December 30, 2002

It's Getting Late

Michael Ledeen says we need to moving faster to affect regime change in .... Iran. I agree. It's time the U.S. let the people of Iran unequivocally that if they rise up against their Islamofascist rulers, we'll support them with whatever it takes to assure their victory and the transition of Iran to a democracy.

December 27, 2002

What's to Blame for Oregon's Budget Woes?

As Tennesseans look back at the almost-over Sundquist administration and remember how the administration blamed Tennessee state government's budget gap on the state's lack of an income tax (rather than on over-spending), it's instructive to look at the situation in Oregon. Why? Because Oregon doesn't have a sales tax. It has only an income tax. It is the flipside of Tennessee. Thus, you would think that it would have no revenue problems at all. We were told, after all, that the sales tax was the problem and the income tax was the cure.

So, Oregon has no budget problem, right? Wrong, says the Portland Oregonian newspaper.

Rising unemployment, business failures and plunging stock prices have driven down the state's income tax collections. The amount has fallen far short of paying for the roads, school support, prisons and other government services in the 2001-03 budget. As the shortfall worsened, lawmakers held a record five special sessions to fill what became a $2 billion hole in the $12.3 billion budget. Cutting spending is one of the main ways they've kept the budget in balance, as the law requires. That has kept officials busy for most of the year deciding how to strip more than $900 million by the time the budget period ends June 30, 2003.

December 22, 2002

Kill The King

Figuratively speaking, that is. Frank Cagle continues to agitate for Republicans in the Tennessee House of Representatives to work with dissident Democrats to oust the General Assembly's Jimmy Soprano, Rep. Jimmy Naifeh, from the speaker's chair.

There are enough votes in the House that prefer someone as speaker other than Naifeh. It isn't just his income tax bill last session. It is dissatisfaction with things in general. East Tennessee Republicans have grown used to being ignored and short-changed by the speaker and his henchmen. But now Middle Tennessee Democrats are catching on that Naifeh's rural West Tennessee mafia is shafting them as well.

This is a golden opportunity for House Republicans to get together with like-minded Democrats and change the status quo. If they vote for Naifeh and give away this opportunity there is a growing network of conservatives around the state that will make sure they pay a price for it. If it is too much to ask that Republicans band together and put forth a candidate then there is an alternative. Do nothing on the first ballot. At least have the courage to abstain. It's not exactly a Profile in Courage. But it's a start.

My Op-Ed is in the Commercial Appeal Today

Here is the text of an op-ed I wrote as published in the Memphis Commercial Appeal today (Sunday, Dec. 22, 2002):

TABOR plan would let taxpayers call shots
By Bill Hobbs

The arrival in Nashville next month of a new governor and a legislature full of new faces will dispel some of the lingering mistrust built up by the outgoing Sundquist administration during the rancorous four-year battle over a state income tax. But it won't be enough to clear the way for tax reform. Put aside for a moment counting how many income tax supporters and opponents were defeated or elected last month, and consider a deeper problem that faces almost any lawmaker who proposes reforming the state tax code:

Tennesseans have much reason to distrust their government. Several recent studies by good-government groups lead to the reasonable conclusion that many Tennessee elected officials are more beholden to their own interests, or to the influence of special-interest lobbyists who fund their campaigns, than they are to the interests of the average taxpayer. Locking taxpayers out of the Capitol during the income tax debate, and saying the state open meetings law doesn't apply to lawmakers, didn't help.

Even if the legislature were to pass tough new ethics laws, though, that still would not be enough to restore public confidence and persuade skeptical Tennesseans to accept tax reform. But there is a way: Combine real reform with a "taxpayers bill of rights" amendment to the state Constitution similar to Colorado's, and put the latter on the ballot.

A Taxpayers Bill of Rights (TABOR) would limit the growth of government spending from state tax revenue to the combined rate of inflation and population growth. It would return surplus revenue to taxpayers via across-the-board tax rate reductions, unless voters approve spending the surplus on specific projects proposed by the legislature. And it would require voter approval of tax rate increases and new taxes.

Martin McBride, who is leading an effort to enact a local TABOR in Oak Ridge, told me he considers himself an optimist, "yet I find I have very little trust left to give my government in the tax arena.

"I see the advancing experience level of American citizens as the single greatest reason why so many tax increases are being currently turned back across the country - good, old-fashioned lack of citizen trust in government," he said.

Income tax proponents tried to impose a new tax on top of a system Tennesseans don't like, run by a legislature they don't trust. Imagine if they had proposed a constitutional amendment that would replace permanently the state's sales tax, franchise and excise taxes, investment income tax and "death tax" on inheritances and estates with a simple, flat-rate 4 percent income tax that would bring in about the same amount of revenue.

Such a plan would make Tennessee the most business-friendly state in the nation. Employers would flock here and entrepreneurs would flourish, creating abundant jobs. The state would see revenue swell, as more people had jobs and incomes rose. Local governments in border counties would see a surge in their sales tax revenue, as Tennessee became a retail magnet for consumers in surrounding states.

