August 2010 state sales tax holidays
Retirement benefits war on the horizon?

Cash-strapped cities cut services

Today is the pinnacle of 2010's state tax holidays, during which some municipalities also participate (or are forced to do so).

But some states and cities are at the opposite end of the fiscal spectrum. They've decided they can't afford to forgo any tax collections.

In fact, their revenue situations are so bleak that they've had to cut services.

We learn from Governments Go to Extremes as the Downturn Wears On that one Hawaiian town furloughed its schoolchildren for 17 Fridays, an Atlanta suburb halted its public bus service and  Colorado Springs, Colo., which I blogged about in February when it was first considering service cuts vs. tax hikes, turned off street lights.

The results did indeed save the jurisdictions money, but at other costs.

And it looks like many other locales will face similar tough choices until we're fully out of this recession.

A plastic sign covers a bus stop sign as the most severe public transit service cuts in the nation begin with the morning rush hour in Ballwin, Missouri on March 30, 2009. Metro, the local bus and light rail line, says 50-million dollars needs to be trimmed to balance the budget with dozens of bus lines have being discontinued. Hundreds of employees are being laid off, and most areas in the western section of the St. Louis region will have no service at all. The service cuts primarily affect the Missouri side of the bi-state area where state financing is far less than levels in Illinois. (UPI Photo/Bill Greenblatt) Photo via Newscom Photo via Newscom

"The cuts that have disrupted lives in Hawaii, Georgia and Colorado may be extreme, but they reflect the kinds of cuts being made nationwide, disrupting the lives of millions of people in ways large and small," writes Michael Cooper in the New York Times article.

As I've said before, nobody likes to pay excessive taxes, and that's the key distinction: excessive. Some taxes are necessary to provide the services that make a community the place in which we want to live.

Have you experienced any loss of services because your city, county or state couldn't pay for them? What government-funded programs would you be willing to give up to save tax money or prevent tax hikes?

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Elizabeth R.

Indiana is just a mess. Our local school system had the Extra Curricular Activities cut for the upcoming year, thanks to a change the Governor made several years ago to "lower" taxes.

Our Medicaid Benefits for the poor, elderly and disabled have all been frozen. So those who need help now face huge waiting lists until there is money to fund this assistance again.

I keep hoping we are done on the downhill slide of this not so fun economy and start to climb out soon!


I think there's another layer to this tax problem. That is the tendency for government to want to at least stay the same size or get bigger. (I'll call it the Government Bloat theory - *grin*)

In tough times, budgets (and governments) require cutting if taxpayers will not vote for more taxes. It does not always follow, however, that cuts chosen by people who have an interest in, at the very least, maintaining the status quo are logical or in the best interest of the locality in question.

In other words, the wrong kind of city councils/state governments gravitate to cutting high profile services first in attempt to get taxpayers to cry "uncle" and vote in higher taxes.

At least some of the voters of Colorado Springs, I understand, felt exactly the way I just described. The vote for no more taxes had more to do with a vote of no-confidence in the government, rather than a real want to see services cut.

I think it says a lot that taxpayers would be willing to call the bluff, live with less services, and work to vote in better management the next time around. That isn't to say that governments can't be starved of money - that certainly happens too. Somewhere in the middle of starvation and a mindless, "here have my wallet", seems to be the most workable. ;)

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