Rule#1 Entitlement Expansion Inevitably Crowds Out Other Priorities - Granite Grok

Rule#1 Entitlement Expansion Inevitably Crowds Out Other Priorities

Still thinking about expanding Medicaid In New Hampshire?  Or maybe you are just indifferent.  Well you can’t afford to be.

The bait expires and the annual stipend is not guaranteed.  In fact, given the Federal debt and deficit situation, any expectation that the Feds will not cut funding to Medicaid and other programs as debt and deficit management become critical are simply fanciful.

Paying only 10% of the expansion costs after the expansion bait-money is gone will already extract millions from the state economy.   But that will pale in comparison to the state’s assault on town and city budgets when it goes looking for money to feed this beast after the feds bail on us.

Rooms and meals taxes will have to go up and revenue sharing down.  Pension burdens will be increased as the state backs off promises to redirect it’s share so it can feed expanded entitlements.   The state’s portion of the education funding property tax will be targeted for decline.  Dedicated funds will be emptied, RGGI –a pointless tax but one we still pay, will be vacuumed out every year.  And any number of fees and other taxes will creep up.

And it will still need more money.

We know this to be true becasue of states that already operate on large or expanded Medicaid and entitlement programs.  They are all in crisis.

Medicaid expansion, in particular, is crowding out other priorities.  It is affecting dollars for education and infrastructure, and pushing states to accumulate debt they must then hide with budget tricks without ever addressing the underlying issues.

We’ve had a taste of that already.  From 2007 to 2010 Democrats ran the state into the ground.  Taxes and fees were constantly going up while state employees faced furloughs and towns and cities struggled with budgets as the state whittles away at them from above.  Every day was a revenue crisis as wild schemes were tossed about and gimmicks deployed to hide structural shortfalls.  Imagine that, every year, all the time, forever.

If you take nothing else away from this impending fiscal crisis, understand this.  This is not a promise we can keep without having to break others, including pensions and benefits promises for public employees–which is already a debt problem for which we have no long term solution.

Every aspect of the budget will suffer, followed by the state economy as Concord takes money out of the economy to pay for the mess it rushed into.

It will cost exponentially more than advertised.  The Federal government does not have the resources to keep it’s promises.  The end result will be a scramble at the state level, every year, that will hit every local budget and compromise the entire state budget.  All so we can take a one time bribe from a loan shark that won’t have to break our legs—the expansion will do it for them.

The federal budget crisis will have serious spillover effects on state and local governments, and state actions will have spillover effects on local governments:
• Cuts in federal grant dollars, lower spending on federal installations, procurement, and infrastructure, and potential changes to the federal tax code all threaten states’ fiscal stability.

• Pressures on local governments, caused by the weak economy and cuts in state aid, are constraining education spending, law enforcement, aid to the needy, and the institutions that make up the culture of our cities. Local government cuts pose a significant risk to the overall economic and social fabric of states.

This is your future if we just take the Obama-Care Medicaid bribe instead of doing the hard work and fixing this ourselves.  Once you take it there is no going back.  You have been warned.

For Reference
State Budget Crisis Task Force Summary
New York State Summary

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