Return of the Food Tax

Comments

9 responses to “Return of the Food Tax”

1. 

   Ronald D. Hunt

   2009-12-01

   “Considering that the state is facing a budget shortfall in the neighborhood of 3/4 of a Billion dollars”

   We have been lied to, after you add the State employee pension funds short fall($6.5 billion) and the difference that the Obama ARRA stimulus is covering in the budget the yearly short fall is closer to $3 billion.

   “It will be the Democrats and these semi-principled Republicans who are unwilling to make unpleasant cuts in waste”

   No one can point to me what waste it is their referring to, from what I have seen Utah has very little waste. They might be able to find a few million here and their(medicaid is a good target), but in reality their isn’t that much waste to be found. Utah doesn’t run any entitle programs above whats federally mandated, Utah has already cut many things over the past 2-3years having a shorter list of things left that can be cut each year.

   Simply saying cut, cut, cut, isn’t good enough. I want to hear what to cut, and/or I want to hear a reasonable plan to increase state revenue enough to cover the costs of keeping the state running.

   Reply
   1. 

      David

      2009-12-01

      You’ll have to share where you are getting your numbers, although I would not be surprised to learn that nobody want’s to scare the public with the size of the shortfall.

      As for the waste question – it’s a fair question and I don’t intend to claim to have all the answers. I know that the Governor put together a task force of business and government people to evaluate where waste exists. I don’t know how much waste there is, but the governor apparently thinks he’s found enough to submit a budget without any tax increases.

      I’d like to know what things you think Utah has cut over the last 2 to 3 years. Last year there were some cuts, but mostly there was back-filling with federal dollars. In the two years (at least) previous to that we were running billion dollar surpluses and raising the funding of many programs plus giving token tax cuts to the citizens. The last three years have been two years of burgeoning budgets and one-time appropriations plus one year of padded cutting. I wonder what would happen if we cut everything back to the levels that came out of the 2006 legislative session as a starting point – how close would we be to balanced? (Of course we have perhaps 200,000 more people in the state since then.)

      Reply
2. 

   Reach Upward

   2009-12-01

   The idea that state government performs only absolutely essential services and has almost no waste is the silliest fairy tale I’ve heard in a long time. What we have are a broad variety of programs that are politically painful to cut.

   I think there is an important dynamic in the food tax issue that cannot go unconsidered. Gov. Herbert simply cannot politically afford to appear to raise taxes in 2010. The food tax touches everyone. It would be the broadest based tax increase of any under consideration. From a fiscal standpoint, spreading the cost of government as broadly as possible is good policy. But the food tax is also one of the most regressive taxes we have. If Herbert hopes to win the special election next November, he cannot allow that tax increase to take place.

   Of course, not all Republicans in the legislature are invested in Herbert’s vision of winning in 2010, so he will face some opposition. Utah Sen. Steve Urquhart has blogged about the internals of the food tax issue intermittently over the last few months at http://steveu.com/blog/ . He initially sounded like there was zero chance that the tax could come back in this session. However in his Nov. 2 post, he didn’t sound as sure about that as he once did.

   Reply
3. 

   Ronald D. Hunt

   2009-12-01

   David,

   from Utah Senate Site: Retirement Challenge,

   “Based on this data, if we keep the retirement system exactly the same the State will be required to ramp Defined Benefit contribution rates from 13.25% to 23.10% over the next 5 years and the rates will stay at 23.10% for the next 25 years to pay for the current $6.5 Billion unfunded liability that opened up due to the market crash of 2008. To put this in dollars, the State will have to pay $400 Million (plus 4% growth) per year for the next 25 years to pay for the current promised benefits.”

   from State recovery site,

   “Legislators resolved an unprecedented $1 billion revenue shortfall over the course of an extended legislative session that began in September. They ultimately closed the budget gap with a combination of General/Education Fund budget cuts ($470 million), revenue enhancement ($70 million), and federal assistance ($390 million), and other one-time fund balances. While appropriators used one-time federal funds from the American Recovery and Reinvestment Act of 2009 to soften the impact of state revenue declines, they also kept the state budget structurally balance – giving state agencies one-year to adjust to lower resource levels. Legislators preserved the state’s two rainy day funds – with combined balances of nearly $414 million (8.5%) – and did not touch a $100 million set aside for future education growth. The fiscal year 2010 state budget declined from anticipated levels by around 9% on average. Public Education – which represents nearly half of state tax funding – declined by only 5.2%. Higher education budgets declined by just under 9%, but cash funded transportation and building projects sustained significant cuts.”

