How Big Government Uses Cuts In Services As Leverage For Tax Hikes

As someone who has been involved in efforts to cut taxes on a state and local level for a while now I’ve noticed an interesting trend. Whenever local bureaucrats are faced with tax cuts, they immediately threaten to cut back on some of the things government does that the taxpayers value most. Many of them some of the basic functions government is supposed to do. Like police officers. Road repair. Emergency responders.
Which is good politics. There’s no better way to scare citizens away from giving themselves a tax cut than to suggest that a tax cut would mean un-repaired roads and too few cops. Case in point, Jefferson County in Alabama slashing funding for things like road maintenance after a tax on, uh, jobs (aren’t they supposed to want more jobs?) was overturned by the state’s courts. Maybe you don’t care about Jefferson County since you don’t live anywhere near there, but the story is important. Because I’m willing to bet that something similar may be happening near you.

June 5 (Bloomberg) — Alabama’s most populous county is preparing to stop road maintenance, close courthouses and shutter services for the elderly after a court struck down taxes that pay for about 35 percent of its budget.
Jefferson County, which includes Birmingham, released a plan to cut $52 million from its budget as it appeals the ruling against its business and occupational taxes to the Alabama Supreme Court. Without that revenue, the county has said it is at risk of running out of money as soon as this month.
The loss of the tax money was another blow to a county that has been struggling to avoid bankruptcy since last year, when Wall Street’s financial crisis caused its interest bills to soar on more than $3 billion of bonds. The challenged taxes provided about $75 million in the fiscal year ended Sept. 30 to the county, which is forced to balance its budget under state law.
“I’m not expecting that this is going to go easy into the night, but I’m abiding by the law,” county Commission President Bettye Fine Collins, a Republican, told reporters in Birmingham. “People who thought this was some kind of game are finding out this reality.”

The problem, of course, is that the government’s threats are usually baseless. Usually there’s more than enough fat to be cut from government budgets without resorting to things like closing down firehouses. And in Jefferson County’s case, there’s a lot that could be cut without resorting to ending road maintenance and kicking old people out onto the street. Like travel for county employees, for instance, as per this article from June 4th:

Jefferson County’s financial problems have not stopped commissioners from approving travel requests this year for senior staff members to attend conferences in Washington, Las Vegas and Orange Beach.
On Wednesday, Jim Carns approved a trip for his chief of staff to attend a conference in Orange Beach this month at a cost of $1,080.
That approval came less than one month after William Bell’s senior administrative assistant attended a conference in Las Vegas at a cost of $1,736.
Earlier this year, Shelia Smoot’s chief of staff attended a conference in Washington at a cost of $2,306.

Now, maybe you’re like me and you don’t live anywhere near Jefferson County and you’re wondering why this story matters. Well, it matters because it is illustrative of what politicians are going to be trying to pull all over the country as tax revenues continue to fall due to the recession. These politicians will try to scare you into raising taxes and giving them more money by telling you that they’ll cut funding for cops and roads, etc. if you don’t go along.
But really all they’re trying to do is bully you so that they don’t have to make cuts to all the little pet projects and fringe benefits spending they do.