A taxpayer revolt is sweeping the nation and the battle cry is for tax and spend limits. The latest count finds activists in 20 states from Georgia to Alaska, California to Vermont, working to enact tax and spend limits on state budgets that would require voter approval over reasonable benchmarks.
As government spending continues to skyrocket, it is time to give taxpayers a seat at the table.
Enacting limits would offer Georgians the power that citizens of other states have to restrain state government spending and taxing. In Colorado, for example, that state adopted a Taxpayer Bill of Rights (TABOR) 12 years ago. It has protected taxpayers by requiring voters to approve tax hikes and permits growth in government spending to increase no more than the population increase plus inflation. Anything above that requires voter approval.
Because of its effectiveness and common-sense appeal, other states are imitating Colorado and tax reformers are getting energized from coast to coast.
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.
The most noted budget crunch of the same time period occurred in California which revved up its budget by 90 percent then found itself with a $34 billion deficit when a recession hit. The result: a recalled governor and massive new borrowing. Colorado, on the other hand, was saved from going off a similar budgetary cliff by the fiscal guardrails of the TABOR provisions.
Those guardrails also have spurred Colorado's economy. In the decade before Colorado's spending limit was enacted, personal income grew sluggishly, the private sector added fewer jobs than government did, and there were no refunds to taxpayers. In the 10 years after spending limits were enacted, the increase in private-sector jobs was nine times that of government, personal income growth almost doubled, and more than $3 billion in surpluses were refunded to the taxpayers. Between 1995 and 2000, Colorado ranked first in the nation in growth of gross state product and second in personal income growth.
That is why reformers in so many states are looking to replicate Colorado's spending limit, and Georgia should, too.
Although passing a spending limit to return control over growth in government to the people is a sensible idea, passing it will still not be easy. Special interests that thrive on government spending will demonize the idea and its supporters. Those who oppose spending limits are fearful of what happened in Colorado: reasonable restraints on government's ability to dole out taxpayer dollars to special interests.
It is because of those special interests that Georgia needs tax and spend limits. When implemented, it would work around the clock to protect Georgia taxpayers from the never-satisfied tax-and-spend lobby that constantly roams the halls of the state Capitol. Regular citizens certainly cannot fund their own lobbyists to keep growth of government under control.
State Rep. Donna Sheldon, R-Dacula, is hosting hearings this week on a Georgia version of tax and spending limitations to be called the Georgia Fiscal Responsibility Act. Her study committee should energize legislators and ordinary citizens because this issue can become a movement with broad public support. If Georgia would adopt a Colorado-type spending limit, then taxpayers would get back more of their hard-earned money and during bad economic times, budget cuts would be less painful - for the less you spend, the less you have to cut.
Former House Majority Leader Dick Armey and Dr. Wayne T. Brough are, respectively, co-chairman and chief economist of FreedomWorks, a nationwide grassroots organization dedicated to less government, lower taxes and more freedom.