Debunking Two Big Lies about Initiated Measure 15

I voted for Initiated Measure 15, the extra-penny sales tax to fund K-12 education and Medicaid. I'm not deeply enamored with IM15. There are decent arguments against this regressive tax. Whether IM15 passes or not, we will have some serious legislating to do to make our state taxing and spending more just and effective.

But I can recognize bogus arguments made against Initiated Measure 15. Two of the biggest fibs about Initiated Measure 15 are the following:

1. IM15 is the biggest tax increase in state history.
2. IM15 dumps much more money into education and Medicaid than has been cut.

The first one is a matter of mathematical interpretation. The dollar figure, $180 million in new revenue, may be correct. But raw dollar figures over time and inflation are bogus. Percentages matter. Jon Walker lists changes in the sales tax in his November 4 article on IM15. We implemented a state sales tax of 2% in 1935 (in the midst of the Depression and the Dust Bowl, no less!). In 1937, we upped it to 3%. Adding that extra penny increased the net sales tax by 50%. In 1969, we added another penny, a 33% increase in the sales tax. In 1980 and 1987, we implemented brief extra-penny increases, each of which was a temporary 25% increase. IM15 proposes to increase the state sales tax from 4% to 5%, a 25% increase. That's a lot of money, but proportionately, it is not the biggest tax increase in South Dakota history.

The second claim above is also untrue, at least in terms of K-12 funding. Jon Walker provides the following numbers on our state per-student allocation for K-12 education:

year	per-student state aid	change	PSA if  increased by 3%
2006	$4,238
2007	4,365	3.0%
2008	4,529	3.8%
2009	4,665	3.0%
2010	4,805	3.0%
2011	4,805	0.0%	4949.15
2012	4,390	-8.6%	5097.625
2013	4,491	2.3%	5250.553

I added the fourth column to show what would have happened to the state per-student allocation if we had followed the funding formula in 2011, 2012, and 2013 and increased education funding by 3%. We'd be at $5,251 per student. That would be $760 more than we are spending this year per student.

According to this year's sales tax revenue and K-12 enrollment, Initiated Measure 15 would increase state spending on K-12 education by about $720.

In other words, Initiated Measure 15 restores 95% of the funding that schools should have received if Pierre had not reneged on the K-12 funding formula for three years in row. Under IM15, compared to where they would have been under the the fiscal policies preceding 2011, our K-12 system will still be running short $40 per student, or a touch more than $5 million statewide.

IM15 is a big tax increase, but it is not the biggest in South Dakota history. And it does not put back into education more than has been cut. It actually falls just short of filling the gap our legislators have dug in the last three budgets.

Daugaard Visits Madison Middle School -- Kids! Ask Tougher Questions!

Speaking of the budget, I learn from KJAM that the man making the state budget, Governor-Elect Dennis Daugaard, swung through Madison to address kids at Madison Middle School. They asked some tough questions, like what Daugaard is nervous about. Now if only some bright eighth-graders could have made him more nervous by asking which of their teachers Daugaard would fire to satisfy the 5% cut to K-12 education he is likely to support.

Regents Face Less Rosy Budget Picture

I noted last week that my current employer, the South Dakota Board of Regents, is projected to receive $54 million more in federal funding in the coming budget year. Under that headline, one may also note that Governor Rounds's otherwise austere budget includes $3.8 million more in state funds.

However, as Bob Mercer reports, those numbers are deceptive. The public university system will likely be tightening its belt (or are we at the budget-cutting point where strait jacket is the more apt metaphor?) just like everyone else. According to Mercer, the governor's plan expects the Regents to take $10.6 million in stimulus dollars and sock it away for FY 2012. As was the case with Rounds's entire budget address, his proposal offers no vision of how or whether the state will make up that funding shortfall when those stimulus dollars finally run out.

Mercer also notes that Governor Rounds included in his budget proposal the 2% pay increase the Regents requested. Our university profs, grounds crews, and other staff would be the only state employees getting a raise. I can certainly make the case for giving our university staff the raises they have foregone for two years... but don't expect anyone in the Legislature's Republican majority to do so.

In their budget discussion last week, the Regents apparently got a timeline for our next governor's budget. Board president Terry Baloun tells Mercer we may see Dennis Daugaard's budget proposal around January 19. Set aside some blog time for that date!

Adelstein on Balancing Budget: Raise Sales Tax

Good grief: if Dakota War College keeps slacking off, will I have to start getting my news from Gordon Howie's wingnut blog? That's scary... but it's the case this morning.

In a public discussion attended by hardcore Black Hills Tea-o-crat (rhymes with theocrat) Ed Randazzo, State Senator Stan Adelstein said Saturday he plans to float a bill in the 2011 session raising the state sales tax by one penny. Adelstein would impose this emergency tax for just three months of the year for three years. The temporary extra penny would raise $50 million a year to help erase South Dakota's looming budget shortfall.

Adelstein notes this plan has the added benefit of getting 26% of its money from tourists.

Mr. Randazzo hyperventilates over the plan with his usual Glenn Beck bromides. Randazzo opposes tax increases that allow the growth of government. He misses the point, however, that Adelstein's tax increase would only allow the reduction in cuts of state government.

Randazzo then opens his rich trove of wingnut contradiction by saying "We must cease the dependence on the 'trainload of money' from Washington to balance the budget." In Ed's fantasy-land, South Dakota is entirely self-sufficient and doesn't depend on Uncle Sam to meet its statewide needs for roads, farm aid, Social Security, Medicaid, Indian education and other reservation services.

At least Senator Adelstein is willing to look at South Dakota's fiscal situation with honesty and guts. Tune out the wingnuts, Pierre, and pay the bills!

Rounds Budget Ignores $29 Million Funding Gap for Homestake

This week, reporter Bob Mercer declared that Governor Mike Rounds's effort to realize Bill Janklow's vision of converting the Homestake mine into a world-class research facility would be recognized as the greatest achievement of the Rounds administration. In a November 12 blog post, blogger Pat Powers pointed to the Sanford Underground Laboratory in Lead as "Mike Rounds' one crowning achievement."

The biggest jewel in Rounds's legacy crown may have just fallen out. Last week the National Science Board decided to ax a $29-million grant that the National Science Foundation it oversees had authorized for the Sanford Lab last year. The National Science Board had lots of good things to say about the lab when they visited in September, But now board member Mark Abbott says the Department of Energy, other agencies, and perhaps international sources should fund the project instead of NSF.

The Governor has spent "countless hours on the phone" with Washington trying to fix this funding flop. Losing those funds would be bad for the lab, even in the short-term. Governor Rounds says at the very least, the scientists at the lab need steady funding for job security. Ron Wheeler, director of the South Dakota Science and Technology Authority that runs the lab, told legislators last month "We’re not looking for the (South Dakota) taxpayers to cover any more expenses for the authority."

