A Theological Crisis at the Heart of State Budget Crises

by Janine Giordano Drake

In the old days, states would balance their budgets by carefully managing their wealth held in property. Their means of acquiring more wealth was the state militia, and wealth, of course was, control over Indian territory. Indian land seizure could either result in fast money from speculators (usually represented by banks), or a slow, long term income stream garnered by renting to municipalities and land developers. When that was no longer easy, states sold exclusive government contracts to companies that traded with and in the state. What I want to argue here is that raising funds for state projects has never relied very much on taxed assets of the people. Today, however, we all have to decide whether it ought to be.

Only a tiny portion of state spending in this country comes from income taxes. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming do not levy any state income taxes. New Hampshire and Tennessee tax only tax dividend and interest income. To me, the problem in budget-starving agricultural-heavy states like Wisconsin, Illinois, Indiana, Ohio, New York and California is that states have never established the principle that effective ownership of land and other income-deriving assets requires services of a state to keep the assets in operation. These services include public servants from police forces and firefighters to teachers and municipal workers.

Cash-poor farmers have essentially been contending against urban service workers since the last Gilded Age over who ought to carry the heavier burden for public services. Henry George, who argued that poor people should not be fighting with one another but recognize the common adversary of those who own large amounts of natural resources, would turn over in his grave at the prospect of undermining organized workers' wages without taxing property owners. Together with Eugene Debs and many other land reformers, George worked hard to get poor farmers and farm workers to agree to hold their property in common in order to simulate the First Century Church (or some other equivalent utopia of peace through cooperation) and together reap the fruits of their labor. However, as Randall's recent post reminds us, pretty much all of these experimental communities failed.

Even though many Christian Socialists of the late nineteenth and early twentieth century believed very strongly in George's concept of a single tax on the ownership of natural resources, Christian landowners put up just as big a fight, often by repositioning their theology of God's grace. Land provided to them through Indian conquest was often understood as a gift from God for the sake of Christian stewardship for one's family, not something borrowed from the state for the sake of the public, or, of course, stolen from Indians for the sake of power and hegemony. Landless and socialist Christians often fought back, criticizing landowners time and again for owning something that was ultimately not theirs but everyone's, and really God's. So, in the 1890s, landowning Populists began to talk about the main assets of their occupation as not land at all. Rather than engage in a business that exploited land and labor, these populists argued that they earned their living through the work of rain and sunshine--their bounty, therefore, was a gift from God.

Many farmers today still point to rain and sunshine (rather than land and labor) as the essential raw materials to their financial prosperity. International trade conditions still keep many farmers cash poor and therefore starved by higher state and municipal taxes on land. Farmers' comparatively low incomes (compared to their net worth if they own land) means that they bring in little income tax revenue to the state, compared to the federal and state subsidies that they use.

In many ways carrying out the Populist agenda, farmers and agribusiness have united to call themselves "growers," a maneuverer that accomplishes at least two political goals. First, it constructs the money-making asset of agricultural capitalists as the weather-cooperating-with-fertilizers, rather than ownership of the land in the first place. Secondly, it renders the agricultural labor required to harvest the crop as something apart from the act of farming. Therefore, "growers" have since the Depression received subsidies and tax breaks for providing food for the masses, but the migrant workers and other agricultural farm hands who do the grunt labor of harvest and farm maintenance are not even required to be paid a minimum wage, let alone a living wage with benefits or the dignity of calling oneself a farmer.

Starving states today rely primarily on revenue streams in sales taxes and a la carte fees for use of services (registrations and licenses, court filing fees, college tuition, tobacco taxes, gas taxes, etc)--in addition, of course, to large loans from banks--loans that bankers rarely complain about because states' inability to go bankrupt means banks' loans are virtually no risk.

Tying state revenue streams to general consumption and fees-for-use rather than pooled fruits of production is not only paralyzing state budgets in this new Gilded Age of poverty, wealth, and high unemployment (especially with tax laws to conserve the wealthy). Even more debilitating, it has established a myth that the state can operate independently of taxes on the production of its residents. Wisconsin never, of course, actually had a budget problem until Walker gave away so many tax breaks and contracts to his corporate sponsors. Wisconsin was in that respect an exception to the rule of starving state budgets over the last decade. However, we must admit that in handing out tax breaks and special contracts to growers and businesses, Walker was only doing what most state governors do.

