Can politicians be trusted to control spending?

State Rep. Donna Sheldon (R- Dacula) doesn’t think so and is heading a Study Committee tasked with examining the Taxpayer’s Bill of Rights(TABOR) being used in Colorado and under consideration in several other States.

Colorado’s TABOR limits the percentage growth of the State budget to the rate of inflation plus the population growth. For example if the rate of inflation is 3% and the population grows by 3%, then the maximum the State budget could grow would be 6%. In addition, any tax revenue surplus collected by Colorado must be returned to the taxpayers.

Last month, former House Majority Leader Dick Armey testified before the Study Committee in favor of TABOR. While the press did not cover his testimony, the Gwinnett Daily Post did publish this editorial written by Armey. In it Armey says:

During the prosperous 1990s, Georgia wasted a lot of state money it could have refunded to the taxpayers. Between fiscal years 1991 and 2003, state spending in Georgia outpaced the increase in inflation combined with population growth by 5.6 percent or $780 million. That $780 million was spent, just like the surpluses generated in other states.

But in Colorado, TABOR kept the state on a responsible budget path. There, state spending grew only at the rate of population growth plus inflation and taxpayers got refunds. Over a five-year period, for example, the state gave back $3.25 billion in refunds. A typical Colorado family of four got a refund of approximately $3,200.

Yesterday, the Study Committee heard from people opposed to TABOR type restrictions. The Gwinnett Daily Post reported some of the testimony:

The vast majority of state spending increases that occurred during the economic boom of the 1990s were due to conscious policy decisions by the governor and General Assembly, said Alan Essig, executive director of the Georgia Budget and Policy Institute.
As examples, he cited teacher pay raises, the creation of a children’s health insurance program and increases in prison spending that followed tough-on-crime laws enacted by the Legislature.
“The state did not grow out of control,” Essig told committee members.
“It grew out of policy decisions that, I’m sure, most of you fundamentally agree with. … What is the problem we’re trying to fix?”

And then there’s this:

Two lobbyists representing Georgia cities and counties said they were afraid that capping state spending would cost their communities vital state aid, forcing local governments to cut other programs to plug the gap.

Personally, I think TABOR is a good idea and should be implemented in some fashion here in Georgia. There will always be something to spend tax revenue on and politicians of both parties are subject to the temptation to spend.

In fact, I would like to see Republican’s run on this issue in 2006. Here me out on this: Conservatives worry that perhaps Georgia’s Republicans will follow the lead of our Washington brothers and sisters and spend like drunken sailors. Embracing TABOR would dispel that fear, set the agenda for 2006 and bring small-government advocates back home to the GOP.

Rep. Sheldon’s Study Committee will continue to meet and take testimony, but like any major reform of government it will take a strong grassroots effort to get it going. I hope people study this idea and let their Representatives know they support it. The GOP should stand for smaller government and passing a law to insure a slower rate of government growth would be a good thing.

26 comments

  1. Why even have future legislatures? Let’s just pass one big constitutional auto-pilot in 2006 and save the trouble of paying 236 legislators and their staffs to sit around and twiddle their thumbs in the years that follow.

  2. Armey’s editorial is misleading. In Colorado (where they are not as crazy about this law as its fans make you think) the rebate was $3.25 billion. But in Georgia, had the same law been in effect the rebate would have only been $780 million. Since Georgia has about twice as many people, that translates into a rebate of $400 per family, or about $34 / year over a 12 year period.

    So we want to amend the state’s Constitution so that the average Georgia family can save $34/year on their taxes? What if a future legislature or court decides that the state hasn’t been adequately funding its schools or courts or (not likely) roads? How then would that fit into this amendment.

    It seems to me that an amendment like this says things are perfect right now, we’re going to crystalize the status quo and only adjust it for changing costs due to population and price increases. If you want a more active Georgia government, you’ll have to cut spending somewhere to increase it elsewhere. And if you want a smaller Georgia government, you can probably kiss that wish goodbye as it will practically be mandated that government must never get smaller.

    Politics aside, this just doesn’t seem like good public policy. And I think you’ll find that many in the Republican leadership are much more interested in good policy than what might be good politics, especially now that it is they who decide who spends what money and where.

  3. Romegaguy says:

    And then when another Katrina happens and we have tons of evacuees here, how will we pay for the extra demand in services? Or The policy may sound like a good idea but in reality it doesnt make sense.

    Holy Sh*t… I agree with Chris on something. I think I need to see a doctor…

  4. upsongop says:

    I saw a guy from Colorado do a presentation on the TABOR. Great concept, but I think it has some holes.

