More painful cuts ahead?

Unless one have been living in a remote cave far from any hint of civilization and the technology that is available, in South Carolina, then one would know that the state’s budget is in somewhat of a bind. With the budget in a deficit (big surprise) the legislature is once again looking to make cuts to try to keep things from getting worse.

While that isn’t really a bad idea, as any of us who have seen a reduction in available funding can well understand, there are some real problems with the latest plan by the legislature. The first has to do with the proverbial elephant in the room that no one seems to want to talk about; how to raise income. As the state depends on tax revenues, fees and levies to pay for literally everything on its budgetary list, one would think that looking for ways to maximize income producing revenue streams would be at least on the table.

As anyone who has felt the pinch of those tightened purse strings can attest, sometimes one needs to look at a way to make a few dollars to bring a little extra to cover some expenses, even if it is short term. Selling a few things that one doesn’t use, taking on extra hours at work, or even taking on some sort of a second job to bring in extra income. It is, naturally a bit different when one is talking about a government, but the premise surely is the same. Part of the problem is revenue, so one would think that looking to bring in more would at least be considered. Would that mean higher taxes, fines and fees? Most certainly it would, but when one really takes a look at the real impact, it isn’t as large as one supposes.

For instance, say a 1% sales tax on groceries were enacted, impacting the category not currently taxed. Some would say that it would make the poor suffer needlessly by the increased burden on their small budgets. The math says it is a very small impact. If someone buys $100 of groceries then then the tax, if it were at 1% would be a grand total of $1, or roughly the price of a candy bar.  Very few people are going to notice that, especially as pre-prepared foods and non-food items are already being taxed. However if 1000 people bought $100 worth of groceries at the 1% tax rate a week for a year, the annual potential revenue would be $208,000. That is just 1000 people’s possible contribution to the state’s revenue.  If we went back to the old 3% tax then it is $3 per 100. If a family spent $100 a week on groceries taxed at that amount, then the tax would add $156 of expenses to their annual budgets.

A reinstatement of the old 3% sales tax on groceries is being proposed.  Yes, it would pinch some budgets a bit tighter, but not as much as some of the latest suggestions coming from Columbia.  This idea apparently isn’t going to come up for discussion until March, and frankly I’m not holding my breath on the success of it’s passing. A tax seems to be a very, very dirty word these days.

Today, it was reported that the legislature is considering some interesting cuts to its Medic-aid budgets. I sincerely hope that this proposal does not pass. On the tables are cuts to Hospice care, prescription drugs for diabetics, home health visits, and emergency dental care for adults, as well as some others. The four just mentioned are the most problematic, as these are issues that deal primarily with very sick or elderly patients. The cost effectiveness on these issues makes no sense. For example it is far cheaper to allow a terminally ill patient to spend their last days at home thanks to Hospice, then to do so in a hospital or nursing home.

It always surprises me that it is always the ones who have the least say in how things will impact them are so often the first that get hit. Our children, our poor and our seniors are having to pay the price for where we find ourselves. We can point fingers all we want at who is at fault, but in reality we all are at fault, the government and the people who elected them. Those in charge now can go on and on about how they are going to make changes from those who made such a mess of things in Columbia, but they fail to mention that there has been little change in the legislature in quite awhile. The last time there was a democrat as Governor was in 2003. Before then there was, Wilson Riley who’s term ended in 1987. The Senate has had a Republican majority since 1996, and the house since 1994. Change doesn’t happen that often when it comes to politics here.

In essence we are entrusting the same people who helped make the mess we find ourselves in to get us out of it.
I know that things are going to be rough for awhile, as this recession was not an overnight sensation but the results of several years of decisions made by well meaning people who either didn’t consider possible ramifications, didn’t understand that economics always has a way of checking extremes, or didn’t care that there could be a flip side. Whatever it was, we are here now, and it is up to us to weather it through and work ourselves to a better situation. It most certainly will take a little sacrifice on many of our parts. I can understand and respect that, as I am sure many of us do. However I do not believe it is remotely fair to ask others to sacrifice who have so little to give up as it is. That does seem to be the trend though these days.

If something like a sales tax on groceries was indeed reinstated then I know that my budget would be able to manage it, and my small contribution would hopefully help others who depend on state funds to provide basic needs that they cannot pay for themselves. It bothers me very much that it seems that, when it comes to trimming fat, it is those that are in the lean that get trimmed instead. I do hope that wiser heads prevail on how best to manage our state’s budget.  There are some good solutions, that may not be the most popular in the short term, but are bearable by all, while not further strapping those who can least afford it. Hopefully they will be utilized.

As I wrote last week, being charitable is something we can do well to practice every day of the year for a myriad of reasons. It may be even more important for those of us with a tiny bit extra to share it, as it looks like for some, it’s going to get worse before its gets better. I am of the mind that it will take us looking out for each other as a community through this difficult time. I just don’t happen to like the reasons behind it.

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