'Pay-as-you-go' will address long-term budget problems

Commentary by Rep. Jim Townsend
Thursday, April 7, 2011

It’s time to balance the state budget and I bet you feel like: “Here we go again.” We are on the cusp of another painful budget that’s going to hurt every community in Michigan. We’re again staring down a fiscal crisis that is jeopardizing our ability to create jobs and compete in the 21st century economy. And yet it doesn’t have to be so.

While the struggles of the auto industry have hammered Michigan, our budgetary problems arise mainly from lawmakers’ failure to look further into the future at the fiscal impacts of the tax, policy and spending decisions made in Lansing. We must address the real reasons we find ourselves facing a disastrous budget every single year.

Despite our economic struggles, it’s the budgeting process itself that leads to such devastating cuts. The current setup allows politicians to ignore the fiscal writing on the wall and pass legislation without creating a long-term plan to pay for it. So we’re left with impossible choices - like cutting education by $470 per pupil and eliminating funding that keeps police on our streets - just to balance the budget.

That’s why I’ve introduced “pay-as-you-go” legislation that will force lawmakers to show they can pay for a bill before they pass it and all the costs related to that legislation on to taxpayers. It’s a very simple concept we all learn at a young age: If you can’t pay for something, you don’t buy it. That’s the mentality we need at the Capitol.

Under the plan, legislation would be rated based on its five-year impact on the state budget. In order to be voted on, any legislation that doesn’t pay for itself would need to include provisions to cover its costs.

Currently, lawmakers can pass legislation with no thought as to its long-term costs. Years after the culprits have left office, those costs accumulate and it’s our residents who pay the price. Mandatory minimums in our corrections system are a perfect example. Sure, the concept was easy to rally around and pass. So were the $2 billion in tax breaks enacted during the 2000s. What’s not easy is budgeting to pay for these escalating costs down the road - and that’s exactly what we need to do as a state.

Pay-as-you-go legislation helped balance the federal budget in the 1990s. Had our federal government carried pay-as-you-go practices into the 21st century we would not be facing a national debt crisis that is forcing painful cuts to federal programs that many of our neighbors need. Pay-as-you-go can produce the long-term financial stability we need here in Michigan.

We should say “never again” to structural budget deficits by committing ourselves to a pay-as-you-go government. Restoring some fiscal responsibility and sanity at the state Capitol will lead to a long-term approach to budgeting that will help keep our schools and universities, our police and fire services and other key programs off the chopping block each year and allow us to grow and move our state forward.