States to residents, localities: forget promises to restore funding
A new normal?
Other Republican advocates of tax cuts in the states were more forthright about their ultimate objectives.
Tommy Stringer, a Republican in the South Carolina House of Representatives, agreed. “Those who are calling for more money may be disappointed,” he said. “They’re assuming that we’re in 2007. But 2008 established a new baseline for everything, and we aren’t going back there.”
Owen Donohoe, a Republican state representative in Kansas, said that he saw the income tax cuts there as a step on the path to abolishing the tax altogether. “The faster we can get those rates to zero, the better,” he said.
Though he firmly believes that the tax cuts passed this year will actually lead to higher revenues, an assessment not shared by many independent analysts, he admitted that if that were to happen, he still wouldn’t use that increased revenue to backfill the cuts that have been made since the recession.
“Then we would be able to afford more tax cuts,” he said. “I’d like to make this government as small as I can.”
Donohoe characterized the current level of services being provided in Kansas as “adequate,” an assessment shared by several Republican legislators in other states. John Kavanagh, who sits on the appropriations committee in the Arizona House of Representatives, said that he does not think the cuts there have done very much harm.
“It doesn’t seem to me that they’ve caused people to struggle that much, so I don’t see why we should be spending more” he said.
But Scott Smith, the Republican Mayor of Mesa, Arizona, disagreed. “Some of our state leaders seem to believe that when they cut programs, the need for those programs disappears, too,” he said. “It doesn’t disappear. When you cut funding for homeless veterans, those veterans are still there.”
Smith pointed out that while state legislators have the ability to “abdicate” the responsibility for delivering services onto local governments, local governments have no such option. “We are the last line,” he said. “If we’re not providing services, then people aren’t getting them, period.” (See bottom box on giving local governments more flexibility to raise revenue.)
But several state lawmakers said that wasn’t their problem. “It isn’t the state’s responsibility to bail out the cities and towns,” said Arizona Representative Victor Williams. “They need to figure this out on their own.”
What’s next?
Smith hopes that as state revenues increase while local governments continue to make cuts in necessary services in coming years, it will prompt a more productive discussion about what the government is supposed to do. “When you’re making cuts of the size we’ve seen here, you’re fundamentally changing the understanding of what our responsibilities are. We need to step back and ask, ‘what are the basic functions of government?’ Then we can fight the battles over additional revenue.”
Florida State Representative Jeff Clemens agreed. “These tax cuts are obviously a strategy to ‘starve the beast,’” he said. “But I’ve lost track of who the beast is. Public education, teacher salaries, parks and roads, public safety? Is that the beast?”
As this legislative session comes to a close, some Republican lawmakers are already gearing up for next year’s fights. In Oklahoma, several proposals to cut taxes were introduced this year, including one that would gradually eliminate the income tax altogether. In the end, however, none of the proposals passed before the session ended, as lawmakers could not agree on how much to cut taxes, or for whom.
When asked whether he believes that the fight will continue next year, Republican State Representative Don Armes laughed. “Oh, don’t worry. This isn’t over. We’ll be back.”
More options for local governments?
In addition to cutting the funding to local governments, many states have placed restrictions on the ability of those local governments to raise their own revenue. Some states, like New Jersey and Indiana, have instituted restrictions on the amount that local governments can raise property taxes each year. Remapping Debate has previously reported on how property tax caps have forced cities to make deep cuts in essential services like public safety as property tax revenue falls. Other states, such as Michigan, have banned municipal governments from levying sales or income taxes without state approval.
“If state governments are going to cut funding to cities, the least they can do is allow them the flexibility to raise their own revenues,” said Christopher Hoene, director of the Center for Research and Innovation at the National League of Cities.
In some states the restrictions also apply to school districts, which are often otherwise empowered to levy property taxes to fund their operations. In Arizona, for example, the legislature has restricted some districts from raising property taxes.
David J. Peterson, the superintendent of the Scottsdale Unified School District, said that because the district is not able to raise its own property taxes, even through a direct referendum, he has had to fire 100 teachers over the last three years. Additionally, a one-cent sales tax increase that was put on the ballot by voters in 2010 — part of which funds local governments and school districts — is set to expire in 2013. Because state lawmakers consistently refuse to raise revenues, Arizona residents are currently gathering petitions to put an extension of the tax on the ballot in November.
“If they are not successful in passing that extension,” Peterson said, “we will be in deep, deep, major trouble.”