The Bush administration has revised its forecasts for the federal budget deficit from just five months ago. The news is not good.

The deficit could top $450 billion for this year and continue up to $475 billion in 2004. The deficit number could climb even higher as costs and programs not included in the administration’s numbers are added.

A combination of a lingering recession, large tax cuts and the wars in Iraq and Afghanistan have pushed the deficit to record levels, surpassing the previous mark of $290 billion set in 1992. The deficit now approaches 4 percent of the entire U.S. economy, a figure that hasn’t been seen since the 1980s and early 1990s before both political parties made an assault on the deficit an agreed-upon objective.

The country sported a nifty $236 billion surplus at the end of 2000. At the end of 2001, the surplus was $127 billion. Tuesday’s forecasts represents a turnaround of more than $680 billion.

At the same time, states are struggling to make ends meet. While Maine finished the fiscal year with a $20 million surplus on a $5.3 billion budget, the news has not been as good in other places. Schools have been closed early, drastic cuts have been made in important social services and localities have had to make difficult choices.

With these predictions, the federal government needs to make some difficult choices of its own. Our yearly deficits add to our national debt, which is the cumulative amount of all national borrowing. The country’s current debt ceiling was increased earlier this year to $7.38 trillion.

An aggressive tax-cutting policy, battlefield commitments and the country’s social safety net and entitlements compete for funding. Either we begin now to address our staggering deficit, and the national debt, or we will be left with greatly curtailed choices in the future.


Tax dispute
The Androscoggin Valley Council of Governments isn’t exempt from paying property taxes. It just seems that way because Auburn has been giving the nonprofit a break.

AVCOG has a 9,397-square-foot building on Manley Road. Last year, the organization was assessed $24,536. Property tax rules are pretty simple, according to a state expert: Unless a property is specifically exempted, tax is owed. But the taxes were forgiven.

The council does good work in the region. Member localities pay dues and the organization promotes economic development and provides environmental and transportation planning services to 43 towns and cities and three counties.

City Councilor Bob Mennealy has led the effort to determine the tax status of AVCOG. He says his qualm is that city staff decided, without council approval or input from elected officials, to make an exception to the law. He has a point.

The council of governments is a quasi-governmental body. It doesn’t have to follow the same rules, like open meetings, that apply to city and town councils. But there’s a down side. It does have to pay property taxes.

The decision to forgive the AVCOG’s property tax might be defensible, but it should be made by Auburn’s elected officials. Considering that Auburn pays $19,445 in dues to the council, perhaps a deal is in order.


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