Diary

Budget Cut Reactions

Judging from the reactions to the Governor’s proposed budget cuts, it seems the pain was fairly distributed. Ken Stolle and Ken Cuccinelli are up in arms over the cuts to public safety and the move to let non-violent prisoners out of jail 90 days early as opposed to 30 days.

The teachers’ union is upset about the nicks in their sacred budget cow and the government employees union is fretting over losing jobs and pay raises.

There are the tax hikes, too — on tobacco and another that trims the deduction for handing land over to the state for “preservation.” Though the tack Republicans have taken to portray the cigarette tax hike as an “affront” to Uncle Philip strikes me as both absurd and ripe for mockery — remember, it’s people, not companies, that pay the tax, folks. The people, not the companies, should be your focus.

So everyone take a hit. But if the House’s numbers on the shortfall are more accurate and much more will need to be cut (and there’s no reason, in the current climate to assume otherwise), then the pain will spread.

If the darker scenario does come to pass, then the pressure to raise taxes of some sort — whether it’s Chap’s idea to revive the death tax or other ideas such as hiking the sales tax — more red ink will necessarily increase the incentive to avoid more “painful” cuts and instead pick taxpayers’ wallets.

One Kaine proposal that really is a neat bit of pilfery does deal with the sales tax:

…eliminate the dealer discount tax rebate — in which businesses are allowed to keep from 1 percent to 4 percent of the state sales tax they collect to cover administrative costs — for a savings of $64.3 million in 2010

Yes, it does cost money to collect taxes. If collections were free, there would be no need to spend money on the state’s revenue agencies. Making businesses pay the entire cost of collecting sales taxes may put more money into the treasury. But who will end up paying for it?

Consumers. Most businesses will pass on this cost to their customers. It will be small enough that most won’t see it. But the cost will be there. If Republicans have any sense — and that’s a big “if” — they will recognize this.

There are those who have urged the GOP to not get controversial during the session and to find as much common ground with the Democrats as possible. Only after the session is done will they then lay out their vision for the future.

This is a recipe for failure. The legislative session is the ideal time to draw distinctions and more importantly, to set the stage for the general election.

And elections, remember, are not decided as much on what you promise you will do as what you’ve actually done.