Rep. John Loughlin on the Rhode Island Budget Deficit

Last evening, at a Super-Tuesday results party hosted by State Representative candidate Jim Haldeman, I had the opportunity to ask current State Representative John Loughlin (R - Little Compton/Portsmouth/Tiverton) about the future of Rhode Island's looming $450-$600 million dollar budget deficit…

Anchor Rising: Everyone knows what the number one question up on Smith Hill is this session -- handling the budget deficits, both for finishing up this year and heading into next year. What's going to happen?

John Loughlin: That's two different questions, what is going to happen and what should happen. What should happen is that we in the legislature should realize that in Rhode Island, we don't have a revenue problem, we have a spending problem. We need to curb our spending. Spending has been growing at a rate of about 7% to 9% percent annually while revenue has been growing by 4%. This is train-wreck that was years in the making.

What will happen, I believe, is that you are going to see the Democrats cave and attempt to raise taxes in one form or another. Whether it's fees, or broadening and lowering the sales tax, you will see an attempt by the Democrats to "enhance revenue". That's the code they will use -- "we're going to enhance revenue". That is something we have to fight against. A tax increase, by any other name, is still a tax increase.

AR: In a perfect world, where could the spending be brought under control?

JL: If you looked at just adopting the 2006 budget, there would be no deficit. The budget is already printed. All you need to do is bring it downstairs, stamp it and enact it. Our budget in 2006 was within our means, but we've basically outstripped the growth of revenue in the state. And by increasing taxes, trying to tax your way out of the problem, you create a death spiral. You make it less attractive for businesses to locate here, meaning less tax revenue coming in the door. If you continue to raise taxes as revenues continue to drop, it gets worse and worse and worse until you have a total economic collapse.