Jul 24 2005

WashPost: Spend Surplus Taxes

Published by at 9:17 am under All General Discussions

The Washington Post presents us with a classic example of extreme liberal bias in the main stream news media. The editorial discusses the good budget news in Maryland but slams Gov Ehrlich for taking credit for the good fiscal shape of state (unlike the Post’s treatment of Clinton during his heyday of living off of republican fiscal policies).

Maryland’s $1 billion surplus for the fiscal year that ended June 30 reflects “some real talent running state government” and creating jobs, the governor said on Baltimore’s WBAL radio.

In fact, the surplus reflects nothing of the kind; it is simply in line with national trends. Forty-two states collected revenue that exceeded their original budget projections for fiscal 2005, often by wide margins, according to a report by the National Governors Association.

We all know the fiscal upturn is the result of sound national and state fiscal policies, specifically across the board tax cuts and controlling what has been out-of-control spending by state and federal governments. But no, the Washington Post cannot bear to address the root cause of the strong economy, it instead points to the positive indicators as if they were the cause

The stronger-than-expected collections nationwide stem from a spike in corporate profits, a heated housing market and rising sales and personal income, especially from capital gains.

These are not fiscal policies, these are fiscal indicators. The policy was tax cuts. But the Post is unable to face this fact.

The early signs are not encouraging. The governor’s first reaction to news of Maryland’s surplus was to make a vague commitment to cut taxes. But state officials are still projecting a $1 billion deficit by fiscal 2008, which starts in two years. Education spending, which represents more than one-third of the general fund budget, is expected to grow by 10 percent a year; Medicaid, the health insurance program for the poor that accounts for around one-fifth of state spending, is expanding by 6 to 10 percent a year. Just to stay even with the anticipated increases in state spending, Maryland’s revenue needs to grow by at least $900 million a year for the next three years.

The rationale here is seriously one sided. Increases of 10% a year is roughly twice what they should be given inflation and increases in the number of people being covered. What the post is saying is, since the democrat legislature planned to spend a lot of money (big surprise there) Maryland taxpayer should not be allowed to get some of their own money returned to them. No big surprise there either. Good example of circular reasoning.

Contrast Mr. Ehrlich’s risky approach with Virginia Gov. Mark R. Warner’s clear-headed response to his state’s $544 million surplus for the year. Mr. Warner (D), mindful that Virginia faces major unpaid bills to clean up the Chesapeake Bay, raise education standards and meet rising Medicaid costs, is putting 80 percent of the surplus into the state’s rainy-day fund. Since he’s leaving office early next year, that money will be available to Mr. Warner’s successor, who will need it.

This statement is truly misleading. Warner imposed the largest tax increase in the state’s history, only to report the day after it passed (and months before it would go into effect) we had a $1 Billion surplus. What Warner did was steal our hard earned money to address a fantasy fiscal emergency – and now the Post says spend it on other things.

I suggest the Post Editors sacrifice half their salaries first, and if that is not enough, then come to us and ask us whether we want to follow their fool-hardy example.

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