Monday, July 02, 2007

Overtime budget decision: Senate Dems v. House GOP

The question will likely be resolved in late July: will the Senate Democratic plan for solving some problems (like a state structural deficit, poor schools in property-poor areas, a transit system shutting down in September and too many medical bankruptcies) with new revenues and new investments be implemented or will the House Republican plan for letting the problems wait for another day in return for not significantly raising taxes, fees or gambling prevail?

In legislative leader parlance, I think the real overtime battle is between Emil Jones and Tom Cross.

I'm not a fan of the leader shorthand that is often employed in state government discussions, as I think each caucus is much more diverse than the particular personality and policy preference of the leader. So, it isn't enough to say "what Madigan wants" as a substitute for what the members of the House Democratic Caucus want, because each of the leaders represents the views of their members, not just their own views.

So, it's clear that many (perhaps most) Republican members would accept not solving some problems in exchange for not increasing the state's 3% income tax, the sales tax, creating a new business tax, raising state fees or expanding gambling (aside from putting slots in existing casinos and, perhaps, race tracks).

It's also clear that many (certainly most, perhaps all) Senate Democratic members would accept raising taxes, fees or gambling opportunities in exchange for solving problems and making investments in education, transportation and health care.

Now that at least 4 House Republicans are required to pass a budget for the rest of the calendar year, the ultimate consensus over the FY08 budget must include some of the views of House Republicans.

Thus, a stalemate.

Either the Senate Democrats will have to trim their sails and allow many problems to go unsolved for another year or the House Republicans will have to grudgingly accept higher taxes, fees or gambling to invest the revenues in solving problems.

Perhaps they will "meet in the middle" but ultimately, the budget must fall between those two poles.

There are a few interesting observations.

One is that there are certainly 4 lower-income districts currently represented by House Republicans that would benefit from higher taxes, fees and/or gambling and the corresponding higher state spending that such taxes, fees or gambling can finances. Generally speaking, lower-income districts benefit from higher spending, and many lower-income rural districts are represented by Rs. Will these rural Republicans be able to "vote their districts" and support a Senate budget or will their ideological affiliation trump the economics of their districts? Ideally, these rural Republicans would get a seat at the table to help find a budget that can earn the votes of 71 Representatives and 36 Senators.

Another observation is that in the face of a stalemate, there is no natural default position. In other words, if Emil Jones and Tom Cross both dig in their heels (and forgive the leader shorthand again, as it over-emphasizes the personalities of the leaders) and stick to their respective positions, even as the 31-day budget expires and the state government starts to shutdown, accepting a no-growth budget in the face of disagreement isn't any more natural than accepting a high-growth budget in the face of disagreement.

Some might suggest that if there isn't a consensus for solving problems, then the coalition to increase spending has not grown strong enough so the legislature should default back to the status quo. However, when enough members have decided they will not support the status quo, then the argument is flipped: the coalition to maintain the status quo has not grown strong enough, so the legislature should default to new spending.

All that is to say that this is really the time when advocates and citizens should weigh in on their vision for state government and help forge a consensus over the smartest investments we can make. Legislative positions will change over the next four weeks or the state government will shut down.

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