Tuesday, October 28, 2008

Cut Services, Raise Taxes, OR... Reorganize Our Thinking?

Everyday I pick up the paper or read the news online and more often than not, I am reading about how state government has decreasing funds with which to provide services to the residents of South Dakota. This is aside from the lack of road money and a lawsuit over the adequacy of school funding. On Sunday, an article elucidating the potential turmoil of the upcoming budget prompted me to write this article.

Can we, as a state, continue to cut services that are already financially strained, such as roads, bridges, infrastructure, and education? What is the role of our government here in South Dakota and how does that role fit into the economic liberties we enjoy?

I believe there are three ways we can go about mitigating this obstacle. First, we can simply cut services to residents of this state. Second, we can impose new taxes and raise old ones to boost revenue. Third, we can reorganize ourselves to fit the 21st century. The same operating procedures and systems created over 100 years ago to meet the needs of industrialism are no longer adequate and our financial position reflects just that.

I cannot vouch for anyone else, but I would choose option three. Albert Einstein noted that, "We cannot solve problems by using the same kind of thinking we used when we created them." In other words... let's get a little creative...


PP said...

Scott -

Can you provide examples, and their fiscal impact?

Anonymous said...

Attractive bromides. Who wouldn't choose option number three? The problem is, Scott, that real life isn't quite that simple.

Scott Munsterman said...


The days of operating as a nation that does our economic business is over. With deregulation over the years, the global economy and technology has changed the way business is conducted. Unfortunately we are no longer competitive as a nation; but we can become more competitive as regions.
Economic science teaches us regional development provides many essential opportunities in growth. But to get there we have to reorganize our efforts and combine resources, strategies and funding to achieve an environment for competitive advantage to flourish for our businesses and industries.

So, to answer your question, reorganizing our tax structure to allow local control of dollars spent; as well as the opportunity for local control of increasing taxation for limited purposes of improving infrastructure can fuel growth for regions under a regional growth strategy. But to be successful in this competitive global environment, we must get everyone on the same page: private sector, public sector; under one strategic development plan to be effective. The economic impact will result in higher quality of life through a higher standard of living.
If people think the middle class is getting squeezed today (and they are), just wait another 5-10 years when we lose more jobs due to high health care costs, wages, and competitiveness in the pricing of products and services... The economic pay off of reorganzing and investing is clear. We get to enter the 'new economy' and capitalize on our return of investment just like we did from the last two 50 year economic cycles.

Long answer to a short question.