Comparison: Governor Rounds has asked for a $39 million reduction in state aid to K-12 education.

The Governor already had to cajole the Legislature to approve $5.4 million in additional funding last winter to keep the lab afloat until the NSF funding was anticipated to arrive in May 2011. The disappearance of that NSF funding could create an ugly political situation in a legislature already being asked to cut K-12 education 5%.

Significant as this decision is, it is thus surprising that Governor Rounds made no mention of it during is budget address on Tuesday. His budget proposal includes a $10.6M reduction in the Science and Tech Authority in anticipation of the NSF grant:

The total recommended FY2012 budget for the South Dakota Science and Technology Authority is $8,960,000 in other fund expenditure authority and 5.0 FTE. A decrease of $10,639,023 in other fund expenditure authority and 65.0 FTE is being recommended because the National Science Foundation (NSF) is expected to take over the Deep Underground Science and Engineering Laboratory (DUSEL) operations in the spring of 2011 [State of South Dakota Governor's Budget: Fiscal Year 2012, p. 47].

The National Science Board met December 1–2. Governor Rounds presented his budget December 7. It seems odd that the Governor would not address a significant budget setback for a project so important to South Dakota's educational and economic development, not to mention the Governor's "legacy."

I share the Governor's desire to see this project go forward. I sincerely hope that this governor's greatest legacy may be a facility for the eggheads and intellectuals who too often get short-shrift in South Dakota culture.

But if the Legislature and South Dakota taxpayers aren't going to be asked to cover the gap again, who's left? We could hit T. Denny Sanford up again... but I have a feeling we're going to enjoy the splendid irony of Republicans John Thune, Kristi Noem, Mike Rounds, and Dennis Daugaard working hard to win more money from Washington, D.C.

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possibly related:

While stopping all the tax hikes would be a good first step, this alone won’t eliminate the job-killing uncertainty hanging over our employers and entrepreneurs.

That’s why we need to focus on cutting spending and reducing the size of government. The American people want us to stop spending dollars we don’t have.

To do that, we need to start taking a long, hard look at the size and scope of government and find new ways to resist Washington’s urge to grow and to grow. Let’s do a better job of following the money and evaluating the effectiveness of government agencies [Kristi Noem, GOP radio address, 2010.12.11].

Update 2010.12.13 10:06 CST—Definitely related: Dr. Newquist's discussion of the Homestake Lab. He notes that the NSF may not have been authorized to make the $29-million "commitment" we thought we had for the lab.

Update 2010.12.14 11:30 CST—Mr. Kurtz was an interested party in the mine once.

Uncle Sam Promises $54 Million Boost for SD Universities FY2012

Please tell me Kristi Noem and John Thune won't send this money back: Governor Rounds's budget proposal has Uncle Sam giving $54 million more to South Dakota's public university system in Fiscal Year 2012. That increase is part of $248 million in total anticipated federal funding for Board of Regents programs. Essentially, Uncle Sam picks up 31% of the total $797 million Regental budget.

Some universities come out better than others under the proposed budget. Here's a chart of the net changes proposed from this year's budget to next year's:

	Proposed Changes from FY 2011 to FY2012
Location	State Fund	Federal Fund	Other Fund	Total	FTE
Total	$3,818,909	$53,823,221	$19,902,254	$77,544,384	227.5
Central Office	($6,026)	$0	$1,650,845	$1,644,819	0.0
Scholarships	$31,642	$0	$0	$31,642	0.0
Employee Compensation and Health Insurance	$3,051,208	$1,113,729	$3,181,609	$7,346,546	0.0
USD	$178,715	($2,737,138)	$0	($2,558,423)	0.0
USD Med	$106,310	($1,628,199)	$0	($1,521,889)	0.0
SDSU	$247,604	$4,807,787	$11,412,400	$16,467,791	136.5
SDSM&T	$80,969	$56,579,910	$1,930,000	$58,590,879	40.0
NSU	$48,780	($747,103)	$0	($698,323)	5.0
BHSU	$40,173	($5,710,280)	$477,400	($5,192,707)	11.0
DSU	$39,534	$2,144,515	$1,250,000	$3,434,049	35.0

The biggest chunk of new federal dollars goes to the School of Mines (Tony's probably building an even bigger laser to pop popcorn at the dean's house). The biggest jump in jobs, though, comes at SDSU, which gets 60% of the new full-time equivalents.

Dakota State University comes out o.k., with nearly three and a half million more in funding and 35 new jobs. That would make up nicely for the seven teachers the Madison Central School District would have to fire to make up for the $275K Governor Rounds wants to cut from their budget. Maybe we just need to graduate some kids early and send them to DSU.

Proposed Education Cuts Bad for South Dakota: Who Should Pay?

What's wrong with Governor Rounds's proposed budget for education? Aside from the usual GOP view of education as expense rather than investment and a determination to cheat our kids of educational opportunities, plenty:

1. While kids get a 5% cut, administration in the state Department of Education gets a 3.3% boost, $342K more than this year.
2. The FY2012 per-student allocation is $100 less than it was in FY2009. Rounds would set schools back three years.
3. The budget anticipates a 20% drop in students taking Advanced Placement courses. If we want competitive graduates, we should be pushing more kids to take AP, and backing that push with bucks.
4. The number of school districts offering post-secondary dual-credit courses drops from 20 to 6. If that's a local decision, that's bad. If that's a state budget cut, that's worse. And yes, the governor is proposing a quarter-million-dollar cut to dual-credit support.

While doing dishes last night, my wife posited two ways out of this budget mess. We can make our kids pay for it, by permanently hamstringing education funding and denying them the educational opportunities they need to compete for admission to the best colleges, scholarships, and jobs. Or we can make Wal-Mart pay for it by imposing a corporate income tax.

Our kids or our corporations: who should pay?

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p.s.: New Dept. Ed. data show fall 2010 K-12 enrollment at 123,629. Multiply those kids by the $240 per student by which Rounds would reduce the funding formula, and that's $29.7 million in cuts.

pp.s.: If you think a 5% cut from Pierre would save you money, think again: the SD Budget and Policy Project reminds us that your local school district (and health care providers) will come a-shifting those costs to you one way or another.

Local Supers Cool to Rounds K-12 5% Cut

The Madison Daily Leader gets three of our local superintendents on the record about Governor Rounds's proposed 5% cut to state aid for K-12 education. They don't sound happy, but they aren't jumping off any grain elevators yet. They list the cuts we'd face under the governor's plan to lower aid by $240 per student (with adjustments for the small-school formula):

• Madison: enrollment approx. 1150, cuts $275,000 (eliminate the new gym proposal, save $2.9 million, and we cover that shortfall for ten years, maybe more).
• Oldham-Ramona: enrollment 124, cuts $30,000.
• Rutland: enrollment 131, cuts $31,000.

