Friday, October 23, 2009

Martin on How State Budget Process is Rigged for Growth of Government



Cut more spending now? Why should we do that, eh?
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Representative Mark Martin has a good read up on some of the continuing games Governor Mike Beebe is playing with state revenue forecasts, and even more fundamentally, on the budget process itself.

Here is one of the jewels from his piece, "the failure to limit appropriations to revenue forecasts cause every ounce of surplus to be sucked into an ever increasing size of state government. It virtually insures that tax cuts are rare. It almost always means that the state government will grow at a rate equal to the fastest rate of growth of the economy during the good times and forces tax increases to maintain the current rate of spending during the bad times."

Please read the piece. Here is what I take from it: It is likely that the Governor's failure to further adjust the budget now will set us up for a planned "emergency" tax increase in the next year.

1 Comments:

Anonymous Economist said...

Since Arkansas has a Revenue Stabilization Act and cannot spend more than it takes in, the best and perhaps only way it can grow government is to spend everything it does take in, and never return surpluses to the people.

9:00 PM, October 26, 2009  

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