The news out of Atlanta in recent weeks has been how the state is going to deal with a shortfall in the current budget year. Lawmakers are there trying to figure that out now. State law prohibits deficit spending, so our represenatives are trying to figure out what to do. The question is why does the state have a $2 billion deficit?”
The answer is partly that our governor, wanting to have more funds to spend in this budget year, decided to use an overly optimistic estimate of revenues when preparing his state budget last year. The legislature then appropriated expenses using those overly optimistic revenue estimates. Congress has been doing the same thing for years.
Certainly some of the current state budget situation is caused by an unexpectedly steep drop in revenues, beyond what might ordinarily occur. This is why budget forecasters are supposed to forecast revenues on the low side, and expenses on the high side. That way, if revenues do exceed forecasts, the additional income can be used to make one-time additional purchases, reduce current debt, or put the surplus in a “rainy day fund,” to be held in reserve for future need. That is the responsible approach to budgeting, in my view.
Instead, the governor decided to simply increase revenue estimates to match the desired level of expenses, and “on paper,” he had a balanced budget. The legislature then allocated the revenue before it came in. When the revenue estimates failed to materialize, the budget went into a deficit status. This is no way to run a state.
Now the legislature has the painful task of rescinding program allocations in the middle of the budget year because revenues are insufficient, and they are required by the state constitution to have a balanced budget –– in reality, not on paper.
Our Congress is in a far worse position. Not only are “ordinary” budget numbers in a deficit, but they’ve overspent revenues for so many years, the accumulated deficits are already in the trillions. That means that a) there are no savings accounts or rainy day funds to tap to pay for any bailouts; b) the interest due on the current deficits are eating up increasingly larger percentages of future budgets, leaving less available to spend on ongoing programs; and c) interest due on any “bailout” funds borrowed to “stimulate” the economy will make it increasingly difficult for future congresses to pay for ordinary operating expenses.
What we have sown, we will reap. The U.S. government cannot file bankruptcy to wipe out its past debts, unlike individuals or corporations. The forecast on the federal side is looking increasingly bleak for years to come. And we have only ourselves to blame, by allowing Congress to do this, year after year after year.
This is why we need a balanced federal budget requirement, a presidential line-item veto, and a two-thirds vote of both houses required to overspend revenues in any budget year. Additionally, no member of Congress should get any raises in pay or benefits until they put the national budget back on sound footing.
Semmes, a Savannah native and graduate of the University of Georgia, has lived in Liberty County since 1986. He and his wife share their half-acre with four cats, a dog, and an occasional raccoon or possum. He has served on several area boards, and is a member of the Savannah Sunrise Rotary Club.
The answer is partly that our governor, wanting to have more funds to spend in this budget year, decided to use an overly optimistic estimate of revenues when preparing his state budget last year. The legislature then appropriated expenses using those overly optimistic revenue estimates. Congress has been doing the same thing for years.
Certainly some of the current state budget situation is caused by an unexpectedly steep drop in revenues, beyond what might ordinarily occur. This is why budget forecasters are supposed to forecast revenues on the low side, and expenses on the high side. That way, if revenues do exceed forecasts, the additional income can be used to make one-time additional purchases, reduce current debt, or put the surplus in a “rainy day fund,” to be held in reserve for future need. That is the responsible approach to budgeting, in my view.
Instead, the governor decided to simply increase revenue estimates to match the desired level of expenses, and “on paper,” he had a balanced budget. The legislature then allocated the revenue before it came in. When the revenue estimates failed to materialize, the budget went into a deficit status. This is no way to run a state.
Now the legislature has the painful task of rescinding program allocations in the middle of the budget year because revenues are insufficient, and they are required by the state constitution to have a balanced budget –– in reality, not on paper.
Our Congress is in a far worse position. Not only are “ordinary” budget numbers in a deficit, but they’ve overspent revenues for so many years, the accumulated deficits are already in the trillions. That means that a) there are no savings accounts or rainy day funds to tap to pay for any bailouts; b) the interest due on the current deficits are eating up increasingly larger percentages of future budgets, leaving less available to spend on ongoing programs; and c) interest due on any “bailout” funds borrowed to “stimulate” the economy will make it increasingly difficult for future congresses to pay for ordinary operating expenses.
What we have sown, we will reap. The U.S. government cannot file bankruptcy to wipe out its past debts, unlike individuals or corporations. The forecast on the federal side is looking increasingly bleak for years to come. And we have only ourselves to blame, by allowing Congress to do this, year after year after year.
This is why we need a balanced federal budget requirement, a presidential line-item veto, and a two-thirds vote of both houses required to overspend revenues in any budget year. Additionally, no member of Congress should get any raises in pay or benefits until they put the national budget back on sound footing.
Semmes, a Savannah native and graduate of the University of Georgia, has lived in Liberty County since 1986. He and his wife share their half-acre with four cats, a dog, and an occasional raccoon or possum. He has served on several area boards, and is a member of the Savannah Sunrise Rotary Club.