Letters

Letters 08-29-2016

Religious Bigotry President Obama has been roundly criticized for his apparent unwillingness to use the term “radical Islamic terrorism.” His critics seem to suggest that through the mere use of that terminology, the defeat of ISIS would be assured...

TC DDA: Focus On Your Mission What on earth is the Traverse City DDA thinking? Purchasing land around (not within) its TIF boundaries and then offering it at a discount to developers? That is not its mission. Sadly enough, it is already falling down on the job regarding what is its mission. Crosswalks are deteriorating all around downtown, trees aren’t trimmed, sidewalks are uneven. Why can’t the DDA do a better job of maintaining what it already has? And still no public restrooms downtown, despite all the tax dollars captured since 1997. What a joke...

European-Americans Are Boring “20 Fascinating People” in northern Michigan -- and every single one is European-American? Sorry, but this is journalistically incorrect. It’s easy for editors to assign and reporters to write stories about people who are already within their personal and professional networks. It’s harder to dig up stuff about people you don’t know and have never met. Harder is better...

Be Aware Of Lawsuit While most non-Indians were sleep walking, local Odawa leaders filed a lawsuit seeking to potentially have most of Emmet County and part of Charlevoix County declared within their reservation and thus under their jurisdiction. This assertion of jurisdiction is embedded in their recently constructed constitution as documentation of their intent...

More Parking Headaches I have another comment to make about downtown TC parking following Pat Sullivan’s recent article. My hubby and I parked in a handicap spot (with a meter) behind Mackinaw Brew Pub for lunch. The handicap spot happens to be 8-10 spaces away from the payment center. Now isn’t that interesting...

Demand Change At Women’s Resource Center Change is needed for the Women’s Resource Center for the Grand Traverse Area (WRCGT). As Patrick Sullivan pointed out in his article, former employees and supporters don’t like the direction WRCGT has taken. As former employees, we are downright terrified at the direction Juliette Schultz and Ralph Soffredine have led the organization...

Home · Articles · News · Other Opinions · The sorry state of our...
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The sorry state of our state

Stephen Tuttle - January 24th, 2011
The Sorry State of Our States
It’s the time of year for State of the State addresses. If they are
honest, governors old and new will offer the same stark message –
states are in deep trouble.
Despite all the talk of the federal deficit, and it’s plenty bad, many
states are now facing calamitous deficits. Unlike the Feds, states
are confronted with constitutional requirements to balance their
budgets and they can’t just borrow from China or print more money.
According to the Center on Budget and Policy Priorities, only Alaska,
Arkansas, Montana and North Dakota are not facing a deficit. Every
other state is in trouble.
Some state deficits, at least on paper, seem insurmountable. Eight
states have deficits that represent more than 30% of their budgets.
Michigan’s deficit, which is less than 10% of the budget, pales in
comparison.
Then there’s Nevada. They’re #1 in foreclosures and fully 67% of
their homes with mortgages are now under water (the home is worth less
than the mortgage). Their deficit this year will be an
incomprehensible 54% of the budget. If they cut their spending in
half it still won’t be quite enough.
We continue to bark at the politicians to stop spending, start cutting
and live within their means like we do. Of course, we do no such
thing. According to the Federal Reserve, we’ve racked up $2.7
trillion in personal debt and that excludes mortgage debt.
Besides, virtually every state has already started drastic cutting.
The last two or three years has seen a bloodletting of unprecedented
proportions in state and municipal budgets across the country. States
have used almost all the accounting tricks, delayed every payment they
could, hacked away at perceived waste, fraud and duplication and are
still coming up short as property tax, income tax and sales tax
revenues continue to sag.
In most states, the bulk of the budget goes to K-12 education,
community colleges and state universities and healthcare costs
associated with their Medicaid programs. In Michigan, public
education and healthcare consume nearly half the budget.
So what do we cut? Public schools are struggling as it is. Do we
eliminate art, music and other non-core classes? Close school
libraries? Eliminate school nurses and counselors? Eliminate all-day
kindergarten and pre-K learning? Do we dramatically increase class
sizes? Do we slash away at the benefits our teachers have been
promised?
What about state-funded healthcare programs for low-income families?
My old stomping grounds in Arizona, now faced with a deficit that’s
nearly 37% of their budget, has already eliminated organ transplants
and the governor has proposed eliminating 280,000 low income adults
altogether from their Medicaid program. It will save them more than
$500 million annually, at least on paper.
But no healthcare does not mean no illness. Those who might have made
it to a doctor early in a health crisis, or who might have had a
serious problem nipped in the bud with an annual preventative
check-up, will now use the healthcare system only in emergencies.
That means going to an emergency room where federal law requires they
be treated. That means much more uncompensated care costs landing at
the door of the hospitals. And it means lost revenue they would have
received from the state’s Medicaid program. As a bonus, states that
carve up their Medicaid programs may lose federal funding. That means
healthcare costs will increase, not decrease.
How did the states get in this mess in the first place?
We need to back up to the Clinton Administration. Times were good.
Real personal income was growing for the first time in two decades.
The stock market was on an upward slope many thought would never end.
Pension funds and investment portfolios were creating new
millionaires, at least on paper, day after day.
States were awash with revenues as we bought houses, cars, appliances
and other big ticket items. Private sector job creation was cruising
along at a record clip. Flush with all that new money, states started
hacking away at their tax rates while approving massive new spending.
Still, the cash flowed in and rates were cut even further.
What states did not do is protect their tax base or save money. As
long as the revenues kept flowing, Republicans and Democrats alike
just kept reducing rates and spending more.
Then the tech bubble burst and the markets tumbled. Investment
portfolios, including pension funds, took a big hit. So did tax
revenues as consumer spending began to stagnate.
States had committed to record levels of spending with a downsized tax
structure. When the housing market collapsed, states were screwed.
Revenues began to fall precipitously and there was no way to
compensate for the losses. State after state drifted into the red
until we ended up where we are today with 46 states trying to figure
out how to balance budgets.
Our past state legislatures spent wildly, saved little and diminished
revenue bases. Current legislatures are faced with impossible
choices. There are huge obligations, no money and, given the current
political landscape, no way to increase revenues.
It’s a sad state of affairs.

 
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