie industry, is serving up a
different form of entertainment these days.
A badly conceived recall statute, an unpopular governor, and
a fiscal crisis of unprecedented proportions have produced the
near-comical, but distressingly real possibility that as little as
15 percent of the electorate could decide the next governor of the
biggest state in the country.
But as the distracting show of personalities and drama unfolding out
west is served up to us as just one more "big story" in
the news, the opportunity to learn its basic lesson is being lost.
While the fingers of blame point in all directions -- to the
governor, to Enron, or to the tax-happy legislature -- very little
thought is being given to fixing the fundamental problem that
produced the crisis in the first place.
That problem is state government finance, and if you think it is
confined to the state of
California
, you are mistaken.
Nearly every state in the country -- including
Indiana
-- is
confronted with a budget-busting situation every time the economy
takes a dip. That is
when demands for social services and other commitments rise just as
the ability to pay -- from state tax receipts, mostly -- takes a
dive. It leaves
cash-strapped states across the country with nothing but bad
choices, from raising taxes on faltering businesses and
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consumers,
to cutting vital services at the very time they are needed most.
The
"solution" to this dilemma practiced to date has been simple,
yet ineffective. We blame
our leaders for the problem. For
some leaders, that's reason enough to kick the can down the road and let
some future leader take the heat. That's
effectively what has happened in the state of
Indiana
, where state
employee retirement funds have been tapped, higher education and other
payments have been pushed forward, and other devices have been used to
give the budget the illusion of balance.
We blame our leaders because they do not act responsibly, by limiting
commitments for new expenditures and saving enough money when times are
good. We take those steps
ourselves, in our personal finances, because we know that we will bear
the consequences if we do otherwise.
But it is high time that we recognize that popularly elected governments
will never, of their own accord, act this way.
The fiscal integrity of the state, and the leadership's own
political and economic well-being, are two entirely separate things.
There was no shortage of plans for spending the state's budget
surplus, when we had it. But
how many have stepped forward with specific ideas for how to get us out
of the hole?
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A
better solution is staring us in the face, if we would only take the
time to recognize it. After
all, it is the balanced budget mandate written into the constitutions of
states like
Indiana
that forces
them to step up to the plate and recognize the problem in the first
place. Those mandates were a
reaction to the crises of an earlier era, when states used public monies
to pursue risky adventures in railroads and real estate that produced
disastrous results.
A constitutional amendment to set money aside for bad times?
It would have to crafted with care, clearly.
To be effective, it would impose real limits on spending that
would doubtless be portrayed as disastrous by the interests involved.
Yet those limits would impose a sorely needed discipline on our
elected leaders, and force them to solve fiscal problems before they
blow up into crises for future leaders to solve.
We don't have to wait for the recall election, or any other election, to
get started on making this happen in
Indiana
.
The beautiful thing about our federal system of government is
that states like us are free to try ideas out on our own.
And a state that doesn't ask its recession-plagued taxpayers to
ante up more tax money when they can least afford it would be a better
place to live and run a business.
Patrick M. Barkey
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