I’m tired of the “no new taxes” rhetoric spouted by lots of our pundits.
The latest to set my teeth on edge comes from the Tax Foundation of Hawaii, where the rhetoric has really heated up in a weekly commentary dated November 1, by the group’s director, Lowell Kalapa.
In fact, the local university system has been cited as one of the nation’s best bargains in higher education. While many politicians argue that the low cost of the university permits the financially disadvantaged, i.e., the poor, to get a higher education, one only has to look at some of the leading private institutions of higher education to see that many, if not all, have students who come from the poorest neighborhoods in the country. There is absolutely no reason for a student who is in financial need to forgo a higher education. Having the general taxpaying public subsidize a public service that enhances the value of a person’s future career is an archaic approach to higher education.
I admire Kalapa for at his blunt honesty in arguing against public subsidies for higher education, calling it an “archaic approach” to providing broad access to a university degree.
For Kalapa, the fact that “some” students from poor neighborhoods can be found even in top-ranked (and expensive) private colleges and universities is enough of a nod to equal opportunity. The rest, he reasons, can pay their way. But tell that to parents who can’t afford mainland tuitions and rely on UH to give their children opportunities they might not have otherwise have.
Kalapa goes on:
But the time has come for taxpayers, the people who are asked to shell out the money to fund many of these programs and services, to have a say. Lawmakers need to recognize that the barrel is not bottomless and that trying to squeeze even more blood out of the beleaguered taxpayer will only further push the overburdened taxpayer and the state’s fragile economy into a deep dark abyss that will ultimately destroy the economic base.
I actually agree with Kalapa that it is time for taxpayers to speak up. The difference is that I think they’re already speaking and the message just isn’t the one Kalapa wanted to hear. We’ve heard loud and clear from taxpayers who want to dump “Furlough Fridays” and keep our schools open.
Although Kalapa derides those who have advocated a tax increase to sustain funding for the University of Hawaii, I think there’s a strong constituency among Hawaii’s middle class who will revolt in similar fashion if slashed budgets significantly diminish the chances for their children to get a higher education. Students who have spoken up are just the leading edge.
When push comes to shove–that is, when services are cut or threatened with extinction–we are forced to discover what is really important. Again, I agree with Kalapa. But, again, I think we are most likely to discover that the government services provided to the public are really important.
Those who advocate deep cuts are usually seeking deep cuts in public programs that are important to somebody else or are seen as producing benefits primarily for others.
We’ve been told that we can’t afford higher taxes, and that’s an attractive message because it seems to be in our individual self interest. We’re encouraged to think that the less tax we pay, the more disposable income we’ll have to buy what we want, rather than pay for what other people (lawmakers?) say we need. But perhaps, in reality, we can’t afford not to look at raising taxes.
It’s easier, and less expensive in the long run, to have everyone pay their fair share, whether it’s for attracting investment to the state, advertising our largest industry, or providing services to the homeless and maintaining a fine educational system. And that’s done best through a fair and equitable tax system.
Parents have quickly found out that finding and paying for alternative arrangements for their children on dozens of Fridays over the next two years will be an expensive proposition, costing them far more than if the costs are shared by all of us through taxes. Ditto for high college tuitions, which have a disproportionate impact on the middle class.
I think Kalapa misinterprets the data. The state is in a financial squeeze today partially because of the tax cuts of the late 1990s, from the tax cuts that gave wealthy investors well over $600 million, or the cuts to individual income tax rates that dropped state revenues by hundreds of millions over the decade.
Those are the same tax cuts that left the UH system hundreds of millions behind in basic building maintenance, that have left other state buildings with similar deferred maintenance, and offices stretched to provide even existing services. Those cuts tricked down through public programs.
And while there’s a myth of heavily staffed government offices with lots of “dead wood”, my experience has generally been that many of Hawaii’s public services don’t function as well as their mainland counterparts because local offices are understaffed, under resourced, and not well managed.
Raising taxes may not be the ideal solution. But, especially in the short run, a well crafted set of temporary tax increases, rather than hasty or ill-conceived program cuts, will provide the best way to keep the state on an even keel while we work our way out of the global financial crisis.
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Thanks for this, Ian. Kalapa represents the inevitable result of decades of government bashing by the right. The notion that we’re better served by armies fighting abroad (would he de-fund them as a waste of taxpayer money?) than by educating our young people seems absurd on the face of it. And yet . . . keep up the good work.
It’s easier, and less expensive in the long run, to have everyone pay their fair share, whether it’s for attracting investment to the state, advertising our largest industry, or providing services to the homeless and maintaining a fine educational system. And that’s done best through a fair and equitable tax system.
I’m quoting this because it really gets to the heart of the matter. The anti-tax group seems to forget that there are infrastructure costs that we all share. From the airport (egads, I was there yesterday and it’s embarrassing), to the schools. As part of a functioning society, we all must share costs. Otherwise Kahala really will have big walls to keep all the rest of us out.
Thankyou so much for being a voice of reason! I couldn’t agree more.
Amen. It’s just a matter of dollars and sense. Where I disagree is in saying raising taxes is not an ideal solution — it IS the ideal solution. It spreads the pain the thinnest and can receive the most payment from those most able to pay. The corporate and excise taxes are areas to look at.