Madison superintendent Vince Schaefer refers to the proposed education hacking as "just talk." He seems to be thinking along the same lines as legislative leaders who are waiting to see what revised budget Governor-Elect Daugaard will submit once he takes office.

Superintendents John Bjorkman from Oldham-Ramona and Dr. Carl Fahrenwald from Rutland both make the point that there isn't any fat left in their budgets. They've already been cutting academic muscle, eliminating programs like FFA and consumer sciences. Anyone who fantasizes that cutting K-12 funding 5% is just getting rid of darned gum'mint waste needs to visit these superintendents.

Update 08:55 CST: John Nelson juxtaposes the proposed cuts to education with news that kids in Shanghai are kicking our cans on math, science, and reading scores.

Live-Blog: SDPB Offers Reaction from Legislators to Budget Address

Senator Jason Frerichs (D-Wilmot) opens politely by thanking the governor for his service. But then he goes right to saying that we need to ask people to pay to keep these services alive. Frerichs expresses his hope that Daugaard will bring a budget package with some vision to the table and protect K-12 and Medicaid providers.

What else can we cut? asks SDPB's Cara Hetland. Frerichs says we can find some savings by closing wings of prisons and reviewing other programs.

Now Rep. Larry Tidemann (R-Brookings) from the appropriations committee. He says he's not surprised this budget is tight. Hetland asks about his position on education. Tidemann says the Legislature can look at this budget, find out whether schools can live with a 5% decrease. He says he wants folks to let legislators know what they think in the coming month. Contact Tidemann at his home number: 605-692-1267.

Tidemann says we need to invest in education, but everything is being cut. He acknowledges that the next discussion after how to cut those programs will be whether we raise taxes. At least he's thinking about it.

Rep. David Lust (R-Rapid City) joins SDPB's Stephanie Rissler to mumble some vagueries. he says federal mandates are coming home to roost on Medicaid (whatever happened to personal responsibility? why won't Republicans take ownership of the problems their bad management over the last eight years has caused?). Lust simply hopes that the economy gets better and decreases demand on Medicaid. He says the legislators will wait for Daugaard's budget.

Senator Bernie Hunhoff (D-Yankton) says a lot could change in the 90 days before the budget is due, particularly with new leadership. He says we have 120,000 kids to educate, thousands of old folks in nursing homes; we've got to find ways to pay for this, says Hunhoff!

Live-Blog! Governor Rounds's Last (Thank Goodness) Budget Address

Governor M. Michael Rounds is in the State Capitol and on SDPB right now telling us how he'd screw education if he were around for another term. Here's my live-blog (hit Refresh/Ctrl+R/F5 for updates!):

Actually, Dennis Daugaard gets to lead off. He expresses his thanks to his great friend, Mike Rounds, for being "a leader and a mentor, a negotiator, a strategist," but above all a friend. (And he says this, even having seen the budget report? That's loyalty.)

13:09 CST: Dennis and Mike shake hands, Gov. puts hand on Gov-Elect's shoulder... aw, no hug.

Oops! Ovation almost petered out... then someone decided it wouldn't be cool for the applause for the sitting governor to run shorter than the applause for the governor-elect.

13:12: Governor Rounds says we face "an unpredictable economic recovery." We have $107M in reserves available. These are rainy day funds that we didn't use during the actual rainy day, which still didn't rain that hard in South Dakota.

Important: some of the reserves-dipping that Rounds is finally proposing are to balance this year's budget, not just next year's.

13:13: Wow: $21M less from the Bank Franchise Tax, down from projected $24.9M to only $3.9M. Guess the banks aren't making money hand over fist any more on high interest rates. Governor Rounds embraces usury and blames federal credit card regulations. Contactors excise tax down $14M, but sales tax up $10M.

Rounds proposes using $14M in reserves to finish FY2011 on budget, then $36.9M in reserves to balance FY2012.

13:17: Sales tax is the biggest revenue source for the state, projected about $700M in FY2012. Second biggest chunk of state revenue: video lottery, over $150M.

Projected Revenue increase only $8M, projected expenses for FY2012 still up $32M. More spent on Medicaid since stimulus is running out (and I don't hear Rounds thanking Uncle Sam for the help over the last couple years). Expenditures on education and public safety are projected to go down.

FY2011 structural deficit: $108.4M. Even with the proposed cuts and reserve spending, Rounds says we'll still have a $74.8M structural deficit in FY 2012. (Tea partiers, bring your shouting home!) Governor's graph shows a structural deficit every year of his administration but FY2007. The recession exploded that deficit... even though that recession never caused our state economy to shrink. What gives? Why isn't our increasing wealth pouring some increasing fair share into the state coffers?

13:27: Bad, nasty, evil, ineffective federal stimulus dollars will cover $36.9M of next year's structural deficit.

The stimulus dollars granted previously forbade cuts to Medicaid and K-12 education for FY2009, 2010, and 2011. The new "Stimulus 3" funds prohibit cuts to K-12 and higher education (even though, Rounds whines, those stimulus dollars don't provide any higher ed support) and prohibit growing the reserves.

13:29: Rounds says stimuluses. Oh! Why couldn't he have said stimuli?

And now, I think Rounds is actually trying to tell us that the federal stimulus dollars caused the structural deficit. No, Mike: it's your and the Legislature's fiscal cowardice that has caused the deficit.

13:31: State revenues spent on general fund expenditures will be almost $1.2B, plus another $36.9M in stimulus dollars. Ah, but Stimulus 3 will require a $10.6M increase in Board of Regents spending, so it replaces much less than $36.9M in general fund spending.

13:35: Rounds says we still need to come up with another $39.2M in state funds to cover our general funds needs and make up for the end of the stimulus package.

SDPB gives us a quick view of House Minority Leader Mitch Fargen. He looks unimpressed.

Rounds talks about FMAP money being based on personal per capita income relative to the national average. Since our economy has outperformed the national economy—i.e., because we are increasing our income faster than the rest of the country—we have to cover more of the costs. And Rounds seems to think this is unfair. It seems Uncle Sam has the right idea: if your state is doing better than others, you should be able to cover your own costs. But you can't do that if you aren't taxing that increased income, if your tax system is still a regressive, property- and consumption-based system!

13:39: Rounds shows us $39.2 in new ongoing funding required to replace ending stimulus, $15.0M to increase our FMAP state share, and $11.7M in increased Medicaid demand. That's a total of $65.9M. Make $36.1 in cuts, and we still need $29.8M more to cover our needs.

13:44: The Governor's chart shows cuts in every state department. Governor's office takes a $236K cut; Legislature takes a $239K cut. 2010 research centers and Cultural Heritage Centers get big cuts. $23.5 million cut from state aid per student K-12. That's the $240 per student, about 5%. Also reducing technology in schools budget, consolidation incentives.

