Ronald
Reagan said:
"Government
may protest that it never gets the
money it needs,
but
it always manages to find a need for
the money it gets."
It
was his second inaugural address as California
governor in 1971 and he was focused on
reining in runaway spending. According
to a new paper produced by Dr. Barry
Poulson, Americans for Prosperity Foundation
visiting fellow, state and local spending
actually outpaced growth of federal spending
over much of the post-WW II period.
The
origins of the tax revolt began with
a referendum proposed by Reagan to impose
a tax and spending limit on California.
In 1973, Reagan backed Proposition I,
designed to limit the growth of state
and local government with voting requirements
to increase taxes or exceed the spending
limits. He recommended refunds of surplus
revenue, provided for an emergency fund
and required state funding for state-mandated
local spending increases.
Today,
it's "round two" as spending limitations
in the forms of the Taxpayer's Bill of
Rights (TABORs) and tax and expenditure
limitations (TELs) are sweeping the country.
The
movement is based on the novel concept
that the size of government should grow
proportionally with the size of the state.
Special
interests stand to gain from increased
government spending. Lobbyists spend
countless hours encouraging legislators
to spend more. Some spending, such as
education, are generally agreed to be
in the common good; though there is wide
disagreement on what level of expenditure
is appropriate.
Those
of us footing the bill are not lobbyists.
Citizens are busy earning a living, and
have only a vague idea of how government
policies impact their pocketbooks --
until the tax bill comes due.
Generally,
in good times, government grows. In bad
times, government grows.
As
part of that earlier tax revolt, Texas
enacted a 1978 constitutional amendment
which was designed to limit government
growth. The measure (Article 8, Section
22) restricted the growth of appropriations
from non-dedicated revenues to the rate
of growth of the state's economy.
According
to a new study issued by the Texas
Public Policy Foundation , the loopholes
in Texas' spending limitations are huge.
In that paper, author Dr. Byron Schlomach
finds if real, per capita non-federal
Texas expenditures in 2003 were the same
as in 1990, Texans could have saved $8.7
billion in state taxes in 2003. This
translates to almost $1,600 in savings
for an average family of four in 2003
alone. And that's only the state tax
bill.
The
best way to determine how government
has grown is adjusting for population
and inflation to look at real, per capita
expenditures. Using those indicators,
state expenditures increased 28.5 percent
from 1990 to 2003 in Texas.
Since
Texas imposes limits on sales taxes,
one could expect that local government
growth would be limited. But when compared
to 1992 spending, local government spending
exceeded population growth and inflation
by $3.5 billion in 2002 alone.
The
1978 Texas constitutional amendment places
weak limits on state expenditure increases.
The end of the decade of the 1990's found
an explosion of local government spending.
Cities
vary tremendously in how much they spend
beyond population and inflation increases.
In El Paso, government spending outpaced
those indicators by 42 percent. Dallas
was far worse -- real government spending
increased 55 percent faster than the
benchmarks. Houston's spending increased
by a relatively smaller 21 percent --
and a viable tax revolt is underway in
Houston.
It
is an indisputable fact that public schools
have been the government spending growth
industry of the 1990's. Per student spending
has grown 25 percent over 11 years. That
translates to property taxpayers paying
$5.4 billion more than population and
inflation growth. That would represent
a .40 per $100 valuation savings, or
28 percent, given the level of 2000-01
state spending.
During
periods of rapidly increasing property
values, like in the 1990's, the state's
education funding obligations fall, freeing
state funds for other uses -- a void
which was easily filled.
But
let there be no mistake that state spending
for education has grown 500
percent since 1976. Advocates of more
public school spending have been successful
in exploiting the state's declining share
claiming the state is "not living up
to its obligations" and that schools
are "under-funded." They fail to mention
that the state funding has increased
annually.
If
ever there is a case to be made for spending
limitations, it's the Texas public education
system.
One
of the key provisions of a TEL is to
provide opportunity for policymakers
to return a surplus to the taxpayers
or to "make their case" and seek approval
for increasing spending. Only when required
to ask taxpayers for more of our hard-earned
money will government be held accountable.
For
Texas taxpayers to rest easily, Texas
needs to enact real tax and expenditure
limitations which provide for government
growth at all levels commensurate to
population and inflation increases.
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