The structural deficit

I could have told you that one.

A July report by Georgia State University put the term “structural deficit” on the tongues of legislators and state candidates. Slowly, voters across the state are hearing it, too.

“A structural budget deficit exists if, even in normal economic times, tax and fee revenues are not sufficient to support existing public-service levels, and thus the gap between revenues and expenditures will not ‘naturally’ close as revenue growth outpaces the growth in expenditure demand,” wrote authors Carolyn Bourdeaux and David Sjoquist. “Such a deficit requires long-term policy changes to the revenue structure, as well as changes to the amount, type, or efficiency of public services provided, in order to close the gap.”

I have never understood why Georgia’s legislators have decided to exempt every preferred group of voters from taxes. Blue hairs get exempt for one thing, parents for another, farmers for another. The state is using the tax code to play special interest politics instead of generate revenue for the state.

Now it’s biting them on the ass.

We should not be using the tax code to punish or praise any particular group. It should be used to raise revenue to fund the state — period.

8 comments

  1. …and there’s this interesting little gem too…

    “The commission’s first meeting had to be moved to a larger room to accommodate the 300 lobbyists planning to attend, retained to protect tax breaks dear to some company or industry.”

  2. saltycracker says:

    Erick,

    So the answer is more revenue to hire more public servants and six figure administrators with unsustainable increasing early out pensions, build bureaucractic empires, monuments and things like the black hole of rapid rail. Sure wouldn’t want to get the house in order with efficient public employees and restructure gov’t……maybe with your plan we can build a $500 million school like L.A.

    There is never enough money to run gov’t.

  3. Quaker says:

    I hope (but do not expect) the legislature to give up the myth of what President GHW Bush called “vodoo economics,” the now thoroughly discredited “supply side economics”, which is to exempt the gentry from taxation and shift the the burden to the petitte bourgeioisie and, especially, the proletariat on the theory that the lower classes will flourish sufficiently if their betters flourish wildly. Before you scoff, recall that after a brief phase-in, Ted Turner, Bernie Marcus, et al will be exempt from state income taxes on unlimited “retirement” income.

  4. Red Phillips says:

    “Such a deficit requires long-term policy changes to the revenue structure, as well as changes to the amount, type, or efficiency of public services provided, in order to close the gap.”

    Not true. “As well as” should be replaced by and/or. And the conservative should prefer the or “changes to the amount…” part.

  5. saltycracker says:

    One guaranteed consequence of Erick’s plan, assuming it applies to the property tax program, is absent the various reductions like conservation or homestead you will see economic catastrophe first hand as a high percentage of Georgia will be put on the auction block, confiscated for taxes and/or sold at crisis prices.

    Nothing churns land better than subjective appraisals and cash extractions from non-cash assets. But then folks that can’t raise their income to accomodate this should not own property, should they ?

    • BoogDoc7 says:

      False dichotomy.

      A solution doesn’t HAVE to be just “close all the holes.”

      Simplify and lower the tax rate across the board, so that it equalizes out.

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