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Friday, September 15, 2006
Government spending has to be tamed
The Atlanta Journal-Constitution
It’s a simple question posed by state Sen. Chip Rogers (R-Woodstock).
“Do the voters have a right to tell us how much of their money we should spend?”
It is, acknowledged Angela Palm, policy director for the Georgia School Boards Association, at the core of a recurring debate: How big should government be?
The chairman of the Houston County Board of Commissioners, Ned Sanders, avers that “I don’t know anybody that wants to grow government bigger than it already is.” But with demands, mandates, judicial orders and the like, it grows, he said.
The debate about the size and role of government, occurring on the day that Gov. Sonny Perdue announced a plan to exempt Georgians older than 65 from the state income tax levied on retirement income, does highlight one of the essential challenges confronting a party that presents itself as fiscal conservatives.
It is to determine how much of taxpayers’ money government should be allowed to spend and where it should come from. It’s not just Georgia, either. Around the country — in Colorado, Maine, Michigan, Montana, Nebraska and Nevada, among other states — taxpayers are attempting to find ways to limit government’s growth by limiting its spending. There is no other discipline.
Thursday’s debate came in presentations to the state Senate’s tax and expenditure limitation study committee, headed by state Sen. Mitch Seabaugh (R-Sharpsburg).
The search is for a “fair” way to check government’s growth. Most efforts, including Colorado’s Taxpayer Bill of Rights (TABOR), passed as a constitutional amendment in 1992, attempt to do that by limiting spending to increases in population and inflation. Colorado’s caused problems because voters also mandated increases for education that worsened cuts elsewhere. The idea, however, is sound.
At Thursday’s hearing, Emily Daniels, policy director for the nonprofit Georgia Family Council, charted budget and spending growth dating back a quarter-century. Using an average of the rate of inflation and population growth for the preceding three years — done to avoid relying on the gyrations of a single year — she tracked the impact of a TABOR-like cap.
It reveals three or four spending spikes. Many came after economic downturns and were accounted for in the ’90s by higher spending for Medicaid and for teacher salaries, she notes, made possible in part by Olympics-related job growth.
Had a cap been in place starting in 1980, the state budget would have grown to $14.75 billion in 2006, said Daniels. Instead it was $17.85 billion.
Had it started in 1990, the budget would have been $17.38 billion. Employed from 2000, it could have been $18.02 billion, she said, or more than it actually was.
Any cap would include an emergency provision. And spending could be raised if voters agree. Said Rogers, “It seems like such common-sense legislation because it really does put the power back in the hands of citizens, whose money we’re spending.”
Local officials, such as Sanders, were concerned that they not get boxed in. Palm, the school boards’ representative, questioned whether caps don’t “put fiscal policy on remote control.” Other government programs can be contained by limiting eligibility.
But with education, “Government has no control over the demand. Nor does any one level or branch of government solely control the regulations that may be added.”
Some form of spending discipline is an idea whose time has come. One key is finding a formula, especially a formula for inflation as experienced by government — concrete, for example — that disciplines spenders without creating unnecessary problems.
This, however, is just part of a larger questions that needs addressing: What should government do? What can be delegated to the private sector? And how and where should taxes be levied? For years, tax reform has been a stalking horse for expanding the sales tax to services, thereby ultimately giving politicians more to spend.
Reform the system, yes. But with an idea toward controlling spending, not making it easier.
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