Published: April 04, 2008 01:03 pm            

No leadership — 04/06/08

The time to propose tax hikes was in January, not April

Gov. Steve Beshear finally is adding a degree of tough talk to the state’s revenue woes, threatening to call the General Assembly into special session if the state’s economy keeps worsening. How we wish the governor had assumed that leadership role much earlier.

How different the 2008 General Assembly would have been if Beshear, fresh off a landslide victory over former Gov. Ernie Fletcher, had proposed a budget that would have adequately funded state government for the next two years and proposed tax increases to fund that budget.

Instead, the new governor proposed a bare-bones budget that included sharp cuts in funding for higher education and social programs but no new taxes.

Even if Beshear had called for tax increases as part of his proposed budget, the Republican-controlled Senate likely would have balked at the tax increases and a budget not unlike the one legislators eventually approved would have been approved. But by offering a tight budget without any tax increases, the Democratic governor played right into the hands of the Republicans who control the Senate.

When the House eventually approved a budget that included a 25-cent increase in the cigarette tax and other “revenue enhancements,” there was no chance that those new taxes were going to be approved by the Senate. All the senators had to say was that even the Democrats own governor did not support a budget that included higher taxes.

When Beshear eventually endorsed a 70-cent-per-pack increase in the cigarette tax, it was much too late in the game. Democratic leaders of the House already had expended their political capital convincing their colleagues to support a 25-cent cigarette tax hike. There was no way they were going to come back and ask those same legislators for another 45 cents per pack increase. Thus, the governor’s proposal fell on deaf ears.

The budget approved last week is different from the one Beshear proposed, as legislators reduced to 3 percent the cuts in higher education and came up with some creative ways to increase revenue. But when all is said and done, this essentially is the budget Beshear sought. He asked for a bare-bones budget and that’s what he got.

Beshear, who has the freedom to veto line items in the budget, now says, “It’s a very lean budget. It is going to cause pain in a number of places. ... But, you know, it’s a tough budget for the people of the commonwealth.”

The governor now says the state needs additional revenue and said he would continue monitoring the state’s financial situation and monthly revenues to spot any patterns. If state revenue continues to be sluggish, the governor said, “I’m going to bring them (legislators) back up here and once again start talking about raising some revenue.”

Well, the time to talk about “raising some revenue” was in January when the budget was first proposed, not in April after it has been approved.

When Republican Louis Nunn became governor in 1968, he arrived in Frankfort to discover that the state did not have adequate revenue to meet its needs. But instead of proposing a bare-bones budget like Beshear did, Nunn stuck his political neck out by proposing a two-cent increase in the sales tax. That increase — still called “Nunn’s nickel” — assured the Republican governor would never win another race, but it was a necessary move for the state to have the money to operate.

Proposing a progressive budget based on real needs instead of a bare-bones budget based on inadequate revenue is what effective leadership is all about. Louie Nunn did it in 1968; 40 years late Steve Beshear failed to do it.

        

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