LJWorld.com

In a few weeks our state legislature will meet to set a budget for next year. There is a projected deficit of about $300 million dollars from last year’s expenditures (about 5% of the general fund). The deficit would be about $600 million from the governors originally proposed 2011 budget. There are many proposals to address the situation. They include reductions in projected expenditures as well as significant tax increases. The piper is here.

We have already reduced our state general fund budget about 10%. Further reductions will likely impact schools, colleges and programs for the poor. Cutting is easy. A proposal to reduce the budget to the expected revenues of $5.2 Billion for the general fund is on the table (total reduction over two years of about 13%).

Sin taxes (liquor, smoking, etc.) are on the agenda and a strong majority supports increasing them. There is just one problem - they will not cover the shortfall.

Restoring sales tax exemptions and other taxes for businesses cut in recent legislative sessions is also on the table. The legislature has been very generous in reducing taxes on this group citing the action will produce jobs. One could argue that a fair amount of the current shortfall results from these reductions. Strong elements of our legislature do not support this option.

Extending sales taxes to utilities and various charitable groups is proposed. There is a lot of money in taxes on utilities as they would increase our utility bills by as much as 6% in addition to the every increasing (> 20%) overall rate increases already programmed. Taxing religious activity could help defray cuts if we can sustain the legality of our actions – this action alone will not cover the shortfall.

A general sales tax increase of up to 1% is on the table. For the math phobic that would be about a 20% increase that would hit hardest on those least able to afford it. This option can go a long way to covering the shortfall depending on how much the increase.

An increase in income taxes for the very wealthy has been proposed. This option did not fair well in the polls. Do we really have that many people with taxable incomes over $150K? This option by itself will not cover the problem although some might argue that when combined with a smaller sales tax increase it might be more equitable.

Now for those of us in Lawrence we face a property tax increase for Library improvements. We also face the costs of new recreation facility to be paid from already existing but no longer required sales tax revenue. It appears that we may also get permission to increase our local option school budget – a property tax increase locally. It is not yet clear whether the county of the city have designs on a property tax increase but noises from down under suggest one may be coming.

All of the above suggest a hefty tax increase for many of us – and I have not even presented the federal situation where we have a continuing deficit of over a trillion dollars a year that will undoubtedly lead to tax increase on many of us – not to mention increases in the costs for medical insurance and fees resulting from the new health care entitlement.

We are all going to have to face this and decide what we want done and how we intend to pay for it. One way or another we must now pay the piper. Make your choices known.

We all know that cuts to our schools and social services have become punitive (except for Americans for Prosperity and their fellow travelers). We all know we need more revenue; there is little if any waste still in our state budget because we have been cutting it for a decade.

The response from our legislature and governor is to increase taxes on those who have been hit hardest by our economic decline - mostly government caused. Sales taxes hit hardest on the lower income segment of our society.

We do not even seem to want to discuss a tax increase on the really wealthy who in general have done well despite the declining economy. Sustaining a progressive tax system that is not progressive is one more example of how most of us are disrespected by our local and state elites.

Is it not time that somebody (our representatives0 put forward the notion of adding tax brackets to our state income tax - not to increase taxes on most of us- to increase taxes on those with incomes over $100K. I am not talking class warfare. I am talking tax equity. Why should a family of four with a Kansas taxable income of $65K pay the same marginal rate as a Kansan with such an income exceeding $1,000,000?

It would be nice to force the “party of no” to say no to increasing taxes on the wealthy. Even if they vote it down, at least we would have a record of those who think the really rich are overtaxed (besides Rush and Fox News).

This sounds so simple to me – what am I overlooking?

There are three fundamental issues with this school debate.

A number of older schools have small class sizes while some newer schools have higher pupil-teacher ratios. Perpetuating that is not fair!!

Many smaller schools have smaller areas from which they draw students. Some larger schools draw from a larger area. Which represents a true neighborhood school? If the larger draw areas still represent a neighborhood school then we could easily increase the draw area of the older schools and they would still be neighborhood schools.

The financial situation, according to both parties in Washington, will likely not improve significantly for five to ten years. This is probably not a short-term problem as represented by the groups advocating for neighbor schools. Further increasing class size in the larger schools in order to protect small class sizes in smaller schools is morally bankrupt.

