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More Income Tax Thinking

Once again I believe the underlying premise of this WyoFile article, submerged deeply as it were, is that current levels of state spending are just fine and should not be touched.

I disagree.

Bureaucracies invariably have fat in them, it's just their nature. It is the duty of legislators to root this out.

From my perspective the fix for the boom-bust cycle is three-fold.

First: Put in place State level Savings Funds. We did that.

One could discuss whether we put away enough for rainy days over the past cycle, but clearly if the bust lasts only a few years we have enough to fund our current funding levels in place.

The rub is we don't really know how long the bust will go on...

Second: During the boom side of the cycle spending must be constrained. The Legislature must discipline itself.

I began observing our legislature in the 2005 General Session. That is about the beginning of the natural gas runup that provided so much revenue that the legislature didn't have to really discipline itself. They had debates on things like school classroom size. It didn't matter that school districts ignored this and spent the money other ways while classrooms were much larger... the debate went on.

Third: When the bust comes along the Legislature must have the intestinal fortitude to look hard at the state budget, get out the sharp pencils, and reduce the spending. Such a reduction will extend the life of the state level savings funds.

Clearly the legislature did not get out the sharp pencils this past Budget Session. Why not? Probably the top item in front of the legislature's mind was education. They get wrapped around the axle on the education world's "basket of goods." This distracted the debate and the interim study they funded simpy ignored anything but the "basket of goods topic" (this study served Wyoming poorly). Since education was about 50% of the excess of spending over income, this emplaced a marker in the legislature's thinking.

Clearly the fix for the budget woes could not just be education. Still there is some fat in the education budget and the legislature should go find it. Other departments should also be looked at hard.

The Senate sought to rein in spending a bit. They wanted to reduce funding by about $150M. OK, that woud take the hit on savings down from around $900M to $750M. So the longevity before exhaustion of savings goes out farther.

Another fix is control of spending during the boom... How do you do that when you have a boom the goes on for some ten years while the election cycle is every two years? One role of a senate is to be able to take the "long view." Yet when the boom goes on for over two senate election cycles... well you get the idea.

The only fix now left to our legislature is to get into the budget details. I believe our budget excess over revenues could be reduced as much as $300M. Admittedly $300M is the high side, yet the $150M the Senate proposed is probably a low side value if both Houses had gotten to work.

Could we take, say, $50M out of education? I think so and without touching either the "basket of goods" or the teachers. Recall the classroom size debate above, Wyoming has fewer teachers than the legislature nominally funds. I believe a hard look at education would show that the extra money being tapped from larger classrooms is going into excessive administrators.

There is a group of hard core conservatives that know all the buzzwords and toss them into the debate without real productive action. It is not enough for some conservatives to sit on the sidelines sniping at things with the right buzzwords or proposed budget amendments that have almost no chance, they have to get in the debate, grab the sharp pencils and do something.

My bottom line is this: before the state imposes any kind of income tax, the legislature must get on with cutting the fat out of their budget. They should have begun this as soon as the reduction in revenues was clear. They didn't. Voters should not allow the legislature to slide by the hard fat cutting by allowing them to fix their spending with an income tax.

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