Net $15M reduction in education spending. Rounds emphasizes Medicaid providers are taking a 5% hit, while some state offices are taking 6, 7, 8, maybe 10% cuts.

Rounds: "I want to share a little bit..."—there's an inapt phrase.

Rounds cites $123.1M in school district general fund cash accounts back in June 2003. $183.9M in June 2009 in cash accounts. June 2010: $194.3M. Rounds is saying that the good people running the schools have very responsibly saved money recognizing that cuts could come. Translation: screw 'em. Force the local districts to burn up their reserves.

13:50: Board of Regents gets an FTE increase of 227.5. A lot of that is linked to federal and private grants. Ax is falling on FTE's everywhere else.

Note that the net education cuts, counting K-12, tech schools, and Regents, is only $11.45M. 'Taking Care of People" goes up $40.97M. Protecting the Public (cops and such) gets $4.2M more. The rest of state government gets cuts [oops! missed the number!].

13:54: Special appropriations for FY2012: Rounds cites seven presidential (blame Obama) disaster declarations in South Dakota this year, plus seven disasters from previous years still being tackled. State needs to authorize 10% match to federal disaster dollars, local governments are supposed to do 15%. Some locals, especially northeastern South Dakota, don't have that cash, so the state has kicked in extra funding to help repair roads. Rounds says we'll need $13.4M to cover this in the FY2011 budget. He requests only two small specials for FY2012 on tuiton and tax reimbursements for old folks, total not much more than $14M for the 2011 Legislature to approve.

13:58: I check my inbox and find new SD Dems chair Ben Nesselhuf calling Rounds's address a "Broken promise" and says the proposed change to the K-12 funding formula: "broken law marks new attack in GOP War on Education." (ben, did you Tweet that from the floor? ;-) )

The state will spend $1.194B in general funds. Federal funds will contribute another $1.876B. Other funds make up $1.004B. In total, South Dakota will spend over $4 billion in FY2012. And pay attention Tea Party friends: almost half of that is from Uncle Sam. So tell us what you're going to do about that, Senator Thune and Rep.-Elect Noem.

Rounds breaks out the goofy dollar graphic, notes that his budget would spend 49 cents out of every dollar on K-12, higher ed, tech schools, and the Department of Education. He answers exactly the question I was thinking about and shows that back in 2004, education made up 55% of the state budget. "Taking Care of People" ate up 30% then, eats up 37% now. There's the big flip. Rounds also notes that the share of spending on state government has gone from 5% of the budget in 2004 to 4% in his proposed budget.

In this entire speech, I think I have heard Governor Rounds mention "increased taxes" once, and he barely finished that last consonant before hurrying to the next sentence. Now he is speaking of spending South Dakotans' tax dollars wisely, as if that money is a fixed sum, as if the idea of increasing that revenue is inconceivable.

Mike Rounds says South Dakotans have the highest average credit rating in the nation. He says we don't buy what we can't afford. He says the legislators have to answer to those taxpayers who aren't in the Legislature, who are back home working. he says they have to be willing to say no to all those great programs people want. Again, no mention of the idea that some good, honest South Dakotans might be willing to pay more to keep those great programs.

14:10: But hey! We're still working hard to make South Dakota an even better place to raise a family. Rounds says 27,000 more people have jobs now than in September 2002. He mentions saving Ellsworth AFB from closure (again, he offers no thanks to Uncle Sam for all those dollars). He brags again about not touching the reserves until now. He says K-12 is getting $109M more each year now than in 2003.

Boy, for heartfelt words of thanks to state employees, the Governor is sure looking at his script a lot. Where's the teleprompter patrol that yells at President Obama for things like this?

Another inapt reference: Rounds mentions that today is Pearl Harbor Day.

14:14: Governor Rounds is now distracting us from the budget discussion by wrapping himself in patriotism, talking about what wonderful soldiers we have in the National Guard and the regular service... yet another great source of federal income for South Dakotans.

Rounds talks about being elected to make South Dakota a better place. And he ends his term with a budget plan that would make K-12 education worse. How tone deaf is this governor?

...and SDPB ends with a great picture of some guy's shoulder in the gallery.

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Now I suppose we could spend a lot of time picking this budget apart. But I am really, really hoping that this slideshow is going right to the trashbin, and that we can eagerly anticipate the first big number-crunch from the Daugaard administration that might have a little more vision behind it.

Rounds Says Ax K-12 Education 5%: I Say Invest in Students

Yesterday the Associated School Boards of South Dakota called on the Legislature to follow the law and increase K-12 education funding by 1.3%. That's a pretty modest request, given that ASBSD's position for the past few years has been to call for an overhaul of the funding formula that would direct much more money toward K-12 education.

Hours later, outgoing Governor M. Michael Rounds called on the Legislature to change the law and cut K-12 education funding by 5%. That follows the Legislature's move last session to rewrite statute and yank a promised 1.2% increase out from under our schools.

This K-12 cut saves $23 million total. The governor's proposed budget, which he'll lay out in Pierre this afternoon (covered live on SDPB), still leaves a $37 million deficit.

There's Mike Rounds's legacy: years of structural deficits that neither he nor the Republican Legislature had the guts to fix. Rounds's limp fiscal policy doesn't even qualify him as a caretaker governor. Today's budget address promises to be one more wimp-out.

So let's talk guts: is it really less painful to nickel-and-dime our teachers and kids than it is to cowboy up and raise our taxes? We have about 100,000 students [2010.12.09: whoops! update that: 123,629 students!]... which leaves about 700,000 of us South Dakotans to pay taxes. Governor Rounds says short each kid $240. I say charge each taxpayer an extra $33 to keep education funded at its already paltry level.

Thing is, you and I are going to end up making up the difference anyway. Odds are your school district and mine will not take a 5% cut. If Governor-Elect Daugaard and Majority Leader Russell Olson pass this plan, you will see opt-outs spring up almost everywhere, as local districts try to fill the gap. Taxes will go up for many South Dakota taxpayers anyway; Governor Rounds just doesn't have the guts to be the one to ask for it.

The odd thing is that we have the wealth to withstand a tax increase. South Dakota technically never joined the recession: our economy has grown each year. Our GDP went up 2.2% in 2009, and I don't see data suggesting less growth this year (though I'm open to counter-evidence). The new South Dakota Budget & Policy Project (oh my: this website looks really cool!) says sales tax revenues are looking up.

Our tax system is clearly not tapping the wealth our state is creating. In other words, we aren't paying the full price of civil society, the cost of maintaining the schools our kids need and that make our wealth-creation possible.

