How to fix the state's budget deficit - without raising taxes: Common Sense really does work!

The short conversation Erik O. and I had on my most recent post got me thinking about how - if I were Governor or in the legislature - exactly I would go about fixing the state's deficit.

The first step, as has been pointed out by numerous individuals, is to freeze current state spending. Much of the more than $5 billion state deficit is the result of a $4.5 billion increase in state spending over the next two years. This one move eliminates a great deal of the deficit and puts it into manageable terms.

From there, we accept the portion of the $3.8 billion of federal stimulus money that is designated for infrastructure improvements such as highway construction/repair and construction of updated power plants and green energy. We should also accept any funds that would go toward the construction or repair of K-12 schools. Many of these projects - like the one in my hometown of Clinton - are desperately needed, but local property taxpayers can ill-afford the increase in taxes that would result. In these instances the federal money designated for this kind of project would be a welcome boost to the local economy as we wait for the economy as a whole to rebound out of this recession.

That said, we must reject federal aid that requires permanent increases in state spending for a one-time infusion of federal cash. That type of spending may help "fix" our current deficit, but will only make matters worse down the line when the federal money is gone.

Outside of the stimulus money, we then need to make tough choices at the state level. We should suspend the state's rainy-day fund until the economy has rebounded. We should also suspend indefinitely the state's Stewardship Fund - these two moves would save roughly $250 million dollars over the next two years. They are programs that are not essential to economic growth and should only be considered when we have the means to pay for them.

I think we must also look seriously at cutting all programs that duplicate services at the state-level. Former Lt. Governor Margaret Farrow is fond of telling a story about an audit of the Dept. of Corrections. There were at the time over 140 separate programs for substance abuse and alcohol cessation, yet when asked which ones worked the DOC officials had no idea. I am quite certain those types of duplication and waste still exist in a large state government like ours. We should look seriously at cutting as much waste as possible.

The savings that result can be used to expand state spending in critical areas if necessary, or they can be used to offer tax incentives to attract businesses to the state. It is my firm belief that we can balance the budget without raising taxes on businesses and individuals, but we need to have leadership in Madison if it is to happen.

Government may not be the exact same as a family's budget, but the basic principles of cutting back on luxuries and saving money wherever possible when times are tough still hold true. If only someone had the courage to offer this type of an alternative.