   Added with population growth, and the coming increase in the Medicaid mandate the state budget is looking scary. Frankly I just don’t see how the state can keep functioning without a tax increase.

   I don’t particularly like the food tax idea it won’t generate enough revenue to make a substantial impact on the budget and it neglects the fact that business are exempted from the sales tax on many of their purchases. If we follow the whole spread the base out theory we should remove all exemptions to the sales tax. Personally my preference is for an income tax increase.

   Reach,

   “The idea that state government performs only absolutely essential services and has almost no waste is the silliest fairy tale I’ve heard in a long time. What we have are a broad variety of programs that are politically painful to cut.”

   You can’t name the program the to cut that can legally be cut? Until you can give a list or at least a reasonable assertion of what should be cut then how am I or anyone else supposed to take you seriously.

   I at the very least I gave the suggestion of Medicaid, but we can only recover a few million from extra anti fraud provisions. The State legislator released a report stating that Medicaid has around 60 million in waste/fraud out of the $1.7 Billion in yearly cost.

   Reply
4. 

   Reach Upward

   2009-12-01

   Making a program ‘illegal’ to cut is merely a political construct. Most programs mandated by Congress are constitutionally illegitimate and could be resisted if sufficient political will were present. I am fully willing to sacrifice programs that should not fall under the purview of a properly limited state government at all.

   OK, so all of that is nothing more than ideological blather that is not about to be reflected in the real wranglings between the state’s legislative and executive branches. But your challenge that I go through the state’s overly expansive operations and select the ones to be cut is ridiculous. Few private citizens have the resources to do such a thing. There is no one person on the face of the earth that is fully aware of everything our state government does.

   You suggest that without specificity, calls for cutting spending are invalid. That is sheer nonsense. Government has managed to expand to the point that it defies ordinary citizen oversight. To then complain that ordinary citizens are unable to specifically circumscribe the sprawling organization creates a tautological construct whereby government by its sheer size is always justified in whatever operations it undertakes. This turns the government-as-servant-of-the-people paradigm on its head.

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5. 

   Curtis

   2009-12-01

   In my poor reporting, I did fail to link to the poll… here it is: http://www.fox13now.com/videobeta/watch/?watch=8f9d345f-3cf8-47f5-8733-e6f47c98e21b&src=front

   And as far as the 81% of Democrats supporting the measure? Again, mistake on my part. 81% of Dems *don’t* support the same measure. The link to the poll will support this. Sorry about the error. Thankfully, this does not change the message of this post, and I am sure you can see why I did not bother to attack Dems in the rest of the post.

   Thanks for keeping me honest!

   Curtis

   Reply
   1. 

      David

      2009-12-01

      Curtis, thanks for making that correction and providing a link to the poll.

      Reply
6. 

   Ronald D. Hunt

   2009-12-01

   “You suggest that without specificity, calls for cutting spending are invalid. That is sheer nonsense. Government has managed to expand to the point that it defies ordinary citizen oversight.”

   No group, individual, political party, or other entity has yet to point out where the state can cut further other then the Medicaid fraud prevention that has already been pointed out. All groups, individuals, political party’s, and other entity’s have full access to the state budget as it is a matter public record. THEIR is no excuse for being unable to point out what should be cut due to the number of people that have access to the information, the number of people who will have financial or political benefit from finding things to cut, etc. The fact is that none of the above can point out anything substantial if anything at all.

   “Making a program ‘illegal’ to cut is merely a political construct. Most programs mandated by Congress are constitutionally illegitimate and could be resisted if sufficient political will were present. I am fully willing to sacrifice programs that should not fall under the purview of a properly limited state government at all.”

   So should we start with education, environmental, or perhaps Medicaid? Federal mandates are about the only power the government has to prevent a race to the bottom. I don’t want to live in a state with poor/no education, no environmental protections, or filled with treatable commutable diseases because the poor can’t get care. THE only way to get some states to do what needs to be done is to simply mandate it. The race to the bottom has got to end.

   So again if you can’t name what needs to be cut then continuing to scream CUT CUT CUT is a gesture ignoring reality.

   Reply
7. 

   Ronald D. Hunt

   2009-12-01

   The Governors office posts a pretty easy to understand budget summery.Their is actually a lot of good information for the budget minded citizen at Governors Office Of Planning and Budget.

   Reply