Maybe we shouldn't get all hot. Maybe this mad-axeman budget is just Governor Rounds's parting gift to his lieutenant, who come January can ride in and save the day with improved revenue projections and a noble compromise that changes the funding formula to only freeze K-12 funding again rather than cutting it 5%.

In the understatement of the week, Mr. Crissman at DWC calls 5% "noticeable." I call Rounds's farewell proposal irresponsible. It's a non-starter: no guts, no vision, no sense of basic social obligation. Governor Rounds leaves affirming the South Dakota Republican belief that education is an expense, not an investment.

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Bonus Timing: Governor Rounds's official portrait will be unveiled for public viewing following the budget address. Expect tepid applause... and maybe some Post-It note mustaches.

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Update 07:45 CST: At least we're not California. But Marc Albert's comment on the California situation has relevance here in South Dakota:

Hyperbole or not, much of the chaos could be avoided by finally convincing state taxpayers that you can’t get something for nothing forever. There may be waste and fraud in the public sector, but not $25 billion worth. Complain about lousy teachers, public pensions and long lines at the DMV all you want — it isn’t going to change the figures on the ledger [Marc Albert, "California's Public Schools in Downward Spiral," Understanding Government, 2010.12.07].

Daugaard Cuts 10% from Honcho Pay, Including Own!

Governor-Elect Dennis Daugaard is leading by example: he announced yesterday that he will cut his own pay ten percent when he takes office next month. He plans to impose the same cut on the top earners on his staff and state department chiefs.

Also dropping 10%: hits on the transition team's résumé-submission webpage.

Cutting salaries for elected officials doesn't usually fire me up much. These cuts probably won't reduce the state deficit by even 1% (though I'll be happy to be proven wrong by a full list of cuts). Pay-cut promises are usually political stunts to win votes from a cranky electorate. I'm just as inclined to say to a budget-cutting politician, "Don't bother cutting your salary; just work your keester off to earn every penny we pay you."

But Daugaard's pay cut doesn't sound like a political stunt. We usually hear paycut promises during the campaign, not after. I don't recall his hooting from the hustings his honcho-haircut plan. And if you accept Mr. Rosenthal's optimistic analysis, Daugaard will be no passive caretaker like his predecessor, Governor M. Michael Rounds. Rosenthal sees Daugaard planning the kind of CEO governorship that will earn its old pay and then some. (Wait a minute: did all you Republicans really vote for an activist governor?)

In homage to Mr. Rosenthal, I offer an Endbar:

Evidently Dennis Daugaard isn't worried about crashing the economy by cutting income for a few people at the top. So why can't he call Senator Thune and his Republican pals in Washington and tell them to apply the same thinking to repealing the Bush tax cuts?

Simpson-Bowles Plan: No Magic Bullets, Just Long, Tedious Discipline

The co-chairs of the President's fiscal reform commission, especially former Republican Senator from Wyoming Alan Simpson, are straight-shooters who are done kissing butts to get elected. If anyone can propose strong medicine for the federal budget, these guys can. Yet even these relatively free radicals are proposing balancing the budget no sooner than 2037. Under their proposal, we keep borrowing more for 27 years. Now that's a disappointment.

Even these fiscal hawks acknowledge that the economy is too shaky to start their plan until FY 2012. In the whacky world of macroeconomics, America is too poor right now to cut its budget. We revert FY2012 spending back to FY2010 levels, cut 1% a year through FY2015, then allow spending to grow at 2% a year. If inflation runs at historical levels of 3.43%, then by 2040, our annual spending would be about 30% behind spending levels that would keep pace with inflation. That's a valuable change for our grandkids, but it takes long-term discipline to get there.

Where do we start with the cuts? Simpson and Bowles offer suggestions that hack $100 billion from defense and $100 billion from domestic spending. The big-ticket savings:

Defense:

• Overhead savings proposed by Sec. Gates: $28 billion.
• Reduce Pentagon procurement: $20 billion.
  
• Freezing noncombat military pay at 2011 levels for three years: $9.8 billion.
• Reduce overseas bases by one third: $8.5 billion (HS policy debaters! Check your Inherency arguments!)

Domestic:

• Eliminate 250,000 contractors: $18.4 billion.
• Eliminate all earmarks: $16 billion (even Rand Paul doesn't have the guts for this idea).
  
• Freeze all federal pay for three years: $15.1 billion.
• Cut federal workforce 10%: $13.2 billion.
  

More disappointment: the plan takes until 2040 to get the national debt down to 34% of GDP, just a little better than the 36% debt-to-income ratio recommended for regular folks shopping for mortgages. We spend the next three decades carrying more debt that responible homeowners ought.

The plan notes that right now, our federal outlays are 23.8% of GDP, while federal revenue is only 14.6% of GDP. The plan calls for aligning outlays and revenue by 2040 at around 21%. Look closely at those numbers: as I read it, for every dollar we reduce spending, we still need to raise revenue two dollars. The plan actually reduces and simplifies rates: one option drops the income tax rates for the top income bracket from two rates of 36% and 39.6% to one rate of 23% and reduces the corporate rate from 35% to 26%. But those decreased rates are contingent on whacking all deductions. Another option lowers rates less and leaves in some deductions, but cuts things like mortgage deductions for second homes and mortgages over $500k (oops: there goes the Lake Madison vote).

Other noteworthy recommendations in the Bowles-Simpson proposal:

• Rein in health care costs by cutting payments to doctors and drug companies, capping malpractice damages, and possibly adding a robust public health insurance option.
• Cut farm subsidies by $3 billion a year (good thing Kristi Noem just got a new job in Washington).
• Keep Social Security solvent by increasing the retirement age by one month every two years, to age 69 by 2075, with a hardship exemption for folks who can't work after age 62.

Folks who thought electing Kristi Noem and her fellow Teabaggers would bring instant fiscal reform and wipe out the deficit are in for the same rude awakening as the handful of Obama dreamers who thought the 2008 election meant we'd reached the Promised Land. Fixing decades of fiscal irresponsibility will require decades of unpleasant spending cuts and increased tax collection. Given the cynical backpedaling of even the most arch of arch-conservatives and the inability of Tea Party faves to take their small-government slogans seriously (Kristi Noem has already pledged her continued support for the expensive Lewis and Clark water system), I am not optimistic that the new GOP majority in the House will take the Simpson-Bowles plan seriously. The Republicans are too focused on 2012 to lay the groundwork for real deficit reduction that will take until 2040.

Daugaard Policy Armor Cracks; Heidepriem Primed for Offensive

South Dakota GOP candidate for governor Dennis Daugaard must be reading too much War College. Daugaard apparently believes the propaganda that the campaign is over, it's a blowout, it's hopeless for Heidepriem... believes it so much that he's starting to slip.