The other solutions inevitably disproportionately hit those who can afford the loss in services or the increase in costs the least. Taxation in our state and country is a progressive system … it’s high time we recognized it as not just a solution, but a GREAT solution.
and then there’s that train thing,sucking up
massive amounts of $$ to be wasted on Mufi’s ego
I don’t think that we need more taxes, just more a efficient, common sense, financial budget plan. The wars are bankrupting the nation. Stop them and bring the troops home along with the mercenaries. America’s priorities are wrong.
Mr. Kalapa’s solution may be wrong, but at least he understands that a society’s resources need to match its expenditures. Too many folks only look at the short term: the “just find the money and make it work” approach. This is the approach taken by GM’s management 40 years ago in the face of escalating demands for pensions and wage increases (both worker and managerial). GM’s bankrupty should make it clear that not thinking about your preferred goals and simply taxing the source of funds (in GM’s case, its customers), may not lead to good longterm results, no matter how beneficial in the short run for the managers and workers who can retire out before a collapse.
You see the same thing in Hawaii’s secondary schools. Eighteen per cent of Hawaii’s school children, approximately double the national average, are in private schools. One reason is that parents (read taxpayers) are so disenchanted with the public school services that virtually all who can afford it are willing to tax themselves $16,000 per year per kid to escape the public schools. Nobody in the public school bureaucracy appears to ask why they have fled; nobody appears to care (much) about the dismal educational stats which the public schools put up year after year; and nobody appears to wonder about the impacts on society generally when you have an entrenched fissure between mediocre public and acceptable private schools.
There are similar issues with the University. As you have pointed out, Ian, somehow the bureaucracy at the U. has dramatically outstripped the growth of the faculty or the student body in the last 15 years. Why? Also, how is it possible for the football coach–paid $110,000 per year two years ago — to get bumped up to $1M per year, just because the prior coach left suddenly? Why do we pay multiple hundreds of thousands of dollars per year for the services of Manoa’s upper tier, all of whom appear to have recently relocated here from California?
Taxpayers legitimately may feel that nobody at the U. was (or is now) watching; neither the regents, the faculty, nor the legislature. It is not an unforgivable leap for them to conclude that the folks in charge really do not care much about the resource expenditure, because all that is needed is to “just raise the taxes.”
We all need to reflect on the purposes of the educational system and the means we have to achieve those purposes. Continuing the existing systems on autopilot may not be either smart or acceptable for many taxpayers.
In this context, it seems to me that bankruptcy of institutions can be a good thing. Bankruptcies give us real information about terminal mistakes that have been made. And that knowledge may be helpful in avoiding terminal mistakes in the future. We now know that GM’s choices were longterm mistakes and the failure of the company was well deserved (and we know that the taxpayers’ recent extraordinary gift of $80 billion is now lost). Before we simply demand tax increases and shovel additional large amounts of money into the schools (perhaps to go to the same place as the $80 billion) , some significant reflection is in order on the purposes of, and the means utilized by, the educational systems. It does no good to continue hitting your head against the wall (or to do it harder) if the problem is that your head hurts. We need to think about how to stop banging.
This reflection should be a public reflection that includes more than the usual cast of characters, i.e. parents, teachers and bureaucrats. (Some of which is occurring; e.g., your (very good) blog has discussed the U.’s bloat; Midweek’s Larry Price has recently pointed out the lack of accountability in the structure of the school system and the real complexity of the existing laws and contracts. The Advertiser’s Volcanic Ash guy has noted the oddities of the football coach’s contract history.)
We need more of this sort of sustained public reflection (including Mr. Kalapa). If it occurs, the State just might be able to construct a system which better serves the needs of all. So keep up the good work; you are on the side of angels.
Thanks, Ian, for yet another intelligent contribution to the public debate. You seem to be about the only one on the public stage (that’s where you are, y’know) willing to point out the roots of our budget crisis in the Cayetano era tax giveaways. I wish more people would pick up and develop that argument.
As I remember it, Ben’s “Economic Revitalization Task Force,” looking for a way to attract outside(?!) investment, boiled their plan down to about four ideas. One was to shift part of the burden from a tax on income to a tax on “consumption,” which for them meant raising the GET. I believe the result was supposed to be “revenue neutral.” (At the time, I thought the changes were regressive and opposed them).
The legislative “strategy” split the tax changes into two bills. One lowered the income tax, the other raised the GET. Well, the income tax cuts were approved, while the GET raise was defeated. Ooops!
The result was a serious decline in state revenues, which was used as an excuse for slashing important government programs in the years since and has led to our current budget crisis. Everyone else is pointing at the recession, as though our current shortfall has been the product of an unforeseeable “natural disaster” rather than the result of past policy choices.
So thanks!
May I congratulate myself on the brevity of my comment by saying that Kalapa’s rhetoric can be reduced to “we shouldn’t have to pay taxes for things we don’t support,” in which case I have a list of his golden oxes that I would wish to gore: corporate tax subsidies/bailouts, military adventurism, etc.
The GM story sounds good until you realize it is flat out false. GM has not “taxed” the customers at higher rates; costs to customers were well-contained and competitive. The problem is the customer base fell away as the US economy increasingly stratified.
The intellectual parallel between pricing of goods and taxation is flawed at best.
Hey, everyone should pay for air too, dammit.
Then again, just because someone is recognized as a convenient quote machine does not mean they make any sense.