I think Paul Grant is absolutely right when he talks about cooperation and consensus-building as essential cultural heritages of many working class Wisconsinites. This is not only confirmed in my research on Wisconsin socialists but helps me understand something I had been trying to figure out--why the Milwaukee atheist socialists and Christian Socialists I study feuded so terribly but still got along so well. Why, for example, Eugene Debs was not kicked out of leadership in the Social Democratic Party in 1897 when he was clearly in the minority in his belief in the possibility of establishing those Christian cooperative communes. Wisconsin socialists fought with Debs but, remarkably, kept him in charge. As Grant suggests, Scandinavian and German immigrants brought to Wisconsin not only a working class consciousness but a dense network of cultural institutions (gymnasiums, cultural clubs, churches, unions, freethinker clubs, political parties, etc) that served as schools for consensus building that would make such political and economic cooperation comfortable. I think Grant is also absolutely right that the national, conservative trend toward "brinksmanship" that Walker has recently employed in Wisconsin is to a large degree in tension with the cultural fabric of his state.

We all hate to admit it, though, but there are still many Wisconsinites who may believe in consensus building in rhetoric and demeanor but do not believe that public services should be paid for through their own pooled economic resources. Rural landowners around the country still resist tax hikes. This, I would argue, is the legacy of Populist rhetoric from the era of Indian landgrabbing: a belief that one's land is all one's own and not really a wealth-producing asset. It is a gift from God for oneself and one's family. State services, too, should be plentiful, but to Populists these should come from public revenue streams contributed to through fees-per-use and state provision, not state tithes on assets like land and income.

I find especially among evangelical Christians in the midwest a surprising combination of "Christian cooperativeness" in demeanor and rhetoric but real resistance to understanding one's income as anything but entirely one's own (and perhaps the Church's). Bethany Moreton's To Serve God and Walmart articulates and historicizes this tension so well.

To me, the referendum in all these state budget crises today is about where state revenue should come from when seizure and sale of state-contraband-territory is no longer as viable an option. Will we continue to find assets in the state's possession to exploit anew--like mines, quarries, aquifers and, err, government buildings, public parks, and guilds of municipal employees--or will we agree to issue higher state income taxes and property taxes, especially on those who can afford to pay more?

Furthermore, Madison is one of the hippest places for left-wing evangelical Christians to find each other. Will our present moment's resurgence of the virtues of communalism, the dangers of environmental destruction, and the violent legacy of settler colonialism stir a rebirth of nineteenth century Christian Socialist theologies? I think this Wisconsin battle may serve as a laboratory for American Christians reconsidering the difference between gifts provided to them and gifts provided in common.


esclark said…
An even more timely post in light of this afternoon's email from AAR regarding the labor contract issues of hotel workers at one of the Annual Meeting locations. The AAR is now establishing a "goal of establishing thoughtful and conscientious labor policies" when choosing hotel sites for the meetings.
Anonymous said…
It is about time the AAR wake up to those issues, esclark. Large conferences such as the AAR have significant clout, and when they act ethically they can improve the lot of the many low-wage workers employed in the hospitality industry.

On the other hand, I'm troubled that they have not yet been able to be as clear-voiced as they might be. Why the equivocating? Why "thoughtful" and not "just?"

But I guess it is a step in the right direction. Bravo to whoever in charge noticed.
esclark said…
I certainly agree that the AAR should have been aware of these issues for a long time now and that this is a step in the right direction. I wonder if its the combination of Wisconsin and this particular Hilton that has impelled them to act. And if so, what's at stake in choosing to act now?

On a side note, at 2008 AAR in Chicago, I stayed not at one of the conference hotels but one midway in between the two at which some employees were currently striking. It made for some uncomfortable feelings each time I walked past the strikers to get in and out the door.
Kathryn Lofton said…
Janine -- this is an immensely thoughtful post -- thank you for it! -- Katie L.