Friday, January 21, 2011

Irresistible Force vs. Immovable Object

The House released its base budget this week, which does not spend any of the rainy day fund or contemplate increased revenue. As expected, its a bleak picture. The Senate will release its version of the budget next week.

The budget debate reminds me of the irresistible force vs. the immovable object. The irresistible force is the perspective by knowledgeable budgeteers that the required cuts are simply too deep. The immovable object is the overwhelming voter mandate to cut spending and absolutely not to raise taxes -- but voters still want their services. How it will end up is anybody's guess at this point.

A couple of observations. While the Senate is open to reworking the Margins Tax, that idea appears to be stillborn in the House. I believe it likely that the rainy day fund will ultimately be used to defray the shortfall in the current biennium. Higher education is still perceived as being "fat", and there is not much sympathy for avoiding deep cuts there. Increasing motor vehicle registration fees is an idea that is being taken for a spin.

Either the force or the object will have to give: We just don't know which one yet.