Milford chronicle., 1959-04-17
A TAX RECKONING IS DUE

In the years directly following World
War ii little was heard of tax and fiscal
problems insofar as they applied to the in
dividual states. There was good reason for
this comparative quiet Due to war-caused
shortages of materials and manpower, the
states had been unable to carry on major
construction professionals, schools, pub
lie buildings, and the like. At the same time,
tax revenues flowed into the state treasures
in vast floods. The result was that when the
war ended, state debts, for the most part
were at very low levels, and state surpluses
were at peaks.
Now the honeymoon is over. The sur
pluses are gone and the debts are up. With
few exceptions, the states are hard-pressed
for money. So state governments, the nation
over, are looking for new revenue-through
new taxes, or increased existing taxes, or
tax systems which will reach farther and
farther down to tap the pockets of low-brack-
ct wage earnerS.
A spate of articles on the state tax prob
lemS-alOng with such cOncOmitantS as pro-
posed taxpayer "revolts" and expressions of
almost unrelieved gloom on the part of high
state officials-has been appearing. An ex-
cellent summing up has been published by
The Wall Street Journal, based on staff in
terviews with interested and involved par
ties. The article amounts to look at condi-
tiOnS and prospects in California, MaSSachuS-
etts, Michigan, Pennsylvania and Washing
ton. These states are particularly hard
pressed, but at the same time their situations
are reasonably typical of the nation as
whole. The problems vary in detail but they
are the same in principle-just not enough
money to meet the bills for existing services,
much less expanded services.
Why should the states be in such dismal
financial shape? The most common answer
is that the reason is found in such things as
graft, extravaganza, gross inefficiency and
waste on the administrative level, and legis-
latiye procrastination and avoidance of the
realities for purposes of political advantage
These, no doubt, play their part. But as The
Wall Street Journal article makes abundant
ly clear, there is much more to the states fis-
cal dilemma.
People who have really studied state finan-
cling, the article says, attribute the troubles
to a combination of factors-to-wit:
1. Rising population, largely concentrat-
ed in the metropolitan areas, whichhas sharp
ly increased the demand for public services.
2. A general public demand for new and
expanded services, notably in highway, edu-
cation, welfare and health programs. These,
the money spent by the states (excluding
Alaska and Hawaii) in 1867, the last year
for which such figures are available.
3. The fact that the states had big
backlog of needed construction projects, re-
sulting from deferral during the depression
days and World War H.
A. Initiation - states, like individuals,
must pay more for what they buy. Interest
rates on state obligations also have risen.
5. The recent recession reduced anticipat-
ed state revenues while, at the same time, it
increased spending for such things as well
fare and unemployment benefits.
Wherever the blame lies the situation is
obviously critical AS The Journals account
shows, it is on the edge of actual desperation
in some places. For instance, Governor Will
liams of Michigan has spoken of possible
"payless paydays" for state employees, due
to lack of cash, and top advisor to Mass
achusetts' Governor Furcolo is quoted as
saying: "We're at the end of the line and yet
we can't stop the whole process of schools
and governmental services"
It's all little reminiscent of the cry of
the carnival barker when he spins his Wheel
of Fortune: Round and round she goes;
where she stops nobody knows" Nobody
knows what the end to the state tax mess is
going to be. But one thing looks sure: Either
the taxpayers are going to make up their
minds to pay out more money in taxes of
one kind or another to the stateS-or they
are going to have to accept a reduction, and
probably a sharp reduction, in the scope of
state services.
FUNCTION OF THE PRESS
The 24th of April marks the 255th ami
versary of the first American newspaper.
On that day in 1904. John Campbell publish