Preventing “on-the-rebound” budget surplus decisions

by Elaine Mejia on April 30, 2014 in April 2014 eNewsletter

Rebound, growth, surplus, surge, gains, recovery. In most contexts words like these would bring comfort, even optimism. But in reference to state tax revenues and budgets, these terms signal a new battle for advocates of a well-functioning public sector—a battle in which well-heeled interests that favor a smaller, less effective government try to persuade policymakers and the general public to use modest revenue gains for costly, often permanent, tax cuts.budget surplus

There has been little to suggest that states have truly “recovered” from the recession and its aftermath in any real sense. A recent 50-state analysis by The Pew Charitable Trusts summarized the current situation facing states this way:

Nearly five years after the Great Recession officially ended in June 2009, states’ financial conditions are improving. But most states have yet to return to prerecession performance on some key measures of fiscal health. Even after states overcome the effects of the downturn, additional challenges await them.

According to the study, by the end of 2013 20 states had not recovered to pre-recession levels of state revenues, and all states are facing pressures from lower funding from the federal government, depleted reserves, ongoing unemployment challenges, and debt and retirement pressures.

Similarly, the Center on Budget and Policy Priorities recently examined public education funding found the following:

States’ new budgets are providing less per-pupil funding for kindergarten through 12th grade than they did six years ago — often far less.  The reduced levels reflect not only the lingering effects of the 2007-09 recession but also continued austerity in many states; indeed, despite some improvements in overall state revenues, schools in around a third of states are entering the new school year with less state funding than they had last year.

Moreover, according to the American Society of Civil Engineers’ Infrastructure Report Card the nation can only muster a grade of D+ due to the lack of adequate funding for the nation’s aging systems of infrastructure including roads, bridges, dams, solid waste facilities, school buildings and more. The Society estimates that the country’s estimated investment needed by 2020 is $3.6 trillion.

Despite this reality a number of states are considering tax cuts. Stateline recently highlighted several ongoing efforts to cut state taxes, including campaigns in New York and Minnesota.

Perhaps the more appropriate ‘rebound’ metaphor Americans should be reminding themselves of is that of the period following a failed relationship and painful breakup, when one is temporarily prone to making poor, short-sighted decisions.

Here are four strategies for combating “on-the-rebound” tax policies:

Pivot quickly to what’s at stake. Focus on the larger context, not dollars and cents. For example, the state’s quality of life and future economic prospects may be at stake. Connect the dots between public funds and the chance to create a successful future for everyone.

Be concrete. Try to avoid abstract or wonky terms and phrases like “budget surplus,” and get to the specifics as quickly as possible. If you’re asked what the state should do with its surplus, offer a stark contrast such as, “We can talk surpluses when we’ve got a surplus of great schools and safe bridges.” Or use social math to give the situation context: “With this year’s increased revenues we could help an additional 10,000 high school graduates attend college next year.” Use concrete, tangible terms about what is at stake – critical public structures, crumbling roads and school buildings, systems we’ve built together over time, etc.

Make it about OUR money, not mine or yours. Stoking a greater sense of civic responsibility is essential. If surplus revenues are perceived as the state keeping too much of my or your money, then the obvious course of action is to return those funds to individual taxpayers in some way. But if those revenues are seen as gains to a public investment portfolio of civic structures that includes schools, health care, public safety and so on, people will be more likely to support reinvestment rather than tax cuts.

Get beyond the current moment. Budget and tax debates are often compressed into what we can (or cannot) afford “right now,” which leads to a limited sense of choices. Payoffs from public investments such as early childhood programs can seem far off, whereas some extra money in someone’s pocket brings immediate gratification. If confronted with a question about whether or not a tax cut would spur economic growth, for example, respond with an affirmative case for the role of public structures in building a strong economy by saying something like, “What our state’s economy needs right now is investment in its people through education and health care and a rebuilt infrastructure by fixing our aging bridges and roads.”

We need to help our friends, neighbors and lawmakers see this “rebound” period for what it is…not a chance to temporarily make short-sighted choices that we’ll regret later, but a time to regroup and plan for the future so that our next fiscal “relationship” can succeed.

Agencies using plain language = progress

by Public Works on April 29, 2014 in April 2014 eNewsletter

Frustration over bureaucratic complications is, without a doubt, one of the fundamental challenges we face as we work to build support for public systems. Often, agencies themselves add to this challenge by overcomplicating their public descriptions of what they do. … Continue reading

Why the government should provide internet access

by Public Works on April 29, 2014 in April 2014 eNewsletter

This month Vox featured an interview and accompanying video with Susan Crawford, former special assistant to President Obama on science, technology, and innovation policy. In the interview, Crawford offers a compelling case for why the government should provide internet access. … Continue reading

Inequality is not a “gap;” rather, it throws the economy “off kilter”

by Public Works on April 29, 2014 in April 2014 eNewsletter

In this article from Salon, communications researcher Anat Shenker-Osorio praises the growing attention to inequality but suggests one major change to how we communicate about it. Anat’s research shows that talking about inequality as a barrier, rather than a gap, … Continue reading

Government’s role in innovation

by Public Works on April 29, 2014 in April 2014 eNewsletter

This article in the New York Review of Books features two books that shed light on the central role government plays in innovation. They are Mariana Mazzucato’s The Entrepreneurial State: Debunking Public vs. Private Sector Myths, published by Anthem, and … Continue reading

How does your state rank on civic education?

by Public Works on April 29, 2014 in April 2014 eNewsletter

CIRCLE, also known as the Center for Information & Research on Civic Learning and Engagement, publishes this handy State Civic Education at a Glance map. According to CIRCLE, quality civic education in schools promotes civic involvement later in life. Preparing … Continue reading

A look at trust in state governments

by Public Works on April 29, 2014 in April 2014 eNewsletter

Gallup recently took a state-by-state look at trust in state government. Years of scandal appear to have taken their toll in Illinois, which had by far the lowest score, with only 28% of voters trusting their state government. North Dakota, … Continue reading