Budget tactics will hurt taxpayers and job creators, says Smith
House Democrats rolled out their budget proposal today which outlined millions in tax increases, raided capital budget accounts, transferred millions from the “rainy day” fund and proposed only modest cuts to state government.
Rep. Norma Smith, R-Clinton, believes that giving up on government reforms to focus solely on tax increases and budget gimmicks is bad for the state’s economy. After reviewing the Democrats’ budget proposal, Smith issued the following statement:
“It is disappointing to see the majority party is patching our $2.7 billion budget gap this year the same way it did last year, which was clearly unsuccessful because we are back in the same predicament. We cannot budget the same way and expect a different result. Citizens expect the Legislature to take serious steps to improve our economy and downsize government, including streamlining programs and finding efficiencies. The budget proposed today goes in the opposite direction. New and higher taxes and fees are the wrong direction to help our economy rebound from the recession.
“House Republicans have offered solid solutions that focus on job creation in the private sector, transparency in the budget process, fine tuning state agencies and their budgets and outline the sacrifices state employees and agencies need to make in this tough time. We cannot continue to extract more from citizens and employers and expect they will feel more secure to invest in their communities. It’s time budget writers change their mindset from a continual pattern of growth to how we can fundamentally reset government to serve the needs of citizens while not overburdening taxpayers.”
The House Democrats’ proposed supplemental operating budget would spend $30.678 billion, leaving just $269 million in reserves. It would address the state’s $2.7 billion shortfall by using:
- $857 million in new taxes;
- $641 million in federal dollars;
- $653 million in state spending cuts;
- $236 million in state budget transfers; and
- $311 million from state reserves.
The state had a $1.8 billion surplus in the 2005-07 budget cycle, driven by extraordinary real estate excise tax revenue. State spending then grew 33 percent, or more than $8 billion, from 2005 to 2008.
The Taxpayer Protection Act (I-960) passed in 2007 and it required a two-thirds vote of the Legislature for tax increases. Senate Bill 6130, passed by Democrats in Legislature and scheduled to be signed into law by the governor Feb. 24 at 10 a.m., removes this taxpayer protection and clears the way for tax increases.
There are currently 77 bills in the state House that, when combined, would increase taxes and fees by more than $3 billion in the state’s next fiscal year.
