This week the governors came out against the proposal by President Bush to cut $40 billion from the budget for Medicaid. That program pays for health care for the poor and disabled and is funded jointly by the Federal and state governments. Therefore, when the Federal Government cuts funding to the states those cuts must be made up by the states.
If President Bush is successful in cutting the funding to states for Medicaid, the states will then begin looking within their budgets to see what monies can be rearranged to pay for the reduced funding. One tactic which states have used is to shift monies from public education which is one of the largest state expenditures. If the states choose to make up the federal funding loss in Medicaid by shifting expenditures, the problem rolls one further step down hill to local school districts. At this point the funding problem has no where else to go and local taxes go up.
The bottom line is taxes, whether they are federal state or local can only come from the taxpayers. Shifting the problem is not solving the problem. We need to take an honest look at our social and non-social needs and then come up with the funding necessary to pay the bill.
The way we have been acting, is similar to a person who needs to buy a gallon of milk for their family. They shop around and find the best price is $3.00 and they go to purchase the milk. Our hypothetical person has only $2.50 and the store manager explains the milk is $3.00. The person pays $2.50 in cash and charges the other $.50 to their credit card. This goes on day after day, week after week, year after year until the day when the hypothetical taxpayer discovers he can't pay his credit card bill. At this point they throw up their hands and declare bankruptcy.