Laslo Boyd: The grass isn't always greener
For years, we've been hearing about the economic decline of the Northeast and Midwest and the growing prosperity of the Sun Belt. There have been population shifts to that area, dramatic economic growth and a steady increase in national political influence. And of course, there's the absence of snow and other signs of winter.
Yet, as the nation continues to struggle with the impact of the current recession and the collapse of many key sectors of the economy, the Sun Belt states have not only not been spared from the downturn but in many cases are doing even worse than their northern brethren.
It turns out that the success of many of those states was built on a particularly shaky financial foundation. Florida and Texas have no state income tax, California has the most convoluted system of government imaginable dysfunctional is not too strong a term and much of the Sun Belt has failed to invest because they didn't want to pay the costs in its human infrastructure.
I was in one of those states, Arizona, last week, and could only marvel at the thrashing around to attempt to balance the state budget. The Arizona budget deficit, current and projected, almost makes Maryland look like the land of prosperity. Almost, because our problems are still very real, but theirs are worse.
What states like Arizona and Florida are learning, or at least having to deal with the consequences of, is that an economy financed largely through taxes on tourists and home construction is very vulnerable during downturns. To the extent that people from the north migrated to those states not only to avoid snow and cold but taxes as well suggests that they are unlikely to learn any long-term lessons.
A friend who works at a university in Texas told me that their financial situation is secure because they have oil wells on the campus. Given the struggles this year of the football team, some test drilling at Byrd Stadium might be worth a try.
And in Arizona, they are developing a plan to sell various state buildings and then lease them back. The list apparently includes both the House and Senate office buildings. For those people who have quipped that the legislature was for sale, this seems to provide solid evidence that they are right.
Other states, including Indiana, have privatized their toll roads and also arranged for businesses to run their prisons and some of their schools.
It makes you wonder if there are some state properties or assets that we should consider selling. Actually, Bob Ehrlich got rid of the governor's yacht when he was in office and other buildings have been sold in the past. But maybe we need to become more creative and get past the obvious frills.
For its potential as a tourist attraction, I'm sure there's a buyer out there for the state capital. Given the entertainment value of some sessions of the General Assembly, I bet that a tour operator would be interested in owning that concession.
And taking that idea to its logical conclusion, it probably would be possible to privatize legislative hearings and charge admission to them. Knowing that the private sector always does things better than the public sector, the hearing would be run on schedule and on time and you could move groups in and out of the hearing rooms in an orderly fashion. A premium ticket might get you the chance to hear some of the state's highest paid lobbyists show why they rack up some large fees.
Similarly, an admissions fee to executive sessions of the Board of Public Works, the Public Service Commission, or the University System of Maryland Board of Regents might generate significant revenues from individuals who want to see how government decision-making is really done. If that approach works for the InterCounty Connector, it's bound to be an even bigger revenue source for closed board meetings.
An alternative fund raising tool for the state might be to emulate the approach of many nonprofit groups that raise money through auctions. Lunch with Mike Miller and Peter Franchot? A couple of rounds of Guinness at a local pub with Martin O'Malley? Or if he gets back into office, an afternoon of golf with Bob Ehrlich?
Or maybe we could open up a number of slot machine operations around the state. Wait a minute, we already thought of that.
Gimmicks are not really a very good way to finance state government. We look to government to provide essential services ensuring for the basic needs of all citizens; investments in the future; assistance for the neediest among us; and the infrastructure to allow the economy to grow and prosper.
To pay for these services in a responsible way, we tax ourselves. As Supreme Court Justice Oliver Wendell Holmes famously observed, "taxes are the price we pay for a civilized society." No one wants to pay more than her or his fair share, but those who criticize and attack all taxation don't seem very interested in maintaining the civilized society that Justice Holmes spoke of. Or perhaps they just enjoy gimmicks.
Laslo Boyd is a partner at Gonzales Research and Marketing Strategies. He also teaches courses at both Towson University and the University of Baltimore. His e-mail address is lvboyd@gmail.com.