A Tight Place

By S.D. Plissken | May 28, 2020

The Milton Board of Selectmen (BOS) find themselves in a tight place. Their government has simply grown too large, and, as a consequence, their budgets and the levels of taxation needed to fund them, have simply grown too large too.

One is reminded of a tale from A.A. Milne’s Winnie the Pooh: “In Which Pooh Goes Visiting and Gets into a Tight Place.” In the story, Pooh visits Rabbit’s burrow and, while there, greedily consumes Rabbit’s stock of honey (for which Pooh has a bottomless appetite). When it comes time to leave, the now larger Pooh gets stuck in Rabbit’s front door. He can neither be pushed through to the outside or pulled back into the inside. Not as he is now, anyway. They simply have to wait until Pooh loses the weight that he gained by eating all the honey. In the meantime, Rabbit tries to make the best of a bad situation by using Pooh’s back end for other purposes.

Now, Pooh – elsewhere described as being a “bear of very little brain” – eventually loses enough weight to escape this particular predicament.

Over their last few meetings, the BOS have been pondering where they have become stuck. Their overly large budgets having been roundly rejected by Milton’s voters, already rejected more often than not in recent years, and now two years in succession. (To be fair, these particular selectmen are responsible only for the most recent in a long train of abuses).

These selectmen began their year well enough by acknowledging their budget problem – a first step in a recovery – and proposing freezes until they could extricate themselves. However, they have evidently not yet reached bottom, as they posted job openings the very next day, and voted yet another in a subsequent meeting. (Vice-Chairman Rawson was a rare dissenting vote on that one).

They are meanwhile seeking applicants to be the minority on a “Local Government Efficiency Task Force,” which is to seek the Lost Dutchman’s Mine of government efficiency. One of its several objectives is to find other sources of revenue. A cynic might suppose that little or no actual changes are proposed and that spending is to continue at current levels, simply through finding other people to pay for it.

The solar panel farm and a cell tower were cited as examples of other sources. As in mathematical proofs, some elements might be “necessary,” but are not in and of themselves “sufficient.” Such money as those examples added was spent long ago on increased government, rather than tax reduction. And there have been also less exciting instances of this sort put forward in the past – for example, the contentious landfill proposal of some years ago.

Space aliens from the eighth dimension might present themselves at the Emma Ramsey Center for a thorough probing. However, it is much more likely that any “other sources” of revenue will just come from the other pockets of the present victims. For example, transfer station fee changes, i.e., fee increases, have appeared on a recent agenda. (Some might remember that these fees did not exist at all just a few years ago).

Several bills were put forward at the State level in this most recent biennium, whereby some legislators sought to add back-door income taxes to our burden. They too sense that property taxation has reached already its outer limits, but are unwilling to curb their appetite. They are seeking instead to add other revenue sources rather than to push back from the table. It would have been, as the British have it, just the “thin end of the wedge.”

The Task Force is expected to take twelve to eighteen months, or longer, to reach its conclusion, if any there be. Its majority of Town officials might be expected to have a vested interest in continuing to feed the beast. How likely are they to discover any redundancies, even those right under their noses? That Milton has both an Assessor and a Contract Assessor can be seen at a glance, as well as its having both a Planning Board and a Contract Town Planner. The BOS is under no obligation to adopt its recommendations, if any there will be.

Meanwhile, the BOS will have gained twelve to eighteen months, or longer, in which they might proceed blithely along their “tried and true” rut. Let’s help them with their annual calculation: a now smaller annual percentage increase (thank God for the Tax Cap’s small blessing) multiplied by much too much government will yield a yet more expensive government. (Nobody there has heard of zero-based budgeting). Under ordinary circumstances, they might be able to kick the can down the road for a few more years, before arriving right back where they started.

But we live in extraordinary times. The “Black Swan” of the Coronavirus just punctured the carefully nurtured economic bubble. (If it had not been that, it would have been something else). Let us suppose optimistically that the whole economic lockdown ends right now, this very week. This year’s GDP, that faulty measure of the nation’s economic progress and wealth, would be smaller by the two-plus months of the lockdown. (And New Hampshire’s and Milton’s GDPs smaller along with it). Yes, of course it would, that much is obvious.

Unfortunately, the usual inanities are being deployed again at the national level. Congress voted and the President approved trillions of dollars in additional stimulus spending. They have done so four, or five, times now in quick succession, one loses count. Now, the Federal government does not actually have any trillions to spend in this manner. And we have just seen that the GDP – the national wealth, if you will – just got smaller, rather than larger.

You see, at the Federal level they have the advantage of possessing a magical money tree. They just borrow the money from the future, i.e., expand the money supply, which is the very dictionary definition of inflation. This has the effect of creating greater numbers of devalued dollars. This reduction in dollar value extends to those in your pocket, as well as those in your bank account, those in your retirement savings, and, for those poor souls on a fixed income, those in their pensions or annuities.

Milton’s last two DRA “flash” valuation increases of recent years have been based upon the wildly-inflated prices of the last two housing bubbles. New Hampshire’s tax model assumes a rough correlation between property valuations and ability to pay. That assumption no longer tracks in these recent Federally-induced housing bubbles. (One cannot slice off a piece of a fantasy valuation and use it to pay taxes). It would require sensible State and Town governments – rather than bears of very little brain – to recognize this disparity and to restrain their spending. The large and increasing gulf between fantasy valuations and the reality paychecks might be compared with our large and increasing dissatisfaction with these methods.

In the longer term, one might expect that housing valuations will tend to fall, given that we have a smaller GDP, a probable recession, unemployment approaching already 20%, and some businesses likely shuttered forever. Does anyone suppose the State DRA will be demanding any “flash” valuation decreases? Of course not, they will want to overtax us through one more cycle.

Our Town government, which was already unsustainable, might try desperately to preserve its bubble size. It might raise tax rates to compensate for declining values. (It did this last time around). It might raise its existing fees, fines, and taxes, across the spectrum, and even create new ones. (Ask any refugee from Massachusetts). It might punish us for not approving their budgets.

Or they might more reasonably scale back our Town government. They might reduce the amount of its annual “fund balance” exaction, which they could do immediately, and extend the timelines of their so-called “plans.”

In Homer Simpson one encounters a more contemporary fictional character, but one with a cognitive capacity similar to Winnie the Pooh. In one episode, a soft drink vending machine accepts his money, but does not dispense his can of soda. He reaches up inside the machine to pull it out, but cannot. He grasps the can, but his hand becomes “stuck.” Various people try to extricate him from the machine. They arrive finally (and improbably) at a solution of just sawing off his hand. Just before they take that drastic step, one technician poses a final question: “Homer, are you just holding on to the can?” In the next scene we find him rubbing his arm while departing amidst howls of laughter.

Watching our wise overlords struggle to retain their current budget levels, one might well ask them the same question: “Selectmen, are you just holding on to the can?”

References:

Wikipedia. (2020, May 22). Black Swan Theory. Retrieved from en.wikipedia.org/wiki/Black_swan_theory

Wikipedia. (2020, May 21). Winnie the Pooh (Book). Retrieved from en.wikipedia.org/wiki/Winnie-the-Pooh_(book)

YouTube. (n.d.). Homer, Are You Just Holding on to the Can? Retrieved from www.youtube.com/watch?v=6qcipCQalzA