2013 Budget Shortfall Blamed on Fiscal Discipline
It was just announced by the state Budget Secretary that the Commonwealth will need to find $750 million in spending cuts to balance the 2012-2013 fiscal year budget. Revenues are continuing to fall short owing to the lingering high unemployment rate and despite some reasonably good private sector job gains.
Predictably, some members of the Legislature were quick to criticize the Governor for not doing enough to stimulate job growth and generate more revenue. Of course, what they mean by stimulate job growth is to borrow money and spend it on public sector projects that will use union labor. And of course, he should have spent any remaining rainy day fund to make sure fewer teachers got laid off. All unionized workers. Notice a pattern?
The problem is that borrowing comes at a cost. Raising taxes is not an option during a recession and balancing the budget is a Constitutional requirement. Thus, when the rainy day fund is inadequate to close a budget gap, spending cuts have to be made. If the previous administration had not insisted on increasing spending at rates well above inflation for two terms, the budget deficit would never have reached the $4 billion mark and the spending cuts would not have been so painful in the current fiscal year.
But for some, spending taxpayers ‘money, whether from taxes or borrowed and paid back out of taxes, is always the answer to budget problems and job creation. Apparently they have not noticed that all the Federal stimulus and deficit spending a long with extraordinarily easy monetary policy has had precious little impact on the rate of job growth nationally, especially in view of the gargantuan amounts of money being spent and created.