Communities Respond Responsibly to Economic Climate, Shouldn’t the State?

Local governments and cities like Belle Fourche seem to be the model example for how a government should operate during tough times. This article shows that Belle Fourche is budgeting for the worst, cutting the fat, and yet still manages to keep essential programs such as education and emergency services free from any cuts…even in tough times.

Local governments have to operate within their budget and stay within the black, for the most part. Our constitution requires the state to have a balanced budget as well, but recently we’ve seen fit to run off to the national government for help to fill our budget holes created by a structural deficit. And we all know that the national government has shown minimal financial responsibility, as there is no constitutional requirement for a balanced budget and they do not mind just printing money to make fiscal problems go away.

Local governments are the model for what we should be doing on a statewide and national level to create a position of financial strength and a strong economy.

From the Butte County Post:

Why The Increased Spending?

The Pierre Capital Journal reported that the legislature actually increased its spending for the 2010 budget by $6.8 million. Much of this spending has been spurred by the federal stimulus money coming into the state, as well as some alleged “cuts” to the state budget. Some of these cuts were in actuality just a cut to proposed spending, not actual spending…so in reality these were not really spending reductions. More details here…

In times of economic turmoil, sacrifices must be made both by us as individuals and by the government as well in order to maintain a stable spending structure in both government and personal life. Relying so heavily on one-time stimulus money requires no sacrifice by anyone and refusing to make some tough budget cuts perpetuates deficit spending and unsustainable funding practices, which will cause even more budgetary problems next year and even more problems down the road.

The article also states that one specific area that spending was actually cut was in the area of education, specifically in the areas of teacher-improvement bonuses, test score analysis, and teacher training. Education is an investment in the future, and these were worthy areas of education dollars that were axed by the budget.

We need to take a serious look at our state’s spending practices and create a more reliable structure that will help the state live within its means, while at the same time providing critical state services, such as education.

Plugging the Budget Holes...

With recent news of the passage of the American Recovery and Reinvestment Act of 2009, otherwise known as the stimulus bill, the budget situation is quickly changing in our state.

Many of the dollars coming in have strings attached, where certain dollar amounts have specific sectors where the money is required to be spent. Here is a brief overview of some of the different areas where our stimulus check will be required to be spent, click here. Areas where money will be directed include water and highway infrastructure development and many various areas of temporary assistance.

In light of this, the Argus Leader reports that our state budget situation is looking a little brighter. Many of the cuts to state programs Governor Rounds proposed will not necessarily have to happen. Read more here…

Although it is great that the stimulus is allowing us to keep some good state programs, it is uncertain how much of a “stimulating” effect this will have on our economy. Using stimulus money to plug budget shortfalls might save some jobs associated with those programs, but it certainly isn’t creating any new ones the best I can see. Furthermore, where will this put our structural deficit in 2011? $100,000,000 or $150,000,000? If we do not get ‘projected’ sales tax revenue increases to ‘bridge’ to, we will be left with a much larger hole than we saw this legislative session. What is our plan or strategy to boost sales tax? Is this a bridge to nowhere?

It is time to prioritize our needs and pay for what we can within our means. Budgeting for outcomes through the use of benchmarks and performance measurements are essential tools and need to be used.