"Cutting Expenses" or Passing the Buck?

Back in December, I wrote about how Former Governor Kaine's proposed budget "cuts" were really an effort to shift expenses on to the backs of poor and middle class taxpayers. The other trend that is emerging from the budget discussions is an effort to shift more and more state responsibilities to local government.

This trend really started with the last "bad" recession in the early 90's. Under Former Governor Wilder, the state balanced its budget by cutting higher education, law enforcement, and courts. To avoid cutting back essential services (like prosecuting criminals, teaching children, or having colleges), most local government stepped in and funded the state's responsibilities.

For example, in Fairfax County the county actually pays for many of our courthouse staff or supplements their salary, pays the entire salaries of 15 Circuit Court law clerks to keep Fairfax County's complex dockets moving, and supplements the salaries of clerks and prosecutors - although these are state responsibilities. If they did not, the Courthouse and Commonwealth's Attorney would have an even more difficult time retaining qualified personnel and our dockets would be a disaster. The $700 million of education cuts under discussion are also going to result in all of the Commonwealth's localities picking up more of the tab on education than they have in the past.

Other jurisdictions in the Commonwealth have started to complain about this as well. The real problem is that by shifting state responsibilities to local responsibilities, the practical effect is for more services to be funded by residential real estate taxes and less funded by income and sales taxes. Residential real estate taxes are not progressive - one way or the other, you pay them whether you rent or own and they are not progressive at all. Residential real estate taxes also put disproportionate burdens on elderly living on fixed incomes.

All of these "cuts" are not cuts - they are cost shifts. "Cutting" higher education increases tuition and pushes costs onto middle class families. "Cutting" Medicaid pushes health care expenses to private insurance payers. "Cutting" homeless funds pushes expenses onto charities. "Cutting" mental health pushes people into the criminal system. People still get sick, are mentally ill, are homeless, and go to college. Most of these "cuts" do not make government more efficient, they simply defer our responsibilities.

Our existing government and tax structure is the round peg of an increasingly diverse urban and suburban state being shoved into the antiquated square hole designed for an non-existent homogenous agrarian state. Avoiding this reality just exacerbates inequality and unfairness. This budget crisis presents an opportunity to step up and have an honest discussion about our Commonwealth and move towards long-term fixes, not stop gap budgetary efforts that will prolong regional conflicts, inequity, and maximize the amount of time legislators are focused on solutiuons intractable problems. I hope that discussion starts very soon.