Cut taxes, but not my benefits

That seems to be the confusing, and untenable, position of many people today. I just read an article in the NY Times and its accompanying poll that asked questions about how to cut the deficit. It seems that most people understand that you can't just keep borrowing money from the future to pay for things today. However, when asked what they are willing to give up to reduce spending, the answer is "not MY benefits".

I think that highlights a fundamental problem - people think the government 'gives' them something; Government can't 'give' anything to people in general. It is possible to give something to an individual; the government then has to take something from hundreds, if not thousands, of other individuals to pay for it (whatever 'it' might be). So, I would propose that government's best purpose is to provide some service, or services, to all the people. At the federal level an good example is the military: we all benefit from the security a strong military provides by discouraging others from embarking on adventurism against us. At the state level, an example is education and highways - we all benefit from a literate, well educated population, and we all benefit from a road system that allows us to move around our state relatively easily. At the city level, fire and police departments, roads, and parks are all examples of services that everyone benefits from.

The catch (you knew there had to be one) is that these services cost money. So, if you reduce the money you are willing to spend, then the services have to be reduced accordingly. In Corinth, Texas this has been an issue for several budget cycles now, and looks to be one again this year. Tax and fee revenues have decreased for the last several years, requiring spending cuts to avoid raising taxes. This budget year, 2010/11 that just started in September of 2010, was unable to be balanced with just spending cuts - so the property tax rate was raised (to the effective rate: more on that later) to keep the amount of property taxes collected level. As of today, we're still expecting a further decrease in property values for the 2011 budget year, that would again decrease the property tax revenue. While sales taxes collected are improving, based on the estimates I have today, that improvement is not enough to offset the drop in property values. The budget won't balance unless spending is further decreased, or tax rates are increased.

For me the question is not do we cut taxes, or cut spending. The question is, what services do we want? What services do we really need? After you answer those questions, a plan can be made to meet those service requirements, and we can see what it costs, then decide if we want to change our requirements. I say this today, because there will be service reductions if spending is further reduced. What we have to do, is determine if we are comfortable with those reductions.