Tuesday, March 30, 2010
Editorial: Killing jobs to save them?
McDonnell's no-tax pledge could harm the economy he's trying to resuscitate.
From the RoundTable blog
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A liberal think tank recently issued an analysis of Virginia's bare-bones budget plan and found it a net job loser.
We hope the Commonwealth Institute for Fiscal Analysis will prove to be wrong in its projections, but we doubt it.
Lawmakers balanced the two-year budget without any tax increase. To get there, they closed the state's $4 billion-plus revenue shortfall with massive spending cuts, alleviated only a bit by a scattering of state fee increases.
Their budget balancing act, though, came mainly at the expense of K-12 education and health care -- and of 37,000 ordinary Virginians who, the institute predicts, will lose their jobs.
The losses would be several thousand more than the number of jobs Gov. Bob McDonnell -- Virginia's self-styled jobs governor -- hopes to create with $50 million in new spending on economic development incentives. His package is supposed to create 29,000 jobs over the biennium.
McDonnell will be blamed, and rightly so, for any net loss that can be attributed to the state's downsizing. As one of the "no new taxes, ever" ideologues now dominant in the Republican Party, he promised to veto any such act of apostasy in the budget bill sent to his desk.
Taking any tax increase off the table even before digging deeply into the budget process was an act of blind faith that took state spending cuts where no compassionate person would have them go.
No reasonable person, either.
Certainly, excessive taxation can put a damper on economic growth. Virginia is not dogged by this particular problem.
What also puts a damper on economic growth is cutting state spending to the point of sending job losses cascading through the economy in the midst of a long, intractable, jobless recovery from a long, painful recession. Virginia is dogged by this particular problem.
Modest, targeted tax increases might have helped an estimated 37,000 people stay gainfully employed who will not be creating demand for goods and services -- and delivering them.
