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WWL: Budgeting Benchmarks
Where We Live - with John Dankosky
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How do Connecticut's budget woes compare to other states?


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48:59 minutes (23.52 MB)
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As Connecticut lawmakers struggle to balance the budget, they can take solace in the fact that they are not alone. Forty-Six states face revenue shortfalls—projected to total over $350 billion over the next 30 months, before the inflow of any federal stimulus dollars. California's crisis has been all over the news lately, but state and local governments all over the country are struggling to fill budget holes. Today on Where We Live, we’ll do some budget benchmarking-- learning from other states and their efforts to tackle the downturn. Rhode Island, New York, Kansas, and Georgia—all facing declining revenues. What approaches are leaders there taking?

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Listener Email from Randall

Tuesday's "Where We Live" show discussed ways that states are struggling to balance their budgets.  One caller late in the show asked if there were any "silver bullets" that could help, but which were being disregarded due to political reasons.  I thought this was an extremely astute question and wanted to comment further.

Clearly nobody wants to pay additional taxes, yet there is no realistic way to achieve balance with spending cuts alone.  Returning to basic economics, one way to increase revenue and decrease spending simultaneously is to create new industries and new markets.

As an example, one such market that could be turned up very quickly is to consider the industrial hemp and medical/recreational cannabis markets.  Cannabis is one of the largest cash crops in the United States, bigger than corn or wheat as of late 2006 (source: http://abcnews.go.com/Business/story?id=2735017&page=1)
, and instead of regulating and taxing this industry, we sink billions of dollars into making criminals of people and clogging our legal system.

Like corn, cannabis is an extremely versatile and productive agricultural crop.  It grows quickly and produces high amounts of biomass for energy production -- this would be domestic, clean and 
renewable energy, something we are supposedly very concerned about.  
Hemp fibers are strong and durable, more eco-friendly than cotton for fabric and clothing, faster growing for paper pulp than wood.  Its seed can be used to make fuels, skin-care products, or various high- protein foods.  And of course, its famous recreational and medicinal properties are widely enjoyed by people the world over, despite its illegal status.

Aside from the massive potential for industrial hemp products, with proper regulation, the recreational cannabis industry could be managed in the same way that alcohol is handled today.  There are large mass producers such as Anheiser-Busch and Robert Mondavi, and small boutique producers like Sam Adams and local vineyards, and even home brewers who make their own beer and wine.  It would not be difficult to require licensing for commercial production, inspections and registration of facilities to ensure adherence to agricultural regulations, and enforce above-boards distribution channels, building on the structures already in place.

In short order, we could turn on an industry that would create tens of thousands of jobs, and simultaneously take a market away from criminal enterprises.  Black markets exist as a result of arbitrary criminalization and prohibition.  Observe that there is essentially no black market for alcohol or tobacco; the black market for marijuana could be eliminated in the same way at the stroke of a pen.  This would remove over 3/4 of a million arrests per year from our legal system, thus freeing police resources for more productive work, reducing the load on an already-overburdened justice system, and saving vast sums in the prison systems.  A financial sinkhole could be turned into a source of substantial revenue and employment.

No doubt the same tired arguments will be raised in response to this suggestion -- it sets a bad precedent for the children or it is a gateway drug, etc.  These arguments are, of course, not only disingenuous, but rank hypocrisy.  Alcohol and cigarettes kill literally hundreds of thousands of people per year, whereas marijuana kills none.  It cannot seriously be stated that the risks posed by cannabis are in the same league as alcohol and cigarettes.  Even 
aspirin and acetaminophen are responsible for more hospital visits.  
As with tobacco and alcohol, a portion of the tax revenues raised could be used to teach of any potential risks and the need to behave responsibly.  Heck, maybe we could even require some high school course on ethical business practices, which we seem to need greatly.

As states and our nation struggle to balance their budgets, it is time to start considering ALL options instead of sticking our heads in the sand just because that is what we've always done.  If we are serious about making changes, then this is the type of issue that is past due for honest, rational discussion.


(Randall) Tyler Heath
Southington, CT