Refusal to Adopt Budget Reform Priorities Last Decade Contributing to Financial Woes Now

It’s getting harder to be an elected official these days. Time was you could throw a little of the people’s hard-earned money this way or that and make a lot of people happy.  Ahh, those were the good old days…for politicians, not taxpayers. Now the word is that the FY2012 budget will be at least $600 million short.

This is why when I was a member of the General Assembly, I sponsored several bills establishing a limit on the amount of growth in state general revenue dollars that state elected officials can spend in a given year.  Of course such a ratoinal, fiscally conservative idea was met with editorials suggesting the legislation would lead to massive spending cuts.  Well here we are years later, we didn’t limit spending growth when we should have and what’s happening? Massive spending cuts!

The House would generally pass my bill and the Senate would always kill it.  Certain groups, known as rent seekers (individuals or groups that lobby government for taxing, spending and regulatory policies that give them financial benefits or other special advantages at the expense of the taxpayers) were succesful in stopping fiscally-responsible efforts that would have prevented state government from raiding the pocketbooks of Missouri families.

Throughout the 1990’s Missouri politicians spent like drunken sailors by massively expanding government programs and spending every dime the state collected without forethought to what would happen in a recession.  The days of reckoning came in 2001 as Missouri faced massive deficits because previous politicians over-promised in good times without preparing for tough times.

The growth limits proposed would have  provided long-term stability to Missouri’s budget by limiting the amount that politicians can spend and establishing state savings accounts to ensure dollars are available in tough times.  Although the time between the last downturn and this one was short, even during that brief period of time a growth limit would have helped the budget crisis currently being experienced.

Opponents decry the common sense tool as the destroyer of state services like transportation and higher education.  They cite Colorado’s Taxpayers Bill of Rights (TABOR) as proof of this fact; a red herring argument.  Colorado’s TABOR protected taxpayers and ensured that state would be a leader in economic performance throughout the 1990’s and even through recession.  Colorado’s TABOR encompasses all revenue sources touched by state entities including gasoline taxes and student-paid tuition at colleges and universities.  Gasoline taxes and tuition aren’t considered state revenues in the Missouri plan and wouldn’t be impacted.

After economic recovery began, a flaw in TABOR resulted in an unintended ratchet back of state spending.  Colorado’s voters embraced TABOR, addressing this flaw by temporarily suspending TABOR and returning to pre-recessionary growth levels in ordre to recover from the recession.  Did it work?  It worked great for big government politicians who used the abscence of a limit to grow government.  Now Colorado is in as bad of a financial bind as any other state.

State growth limits spur economic prosperity by adding stability to a state’s tax policy.  They reduce peaks and valleys in spending patterns by saving dollars in good times for use in tough times, attracting new job-providers seeking predictable financial environments.

Opponents suggest a state spending limit will destroy state services.  These opponents also claimed Bob Holden’s tax increase proposals were the only way to avert state government collapse in the early 2000’s.  Despite their sky-is-falling rhetoric state services continued and no tax increase occurred but now they are back clamoring for tax increases again!  We should fix the problem of spending, not put a bandaid on it by feeding the monster.

Rhetoric against the bills always reminded me of Aesop’s tale of the Ant and Grasshopper.  The ant feverishly worked to store food and resources in the summer for use in the winter.  The grasshopper rested on his laurels and wasted his resources.  Winter later arrived and the ant survived; the grasshopper didn’t.  Given the opportunity, I think Missourians would choose to support commonsense spending growth limits rather than be misled down the perilous path of the grasshopper.

Establishing a limit allowing government to prudently grow while requiring politicians to put dollars aside for use in tough economic times is a solid long-term approach to protecting Missourians.

Carl Bearden
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