Why State Budgets Matter

Following up on California’s status as an economic disaster-hole, it begs the question of “why do state budgets matter?” Frankly, the long and short of it is if your state is broke, then by law they’re required to not be broke. The result is higher taxes and cuts. Because most governments are incapable of thinking rationally, they usually start cutting education, police, healthcare, etc. You know, the things people use and actually hired the government to deal with.

When they raise taxes, that lowers demand for services as people have less money, businesses have less funds for payroll and supplies and they cut wages and staff and, voila, you have a deeper recession. Not to mention that states cut contracts with outside vendors, thereby deepening matters more.

Again, I’m going to re-iterate that this governing things isn’t necessarily hard. Mitch Daniels saved money by buying floor mats for heaven’s sake:

[Daniels ended] bottled water for employees of the Bureau of Motor Vehicles (annual savings, $35,000). Ending notification of drivers that their licenses are expiring; letting them be responsible for noticing (saving $200,000). Buying rather than renting floor mats for BMV offices (saving $267,000 this year). Initiating the sale of 2,096 surplus state vehicles (so far, $1.95 million in revenue from 1,514 sales). Changing the state lottery’s newsletter from semimonthly and in color to a monthly and black-and-white (annual savings, $21,670).

Note, this was in 2005 after 1 year in office. I’d also mention that I’d go as far as to eliminate newsletters, period. Who reads newsletters!? Get a website!

And, the BMV now reminds people about expiration notices electronically, for practically nothing, via email for Hoosiers enrolled in MyBMV.

States have money to burn and money that can be saved and refunded to taxpayers. They just need to step up and deal with it. Don’t tell me the Feds don’t have a few newsletters that can be chucked.

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