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A Faster, Better Stimulus

Give it all to the states.

11:00 PM, Jan 12, 2009 • By PETER J. HANSEN
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Some localities are hurting too. For the most part, however, localities are not struggling as much as states, since they rely primarily on property taxes, which do not vary as much with business activity as sales or income taxes. Moreover, state governments are more or less one kind of entity. Their needs and budgets vary, but not by tremendous amounts (per capita). It is a different story when it comes to localities. Should the federal government give Lexington, Virginia (the small city where I live) and New York City the same amount per capita? That's a difficult question. Perhaps Congress will examine it. Meanwhile, however, if we want to stimulate the economy quickly, let's give the states a uniform per capita chunk of money, and then consider whether other measures are also needed.

Peter J. Hansen is president of Hansen Capital Management, Inc., in Lexington, Virginia.