Posted on Tue, Aug. 19, 2003


Latest deficit news means leaders must make tough choices



WE WERE DISTURBED to learn last week that the General Assembly has been even more unwilling than most realized to deal with the state's financial turmoil.

We knew lawmakers had not made the kind of smart, targeted cuts (or, alternatively, tax increases) that were necessary to deal responsibly with the gaping holes in the budget. We are embarrassed to admit, though, that we had naively assumed that they had repaid the $150 million deficit from the fiscal year that ended in June 2002. Instead, the state has continued to essentially float a check to cover those unpaid bills.

Now that Comptroller General Richard Eckstrom has let the cat out of the bag -- and announced that there's another $22 million in unpaid bills from the fiscal year just ended that is being covered in the same manner -- it is unclear what precisely should be done.

Oh, it's clear that the state must pay the bills. What's not clear is whether the Budget and Control Board should pay them when it meets Wednesday, or whether it should defer action to the Legislature, which won't meet until January, almost certainly would not address the issue before June and apparently is under no legal obligation to do a thing about it.

The second option cannot be considered palatable, both because it allows an inexcusable dodge of responsibility to continue for practically another full year, and, perhaps more disturbingly, because there is absolutely no way of guaranteeing that the Legislature will choose to do its duty next year.

Budget and Control Board action is problematic, too, though. First, some members question whether the board has the authority to pay off debts from a previous year, or whether its authority is limited to preventing future debts from occurring. Beyond that, it is difficult to endorse using the blunt instrument of across-the-board cuts -- the only tool the board has at its disposal -- to pay past-due bills. Particularly when it could be argued that the temporary failure to pay them does not do any immediate harm, the main damage of that inaction being the enabling effect it has on an already irresponsible Legislature.

This much is clear: The board must deal immediately with the $108 million shortfall in the current year's budget, which the Board of Economic Advisors declared Friday. And in January, the Legislature must change the law to make sure the state can never again refuse to at least start repaying its bills immediately.

Legislators say they didn't repay their $150 million debt this past session because doing so -- on top of the cuts they had to make just to deal with declining revenues -- would have been too traumatic a blow for state government. That argument makes perfectly good sense -- if you believe, as most legislators do, that they have no money and no way of raising money. But that simply is not true. They can come up with the money to pay the state's bills in one of two ways: They can raise taxes, or they can identify and eliminate those programs and agencies that are not absolutely essential.

Whether the Budget and Control Board does the dirty work Wednesday and pays the state's past-due bills or leaves that to legislators, who are ultimately responsible, this news of an even deeper financial crisis should serve to underscore the fact that legislators can no longer trim around the edges, spread the pain through all state agencies and hold their breath and hope to survive until the economy turns around.





© 2003 The State and wire service sources. All Rights Reserved.
http://www.thestate.com