state budgets 101: yep, if you cut a tax, you have to cut spending or raise another tax

From Mike Smith of the AP in today's C-J...

Local officials warned state lawmakers yesterday that proposed caps on property-tax bills could lead to cuts in public safety and other services.

"Residents seem to think these services come at them at no cost and don't realize that property taxes are paying for them," Logansport Mayor Michael Fincher told members of the tax- and budget-writing House Ways and Means Committee.

I share Fincher's some concern about the public's understanding of these issues.

The caps -- also called "circuit breakers" -- are projected to save property-tax payers about $635 million in 2010. But that also is $635 million less in tax revenue that schools and local governments would otherwise be projected to collect that year.

Logansport would get about $2.1 million less in 2010 under the proposed caps, according to new estimates by the Legislative Services Agency. That would amount to 14.3 percent of its projected budget and about 25 percent of its property-tax levy.

Note the massive tax cut they would receive...Of course, they could compensate for this by increasing local or county income taxes to make up the revenue shortfall-- if they want to keep taxing and spending at the same levels.

Fincher said the city might charge a monthly fee of $20 to $22 for trash collection. That means that if someone received a $200 property-tax break from the caps one year, he or she would still pay $240 in trash fees, he said.

"What have they saved?" Fincher asked. "How have you helped that citizen?"

Well, if you charge them $240-284 to pick up their trash-- after they save only $200-- not much! Fincher's math seems funny though, huh? Nice move: try to scare people into avoiding $200 because you threaten them with $240-plus.