Thursday, March 4, 2010

A lot going on

There is an enormous amount of news swirling about in the political world. A few thoughts:

Higher Education Budget Cuts
  • The number one thing on everyone's mind locally is the potential $300 million cuts to higher education ordered by the state legislature in 48 hours, which was requested on top of huge cuts already done by most of the state's public colleges and universities. Details here, here, here, here and a million other places. I for one support some revenue raising -- the $1 per pack tax on cigarettes, bringing back a 1/2 or 1 percent sales tax on groceries, and a market-driven tuition raise -- to offset the slash and burn mentality that is going to do untold harm to higher education and healthcare in this state. Would you rather pay $1 on a $100 grocery bill or potentially have your child miss out on higher education due to required reductions in enrollment across the state by massive budget cuts? Easy choice for me, and I think for most Georgians, especially if we could dedicate the revenue to higher education rather than sending it to the black hole of the general fund.
  • I find it laughable that the very state legislators who asked the Board of Regents to come up with $300 million in potential cuts in just a few days then come back and accuse UGA and others of playing political games with the process. Really?
  • So Gubernatorial candidate Austin Scott implies that 4-H is more important than the basic functions of the University. 4-H is a wonderful program that should be preserved (I had a lot of friends in school who benefited -- and even met future spouses -- through the program). But preserving the core function of higher education at an institution of higher education is more important than service and outreach. The real question is whether 4-H should be housed and funded independently of higher education, or perhaps in the department of agriculture.
  • Rep Scott states that "agriculture is Georgia’s major economic driver and vital to the success of our economy." Newsflash: could there be any institution more committed to the health of agriculture in the state (and even the nation) than the University of Georgia? UGA research is probably the reason that Georgia still is an agricultural leader. Better and larger poultry, healthy large animials, more bountiful crops, and new types of profitable turfgrass, alternative crops and ornamental plants have come from research at UGA that could be dramatically impacted by proposed budget cuts. The beneficiaries of this research are not the professors in the labs, but landowners and farmers across the state.
  • Rep. Scott also decides to play with the numbers a bit in his comments on Peach Pundit here. Okay, so the Regents' budget has gone up, from $5.2 billion to $5.4 billion while other budgets have gone down. Want to know why? Because our institutions of higher education have done what businesses do when a key revenue source (state funds) is consistently shrinking -- they have aggressively pursued revenue from other sources, namely private fund raising and federal grants. This year, UGA will receive about the same amount of state funds it did in 2002. And if the funding cuts proposed by the Governor and the additional $60 million cuts requested by the legislature took effect, UGA would get the same funding in fiscal year 2011 as it received from the state 13 years ago (1997), with thousands more students to educate, new facilities to maintain and inflation to deal with.
  • I really like some of the things Rep. Scott says on his website, and have high hopes for him. But his approach to this higher education debate could be a credibility killer. I have no doubt there are inefficiencies in higher education, as there are in any large organization. But after years of state budget cuts, most of those have been wrung out of the system. There may be a few more, but not $300 million more, and the damage we are doing to higher education -- the one area of education that is working well in our state -- is staggering.
  • Full disclosure: my company, Jackson Spalding, does limited project work a few units of the University of Georgia and also works with the Georgia Research Alliance, which helps fund research jobs and infrastructure at the state's six research institutions.
Some Good News
  • Athens has two exciting new sports events on the horizon this fall: a new sprint triathlon called the Tri to Beat Cancer, which will benefit the Cancer Foundation of Northeast Georgia, and a new half marathon, which will benefit Ath Fest. Athens has a long history in participatory sports that has waned somewhat in recent years -- it is good to see large scale, high profile events returning.
  • As you drive down Hog Mountain Road, check out the new trees going in at Veterans Park. Talk about a change! They were provided by Select Trees, a local nursery, and will leave quite a legacy at the Park. Kudos to the BOC for this investment. BTW, to connect the dots with the above points, Select Trees is one of those agricultural organizations that has been successful largely because of UGA-driven agricultural research.
  • There is still discussion of a park around Elder Mill and Elder Mill covered bridge. This would be a wise use of county funds if it could be pulled off. Lee Becker and the Oconee Enterprise have also covered the topic extensively. Oconee County doesn't have as much tangible history as a lot of other communities -- what we do have needs to be preserved when it is available, especially if we have excess SPLOST funds that could be so utilized. If we don't have SPLOST funds, then this obviously isn't the kind of economy where you can allocate annual budget resources to such a large effort.
Let me know what you think.

1 comment:

Martin Matheny said...

I'm not ruling out reinstating the grocery tax, but that needs to be more or less the nuclear option in terms of revenue raising. There are a lot of less regressive, more fiscally responsible things that need to happen before I'm going to support grocery taxes. Among these:

Update the state income tax brackets so that Arthur Blank and I aren't in the same bracket. The proposal I like is a 1% higher rate that kicks in at $400,000 in AGI. (Another flavor of this proposal makes it $400K for couples, $200K for individuals.)

Pass some version of HB 356 (I know, broken record), to reform point of sale collections, cut down on tax cheating, free up DOR auditors to go after more income tax dodgers, and stop leaving between half a billion and a billion dollars on the table every year. At this point, I don't care whose name is on the bill, although the political hack in me would like to see my team get credit.

Adjust user fees for certain state services - state parks, state golf courses, etc. I haven't been in favor of this in the past; you ought to be able to take your kids hiking without having to shell out for the privilege. But, desperate times, etc. This one ought to be temporary, though.

Put a sun-downed moratorium on sales tax holidays, maybe 2 years, with an option to renew the moratorium for an additional 2 years.

Raise sales taxes by an additional 0.5%. Again, perhaps with a sundown clause.

What I want to avoid in any discussion of revenue raising is stuff that can't be easily undone. This is a really unique time. Things are going to turn around, and while some policies to raise revenue and stop the structural spending problems we have should be permanent policy (e.g. income tax reform), I also think that we're going to want to re-evaluate the ways the raise revenue in less uncertain times before they become permanent.