As an aside, I cannot defend each specific administrative position in our school system. However, the requirements of a number of federal and state laws tend to drive staff to manage and report on these programs. Adding that workload to teachers, particularly in large class size settings would be unconscionable. I am not sure we can walk away from many of these requirements. The issue here is with Washington!

Now, I am not against small class sizes or small schools. That said, if we are going to have those than we need to provide them to all students. That would make the financial problem a lot larger than $5Mil.

Just exactly what are we arguing about?

Well, we have gotten ourselves in another fix. We do not have enough money to run our schools as some of us would like. Of course, we have seen our state contribution decline significantly as the state has addressed declines in tax revenue – heavily weighted by individuals experiencing reductions in their income. Our local contribution has been increased – although the decline in property values will probably reverse that. Consequently, we have a real problem.

I doubt the state will reverse the trend of declining school contributions. We will be lucky to break even this session. There is a glimmer of light as there is a bill before the legislature that may allow us to increase our local contributions. For a variety of reasons it may pass. That could mean a local property tax increase. Before the rocks start to fly maybe we can have it both ways.

We all know that the city has an uncommitted stream of sales tax revenue because we have retired the original debt. How about a deal. The city just lets that revenue stream die and reduces our sales taxes, thereby possibly making our community more business friendly. In return, we acquiesce to a short-term property tax increase to fund schools – to be revisited if the economic environment improves. I am not talking a tax to make it whole but a tax to avoid the worst of the impacts. If schools need to close to balance our student population and ensure equal treatment of our children then so be it.

Maybe there are other solutions but if we simply go for a massive tax increase to meet all the demands from portions of our community we will further reduce the attractiveness of our community by making our every increasing tax rate unattractive to businesses and new population. There is no future if we drive people away. Worse, many of our potential newcomers would likely be those who would increase our elementary school population to warrant the continued funding of all our neighborhood schools.

There have been many articles on the need for preserving certain neighborhood schools. Those articles have been uniformly silent on how we obtain the needed money. If you do not like my idea, how would you fix the mess?

I have come to a conclusion that climate change proponent think the rest of us are very very stupid. Yes, there is data that suggests that there is climate change. That is science. Then there are models that project all kinds of futures. Since these models deal with much uncertainty, assumptions must be made. At each such assumption the models builders select the worst possible outcomes. This may not be surprising when one realizes that money from the proponents is at stake. The resulting models produce variants on what amounts to a worst possible climate change scenario. The proponents seize on the worst case and demand never ending major sacrifice from all of us.

Nobody seems to know just how much we have to change to reverse the perceived problem. Some statement of an endpoint might just be useful. Demands for never ending carbon reductions without any end target associated with a useful outcome are unrealistic. The whole thing might be more compelling if the shrillness declined and a rational defendable incremental remedy with consequential reflection of improvements became available. Of course there is the chance that what is needed can not be achieved. There just might be factors beyond human contribution involved? Living in a world of endless sacrifice toward an unstated endpoint is needlessly demeaning toward the human race.

Maybe we simply can not get where the advocates seem to be demanding that we go. Maybe we just can not put this genie back in the box. Maybe we are going to have to accept change as we have accepted change since we got here. Are the proponents of the overwhelming crash response not believers in evolution? Looks to me like we may have to evolve a bit - but probably not as much as the advocates are threatening.

Most of the world seems to wants us to give up everything until we live like their poor. That is a real hard sell in a democratic society. It is a particular hard sell when the elites proclaiming it live so much better than those from whom they demand sacrifice. We are already making significant efforts to address the challenge. Our elites started us on that path long ago. Is it really an accident that the average American is financially marking time – for more than a decade? That is a non-trivial sacrifice. The elites have made no comparable sacrifice. If this is a real global emergency maybe the necessary sacrifice should start with the world’s leaders.

Where is the leadership – leaders lead the way not drive the flock. Everything I have seen the leaders do appears cosmetic. Our Congress proposes a carbon cap and trade solution. But then they exempt many of their own local elites. Where is all the urgency when it comes to actual pain? I might take this all more seriously if the elites reduced themselves to where they want the rest of us to go. Maybe they should renounce their fortunes as contribution to the rest of us to invest in responsible and accountable initiatives? There is just way too much “do as I say” and way too little of “follow me”! I know “all the animals are equal – only some of the animals are more equal”.

