Idaho Republicans: Reverse Robin Hoods Bad for Idaho's Economy

Listen to the TED talk by Nick Hanauer, Seattle venture capitalist and member of the 1%, skewer the conventional wisdom that the rich are job creators.

Hanauer underscores and illustrates the painfully apparent fact that in our consumer driven society, it's demand that creates jobs. Tax cuts for the rich just means that savings is hoarded in tax sheltered off shore accounts until demand arises. Demand is created by the middle class with disposable income. Nick's editorial and the transcript are both available. This talk was briefly censored by TED which created a bit of a tempest. TED's rationale for refusing to publish a talk that received a standing ovation doesn't hold water as the comments indicate.

Idaho Republicans certainly utilized the economic recession, with its resulting decline in tax revenue, as an excuse to cut Idaho programs long on their ideological chopping block such as Medicaid. Yet, in doing so, Republicans eschewed the 2:1 matching federal funds and left Idaho's sick and infirm as a burden of other state funded programs, like the CAT fund, the judiciary and the the Correction Department. Republicans actually cost the state money demonstrating unequivocally that fiscal conservatism is NOT fiscally responsible.

Idaho’s $35 million in Medicaid cuts have not saved the state money, have eliminated thousands of jobs, put pressure on law enforcement operations and hurt individual residents, according to a panel that met Wednesday to discuss impacts of the cuts.

The panel in Boise included the state’s former chief economic analyst Mike Ferguson, Boise police Sgt. David Cavanaugh, advocates for the disabled and Medicaid recipients.

Ferguson, now executive director of the Idaho Center for Fiscal Policy, estimates the cuts to Medicaid cost Idaho 4,000 jobs. He said the state’s projected revenues allow for the reinstatement of much of the cuts, but lawmakers have no plans to do so.

Moreover Republicans used the fiscal crisis to wield the ax on public employees, enthusiastically imposing spending freezes and furloughs on departments, job elimination and actual employee terminations under the guise of less government is better government. Indeed on May 9, 2012 Governor Otter cynically proclaimed Public Employee Recognition Week, a dubious benefit to the 1000 state employees who lost their jobs, to say nothing of those clinging on with nary a cost of living increase.

Moreover, Governor Otter and Superintendent Tom Luna specifically utilized the revenue shortfall to justify the unheralded Student's Come First public school reforms, designed to give each Idaho student a laptop which would be paid for by eliminating the jobs of 1000 Idaho educators. With this legislative package came laws weakening job protections for teachers including collective bargaining, decreasing the chances of salary increases for the remaining educators. And since Idaho has no computer manufacturing, the tax revenue formerly spent on teachers will go to private interests out of state.

These cost saving efforts coupled with "conservative" estimates of projected tax revenue led to an actual revenue surplus. While Republicans restored some modest Medicaid funding, gave remaining state employees a 2% raise, the bulk of the saving went to Idaho's richest in the form of a $35.7 million tax cut for top earners, an amount almost identical to the Medicaid cuts from the previous year. So in addition to killing at least six thousand Idaho jobs, freezing the pay of thousands more, Idaho Republicans took that money and gave it to the rich, at the expense of Idaho's economy, its sick and infirm, and Idaho's school children and the hope for the future that they bring. If Idaho's economy improves, it will be in spite of Idaho Republicans, not because of them.