Wyoming Liberty Group
In my Op-Ed in The Hill today I explain why we need to add a Balanced Budget Amendment to the U.S. Constitution:
Inevitably, a debt crisis is coming. We know it will happen - the only uncertain thing about it is to forecast when it will happen. Practically no economist was able to predict the unfolding of the current European government debt crisis. On the contrary, many forecasts were still predicting “business as usual” as late as in 2007. It is just as difficult to say when the U.S. debt becomes an acute crisis. All we know is that the crisis will come. That is as certain as an earthquake in California. And that makes the Obama budget all the more irresponsible. Fortunately, there are some encouraging signs of fledgling fiscal responsibility in Congress. The GOP budget for 2016 slowly reduces the deficit over nine years and balances the budget by 2025. This is a welcome change for the better. There is just one caveat. The GOP budget won't become actual policy unless the Republicans win the next five Congressional elections and the next three presidential elections. We need a better insurance policy against the looming debt earthquake. It is time to reopen the case for a balanced budget amendment to the constitution.
In Governor Mead’s 2015 supplemental budget, the governor called on the legislature to set up a reserve account for an industrial park, and the legislature complied with a $5 million appropriation. The idea comes from the Industrial Heartland in Alberta, Canada, an industrial park funded by the provincial and various local governments to attract oil and gas companies to the province. Although the governor has waxed eloquent on the Alberta government’s use of tax dollars to attract value-added oil and gas activity to the province to create jobs, the Industrial Heartland is but one example of a project financed by a government that lost its way, and has now paid the price at the polls.
- Wyoming needs more than budget trickery
The Consensus Revenue Estimating Group (CREG) released its April 2015 update, and the situation is not rosy. The update shows Wyoming state tax revenue collected between July 1, 2014 and March 2015, and how the revenue collection differed from expectations. It also includes what we can hope for the future. While revenue collections are for the most part slightly ahead of expectations, dark clouds are forming on the horizon.
Wyoming’s State Capitol renovation project is in trouble, and spin won’t fix it. That’s why a $200,000, three-year communications contract to a well-known Cheyenne firm to sell the project raised a few eyebrows. Legislators questioned whether the project should even go ahead, as the design itself is a long way from finalized. With budget deficits and funding uncertainty, is it right to spend money on propaganda for a project with problems no communications plan could fix?
Imagine you have ten accounts you allocate your paycheck to every month. At bill time, you take money from two of these accounts, call them your traditional accounts, to pay your bills. One day, your paycheck suddenly plunges and you don’t have enough flowing into these traditional accounts. No problem, you can just divert the flow from some other account into your traditional accounts and pay your bills that way. All appears good—but is it?
Facing a state budget deficit, declining revenues and the desire to continue spending, Gov. Mead asked, “What constitutes a rainy day?” This thinly veiled call to raid the state’s rainy day account to fund his spending priorities was ignored by the legislature. Instead, the legislature began the search for more revenues by developing a task force called Vision 2020. But if the legislature keeps its focus on revenue mining instead of spending withdrawal, it is merely delaying the rainy day fund raid –or worse, it is leaving a legacy of debt and higher taxes to our children and grandchildren.
The time has come, the walrus said, to talk of many things. Wyoming’s Joint Appropriations Committee (JAC) is talking about a time for spending caution—but it must do more than hold steady. With falling oil prices and a rising deficit, the time has come to rein in government spending.
The JAC started to review Gov. Mead’s supplemental budget on January 21, 2015. JAC Chairman Senator Tony Ross set the tone when he said, “each and every budget item has a constituency, however there is not one dime we can spend here that isn’t one-time money. I am urging you to be cautious about what you spend and whether or not it is reoccurring because if it is—it will come back and double.”