We’re Looking Bad By The Numbers
Wednesday - November 18, 2009
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Del.icio.usThe numbers didn’t get any better last week. The state Department of Taxation reported predictably miserable October tax collections: 10.9 percent below last October. Every revenue category was down: The general excise and hotel room tax revenues were 12.9 percent below October; the individual income tax brought in 9.6 percent less; and corporate income tax revenue was down 38.3 percent.
In total, the state collected $1.38 billion less than it did a year ago.
That means, of course, that the state will cut more programs, lay off more workers, or furlough for longer periods those who are deemed essential enough to be kept at their jobs.
What it does not mean is that anyone will be asked to pay higher taxes, neither visitor nor resident. When asked to comment on the lower state revenues, Gov. Linda Lingle’s chief policy adviser, Linda Smith, reasserted the governor’s position: “She doesn’t want to increase taxes because she thinks it would be adverse to bringing us out of this recovery.”
So our school-age children will pay by spending fewer hours in their classroom than any other young scholars in the country. Our citizens will pay by finding state offices closed and services curtailed. Our state and county workers will pay as their salaries dip.
We’ll all pay, in the short run and the long.
But our governor will not entertain the idea of raising taxes on those with the ability to pay.
That’s a shame.
I understand the degree to which no new taxes have become the ideological base of the Republican Party over the last 30 years. But these are not normal years.
And I would remind my Republican friends that until 30 years ago, fiscal responsibility and balanced budgets constituted the ideological base of the Republican Party. Republicans abandoned them with the arrival of President Ronald Reagan and “trickle-down” economics, thus the Republican credo became tax cuts for the rich and “no new taxes.”
In a period of economic crisis, however, to refuse to tax those with the ability to pay verges on gross governmental negligence.
Another number reported last week holds a lesson regarding taxes, spending and the role of government. The Hawaii Employees Retirement System posted a surprisingly healthy balance: $9.77 billion. That was up almost $1 billion from the previous quarter. The ERS’s numbers began to tumble in the first quarter of 2008 with the failure of Wall Street investment firms and reports of the tremulous condition of the nation’s banks. The ERS’s portfolio of investments was valued at $11.7 billion in the third quarter of 2007. By the first quarter of 2009, it had spiraled downward to $8.12 billion.
The Federal Reserve Bank stepped in. So, too, did President George W. Bush and Congress, with a $900 million bailout of the banks. President Barack Obama and Congress followed in the spring of 2009 with a $900 million stimulus package. Republicans in Congress, dredging up their distant past as the fiscally responsible, yelled “Foul!”
Bailout and stimulus appear to have worked, however, on the stock market, but not where the mass of Americans work.
It’s jobs the nation bleeds. The nation’s unemployment rate soared to 10.2 percent in October with another 17 percent listed as “under-employed.” As I write, Hawaii’s October unemployment number is not in, but it was at 7.4 percent in September.
Before the nation sees economic recovery, we may well need more economic stimulus. Nobel Prize economist Paul Krugman, a man who forecast the bursting of the nation’s housing bubble five years before it happened, argues that Obama’s $900 billion was too small; $400 billion more was - and will be - needed.
Oh, there was another bittersweet number reported last week. A Pew Center study did not rank Hawaii among the top 10 states on the brink of financial collapse.
We’re No. 19.
I’m trying to find some comfort there.
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