Yesterday the St. Louis Post-Dispatch ran a great editorial. The problem it addressed was straightforward: the $500 million plus state budget shortfall. The editorial writers made no bones about the obvious source of the problem:
Digging out of this hole is Missouri’s true challenge. But neither our Legislature nor our governor can get over their “no new taxes” pledges to do anything meaningful about it.
The solution they suggested was just as straightforward:
Mr. Nixon should declare a holiday. A tax credit holiday.
This single action would more than fill the budget hole estimated by legislative leaders to be in the range of $500 million.
Everybody in the Capitol knows that Missouri’s biggest ongoing budget problem, outside of the Great Recession, is the state’s propensity to hand out tax credits like legislative candy along a parade route. Some credits go to good causes, like senior citizens on a fixed income. Most go to developers or corporations as incentives, theoretically, to create jobs.
Unfortunately for the theory that tax credits create jobs, the evidence that they do so overall is just not there. This fact is fairly well known, accounting for the fact that there are folks on all sides of the partisan divide willing to take pot shots at the practice.
Happily, there are some folks who are willing to at least try to take action to rationalize the use of tax credits. Sadly, they aren’t in Missouri. Michigan Democratic lawmakers, referencing the relationship between an educated work force and job creation, put forward a plan to finance free community college tuition for state residents, which would paid for by canceling $3.5 million worth of tax credits:
Study after study after study has emphasized the importance of a highly educated workforce in the economic vitality of any state in the 21st century” said Senate Democratic leader Gretchen Whitmer, D-East Lansing
So what has our governor decided to do? In spite of the importance of education to our economically beleaguered state, Governor Nixon proposes to partially balance the budget by cutting $89 million from an already mediocre state higher education system.
This year, when you hear talk about the state’s dire budget situation and the pain and suffering it has caused – 860 state jobs will be lost, for just one instance – remember there was a solution staring us in the face, and miracle of miracles, it might even have garnered some bipartisan support. Also keep in mind that a few days ago, GOP gubernatorial candidate Dave Spence actually proposed a moratorium on tax credits as an important part of his economic plan. He seems to have learned something in those home economics courses.
To give the Governor his due, he’s up against a system that practically dictates that the worst case solution will be the only practicable option. In spite of some GOP criticism of tax credits, others in the legislature have made their unwillingness to reform the state’s program known. Last year, in fact, the Governor was warned by Steve Tilley, who has since become House Speaker, and three other powerful committee chairman – before he even put a budget proposal forward – that they would not permit him to use tax credit reform to balance the budget.
It’s hard not to conclude that once again powerful vested interested are calling the shots when it comes to the distribution of state tax dollars. Nevertheless, one can’t help wondering just what might be achieved if the Governor had been willing to go out on a limb and show just a little more political courage. Surely there’s a time when we have to fight – even if we’re already backed to the wall? Perhaps that’s when we most need to show some fight.