Progressives pride themselves on being members of the reality-based community. This preference for reality directly pits them against today’s GOP, the members of which are almost uniformly enthralled by ideological fantasies that involve assumptions unsupported by facts (e.g. low taxes on the wealthy support growth) and that result in simplistic, often destructive policies (e.g., cutting government spending during a recession). Nowhere is this attitude more evident than in the battle over how to finance government.
In Missouri this dynamic has played itself out in what threatens to become a yearly ritual: the effort to impose TABOR-style spending caps. This year is no exception; GOP legislators are proposing a a resolution(HJR 43) that would place on the November ballot a constitutional amendment to enact a TABOR variant, a tax and expenditure limit or TEL:
The proposal, which would amend the Missouri Constitution, would limit the growth in annual state spending to the inflation rate plus the percentage change in population for Missouri. Any extra revenue would help pay off state debt, cover emergencies or go back to taxpayers as temporary tax cuts.
Similar efforts to handcuff future legislators have failed in the past, but there are two factors that could make a difference this year. First, Missouri’s plantation master, Rex Sinquefield, supports the concept and has supplied his main man in the House, Speaker Steve Tilley (R-106), with a sizeable payout. Second, the inevitable Democratic quisling has been secured, in this case, Rep. Chris
Kelley Kelly (D-24), who thinks it will be fine to handicap future legislators as long as the cap is high enough – based on 2008 revenue – and does not take effect right away, but is delayed until state revenues reach that highpoint.
It doesn’t take a genius to figure out that it’s never a good idea to decrease legislative flexibility, particularly when dealing with future conditions that cannot be accounted for in the current environment. As the Center on Budget and Policy Priorities notes, here are numerous factors that belie the seeming simplicity of this approach to enforced government spending restraint.
— No existing measure of inflation correctly captures the growth in the cost of the kinds of services purchased in the public sector, so the inflation adjustment generally is not sufficient to allow the continuation of existing services. State governments spend much of their money on education and health care, which typically have cost increases greater than the general rate of inflation. […]
— The subpopulations that state governments serve tend to grow more rapidly than the overall population growth used in the formula. […]
— The rigidities of formula-based budgeting, such as a population-plus-inflation growth factor, do not allow funding of new priorities that may be embraced by the public, such as reduced class sizes or more stringent corrections policies. They do not allow states to adapt to federal mandates that require states to spend more in areas such as security and education, and they may have no provisions for emergency spending on natural disasters or other unanticipated problems.
— A TEL based on a population-plus-inflation growth factor, or any other artificial formula, moves the budget process away from the careful weighing of competing priorities and consideration of the value of new initiatives and toward a process defined by sterile limits that require the shrinking of government services in most years.
Most damming, of course, is the Colorado experience with its TABOR law which had a disastrous effect on the state. Speaker Tilley seems to think that this new effort to limit future finance options is “very, very different” from the Colorado law, but it is difficult to figure how it really differs in substance, or how it answers any of the objections outlined above.
Of course, the Missouri TEL wouldn’t take effect until state revenues have recovered significantly, but even in the highwater year of 2008, revenues were arguably not sufficient for the state’s needs. Rep. Ginese Monticello (D-66) expressed concerns about education and social services in Missouri under the proposed formula:
Even if I could get all the money in the world for education I have some concerns for social services as well. So, it seems to me that we’re kind of locking some groups into a continued future of being under funded when our needs in our state are becoming greater with unemployment still at really high levels
Bear in mind that Missour’s infrastructure was in sad shape long before the recession; Missouri’s bridges, for example, are the seventh worst in the nation in terms of decay. Also stop to consider that Missouri is already a very low tax state – 43rd lowest in the nation.
Wouldn’t this low tax status combined with the need for greater social, educational, and physical infrastructure investment lead one to think that Missouri’s legislators would be better employed if they were to spend some time overhauling the moribund state tax system, or perhaps looking for some revenue enhancements, like setting up a mechanism for collecting Internet sales taxes, or raising cigarette taxes that are also much lower than in most states? But such rational activity, of course, would mean abandoning ideology for reality.