The answer to my question above is yes, the advocates are causing the problem by demeaning the rest of us. We are all to be drafted for a cause that demands great sacrifice that is not universally applied and that has no identified endpoint. Until that is corrected, I remain a committed draft dodger.

In a recent Blog I tried to point out the need to show prudence in pursuing all the goals of any political party or advocacy group. The response was underwhelming. Perhaps a comment from someone much better informed then I would help. Many of us know of the warning by President Eisenhower against the “Military Industrial Complex”. What follows is a much lesser known warning but one I believe very germane to our present time with our daily and frequently misleading “talking points”. It is in the form of a letter response to a veteran who had communicated with him. I might also note that apparently our times are not much different from earlier times.

“Dear Mr. Biggs: I was much moved by your recent letter to me, and can well appreciate from it the serious thought and reflection you are giving to problems affecting our country. The points you raised (some not entirely clear to me) included three that especially impressed me. Some of them clearly have significance to our free society and form of government.

I refer to your comments that normal confidence and feeling of security can be easily shaken in these times; your implied request that I undertake to stabilize the spirit of our population, and your conviction that if the government and its leaders know the nation’s goals and missions and state the way they should be achieved, those leaders could be sure of the backing of our people.

Concerning these comments I have several observations.

I think it is undeniably true that the activities of our government have tended to become much more complex, impersonal and remote from the individual, with consequent loss in simplicity, direct human contact and clear guidance by higher authority I believe you to be urging. In good part this situation is inherent in life in the mid-twentieth century--in a highly developed economy and a highly complex society such as our own. The complexity is reflected in the need to qualify (to "hedge" is the term you use) many of our policies, which means simply to give careful thought to the possibility that what we do in one field may have unacceptable impact in another. To reduce complexity I believe it essential to keep governmental activities as close as possible to the people concerned. I have frequently stressed the need for these functions to be performed at local and state level rather than at the Federal. Incidentally, I assure you that I have tried always to avoid creating any doubt in anyone’s mind as to my own goals and convictions. If I have failed in this respect, it has been purely an error of an expression and not one of purpose.

Another part of the difficulty undoubtedly comes from the high degree of confusion and uncertainty on major national problems that seems to exist today. As you know, for four years our government has been a divided government, with the Administration confronted by a Congress controlled by the opposition--and the two working, if not in opposition, at least at cross purposes much of the time. An example is the sparring that seems to go on constantly over our defense situation--and specifically over our missile position. It is difficult indeed to maintain a reasoned and accurately informed understanding of our defense situation on the part of our citizenry when many prominent officials, possessing no standing or expertness except as they themselves claim it, attempt to further their own ideas or interests by resort to statements more distinguished by stridency than by accuracy.

Even if this division in the government did not exist, I doubt that citizens like yourself could ever, under our democratic system, be provided with the universal degree of certainty, the confidence in their understanding of our problems, and the clear guidance from higher authority that you believe needed. Such unity is not only logical but indeed indispensable in a successful military organization, but in a democracy debate is the breath of life. This is to me what Lincoln meant by government "of the people, by the people, and for the people."

The mental stress and burden which this form of government imposes has been particularly well recognized in a little book about which I have spoken on several occasions. It is "The True Believer," by Eric Hoffer; you might find it of interest. In it, he points out that dictatorial systems make one contribution to their people which leads them to tend to support such systems--freedom from the necessity of informing themselves and making up their own minds concerning these tremendous complex and difficult questions.

But while this responsibility is a taxing one to a free people it is their great strength as well--from millions of individual free minds come new ideas, new adjustments to emerging problems, and tremendous vigor, vitality and progress.

One of my own major aims and efforts has been to assist in every way open to me in giving our people a better understanding of the great issues that face our country today--some of them indeed issues of life and death. Through being better informed, they can best gain greater assurance regarding our nation’s situation and participate in establishing policies and programs which they think to be sound and right. The quest for certainty is at best, however, a long and arduous one. While complete success will always elude us, still it is a quest which is vital to self-government and to our way of life as free men.

