THE BUDGET

In Rhode Island budgeting, the Governor proposes and the Legislature disposes. That said, there is often a misconception as to where the fault in the budgetary process lies. In reality, there is more than enough blame to go around.

The Legislature has long been wild in spending. The seemingly unsatisfied spending spree of the Assembly has clearly gotten us to where we are today. The Assembly always thought that there would be more money coming in and that the ride would never end. It did.

Now that the budget has been stretched to its furthest extent, the State must now consider what to do in light of the uncertain times and limited funding. That begs the question, what needs to be done?

The bottom line is that government revenue is governed by three factors: spending, raising money from taxation, or expansion of the tax base. There are no other factors in this equation.

The ability to expand the Rhode Island tax base at this time is speculation at best. It would be nice, but since it is speculative, it is more like spending in anticipation of winning the lottery. Such is impractical. If the base is expanded, it should not be spent in anticipation. It should be a seed planted for a future fruit.

That leaves taxation. It is a difficult budget position to argue for a tax increase in light of the fact that Rhode Island’s current tax situation puts its residents in the highest of brackets in most tax categories. Thus, the more tax option is an unlikely solution.

This then makes the reduction in spending as the sole option for budget reform. Now each and every special interest group will complain that their ox is being gored, but the reality is that a difficult financial time requires a tightening of the budget.

The real issue is whether or not the budget cuts are being done with reason and with effectiveness. Bad budget cutting decisions will only exacerbate the already terrible situation. To make decisions on programs require work to consider effectiveness in a per dollar mentality.

It is hard work, especially when it can be so manipulated by the special interest groups determined to maintain their domains at any cost. Such resistance, while expected, must be countered logically. Sure, everyone wants everyone else to have a healthy, happy life. Sure, we all want children and elderly to live comfortable lives. The only problem is that this is not paradise and money doesn't grow on trees. To fund a program for someone else means that money has to be taken from another.

A budget without a heart is difficult, but a budget without a head rings a death knell for the state. A budget cut will not necessarily result in the safety net of society being withdrawn. These social advocates can still raise money privately, it is just far more difficult than having the government seize money from people for their programs via taxation.

There is clearly a need to reform the spending methods of Rhode Island government. The idea of capping spending and pegging growth to the cost of living, along with a process for increased budgets in emergencies, may be a creative way with working with social program spending.

Another idea is the deregulation of Rhode Island. By deregulating the state, there will be savings, if only on the need to retain people to enforce the regulations. This will stop the dog from chasing its tail.

The difficult budget cycle is a good for Rhode Island. It can provide for the rise of the Phoenix from the ashes of its budget woes. The needs of Rhode Island must come before the special interests that control the legislative process. I have long argued that the voter initiative process could have stripped these special interest lobbyists from their control, but, alas, the special interests have prevailed on this issue as well.

Rhode Island must now confront its budget crisis. The time is now. The belt has been expanded over the years; now it needs to be contracted.