Don't stimulate state spending

Inter Lake editorial

One of the least desirable outcomes for federal stimulus spending is for it to be directed toward stimulating government rather than the private sector, but to a degree, that appears to be where we are heading.

Even here in Montana, where state government has a brighter fiscal outlook than most other states, there is a push to include stimulus spending in the general fund budget.

David Ewer, Gov. Brian Schweitzer's budget director, told the Senate Finance Committee last week that about $45 million more in "discretionary" stimulus funding needs to be spent on basic state services.

He said it is acceptable to use the federal money to backfill primary government services since "government stabilization" is an approved use of the money.

That's not what we wanted to hear.

Indeed, the funding can be put to one-time uses - such as paying for a freeze on college tuition - and that's not so bad. What is discouraging if it is used to expand ongoing programs, thereby creating a 'structural imbalance" in the budget for the next Legislature to deal with.

The real concern, however, is not with some $45 million in government stabilization in Montana; rather, it is how other stimulus spending will be applied in other states that are in far worse financial shape, such as California and New York.

How is it that the state of New York is actually considering a $131 billion budget, a 7 percent increase over last year's spending, with $7 billion in new taxes and fees, when the economy is in the tank? To be sure, stimulus spending for 'state fiscal stabilization" fits into the equation.

Now apply the same approach to other states and even worse, stimulus spending directed toward federal bureaucracies, and it's not hard to see how a program aimed at jump-starting the economy will in part be fueling permanent government growth.

Congress cannot keep this government bubble inflated forever. At some point, there will be a reckoning, and politicians will have to contend with the government they're creating.

Montana Senate Republicans are already trying, insisting this week that they prefer cutting general fund spending rather than trying to balance the budget with stimulus funding. Good for them.

The rest of us have had to tighten our belts during this economic downturn; we expect the same from the government that works for us.