May I end by saying how stimulating I found your letter and the thoughts it evoked, and how much I admire your fortitude in pondering these problems despite your deep personal adversity. My best wishes are with you in your grave illness. “

From: The Papers of Dwight David Eisenhower, Volume XIX - The Presidency: Keeping the Peace: Part VI: Setbacks; November 1958 to February 1959 Chapter 15: "Debate is the breath of life"

Recently there were some exchanges on “smart” growth. The idea of trying to reduce impact on our environment is unassailable. The approach to doing it is not! Retrospectively trying to “punish” people living in single family home is at best vindictive. Single-family homes were the American dream. The “smart” growth solution is to force people vertically into large apartment complexes. Shades of the Soviet Union with those massive centrally controlled housing units. Is this the best the “smart growth” community can envision?

How about “climate change”? Of course we need to address it! The solution, however, appears to be to raise the costs of almost every product produced in this country. Are our international competitors buying into this? Not on your life! We have 10% unemployment with a significant number of those on government “hand-outs” because the job they held is now gone – likely forever. So let us have more low paying service jobs so we can deny Americans the better paying “blue collar” jobs we used to have. Is there no better way to try to address climate change?

I could go on all day with initiatives by one group or another to make things “better”. All of them cost money. All of them will take that money from the American consumer. Yes, many of them are worthy to consider. Could it be possible that we might prioritize all these “initiatives" and address them over a longer period of time so we do not dramatically reduce our own standard of living at the same time as we drive much of our better paying jobs off-shore?

Why are we doing this? Are the people pushing these efforts too stupid to understand the consequences? Do too many of the people pushing these initiatives expect a direct benefit –are they simply greedy? Are these people into “control”? They seem to thrive on making their fellow citizens conform to their way of life. Are they in essence power hungry.

If we do not do something to stop this incessant demand for government intervention to change things at ever increasing cost to many if not most of us, will we find our children’s future what we would have it be? Are we headed for all the success demonstrated by the former Soviet Union with all the associated controls and inequities?

What do you think?

I noted in yesterday’s LJW a letter to the editor about our LMH. I, of course, am sympathetic to the thrust of the letter. I am going to use it to address a topic that it avoids. Who pays?

Day after day, there are articles documenting some form of human tragedy or misfortune. Day after day there is a direct or not so direct call for somebody to do something. In most cases the implied somebody is government. What is always lacking is some indication of an understanding that if government is to do something, somebody has to pay. That somebody is inevitable those of us with and income through our taxes.

In a society that already extracts close to $40K of a $100K income for taxes you would hope that those demanding more would have a suggestion as to where the resource is to be found. Should we go to 50%? Is there some group not paying a just contribution? Maybe the lower end of the income distribution should pay at least some tax?

Perhaps all future LJW articles should include some inkling of where the resources to right the documented wrong are to be obtained. What part of the existing budget should be decremented to find the resource? Whose taxes should be increased to pay for righting the wrong?

There comes a point where the society takes so much from the productive elements that the desire to be productive wanes. That happened in Britain before Mrs. Thatcher and we benefited from a large brain drain. That happened in our own District of Columbia some decades ago when many tax paying enterprises moved to another state to avoid what some considered confiscatory taxes. It is happening now in California.

There are parts of the world that well reward productive citizens and before long, if we are not more circumspect, we could be the society experiencing the drain. Maybe, you don’ think it can happen here. You would be wrong. Lawrence, because of high taxes, is in the opinion of some already experiencing a loss of jobs and a decrement in population-despite being a government enclave. When the productive people leave all the goodies we feel are so important will be lost because there will be no resources to pay for them.

Where is the tipping point? Is it in the larger interest of the society to keep pushing toward it? Should we start looking to priorities rather than new revenues? Alexis DeTouqville, the distinguished French commentator on our affairs, noted that a society where the majority of the people benefit from public largess may not long survive. Are our days numbered?

My wife and I went to hear our Congressperson speak yesterday. We had three specific questions about how the ongoing health care reform would affect our Medicare. We ended up in the hallway with no real way to ask those questions.

There were a lot of people there from the far left pushing a single payer system. To our knowledge even the Democrats are not pushing that solution. There was clearly much passion in the “performance” of the advocates for that solution. There seemed to be little tolerance for any other opinion. The tactics of interrupting people and pushing signs around are reminiscent of the tactics employed by the “Reds” against the Trotskyites way back then. Could our far left be adopting such tactics?

