Unless you raise tax rates, it isn’t a tax hike
My friends over at Blue Jersey are raising the issue of what I’ll call “de facto tax hikes.” It’s a tactic that conservatives have long used to unfairly portray Democrats as “tax and spend liberals” who are just too sneaky to tax you outright. For example, when Jon Corzine tried to cut municipal aid to cities, we heard this kind of protest:
“Cutting municipal aid is really not cutting government,” said Sen. Phil Haines, R-Burlington. “It’s a tax increase.”
Now, I can’t find any direct quote From Senator Haines on the State of Fiscal Emergency, but this is what his Senate Majority Leader, Tom Kean, Jr. had to say:
“It’s also worth noting that his plan for balancing the budget, unlike proposals by other governors over the last eight years, contains no unconstitutional borrowing, tax increases or irresponsible accounting gimmicks,” Senator Kean said. “No other governor over the last eight years has proposed such a responsible and fiscally sound plan for closing a deficit.
Well, different people are entitled to different opinions on what is and isn’t a tax increase. But this is just a matter of the cuts being wielded by the other hand. How else can we explain this partisan flop as well as Democrats who voted for municipal cuts in 2008 now decrying Christie for “raising taxes?”
The explanation is simple. Both sides understand that cuts have to be made. But they want to avoid being held responsible for cutting anyone’s favorite program, while being able to claim they reduced the budget problems. So, in a word, they lie. Through their teeth.
The reasoning works like this:
local services are paid for, in part, by state aid=>if the state aid is reduced=>local taxes must increase.
It’s a lie. First of all, local services could be reduced to the point where local tax rates are simply not impacted at all. But that isn’t going to happen because no one wants to cut some voter’s favorite program. And, honestly, reductions in services can hurt, and sometimes they can hurt a lot.
But, more to the point, reductions in state aid result in the opportunities for municipalities to revisit their funding priorities. Which is more important: To spend $1 million on Christmas decorations or to spend $1 million to pay the full salaries of twenty-two early preschool teachers (if they each make $45K per year)? Do we really need thirteen independent school districts in Hudson County or could we maybe combine them all into one administrative apparatus and cut twelve superintendent jobs (not to mention assistant superintendents, curriculum supervisors, and paper hole punch operators)?
The point is that anything that doesn’t directly raise tax rates is not a tax increase. Cutting municipal aid, transport subsidies, and other cost cutting measures might be painful, but if we are going to talk intelligently about the budget, and how to fix it, then we have to stop trying to find the highest emotional pitch possible in which to frame budget actions.
Besides, a budget is still a moral document. If you can’t motivate opposition by telling people, “It’s going to cost you an extra $5 per week to get to work!” or “Your kid isn’t going to have a school to attend!” then you are probably overreaching anyway.
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