First Team Daugaard puts out an ad so doggedly designed to deny reality that even mild-mannered journalist Bob Mercer, not the most obviously liberal journalist in the state, felt obliged to point out that the ad outright lies when it claims we balanced our state budget without raising taxes. Mercer catalogs a few tax and fee increases propping up our state budget; contact your local county commission and school board to learn the tax hikes they've had to pile onto your local assessment to make up for the state's budgetary neglect.

Then Daugaard tells nursing homes that they probably won't get the $21 million in medicaid stimulus Washington sent them. "We need to guard against the increasing tendency to look for the government to save us," Daugaard lectured the nursing home workers' convention in Sioux Falls Wednesday, even as he defended Pierre's pouring that stimulus money into the general fund to save our budget. That's the same shell game Daugaard and his boss are playing with the $26.3 million in education stimulus approved in August, diverting it from its intended purpose and guaranteeing it won't have the stimuluative effect lawmakers intended.

Now Daugaard skips a great opportunity to defend his record and his plans on a major state policy issue. Tonight's Inside KELOLand (10:30 p.m. CST) will discuss the recent Zogby poll, sponsored by the Associated School Boards of South Dakota, on South Dakota voters' views of K-12 education. Democrat Scott Heidepriem will be there. So will an ASBSD official. Daugaard was invited, but he won't be there. Team Heidepriem is telling supporters that Daugaard said he doesn't want to debate this issue with Heidepriem. Maybe Daugaard, like fellow Republican Kristi Noem, is just getting tired of having his indefensible claims challenged and thinks he can coast to victory in November with fluffy ads and nice hair.

Whatever Daugaard's reason for skipping this discussion, Heidepriem gets free shots for a half hour on the highest-rated TV station in the state. And what will those free shots include? Paraphrasing the latest Team Heidepriem e-mail, Heidepriem will likely cite various expenditures the state has incurred even while breaking its promise to schools and shorted K-12 education this year:

• Rounds and Daugaard happily sent TransCanada an extra $10.5 million in tax refunds to incentivize a pipeline TransCanada had already built through our state.
• The current administration has given over $533,000 dollars in pay raises to their top 19 executive branch staffers... who have turned around and given Daugaard over $62,000 in campaign contributions.
• They've refused to sell any of the state airplanes.
• They closed the Black Hills Playhouse while spending over $200K to renovate "Valhalla," the historic Peter Norbeck cabin just up the trail that Governor Rounds has turned into his personal playground.
  

Tonight's KELO broadcast is the beginning of what could be a big media week for Heidepriem. His big 30-minute documentary is already making the rounds at Dems events and hits the airwaves on all the major South Dakota channels this week Thursday. And by dodging a discussion of education and papering over bad policy with cheery optimism and plainly false claims, Daugaard may be making it that much easier for Heidepriem to grab folks' attention and make the big push for November.

Sneak Peek: Stricherz on the Issues

Patricia Stricherz, candidate for District 8 House, forwards the Madville Times her responses to a questionnaire from the Mitchell Daily Republic. Who am I to turn down a scoop on tasty policy questions? Here are the questions, candidate Stricherz's answers (verbatim, unedited), and my own commentary:

1. What qualifications do you possess to be a state lawmaker?

Stricherz: In 1992 I joined the Army, was deployed to Kuwait and was awarded the Army Achievement Medal for my work to generate new computer based files that would assist 24th FSB Company in easily locating and identifying each work order, their status and the parts ordered. After the Army I worked several years in Retail Management. In 2003 I felt I needed a change of employment and began attending the University of Sioux Falls working on my BA in Social Work. This decision came as a result of my time as a CASA Volunteer as well as a Foster Parent. My junior year I had to drop out to care for my husband, who was injured during his deployment to Iraq. The last two years I have been running a nonprofit organization that provides emergency services to the troops and the families they leave behind during deployments. This is where my heart is. Speaking on behalf of our military hero’s and their families. This position has allowed me to gain experience advocating on behalf of families, fundraising, speaking publicly, organizing, training new volunteers, working with the media, and so much more. Locating the best service providers for home repairs, appliance repairs and vehicle repairs has given me additional speaking experience. The overall day to day functions of running a business has given me additional experience in balancing budgets, applying for grants and approaching donors for financial assistance and in-kind goods.

2. Roads have become an issue this year because of extensive flooding causing a lot of damage, forcing some counties to seek opt-outs or wheel taxes. What action do you think the state Legislature should take to assist counties and municipalities with funding? What proposal would you introduce?

Stricherz: Roads are an important part of our infrastructure that allows for the organizational structures needed for the operation of society. Allowing for the funding needed for regular maintenance is a necessity, allocating funding for emergency repairs is a must needed priority. In balancing the state budget, funds must be set aside for times such as these that counties and municipalities are currently experiencing. Cutting back on unnecessary spending, cutting failed and unsuccessful programs will give some additional funding for infrastructure. In today’s society we can not afford wasteful spending in our personal lives, expecting this same standard for our government should not be any less required.

CAH: I am heartened to hear a Republican who remembers that we do need government spending to maintain the basic "operation of society." However, the standard line about cutting wasteful spending represents wishful thinking, not hard fiscal analysis and decision-making. We face a 100-million-dollar state budget shortfall. I do not believe the state of South Dakota is currently wasting 100 million dollars. There's a strong argument to be made (especially by the counties trying to pass opt-outs and wheel taxes) that we need to spend more to fix our flood-ravaged roads and failing bridges. Candidates need to tell us exactly which $100-million-plus worth of programs they plan to cut to cover the deficit and the increasing road repair bill... or they need to be honest as the counties are and say, "You know what? We need to pay our own way with tax increases."

3. Do you think education is under funded in the state? If so, please explain how you would increase funding and where the money would come from? If not, please explain why you think that way.

Stricherz: Education is the foundation of our economic development, and the future of South Dakota’s economy depends upon creating highly-educated young South Dakotans. Currently, education takes 31% of the states budget, we need to work on increasing that number to no less than 36%. South Dakota schools perform at a high level and produce high quality students, in order to maintain this standard we must view education as an investment and not an expense. Therefore, it is important to the future of our schools to provide for a yearly increase in the funding that is available, one possible solution would be to lower property taxes and equalized the funds available to schools for operations. Another option would be to find alternate solutions to the schools laptop program. The 2.9 million dollars it takes to fund this program could instead be used to boost general state aid to schools.

CAH: For a moment there, Stricherz sounds like my man for governor Scott Heidepriem, who recognizes the state is failing to shoulder its share of the burden for funding education. But then Stricherz drops back to cutting taxes, which returns right back to the problem of the state doing less and expecting locals to do more. Even the reallocation of laptops may cause the same problem: the state may withdraw its tech support (the state dropped expansion of the classroom laptop program last year), but local schools will have to pick up the tab... and making each local school do its own tech support may only increase costs. Still open for debate: whether those school-supplied laptops are essential for education in the first place....

