Do we really have a revenue problem?
In recent weeks, much press has been devoted to pushing the idea that the state suffers from a lack of revenue, oftentimes leading readers to believe that tax increases are needed in 2013 to shore up the state’s finances.
But what’s often missing from these articles is the fact that state revenues have grown generously over the past two decades, far outpacing the growth of other economic indicators.
In contrast, over the same period state personal income has increased by just 223.5 percent; per capita personal income has grown only 118.5 percent; the consumer price index (a common measure of inflation) has increased by only 66.8 percent; and population growth totals just 48 percent.
As the data shows, state revenue growth has, in every instance, either exceeded or greatly exceeded the growth of other important economic indicators over the past two decades, leading one to conclude that the state’s fiscal issues stem not from revenue deficiencies but rather spending excesses. Or as Marsha Blackburn so eloquently put it: “Government does not have a revenue problem; government has a spending problem. Government does not have a revenue problem; government has a priority problem. It is time that we begin to fine tune our focus and decide what the priority of government ought to be.”
- James Quintero