State budgets and the kitchen table fable

We often hear the simple-minded explanation that balancing the state budget is like the family sitting around the kitchen table deciding which expenses to trim.

The lesson we're encouraged to draw: We must prioritize, not spend more.

St. Cloud State economics professor King Banaian doesn't allude to that conservative cliche in his analysis of an article about a family dealing with tighter finances. He was reacting to whether the pressures on the family budget indicated evidence of a recession.

But the comparison certainly occurred to me as I read about how the family dealt with rising prices and made choices about an all-day kindergarten and a new TV.

She now works an additional four days a week at Office Depot as a cashier while her fifth-grader and kindergartner are in school.

She tries to make up for extra costs. She clips coupons and budgets meticulously. She's allowed herself and her husband $90 per week for gas and $125 per week for groceries.

She takes advantage of mail-in rebates and uses gas coupons. She rides the bus when she can and doesn't take frivolous drives.

How might that real-life example translate back to the state budget/kitchen table fable?

Certainly the family did some re-prioritizing and set budget limits as advocated by Republican legislators. I suppose you could count cutting frivolous drives as the equivalent of cleaning up waste, which some people insist is still rampant in state government. Taking the bus instead of driving might represent redesigning a process. It also represents taking better advantage of prior investment in infrastructure.

In state terms, using rebates and coupons equals federal funding. For example, federal dollars for major highway projects cover 80 percent or more of the costs — but only if state and local governments provide matching funds to pay for the remainder.

But look at what else the family did. It raised revenues.

Cindy Haupert had been a stay-at-home mom, but the family decided to spend more for education, and she took a job. The family's increased revenue came from the equivalent of raising taxes, not some accounting shift, loan or magic beans.

As the legislature looks at ways to address the state's various budgetary challenges, it might remember how this real family went about it.

— Charlie Quimby

Comments

[kb]

Charlie, before she decided to cut coupons, she decided first to INCREASE SPENDING. She chose to put her child in all-day, five-day kindergarten. She had to take the measures she did because she did not choose to take them from the time the child was conceived, or was born, or perhaps even when the child was four. So she has to make those choices now. You're just as bad with the metaphor as that reporter was.

[Charlie Quimby]

Never dispute this English major's use of metaphor, King.

Of course they decided to increase spending now. Why would you suggest they raise more revenue when the child was conceived and before they needed to pay for kindergarten? That would be tax and spend, wouldn't it?

I suppose they could also have taken the Pawlenty approach to long-term investments — bonding for kindergarten and having the kid pay it back.

The family wanted something better and decided on a strategy that would allow them to spend more. That's an example of people making choices about what's important in life and figuring out how to pay for it.

Taxpayers and their governments can decide to do that, too.