Wednesday, February 24, 2010

A Bitter Pill

An irritation has been building inside me over the past months and years and I guess I'm finally ready to address it. This is making it to the page because, like that wee straw that eventually breaks the camel's back, I have had to suffer through reading yet another article that documents the woeful cries of government over the loss of tax revenues in an imperfect tax system.

It may make more sense to property owners in Muskegon County that they will be paying less in taxes because their property values have declined.

However, the flip side to the declining property values projected by the Muskegon County Equalization Department will mean less dollars for local governmental units that already are struggling to balance a budget and oftentimes resorting to cuts they deem painful, but necessary.

Times are tough everywhere, not only for federal, state, and local governments, but also for the people who work 'til June to pay for the operation of those efficient machines we call the federal, state, and local governments.

I know that governments are not businesses. I know too that they are incapable (and undesirous) of responding to market forces exactly like businesses do because in tough economic times many of government's services and programs become more demanded; more people need assistance with food, heat, and transportation. More people need the unemployment check and help with the kid's tuition. More people need public resources to find that next elusive job.

But what about the good times?

During the good times, when profits are climbing and payrolls are expanding and all associated tax receipts are rising as a result, governments do not respond in a manner that should reflect a predictable decrease in the need for government provided services.

Instead, governments at all levels find themselves expanding in times of prosperity because they find themselves encouraged to do so by the burgeoning public treasury. When the money tap is wide open services are expanded into new areas, facilities are updated and built, new programs are created, and staffs for all such expansions are hired and slathered with benefits. It is also during the boom times that political leaders are finally able to pull the trigger on pet projects that they could not justify when the money was tight.

But, when tax revenues cyclically contract due to a sluggish economy, most of these boom time expansions are maintained even if on a reduced level--the hallway still has to be buffed and that boiler isn't going to clean itself.

The net result of a government's desire to grow in boom times and its perceived need to grow in times of contraction sets citizens up for more lengthy periods of economic distress and for a perpetual assault on the taxpayer's pocketbooks.

Our governments have become exactly what we have allowed them to become--relentless collectives intent upon providing more and more for individuals in both good times and bad. They seek to become the do all and end all in both our personal and public lives.

While I don't like Michigan's decade old recession any more than the next guy, I am at least observant of one positive that might come from it. A strong and protracted period of economic contraction is the only proven way to actually force governments to act more responsibly. They might still resist and they might ultimately succeed in that resistance, but without a hobbling of revenue they will never be restrained.

It is a very bitter pill to swallow.

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