Posted by
Sgt.Stryker on Wednesday, May 20, 2009 8:18:27 AM
Although my home state of Kentucky doesn't boast an economy the size of California's (
8th largest in the world), our budget shortfall is looking just as problematic.
"
State revenue plunged 12.1 percent last month compared with April 2008" according to the
Louisville Courier-Journal. There are a few bigger issues at play here.
First and foremost, I was pleased with Republican Senate President David Williams' response to remarks by Governor Steve Beshear that all options were on the table to close the shortfall. "We've given this governor as much money as he's going to get."
Just as compelling were Democratic House Speaker Greg Stumbo's remarks
-"Now is not the time to raise taxes on Kentucky families. There are other ways to raise revenue." Surprising, coming from a Dem.
Also interesting to note is the 36% drop in Corporate Income Tax in the table above. I would be curious to know how many businesses have moved out of the state due to the tax rate.
But what I found most interesting was this little tidbit-"Eric Gregory, president of the Kentucky Distillers Association, said a 58 percent decline in revenue from the wholesale tax on liquor in April reflected an "alarming" drop in sales as a result of the tax increase." The increased tax was passed earlier this year on alcohol and cigarettes, and looks to be backfiring already. I've heard anecdotal evidence that cigarette sales are already down over 3%. Local news mentioned that lawmakers were "surprised at the drop in revenue." No kidding.
And there, my friends, is today's object lesson. When taxes are raised to increase revenue without cutting spending, people will opt out at every possible opportunity.
I pray that the legislators in every other state in the Union take a long, hard look at what has happened to California.
"Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone" Frederic Bastiat