For years, it has been a GOP article of faith that the United States should pass a balanced budget amendment. Here in Indiana, Republican Governor Mitch Daniels was the driving force behind the “constitutionalization” of tax caps–adding a measure to the state’s constitution limiting state and local government’s taxing power.
Fortunately, wiser heads prevailed in Congress, and the federal government retained authority for the massive deficit spending needed to ease what will certainly be a major recession or a depression in the wake of the Covid-19 pandemic.
Here in Indiana, we weren’t so lucky; Mitch Daniels successfully curried voter favor by decimating the ability of cities to adequately fund services and hobbling the state’s ability to meet unanticipated crises.
The average voter doesn’t recognize the different functions of constitutions and statutes, or understand why specific tax provisions of this sort don’t belong in the former. Most Hoosiers thought it was a good idea to place tax caps in the state’s charter, making it difficult–if not impossible–to change direction if the need arose. Now, the state of Georgia–which has a similar restriction–is demonstrating just how short-sighted and damaging it is to elect people who are more concerned with politics than good policy.
From Heather Cox Richardson’s daily “Letter,”(no link, but her URL is email@example.com) we learn about an investigation by George Chidi, a Georgia journalist and former staff writer for the Atlanta Journal-Constitution.
Chidi examined Georgia Governor Brian Kemp’s decision to reopen gyms, fitness centers, bowling alleys, tattoo parlors, barbers, nail salons, restaurants, theaters, and massage therapists, among other businesses, next week.
Kemp said the businesses would be required to screen workers for illness, increase sanitation rules, separate workspaces by at least six feet, telework where at all possible, and have staggered shifts. He also said that more restrictive local rules could not override his order.
Kemp told reporters that his concern was to protect small businesses, hurt by the economic shutdown, but Chidi had a different interpretation. “It’s about making sure people can’t file unemployment,” he wrote.
The state’s unemployment fund has about $2.6 billion. The shutdown has made claims skyrocket—Chidi says the fund will empty in about 28 weeks. There is no easy way to replenish the account because Georgia has recently set a limit on income taxes that cannot be overridden without a constitutional amendment. It cannot borrow enough to cover the fund either, because by law Georgia can’t borrow more than 5% of its previous year’s revenue in any year, and any borrowing must be repaid in full before the state can borrow any more.
By ending the business closures, Kemp guarantees that workers can no longer claim they are involuntarily unemployed, and so cannot claim unemployment benefits. Chidi notes that the order did not include banks, software firms, factories, or schools. It covered businesses usually staffed by poorer people that Kemp wants to keep off the unemployment rolls. (Emphasis supplied.)
We already knew that Kemp was despicable; a man for whom the word “ethics” is clearly meaningless–as Secretary of State, he refused to recuse himself and oversaw the Gubernatorial election in which he was a candidate. By throwing out some 50,000+ registrations from African-American voters, he narrowly deprived Stacy Abrams of a victory in that race.
This effort to deprive low-income workers in Georgia of the ability to claim unemployment is equally contemptible, but it is also equally attributable to the restrictive provisions in Georgia’s constitution.
Indiana’s constitution requires a balanced budget. That requirement need not be debilitating–if the state and its subdivisions can raise taxes to meet unanticipated challenges. Thanks to Mitch Daniels, his successors in the Governor’s office are unable to do that. Governor Holcomb thus far seems like a pretty solid guy–a throwback to the kind of Republicans I used to know–so I am hopeful he won’t emulate Georgia’s Kemp.
When rightwing Congress-critters bloviated about a Balanced Budget Amendment, cooler heads pointed to the perils and prevailed. When Republicans in the Indiana statehouse crowed about putting tax caps in the constitution to “protect” taxpayers, warnings by fiscal and tax policy experts were pooh-poohed.
Politics won, sane and informed policy lost.
Isn’t there a song called “Georgia on my mind”?