Tuesday, October 2, 2007

The New Floor for Big Government

On Sunday night, the legislature gave Governor Granholm most of the new revenues she asked for, about $1.5 billion. Argue if you like whether she needed the money to balance the budget, or to "protect the vulnerable" or to keep government running. Believe what you like about the reasons for the big increase in revenue, the fact is we have raised the floor for the minimum budgetary expenditure for next year.

Government grows; no matter how hard we try to shrink it, the best we can hope for is to minimize its growth. Under Craig DeRoche's leadership as Speaker of the House in 2005 and 2006, government did something it has not done in years: it grew at LESS than the rate of inflation. But this year, we went back to government business as usual. The budget is not final, but when it is at the end of October, you will find that once again state government is growing at above the rate of inflation, even though the economy is contracting and state population is shrinking.

Bad as all that is, early projections are that the budget for 2008-09, will be $500 million in the RED. Anyone care to wager that number will be larger when the annual revenue estimating conference takes place next January?

We conservatives have said it ad nauseum, Michigan does not have a revenue problem, it has a spending problem. The halls of the Capitol have been clogged with good people called lobbyists. They work hard and earn their money well. They are paid to make the case for any number of agencies and organizations, all of whom are tax-eaters. When they see a fresh supply of revenue, they descend on the black and white tiles of the Capitol like a plague of locusts. They are every bit as effective; when they are done, there is nothing left.

We just increased taxes by $1.5 billion; we do not yet have a budget for the new year. This means opportunity. Every beneficiary of the government largesse will be there, making the case for why they need just a little more money.

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