New revenues, not cuts solution to budget

Sen. Jeff Essmann, in his guest column on Sept. 21, says of the upcoming Montana legislative session that "the proper budget prescription is a ranking of priorities and the elimination of those programs that are not critical." Easily said. But our budget goes almost entirely to education, health and human services, and corrections. Which of those does he want to cut? And by how much? Any fair look at those programs shows that on an on-going basis, all were underfunded in 2009.

Current revenue projections do give cause for concern and all state agencies are preparing for cuts but it would be foolish, for example, given our need for a sound education system, not to find new revenue.

First of all, Montana needs laws that force corporations and individuals to pay what they owe. As we’ve done before, we will introduce legislation that prevents major corporations from hiding Montana-based income overseas and that requires non residents to pay taxes on the income they receive when they sell property in Montana. And that’s not all: recent revelations from the Governor’s Office on tax shenanigans by the pharmaceutical and telecommunications industries are other examples of the need to be fair in our tax policies. Unfortunately, Republicans in the past several sessions have routinely stopped legislative efforts to collect revenue due to the state.

Second, we must consider increased revenue from sources such as reductions in tax credits (the $37 million to $45 million per year capital gains credit comes to mind) and spending the excess money that’s accumulated in various agency funds. And of course we should take a good look at the list of new revenue sources conveniently supplied by Essmann himself.

Essmann argues that businesses will come to Montana if we don’t change tax policies, but many studies have shown that what businesses most seek is a well-educated work force. In fact, those studies show that taxes play a relatively minor role in businesses’ decisions to relocate. On the other hand, public investments in education and health care are the best way we can secure the long-term economic prosperity of Montana’s children and families, and at the same time provide the environment that enables businesses to prosper.

Finally, by espousing "tax stability" and a "decent regulatory environment," Essmann is advancing the same supply-side, trickle-down economics pushed by Republicans in Montana and the rest of the nation for the past three decades. These policies were responsible for the rapid growth of federal debt, the widening gap between rich and poor Americans, and the reckless expansion and collapse of the financial system that put us in the mess we find ourselves today.

Sen. Ron Erickson represents Senate District 47 in the Montana Legislature; Rep. Dick Barrett represents House District 93. Both live in Missoula.

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