"Laboratory of the States" to Test Several Spending Limit Plans this Fall, Study Finds

(Alexandria, VA) -- The presence of tax- and spending-limitation proposals on four state ballots for November has led opponents to cry "copycat!" when in fact the plans have distinct stripes and spots. That's the conclusion of a new study by the National Taxpayers Union (NTU), whose members have worked on hundreds of citizen-initiated state and local ballot measure campaigns over the past three decades.

"Taxpayer advocates across the country clearly have been inspired by Colorado's Taxpayer's Bill of Rights (TABOR) in their quest to limit the expansion of government, but they've also adapted their home-grown proposals to their states' situations and needs," said NTU Senior Government Affairs Manager and study author Kristina Rasmussen.

In 1992 Colorado voters enacted TABOR, which holds annual revenue increases the state government may spend to an amount that keeps up with inflation and population changes. Elected officials must obtain consent from the voters to retain any other surpluses (local governments are under restrictions tied to student enrollment and property values). Critics, mostly bankrolled by government-employee unions, accuse tax and expenditure limitation (TEL) sponsors of conspiring with "out of state interests" to foist copies of TABOR in Maine, Montana, Nebraska, and Oregon. In reality, NTU has over 16,000 members in those four states.

Rasmussen convincingly dispensed with this accusation by conducting a side-by-side comparison of the measures. She found that while the proposals borrowed some aspects from TABOR, no two are exactly alike:

  • Three of the four measures focus on state-level expenditures, while one (Maine's) would apply to both revenues and expenditures by state, local, and other governing bodies.
  • Each proposal differently defines budget categories subject to restriction. Exemptions range from pension payments and tax rebates to asset sales and highway funds.
  • Provisions for budget reserves and emergency spending vary greatly. Two (Nebraska and Maine) mandate specific percentages of spending surpluses to be set aside, while the others simply permit the option of "rainy day" funds.
  • Nebraska's plan specifies the exact ballot language to be used in future elections asking voters to give up refunds of budget surpluses, while Maine's does so only for tax increases. The others provide more latitude to public officials on the matter.

As Rasmussen notes, there is nothing sinister in the fact that a successful measure in one state encourages others to follow with their own mechanisms. After all, California's landmark Proposition 13 property-tax limit was adapted to suit places such as Massachusetts and Washington.

"At the end of the day, the concepts behind TELs are hardly radical," Rasmussen concluded. "The voters of Maine, Montana, Nebraska, and Oregon can go to the polls on November 7 with the confidence that the proposals before them will help to restore fiscal sanity in their states."

NTU is a non-profit citizen group working for lower taxes and smaller government at all levels. Ed. Note: NTU Policy Paper 122, One Solution, Many Formulas: How States are Solving the Tax and Spending Problem, may be read online at www.ntu.org.