Yesterday, I talked about Republicans changing the process of how budgets are decided.  Today, most government budgets start with baseline spending, and then try to figure out how to make a combination of "cuts and revenue increases to balance the budget."  That mindset has led to the tax and spend mentality that predominates in government, whether the government is run by the Republicans and Democrats.  If the starting point of any budget discussion is how much to spend, every decision made after that is driven by a discussion about spending.  In fact, the language of budgets is the language of preserving spending levels, not finding ways to "live within our means."

However, if the budgeters look at revenue, and then try to figure out how to match the spending to the revenue, the whole mindset changes.  I promised yesterday to apply this principle to the Governor’s budget.  Here it is.  The numbers are derived from the Governor’s budget.  Remember, I don’t have thousands of staff to analyze this multiple volume document.  If the numbers are not precise, use the principles to find the right numbers.  These principles can work, and will revolutionize the public discourse about the budget.

There are two revenue "numbers" in the Governor’s budget, one without the tax increases, and one with the tax increases.  With the tax increases, $89.7 billion general fund, without the tax increases, $83.5 billion general fund.  Since I am a no tax increase guy, I choose the $83.5 billion number.

Here is an interesting fact, the Governor’s budget proposes spending $84.6 billion in the general fund.  That is only a $1.1 billion deficit, not  $25.4 billion as has been reported.  That $25 billion number comes only if NO spending reductions are made.  Quite frankly, no tax increase is necessary in the Governor’s budget, only $1.1 billion more in spending reductions.

However let’s go on to apply the revenue principles to the budget.  Why is the spending plan enacted in 2010-11 required to be the baseline?  It is not.  We should choose as our baseline the year whose revenue is closest to the projected revenue for 2011-12, the $83.5 billion number.  Let’s go to Schedule 6 in the Governor’s budget summary (see the attached file).  We find the last year where revenues were closest to the budget year (11-12) was the 08-09 year, where revenues were $82.7 billion.  Our problem, if we adopt the spending plan for that year, we would be spending $91 billion.  So, let’s go back a little further.  Revenues in the 04-05 budget were $82.77 billion.  Spending was $79.8 billion.  So, starting with the 04-05 spending plan, and then adding on to that with our priorities, would give the state a workable plan (since all of those records are easily accessible), and balance the budget.

And how about the public relations battle?  The response to the left’s cries of starvation and dying from these "cuts" is simple.  Most people remember 2004 and 2005.  The economy was booming, people weren’t dying in the streets, children weren’t starving and old people had nice warm places to live, on $82.77 billion in government spending.  Most people would actually like to return to those "good old days."  The doom and gloom scenarios wither away.

It is a budget proposal that works, is easily explainable, and counters any argument by the Dems about death and destruction.  More important, it gives Reps a place at the table, and a method to begin redefining the budget process.  No more are the Republicans just quietly sitting by, being the party of NO (which by the way I don’t mind, but I think you have to explain why you are saying No, and this helps you do that).  Republicans need to enter the arena, and fight the fight armed with the tools and the language to counter the leftists in the Capitol and the media.  This gives them a structure around which to accomplish that task.

Apply the principles, enter the arena.  My fellow Republicans, you can win this fight, and stop the tax increases.  Just do it. 

This entry was posted on Thursday, January 13th, 2011 at 12:00 am and is filed under Blog Posts.