  5. kspencer says:

    I came to this state from Colorado, and I’ve family there. I’ll mention the major flaw with TABOR – not to say all such are bad, but to note that unanticipated consequences bite hard.

    Basically, there was no avenue for coping with major projects. Thus when major expenditures were needed they could only be funded by cutting funds necessary to maintain other areas.

    Thus (for example) when the blizzard of 1997 hammered the front range and the money in the relief fund was insufficient to pay for losses and damages, money had to be taken from other accounts to manage. Yet I got my rebate check in 1997 as there were revenues collected that exceeded the TABOR authorized increase. Equally demonstrative was schools systems who were limping by on building repairs and new construction – due to Colorado’s structure the state pays a part, and since starting a project of that level required a significant (though temporary) bump in expenditures the TABOR barrier was encountered. End results – for all but a handful of counties (the richest), capital expenditures were for emergency repairs only. Specific example, Limon Colorado’s school (combined K-12) boiler was known to be “risky” but was unrepaired for ten years (till 2002), and even then the repair was only initiated because the darn thing overheated and stopped venting during a school board meeting. Third example: Federal Government Mandates were not exempted. You can pick your mandate of choice, but there was no authority to increase the budget to cover those requirements above the cap.

    There was a second flaw that bit Colorado that I’ve seen indicators of here in this state. Basically, the actual population growth (particularly in counties such as Douglas) significantly exceeded the official count – the official count was adjusted in 2001 after the Census numbers came out, but that’s a significant lag. Consequently the formula that said increase was allowed for population growth didn’t work – garbage in, garbage out. Douglas, Denver, Adams, El Paso, and several other counties suffered from having to provide more services without an equitable revenue increase.

    FWIW, several amendments to TABOR were attempted so as to cope with these flaws. Some were poor and would have neutered it entirely, some were very well thought out and would probably have solved the specific problems they addressed. Unfortunately, the resistance to ANY change in TABOR by a very vocal minority was effective enough through 2002 that candidates were getting traction by claiming they’ll work to get TABOR stricken – it’s one of the major reasons Democrats made such gains in that state in the last election. Which brings the last recommendation: If you push for and get a Georgia version, accept that what you put up will be flawed and be willing to adjust it, or you’ll by the end of a decade it risks being so despised as to be an aid to those wishing it gone. When the choice is all or nothing and all doesn’t work, people often go with nothing.

  6. Hammertime says:

    And, if the legislature does the right thing – as it has the past few years and cut spending – TABOR doesn’t allow an opportunity to rebuild funding in programs that were cut in recesssion. Take care of that issue and Georgia could use it.

  7. Bill Simon says:

    SO, in the 1990s, huge surpluses were collected by Georgia’s state revenue department and not returned to the taxpayers…well, where are all those Republicans who wanted to annoint Zell Miller a saint last year?

    All those Republicans who decided “Yeah, Zell was a scumbag of a governor, but, we forgive him now because he likes GWB…” All those Republicans like…well, like you, Buzz, eh? 🙂

  8. shamanic says:

    It’s worth noting that Colorado tossed out its GOP legislature in 2004 in favor of Dems, if memory serves. TABOR might just make a state less responsive to constituent needs.

  9. Hammertime says:

    Zell spent like crazy. Roy spent like crazy, but at least started some tax cutting. Sonny has cut spending and taxes. But, oh yeah, he can’t do anything right.

  10. Georgia’s budget over 12 years (’91-’03) the Miller and Barnes years, only grew 5.8% faster than Dick Armey thinks it should. Compare that to the Bush budgets where they can knock out a 5.8% increase in spending in about three months and it paints a pretty good picture for Zell and Roy.

    I mean, if the bullpen only gave up 5.8% more runs than when Smoltz was the closer we’d still be playing baseball in Atlanta.

  11. Buzz, thank you. As far as Georgia’s government growing too fast, clearly it hasn’t yet. I think it’s telling that Republicans no longer trust the people and their elected representatives to fashion a decent budget for the state now that those same people have put Republicans in charge. Or maybe they are trying to solidify a Republican-ish approach to government in case a future legislature is more Democratic?

  12. shamanic says:

    I have to wonder how microscopically federalism is to be applied. I work for a living, and really don’t have time or make enough money to build roads, for instance. I also don’t see the merit in having random people stick roads wherever they feel like it. Seems like that’d get messy.

    There’s a purpose for states. Perhaps when things are booming, that’s when states should invest in infrastructure and build up rainy day funds instead of putting artificial caps on how much money it can have on hand at any given time.

    It’s a philosophical debate. One side thinks that anything called “the state” is inherently destructive to freedom, and one side views it as a necessary entity that can be contained with proper oversight. TABOR looks to me like a way of taking a pass on oversight and abstaining from hard choices.