4. Gov. Mike Rounds has asked that state agencies and departments prepare a 2012 budget that should include a 10 percent decrease. Do you support or oppose a budget decrease? If not, please explain why you think that way.

Stricherz: I agree with Governor Rounds proposal that state agencies and departments decrease their budget by no less than 10%. As I stated above, we should expect no less from our government than to live by the same standards as that of our states citizens.

CAH: Ah, there's a step toward closing the $100 million shortfall. But does that include Board of Regents? Department of Transportation? Highway Patrol and Corrections? Again, I don't believe there's $100 million in waste, so I want to hear the good programs the governor and our legislators want us to do without.

5. Other than education and road issues, what legislation do you plan to introduce next year if elected or re-elected?

6. What issues are occurring within your district that will prompt you to propose legislation to address them?

Stricherz: 5./6. Answered together: I oppose increases in sales and use taxes without significant cuts in current government spending, as well as oppose increases in property tax. During this time of recession it is irresponsible for our government to increase taxes adding burden to our struggling South Dakota families. We, instead should be focused to finding sensible solutions to the creation of jobs that would allow our South Dakota families to take care of themselves.

During the 2010 session, the state Legislature considered the “South Dakota Health Care Freedom Act” ( SB 137 ), as we learn more and more what this extensive bill contains, I believe it is as important, more than ever, to reintroduce this bill to protect our citizens from the mandated and regulated laws coming out of Washington, DC.

The security of South Dakota families is important, instead of cutting funding to our Police, Sheriff and Highway Patrol Dept.’s it is more responsible to increase funding. Without a strong security system, we are placing our citizen’s in undue harms way.

CAH: Dang—Stricherz is preaching Gordon Howie's nullification again. Can we just accept the health care law and work to improve it? Can Republicans just accept defeat and look for real solutions? I guess not.

And evidently Stricherz wants to exempt law enforcement from the governor's proposed 10% cuts. It's hard to argue with funding public safety... but again, there lies the challenge we face in squaring Republican tough talk on budgets with Republican tough talk on law and order. Government is not all waste: in South Dakota, government is mostly things we like and need. If our candidates spent less time railing about how bad and wasteful government is and instead focused on how necessary police, roads, and education are for our well-being, we might have an easier time convincing taxpayers to support the funding necessary to keep society running.

I still plan to vote for Mitch and Gerry here in District 8. Stricherz won't get my vote, not because she's Patty Stricherz, but because she sounds too much like Russ Olson and every other Republican. The South Dakota GOP says things we like to hear about cracking down on waste, supporting education and police, and not raising taxes. But they never offer a consistent and straightforward explanation of the fiscal realities of turning our fiscal wishes into workable policy.

South Dakotans Get 11% More Federal Aid Than Average Americans

Republican less-government platitutdes notwithstanding, South Dakota remains a welfare state. Mr. Woodring draws my attention to a report in that Sioux Falls paper on the Census Bureau's 2009 Consolidated Federal Funds Report. The Census says South Dakota received $9.5 billion dollars from Uncle Sam last year. That's up from $5.1 billion in FY2000.

Put that $9.5 billion in perspective: The federal government spends eight times more on us than we spend on ourselves through our state government's general fund expenditures. Self-reliance, anyone? (Thank-you notes may be sent to 1600 Pennsylvania Avenue NW, Washington D.C. 20500.)

Mr. Woodring finds our windfall is unsurprising and ascribes it to our being "a largely rural state with lots of roads." True... but the biggest beneficiaries of federal largesse are our biggest urban counties. Minnehaha and Pennington lead the list with $1.9 billion and $1.1 billion, respectively. The only two counties in the top ten that are not also home to one of South Dakota's ten largest cities are Shannon (6th, $236 million) and Meade (8th, $210 million).

My home, Lake County, got $104 million. Madison's city budget is around $18 million.

And while we get a fair amount of money for laying new concrete and asphalt, over 50% of the federal dollars we get go for direct assistance like retirement and disability payments, Medicare payments, unemployment compensation, student aid, farming subsidies and housing assistance. As I've reported previously, roads are not at the top of the list of our handouts from Uncle Sam. It's not even Indians who make South Dakota a big welfare state. It's old folks, sick folks, kids, farmers, and other friends and neighbors who need help.

South Dakota ranks tenth in per-capita federal expenditures. Our "best" category: we rank 4th in direct payments other than retirement and disability. Overall, Alaska is first. (Funny how states like South Dakota and Alaska breed such rampant biting of the hand that feeds them.)

Naturally, the number I really want to compare is our average per capita contribution to the federal coffers. I can't find the 2009 figure, but according to the Census Bureau's Statistical Abstract, in 2006, the average South Dakota income tax return submitted 77% of the national average per taxpayer's return. Say it again, dear readers: welfare.

Face facts, friends: South Dakota survives on federal assistance. And contrary to the good Dr. Blanchard's paraphrased comment in Ledyard King's report, it really is a contradiction for South Dakota Republicans to play to the Tea Party by crying about federal spending while assuring us they'll protect every federal program that keeps South Dakota afloat.

Thune Proposes Biennial Budget: Cool Reform or Cop-Out?

Seantor John Thune spoke to the Sioux Falls Chamber of Commerce yesterday about his proposal that Congress move to biennial budgeting. Congress would pass a two-year budget in each odd-numbered year, right after the new guys get sworn in, then let the federal government run on fiscal autopilot during the even-numbered years when everyone is election-happy.

Thune's plan, Senate Bill 3652, puts Congress and the President on a pretty tight budget timetable:

1. The President has to submit a budget by the first Monday in February.
2. Congress has until April 15 to complete its joint resolution on the budget.
3. Final budget must pass by June 15.
   

That time frame could make it more difficult for members of Congress to read in full the budget bills they are voting on. But deadlines can focus one's attention....

The biennial budget has its merits. Congress does have a hard time concentrating during election years, and many appropriations get ad hoc extensions that make it hard for federal agencies to plan ahead. Under a two-year budget, federal offices can make basic management decisions, like hiring and procurement, with a little more certainty, and maybe savings: if the boss at the regional USDA office knows a program is funded for two years, she can order two years' worth of printer cartridges on sale now.

But the biennial budget also gives in to the GOP narrative that government can't do anything right. Conservative Stephen Moore of the Club for Growth promoted a biennial budget fourteen years ago. He said the efficiency gains would be marginal; for him and fellow conservatives, the bigger benefit of a biennial budget is reducing the amount of time Congress is in session. The less time Congress spends in town, the less government action it can take. If you take as an article of faith that government is evil, the biennial budget is great. But if you take the position that the government is us, capable of working together to solve problems, then scaling back to a half-time Congress poses problems.

