A Spending Problem Is Not A Revenue Problem

May 20, 2016

Seal_of_West_Virginia_svg

“If Congress can employ money indefinitely to the general welfare… The powers of Congress would subvert the very foundation, the very nature of the limited government established by the people of America.”   – Alexander Hamilton

“I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I traveled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”    – Benjamin Franklin

As you may have guessed, my column is about West Virginia and taxes. With WV facing a deficit of $270 million, legislators are looking for ways to close the deficit. Of course, tax increases end up on the board. What’s that mean for citizens? Paying higher taxes, yet again. Increases being looked at are sales tax increase of 1%, repeal of the sales tax exemption for telecommunications services, and the always popular income tax increase. What strikes me, is that Revenue Secretary Bob Kiss, says that West Virginia has a “revenue problem”. A revenue problem? I’m sorry, but that is completely wrong!! How much does West Virginia rake in, from tax revenue? West Virginia Tax Revenue is $5,355,809,000!! I believe the problem is a spending problem, not a revenue problem. We The People have to handle our households on budgets and spend within those limits. Something that our elected officials apparently can’t accomplish or fathom. Spend within a budget? Gasp!!

West Virginia legislators are in session, looking to settle on a budget for 2016 – 2017, in a $4.2 billion spending plan. Revenue Secretary Bob Kiss acknowledged that the Tomblin administration has not closed the gap between their plan to raise revenue, to close a $270 million deficit in the budget, and legislators’ desires to erase the deficit entirely or partially through spending cuts. Gov. Earl Ray Tomblin has proposed three tax-increase proposals, asking them to come up with some combination of the three to raise $270 million to close the shortfall. Senate President Bill Cole, R-Mercer, sent a strong message against two of Tomblin’s bills, a sales tax increase of up to 1 percent (SB 1004), and a repeal of the sales tax exemption for telecommunications services (SB 1003), by removing his name as a co-sponsor. Traditionally, the Senate president and the minority leader co-sponsor all of the governor’s bills.

The Senate, on Monday, fast-tracked passage of a 45-cent-per-pack increase in cigarette taxes (SB 1005), by waiving any committee assignment and reading the bill a first time on the Senate floor. Cole said he recognizes that some tax increases will be necessary to get through the budget deficit, and said, “We feel like there’s some support for the 45-cent tobacco tax rate.” In the regular session, after the Senate advanced a tobacco tax bill on a 26-6 vote, members of the House Finance Committee soundly rejected a 45-cent hike (SB 420) by a 21-3 margin. The opponents in the House included anti-tax Republicans and Democrats holding out for a $1-a-pack increase. Monday evening, House Finance Committee members began reviewing the tobacco tax bill, but took no action on it. Even if the House has a change of heart, a 45-cent hike, with corresponding increases in other tobacco taxes, would raise about $78 million a year, still leaving a deficit of about $190 million in the 2016-17 budget.

Cole said he believes the deficit can be closed through a combination of spending cuts, sweeping accounts of reappropriated funds and dipping deeper into the state’s Rainy Day emergency reserve funds. Later Monday, Kiss told a joint meeting of House and Senate finance committee members, that West Virginia could close the 2016-17 budget deficit with one-time funds, but that would merely postpone the budget deficit for a year, saying, “You don’t have to be a math whiz to know you will eventually run out of one-time money,”. State Budget Office Director Mike McKown told the committee members that, even if the Legislature approves $270 million in tax increases for the 2016-17 budget, the following year’s budget would have a $118 million gap, assuming 2 percent pay raises for public school and state employees and medical inflation increasing PEIA costs, a gap that grows to more than $500 million, if no new revenue is approved this year. “We have a revenue problem, and we can’t solve our problem simply by cutting our way out of it,” said Kiss, who pointed out that Tomblin has cut more than $463 million in annual spending out of the base budget since 2014.

A Spending Problem Is Not A Revenue Problem. In my humble opinion, we don’t need to raise taxes anywhere. Spending got us into this mess, both locally and federally. Just as our federal government has done, West Virginia has spent this state into a deficit. Our elected officials paid no attention to what they were spending, but spent it anyway. Democrats think that we can spend ourselves into prosperity. A pipe dream, at best. Common sense says that if a family has a yearly budget of $50 thousand, and said family spends $60 thousand, increasing every year, the deficit grows, but does not shrink. Spending beyond your budget, digs a hole that can only be filled by spending less than your budget and applying the left over money to your deficit. Maybe simple economics was not required to be elected to state office. We The People were not asked about the increased spending and are not being asked about any tax increases. Instead of forcing We The People to pay more in taxes, West Virginia needs to cut spending and work within the budget they have. Call your local representatives and tell them you won’t tolerate any tax increases. I have and will continue to do so. Until next time, God Bless You! God Bless West Virginia! God Bless America!

 


Share

Comments

Powered by Facebook Comments

DISCLAIMER

TERMS OF USE

Privacy Policy

Like Box

WordPress SEO fine-tune by Meta SEO Pack from Poradnik Webmastera