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| Tax and Revenue |
| July 2009 |
RAISING TAXES IN A RECESSION
As states went through the pain of balancing their budgets for this fiscal year, 48 of them faced a total of $166 billion in revenue shortfalls. It was hard enough finding spending cuts and tax and fee increases to narrow and finally close those gaps; within weeks, the budget holes opened wide again. As Nicholas Johnson, director of the State Fiscal Project at the Center for Budget and Policy Priorities, points out, federal stimulus funds helped--but still only filled in 30 to 40 percent of state budget shortfalls. The remaining 60 to 70 percent, he notes, is 60 to 70 percent of a very large number.
This reminds me of the commercial ... do you want it to hurt now or later! Perhaps changing one's diet is in order ... getting off grants and other funding vehicles is the right thing to do. Each of course are "hurt later meals", when the operational budget kicks in to support the "investment" ... That's what happens later 'hurt' ... what's impacted is the quality of public services [road maintenance, snow plowing, etc., -- you really need an growing tax base to pay for unbridled growth caused by 'free money - grants'. So, the question is ... what level of public services can the property tax base in New Fairfield support? What is the growth in the property tax base? What is the growth in the conveyance taxes? What happens if the state significantly reduces its PILOT formula and programs? What happens if the state significantly 'drags its feet on grant payments?' The questions aren't that difficult ... changing the diet is!
Let's see ... the BOF was right about the Communications Project ... a new bid is over $1,000,000 lower than the 'must have' ... the best solution whereby the town at referendum voted it down 2:1. Besides a new Referendum should provide the same answer ... NOT NOW ... NO!
Let's see ... the BOF was right about the weevils ... they had to go into before the second week of June ... gee whiz ... there wasn't enough millfoil to implant the weevils ... the draw down worked, besides they could not find any of last years weevils!
Let's see ... the beat goes on! The Town needs to change its diet to a more lend and mean program of operating with the property tax base and its growth.
OH, but wait there's more ... the Reval is upon us ... like the plague of the Dark Ages. What will the Reval reveal in the property tax base? Has your home increased in value? Will your taxes go up? DUH! Short answer is no. The Reval should show that the property tax base has retreated to between 2003 and 2004 values. Sooo, your taxes should not go up ... RIGHT! Wrong ... "hurt later" is the correct answer!
