Wednesday, January 09, 2013

Surplus Surprise

Certain states show how to make things work:
Thanks to a Republican governor committed to developing its natural resources, not punishing entrepreneurs who do, Texas legislators are facing an $8.8 billion surplus over the next two years. To the east, Republican governors Bill Haslam of Tennessee and Rick Scott of Florida have also turned recession deficits into budget surpluses. Moving north, Michigan’s Gov. Rick Snyder, Iowa’s Gov. Terry Brandstad, and Indiana’s out-going-Gov. Mitch Daniels, also can now all boast surpluses in the hundreds of millions of dollars. All of these governors managed to turn their state’s fiscal situation around through spending cuts, not tax hikes. Now their budgets are in the black and their economies are growing.

Things do not look as good in Democrat-controlled states. Illinois, who massively raised taxes on the rich, still has a $5.9 billion stack of unpaid bills. California, who also raised taxes on the rich, was supposed to post a small surplus this year. But tax collections are coming in at 10.8 percent below budget projections. As a result, the state is now projected to be $1.9 billion in the red by the end of this fiscal year.

It does not appear that that Congress and the White House will come to any consensus on how best to solve our fiscal crisis at the federal level. Conservatives and liberals simply have diametrically opposed views on how our fiscal crisis can best be resolved while preserving economic growth. But at the state level, conservative and liberal models of governance are being fully implemented.
It bears repeating that Washington could stand to learn a lot from the states...

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