Despite Ms Jenkins statements that she supported reform to include portability, affordability and inclusion the group continued to harp on those very issues. Many factoids were pronounced but little effort (with one exception) was made to tie them to any specific proposal. Nobody dealt rationally with costs. Costs were dismissed by branding the Insurers as greedy so that all could be paid by their elimination. No independent entity such as the CBO has come to any such conclusion.

One participant threw out data about our dismal performance in a number of areas such as infant mortality sighting a series of statistics gleaned from a number of sources as the basis for our adoption of a single payer system such as in Sweden. The speaker is a PhD at KU. While I will not dispute her data, I will dispute her implied conclusion.

Could there be other factors besides health care that could produce our poor performance. Sweden being a very homogeneous country has cultural norms that are different from ours. The incidents of “crack babies” and other self inflicted illnesses are not tolerated there as easily as we seem to do so here.

More importantly we have government sponsored health care for all needy infants and their mothers under the Chips’ program. Unfortunately, many do not use it properly or at all. So just why do we have higher infant mortality? Could it be that our society tolerates such stupid and self destructive behavior and then is unable to recover from the results.

I bet we could write a PhD thesis on some of the differences between here and Sweden that just might explain our poor performance. One would think a PhD would know there is more to useful data then statistics alone. They must be put in context and the differences understood. How did she earn her PhD? Her performance reflects poorly on KU.

People, redoing our entire health care system is not a “walk in the park”. It represents about 20% of our economy. More significantly it deals with life and death decisions. I have health care as does a significant majority of us that want it. If I am to give up something, I want to know what that might be. This whole thing needs to be better defined and more clearly articulated.

Why should I accept the assurances that I will suffer no impact proffered by people that disrespect me because of my concerns? I have a lifetime of experience watching my government renege on promises and assurances – many affecting my wife and me. I am sorry but I will not be cowed by loud and boorish people demanding their goodies at what appears to be my expense!

It appears that we have many very greedy people right here in Lawrence! I know, from each according to their ability to each according to their needs. I don’t buy it! My life and that of my wife could be on the line. I demand we do this right! I will not continue to tolerate heavy handed tactics that seek to evade real concerns!

Fooled again - I sure am gullible. Here I was protesting a requirement that I pay a disproportionate fee for the sidewalk that I do not own and that is not on my property. I had been willing to pay a flat fee. But, I missed the point. Why is this a fee? The property belongs to the city and should be maintained, as all real property is, with taxes. Is a fee a tax? No – there is supposed to be some deliverable to the payee!

Cities in Kansas have certain proscribed sources of revenue. They can use the property tax. They can use the sales tax. They can levy fees for services such as water, trash and the like actually provided to a citizen.

Of course, an increase in sales tax requires our agreement. Increases in property taxes run a dangerous gauntlet. Bills in the past three legislatures have addressed limitations on property taxes. Further increases could easily lead to passage of such legislation. Could we have reached a point where further tax increases might be circumscribed?

But, wait a minute. How about new and novel fees. A sidewalk maintenance fee on all property owners is a starter – even if you do not have a sidewalk (if any of us actually do). Then we will see a fee to maintain sod in the parks. How about a fee levied for homeless services? Once we start to charge fees when there is no actual service provided the payee where will these fees end? Yes, it serves somebody’s definition of the common good – that of course is what taxes are supposed to address.

The city has found a really neat way around the normal limits on its ability to tax us to destruction. So, I will “man-up” as suggested by a clueless greedy simpleton and pay for services I do not receive. The rest of you might want to think about what the city is doing before you find yourself paying fees until you are bankrupt!

My compliments to our “law givers”. The future of public services is now limited only by the creativity of our bureaucrats in establishing fees for things now funded with taxes!

Just a thought, why don’t we take a portion of the should be expiring sales tax that has been notionally allocated for a new recreation center and use it for the sidewalks. After all, sidewalks are a recreational element. Then we could give the rest of the tax back until we actually go to the citizens and get permission again to build another recreation center (will it be adjacent to the aquatic center we already have out here?).