Election-year pressures no longer seem confined to election years. John Thune's Senate hasn't been terribly productive in either year of the current session, with Republicans playing obstructionist politics since President Obama's inauguration. Arguably, a biennial budget just makes the obstructionists' job easier, as they only have to say no half as often.

The biennial budget seems to surrender to the problem of the constant campaign. If Congress consolidates all budget action to the odd-numbered year, the incumbents will be that much freer to take off for fundraisers sooner, facilitating even bigger-money campaigns.

The biennial budget has its merits, but it feels like a cop-out. If Congress has trouble making decisions, the proper response would seem to be to elect people better suited to making decisions, not reducing the decisions they have to make.

Serious about Cutting Debt? End GOP Voodoo Economics

A new report from the Congressional Budget Office expresses concern (as ought we all) over continuing growth of our national debt-to-GDP ratio. The CBO appears to agree with something I said to Mr. Gibilisco the other day: sometimes you have to borrow money (e.g., wartime production, anti-recession stimulus), but the more you borrow, the less wiggle room you have for future spending. Bringing down the debt requires austerity programs that raise taxes and cut spending. CBO says such policy changes usually though not always "exacerbate... economic downturns." So odds are you have to pick what you want grumble about. If you don't like the recession, you might have to live with a growing debt for a few more months. If you don't like the debt and want austerity now, then brace for another downturn.

Austerity, alas, is a dirty word in American politics, which assumes a perpetual-motion machine of magic abundance. Conservatives are harping on the debt, but they don't want to take direct action to pay it down. The President comes up with a health care law that will save $8 billion on Medicare this year and $575 billion over the next ten, and conservatives fan fears among seniors that these cuts will mean Democrats want old folks to die. Conservatives instead want to leave most of the big spending (war, entitlement programs for senior voters) in place and cut taxes, thinking the debt will magically reduce itself.

Cutting taxes does a lot of things, but it doesn't reduce the debt, certainly not as a percentage of GDP. Check out the bumps around the time of the great Reagan and Bush tax cuts. Those bumps don't go downward:

Figure 1: U.S. Debt-to-GDP Ratio, historic.
Source: CBO report, p. 2. Click figure to enlarge.

David Stockman, who worked for President Reagan, agrees that the fiscal policy Republicans offer is a useless mess. Stockman finds it "unseemly" that Republicans respond to our mounting public debt with cries to extend the Bush tax cuts and spare the wealthiest Americans a three-percent tax increase. (CBO notes it would take a 1% increase in federal revenues to stop the growth of the debt-to-GDP ratio; a 3% increase would reverse that growth.) Stockman finds this shirking of fiscal responsibility particularly odious given that the wealthiest 1% amassed two-thirds of the economic gains from the 2002–2006 economic bubble.

Our debt situation is dire due not to drunken-spending Democrats but Republicans living in la-la-land, says Stockman:

This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.

In 1981, traditional Republicans supported tax cuts, matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.

Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.

Through the 1984 election, the old guard earnestly tried to control the deficit, rolling back about 40 percent of the original Reagan tax cuts. But when, in the following years, the Federal Reserve chairman, Paul Volcker, finally crushed inflation, enabling a solid economic rebound, the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts [David Stockman, "Four Deformations of the Apocalypse," New York Times, 2010.07.31].

Stockman notes that under President GW Bush's last budget, federal revenue was just 15% of GDP, the lowest percentage since the 1940s. Once again, we see that cries of "Taxed Enough Already!" show ignorance of historical fact... and a thin-skinnedness that Grandma and grandpa would find shameful. And don't forget: those low taxes not only make the debt worse but also may be hurting the economy.

Let's trade the myths about the Bush tax cuts for reality. Right now, those tax cuts for the rich are responsible for about 25% of our annual deficit. Extend the Bush tax cuts, and they'll be responsible for around 50% of our deficit in 2019.

Make Grandma and Grandpa proud: end voodoo economics. End the Bush giveaways. Pay the bills.
---------------
Update 10:41 CDT: Robert Reich helps out with some useful facts.

Extracurriculars 3.2% of Madison School Budget

Madison Central School District publishes its proposed budget in Thursday's paper. Extracurriculars take up 3.2% of $11.3 million in total appropriations:

• Boys' Sports: $70,543
• Girls' Sports: $60,324
• Co-Ed Activities: $189,677
• Transportation to Games, Tournaments, etc.: $36,730
• Total Proposed Extracurricular Budget: $357,274

Debate note: if the MHS Debate team competed at every debate tournament during the season instead of staying home more weeekends during the season than it traveled, firing up two Suburbans to make the trip would add maybe another $630, less than 2%, to the total travel budget (your mileage may vary).

Opt-out note: You could eliminate the need for the $250,000 opt-out renewed this year by eliminating all co-ed activities, all transportation to games (play only home games? intramurals?), and maybe a third of the sports remaining sports. But does anyone think that's a good idea.

3.2% of the school budget buys arguably the most memorable, formative, community-building experiences our kids have in school. That's pretty good return on investment.

"Taxed Enough Already?" So We Shouldn't Pay for What We've Bought?

Funny that for all their fretting about the public debt, the conservative crowd rarely advocates we take personal responsibility for all that debt. We hear accusations that high tax rates are destroying our liberty, yet we are shouldering a lower tax burden than the last couple generations. USA Today reports that federal, state, and local taxes eat up 9.2% of our total personal income, the lowest percentage since 1950. Over the last 60 years, the average tax bite of personal income has been 12%. (Say it with me: manufactured outrage.)

Some quick numbers:

• Nationwide, our total personal income last year was just a hair over $12 trillion.
• If the tax burden on that income were the 12% recent historical average, we'd kick another $337 billion toward our public debt.
• Unfortunately, we have just under $17 trillion in public debt at the national, state, and local levels.

Without some serious budget reform, we may add almsot a trillion dollars to the federal debt every year this decade. Uff da.

But what are we spending that money on? Check out this graphic:


Right now, the recession, the bailout, and the stimulus are responsible for about 60% of our deficit. But the bailouts are wrapping up and putting cash back in the kitty. The stimulus runs out next year (which is the first thing every South Dakota legislative and gubernatorial candidate should be talking about). Heck, we might even get out of Iraq and Afghanistan. For most of the coming decade, the single biggest deficit driver will be the Bush tax cuts—i.e., our unwillingness to pay for the fighter jets, border patrol agents, Medicare drug benefits, and other goodies that we all love and that not one serious candidate for South Dakota's lone House seat is willing to part with.

Candidates can talk all they want about reducing government. We still have to pay the bills we've already racked up. And current tax rates suggest we are all shirking our responsibility to pay for what we've used.

If you're serious about eliminating the national debt, step one is to let the Bush tax cuts expire... unless, of course, you can identify $693 billion to remove from the annual budget by 2019.