  13. Bull Moose says:

    Well, if this effort does become a Republican issue, I say, why have a legislature at all… I mean, I guess we can elect them, send them to Atlanta for a weekend and give them gas money for that so they can gavel into session pass the automatic budgets and come home, but there’d be no other use for them…

    Legislators need to be held accountable and do their jobs… This bill could be call the Legislative Abdication Bill of Georgia.

  14. Mike Hassinger says:

    TABOR is a powerful concept that Republicans can use to limit the growth of government -if they want to remain true to their conservative roots. Chirs and Bull Moose seem to think that not having a legislature is somehow bad. Let me get my Ronald Reagan/Barry Goldwater crayons out and make it as simple as I can: “Less government = better government.”

    Yep, TABOR in CO had problems, no doubt about it. But the Florida Lottery had problems too, but Georgia implemented a better, more efficient version of the lottery. We can learn from others’ mistakes.

    But these are philosophical arguments, not political ones. A lot of people who call themselves “Republicans” get nervous when it comes to making the tough decisions about actually cutting spending -and not just at the federal level. Example: Buzz and I were just involved in a Special Election to the State House, (each working for opposing candidates, though both were conservative Republicans) and this issue came up. My guy was four-square in favor of this concept, as capping spending is the only way to really limit tax increases. Buzz’s guy wanted to limit taxes, but didn’t like the cap spending idea as much, and said in a forum that he wanted to preserve funds for schools.

    Buzz’s guy won. (Congratulations, BTW, Buzz. Where’d you get those 27 votes?)

    One Special Election does not necessarily make a trend. But a good portion of the electorate is squeamish about cutting spending when faced with specifics; i.e., schools, roads, traffic lights -whatever. It’s a tough issue to run on, because the hypothetical cuts are always going to gore somebody’s ox.

    I still think it’s a great idea, but it’s going to take some selling.

  15. buzzbrockway says:

    “One Special Election does not necessarily make a trend. But a good portion of the electorate is squeamish about cutting spending when faced with specifics; i.e., schools, roads, traffic lights -whatever. It’s a tough issue to run on, because the hypothetical cuts are always going to gore somebody’s ox.”

    Very true and well said Mike. I think perhaps the biggest obstacle TABOR would have will be school funding. That was a huge issue in Colorado and it will be here as well.

    I was scared that your candidate would seize on Armey’s editorial and push the issue even harder. As to where those 27 votes came from I have no idea. It’s better to be lucky than good. It was a hard fought campaign but to have a runoff turnout of 11% when the special election turnout was 12% was amazing. I think it speaks well of everyone involved.

  16. I think it’s interesting that the Democrats in the legislature, the Republican Governor and many of the Republicans in the Colorado legislature as well as the Colorado business community are all backing two amendments that drastically change/neuter that state’s TABOR.

    Does anyone know if Sheldon/Armey are pushing this altered TABOR or are they refusing to learn from Colorado’s mistakes (or unwilling to face the facts of how disastrous it has been there) and pushing the original TABOR?

    My feeling about that thing is that Armey et al are like traveling conmen, the gig is up in Colorado and they’ve picked Georgia as the sucker state du jour to sell their product.

    And while the turnout in the runoff election was impressive (for those types of things) I think it’s hard to divine the winds of politics from a 12% turnout in a single state House special election. That’s less than 0.1% of the state’s registered voters.

  17. buzzbrockway says:

    Chris,

    In the Gwinnett Post article I linked to, Rep. Sheldon says:

    “They’ve been a successful model,” she said, referring to the Colorado law. “But we need to learn from their mistakes and make improvements.”

  18. buzzbrockway says:

    “My feeling about that thing is that Armey et al are like traveling conmen, the gig is up in Colorado and they’ve picked Georgia as the sucker state du jour to sell their product.”

    Actually Chris, there are a number of States at various stages of consideration – Kansas, Ohio, Oklahoma and Wisconsin to name a few. Americans for Prosperity is another group pushing TABOR and Dick Armey isn’t even involved:
    http://www.americansforprosperity.org/index.php?issue=1

    You see, people want to keep their own money and not allow government to keep on growing.

  19. Bull Moose says:

    Less government = better government

    Taking out the CITIZEN component = CORRUPT government

    Remember — we are the government. It’s not like we don’t have ultimate control of it…

    If people would just stand up and take it back it wouldn’t need stupid political fixes like this proposed legislation…

  20. Tommy_a2b says:

    Keep in mind TABOR does not lessen taxes or lessen government control. It keeps it at a controllable growth rate. I see that TABOR has promise but we need good legislators to give us “Less Taxes and Less Government Control.”

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