Chicks-n-Scratching

Budget woes, oh budget woes. Yes, in this economy, everyone has them.  But, really, can we TRY to keep our priorities straight?

Local example.  The county in which I live – Chesterfield, VA – has a major budget shortfall.  They are cutting funding for libraries, schools, and county services. Major cuts. At the same time, they are offering tax breaks to big developers to put in new retail and housing space – when we can’t fill the retail space we have currently and houses aren’t selling. WTF? Oh, and as an added bonus, they aren’t cutting in places that it makes sense to cut. Our county has 48 county employees who make over $150,000 per year. Compare that to Henrico, which has a similar tax base and similar school system, and is located just across the river.  They have 6 who make over $150,000 per year.  Why do we have so many? Cut THEIR pay. Don’t eliminate their jobs, but cut their pay. If we instituted a county-wide salary cap of, say, $148,000 with the exception of maybe the school superintendent (who, btw, is a whole other bucket of WTF. He gave himself a 58% pay increase last year in the school budget, and while the parents screamed, the county said fine) and the county superintendent, which we could cap at $200,000, we’d save enough to fund the libraries at their current level and make up about 80% of the budget short fall for the schools to bring them to current levels. If they don’t institute the proposed tax “incentives” to the developers, the revenue might actually pay for the proposed infrastructure expansion that will go along with the development. Though, frankly, I wish they’d shelve the development for at least 5 years – give our existing space a chance to fill up.

This is ridiculously short-sighted and profoundly disturbing. The county is effectively telling me, as a parent, that they don’t care about my child. They are cutting my child’s education budget and at the same time cutting funding to the other places I might go to make up the lack – libraries, community centers, county parks.  You know what, Chesterfield? That sucks.

There are similar cuts on the plate at the state level, but I’m not even going to get into what I think of the Virginia state budget and my extreme unhappiness with McDonnell’s asinine plans (you tell me – what sense does it make to eliminate a key revenue source at a time of serious budget shortfalls? Really?)

We aren’t the only ones. Kat talked about NJ libraries losing funding (good article here), and California is teetering on the edge of bankruptcy.

We all understand that the states, counties, the nation, need to tighten the collective belts. The problem is the priorities.  The only thing that Americans have to sell on the global market is service and innovation. We make almost nothing – our manufacturing is nearly nonexistent (in 1965, manufacturing accounted for 53% of the US economy, in 2004 only 9%).  That means that our brains our carrying us. We HAVE to invest in those brains – in education, in services that encourage learning, and in services that encourage strong service.  Our education system is sliding compared to other industrialized nations, and without the education, our young people will have nothing to offer on the global marketplace.  Far from cutting education and libraries, governments should be manning a push to increase the level of competency in our education system.  Cutting education and similar resources is the height of short-sightedness.

Instead, states should be cutting the fat in high-end salaries, in capital overhead (facilities, etc.), and similar places. And, yeah, I have to say that while I, personally, would love to have more money in pocket, I don’t think it’s the time for tax cuts or eliminating revenue streams or providing big tax incentives for new development projects. If you want to encourage development, offer a tax break for occupying space that has been empty for longer than 6 months. Offer tax breaks for rehabilitating and updating existing facilities. Offer tax breaks for rehabbing and/or occupying vacant homes, or provide tax incentives for buying foreclosures. THAT might actually help stabilize the real estate market.

What our politicians fail to comprehend is that real estate is in a  basic capitalist crisis here. We have a case where the supply of existing homes/retail space far exceeds the demand. Adding more supply is NOT going to help. All it will do is drive prices down further.  Instead, we need to decrease the supply, and the only way to do that is to NOT add more and make the existing supply more attractive. For people who theoretically should understand basic capitalist theory, a lot of politicians sure look like they don’t get it.

It’s simple.  We are a capitalist society.  We must offer something the market wants – and in the US it isn’t manufactured goods, it’s service and innovation.  And the supply must be appropriate for the market – which means we need an educated, innovative population. Cutting education and libraries and community centers is precisely counterproductive.  On the other hand, we need to balance supply and demand in real estate. That means NOT increasing the supply when there is already over-supply. Instead, we need to increase demand for the existing supply by changing incentives from new development to using existing development.

And, really, basic financial rules of the game wouldn’t go amiss. But that’s a whole other rant.]

Okay. I promise that next week I will find something non-political to discuss. I SWEAR. Though it might pain me to do so. lol

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