State of the State Reviewed

The speech sounded like one delivered by a governor re-elected to his final term by a landslide percentage. In fact, he sounded rather like a libertarian, sounding the call for tighter budgets as the only common sense approach to tough economic times.

It was certainly music to my ears. I have been calling here for a 5% across-the-board budget cut for the last three years. Although such cuts would have done even more good in positioning our state better than New York or California, it's better late than never, and all to the good.

The real question I have is how effective Mitch Daniels can be in lashing the legislature on to do his bidding. Republicans like to spend tax dollars just as surely as Democrats. Daniels did the Reagan thing by going to the public with his strong appeal for cuts. Was the public listening? Will the public assert to their representatives in the Indiana House and Senate their desire to implement the governor's call for cuts?

Here are some lines from the Governor's speech that could have as easily come from a Libertarian governor:

First, no tax increases. A state striving for economic greatness should constantly be looking for ways to reduce its burden on workers and enterprise. A time of recession is the very last time at which government should add to the struggles of the citizens for whom it works.

Preserving government intact at the expense of families and businesses would be wrong in human terms and backwards in economic terms. The dollars claimed by higher taxes would come from families who need them more than ever to get by. They would come from businesses which would otherwise use them to keep someone on the payroll, or add a new job. Let's agree right now that, whatever course we take this budget year, higher taxes will play no part in it.

Bravo! Could have been written by Andy Horning or Kenn Gividen. Excellent!

The other good news was that Daniels urged the shelving of funding for full-day kindergarten and guaranteed college tuition. The budget can't be maintained if this bloat is added.

There was no word about the State's legacy costs, beyond a promise not to rob the pension fund in order to suppliment the budget. That's a glaring omission in light of the wreckage legacy costs have visited upon Ford, GM, and Chrysler. Governments give the fattest benefit packages in the country. This will come home to roost, and should be dealt with now, before we have the kinds of problems California is already beginning to experience.

Daniels continued to push for his consolidation plan. I'm just not sold on it because it looks merely like a panacea for those who want smaller government. For those who have wanted it and never seen it, smaller government includes smaller budgets, eliminated departments, and significantly fewer bureaucrats. So, let's look at one area of proposed consolidation, from the Kernan-Shepard recommendations:

Consolidation of Township Assessors. Property is still going to be assessed, because it is still going to be taxed. In a county with 9 townships, consolidating to the county level doesn't mean that one person is going to do the work of 9. It means that those who did the work will simply be housed in one location. Ok, that yields the savings on office space, and that shouldn't be overlooked. But that's nipping at the fringe of the cost.

Worse, it will make assessment less accountable, not more. Currently, the resident of the township can go to the Township Assessor's office if there is a dispute over the assessment. One-ninth of the County elects the Township Assessor, so if the township's people are dissatisfied with the work of that official, they can back a candidate and run them in the next primary. Under consolidation, if the citizens of one township are completely dissatisfied with the work of the County Assessor, they not only have to win their township, they have to win the votes of the other 8 townships with their candidate at the primary. In fact, a County Assessor can screw one township completely and be re-elected comfortably, if that screwed township generally votes for the minority party.

If you want to see how this plays out, a nice parallel exists in Hamilton County, where the County Commisioners members ostensibly represent a district, but are voted on at-large countywide. They sometimes lose their districts while winning on the backs of the areas they do not represent.

If you want smaller government, don't goof around with consolidation. Cut a department. Cut budgets by 20% instead of 5%. That's the real deal.

Bottom Line: Good speech, with nice substance for libertarians, even if it doesn't go nearly far enough towards more appropriately sized government.

Text of the speech.

Cheap. Pitiful.

I see that Indy's Mayor is proposing a cut on the County Option Income Tax (COIT) for Marion County. From the Indy Star report:

Mayor Greg Ballard has introduced a proposal to lower the county income tax by three-hundredths of a percentage point, to 1.62 percent.

The adjustment would give a $6 million break to taxpayers. That works out to about $12 a year for the average $40,000-a-year wage-earner in Indianapolis.

Well, ain't he Santa Claus! Is this the same Mayor Ballard who was greatly aided in his election by tax protestors? Is this the level best reward he can give to a constituency that rallied to make itself heard?

Last year, the council increased the county income tax from 1 percent to 1.65 percent to cover an ongoing shortfall in public safety and criminal justice costs. The 2007 state law authorizing that tax increase required 0.3 percent of the money to go toward freezing property tax spending.

On Nov. 7, the state certified the county tax rate at 0.27 percent and gave counties the option of returning excess revenue to taxpayers. In Marion County, that excess is 0.03 percent.

It's very safe, very likely to gain passage by the City-County Council. It's a gain. But it's pitiful. It's a pittance. It doesn't reflect any genuine cut in government, it only represents not taking that small amount which isn't deemed 'necessary', in returning 'excess'.

In times of economic hardship, government is a luxury, not a necessity, and people at home should be allowed to keep a greater share of what they earn so that they can provide for their households.

At what point can we expect to see actual cuts in government?