Budgets Reflect Moral Choices As Much As Fiscal Realities
At their core municipal budgets, like their federal counterparts, are a reflection of social priorities, an expression of the social contract that binds communities together. What communities chose to spend money on, and who those choices directly benefits says as much about the values of that community as any demographic information gathered through census or polling.
It’s easy to grandstand on platforms of “small government” or “no new taxes”, but what happens when that grandstanding nearly costs a life? Or when it does, eventually?
The New York Times offered a glimpse into these issues in a profile of the bleak choices facing municipal governments these days. Despite pleading to the Wilmington, North Carolina city council for enough revenue to replace a fire engine after a mechanic told the fire chief the current engine would likely fail, the fire chief was told to “find a new mechanic” rather than replace an engine with over 100,000 miles and 16 years. The chief had tried for five years in a row to get a new fire engine and was rebuffed, year after year. That engine quit working as his crew responded to a house fire with a man trapped inside.
That’s not as bad as Camden, New Jersey which laid off half its police force. Or Detroit which is closing half of its public schools. Or even the state of Minnesota that has shut down entirely in order to prevent a tax increase on the roughly 7000 state residents who earn more than $1,000,000 a year.
The familiar refrain, from conservatives pushing this new “fiscal austerity” is that our state and federal governments have a spending problem. But that’s not quite the case. In fact, it’s not the case at all. There’s not a spending problem, there’s a revenue problem.
In the wake of the Bush tax cuts, and thanks in large part to the Great Recession spawned by them, tax revenue is at a near-record low. As a percentage of the GDP it has fallen 24 percent since 2001 and, corrected for inflation, the government is collecting nearly 20 percent less in tax revenue per person than a decade ago. Meanwhile discretionary security spending has increased $364 billion since 2001 while non-security discretionary spending remains flat. And while spending on mandatory programs such as Social Security, Medicare, Medicaid and Veterans support has also increased, when adjusted to reflect population growth we spend no more on those programs than we did a decade ago?
Now consider the fact that last week Republican negotiators walked out of meetings over the federal debt limit when Vice President Joe Biden and congressional Democrats suggested that a deal to raise the nation’s debt limit should include cuts and reforms to federal spending programs that provide interest-free loans for purchasing corporate jets. Or for a program that incentivizes people to become hedge fund managers by sending them an annual treasury check for 20 percent of the cut they take from managing investor portfolios.
Those programs, according to Senate Republican Leader Mitch McConnell (R-KY) are off the table. But cuts to Medicare and Medicaid are not.
Is a pattern emerging? Or maybe, more accurately, a theme?
photo courtesy of Tracy O via Flickr