Now imagine such a constitutional amendment also included a TABOR provision. I believe voters would approve it - and it would boost public trust in government in two important ways. Voters will trust what they can control, and TABOR would give them more control over taxes and spending. And a TABOR-ized tax system would force lawmakers to tell entrenched Nashville special interests the feeding trough is closed.

Lawmakers could no longer promise new spending to narrow interest groups in exchange for generous campaign donations, because TABOR would put surplus revenue off-limits without voter approval. Taxpayers would become the most powerful special interest, and ordinary citizens would be the most powerful lobbyists.

This isn't pie in the sky. It's happened in Colorado. The Denver Rocky Mountain News urged Colorado voters to reject the TABOR amendment when it was on the ballot in 1992. Seven years later, the newspaper urged voters in Washington state to enact a similar measure, saying TABOR "strengthens the political process rather than (destroying) it."

The newspaper added that "shifting responsibility for taxes from politicians to the public hasn't resulted in automatic rejection of every spending plan." In fact, Colorado voters have approved most tax increases and surplus spending in Colorado over the past decade, according to the Colorado Municipal League.

The newspaper editorialized: "But while TABOR hasn't straitjacketed government, it has accomplished a number of good things. It has heightened interest in elections and government policy; it has given public officials mandates they otherwise would have lacked; it has shrunk voters' sense of helplessness over the use of their hard-earned taxes; and last, but hardly least, it has strengthened the fiscal responsibility of state and local government."

Having a legislature that ranks near the bottom on the integrity scale pass new ethics laws it won't live by or enforce won't engender public trust in state government. A TABOR-ized tax system in Tennessee - with or without an income tax - would.

Guest columnist Bill Hobbs, a Nashville journalist, publishes a Web site of political commentary at: www.hobbsonline.blogspot.com.

Pushing TABOR

My guest column in the Memphis Commercial Appeal today offers up the Colorado model as a solution to the twin problems of tax reform and the public's lack of faith in their state government.

Several recent studies by good-government groups lead to the reasonable conclusion that many Tennessee elected officials are more beholden to their own interests, or to the influence of special-interest lobbyists who fund their campaigns, than they are to the interests of the average taxpayer. Locking taxpayers out of the Capitol during the income tax debate, and saying the state open meetings law doesn't apply to lawmakers, didn't help.

Even if the legislature were to pass tough new ethics laws, though, that still would not be enough to restore public confidence and persuade skeptical Tennesseans to accept tax reform. But there is a way: Combine real reform with a "taxpayers bill of rights" amendment to the state Constitution similar to Colorado's, and put the latter on the ballot.

December 16, 2002

How Blogs Drove the Lott Story

What you are reading right now is a weblog or "blog." It is part of the "blogosphere," which one writer calls "the cyberworld of personal op-ed pages on the Internet." Blogs are a new form of journalism. And they are the reason the Trent Lott Affair became a national story even though Big Media mostly ignored it. Here are two stories explaining how the blogs turned Lott's idiotic comments into a national story: The Internet's First Scalp - by New York Post columnist John Podhoretz. And A Hundred-Candle Story And How To Blow It - by Washington Post media critic Howard Kurtz.

Whacking Jimmy Soprano

So far, Tennessee House Speaker Jimmy Naifeh has not paid a polical price for trying to ram an unconstitutional and unpopular income tax through the Legislature. Frank Cagle explains why, if Naifeh is re-elected Speaker, it will be Republican legislators who bear the blame.

There are enough House Democrats dissatisfied with Naifeh's heavy-handed rule and his pushing of a state income tax to elect someone else. But these Democrats are not suicidal. They will not vote for someone else unless they see that House Republicans will be united and will vote for an alternative candidate. If they see that House Republicans intend to vote for Naifeh then they will not go marching off the cliff.

A Republican vote for Naifeh this session is not a courtesy, not a formality, not a meaningless gesture. It is a real vote to retain him in power, because he will not stay there if Republicans do not support him.

December 13, 2002

Question

Why is it when revenues don't match estimates, it is always portrayed as the fault of the revenue? Isn't it really the fault of those who made the estimate?

After all, tax revenue is the natural result of the natural economic activity of 5.6 million Tennesseans. The estimate is an artificial number created by the five-member State Funding Board - the governor, secretary of state, comptroller of the treasury, state treasurer, and commissioner of the Department of Finance and Administration - who are aided by testimony from three economists. In the past four years, the board - dominated by pro-income taxers - has selectively heard only from economists who are either openly in favor of or not publicly hostile to the income tax.

So why is the artificial "estimate" created by 8 people considered right and valid, while the natural economic activity of 5.6 million people is considered wrong and invalid?

Perhaps stories like this one and this one would be more accurate and fair if instead of blaming the budget gap on "sluggish revenues" and tax collections that "may fall short," they were to describe the budget gap this way in reporting on the monthly revenue data:

NASHVILLE - State officials today reported that, four months into the fiscal year, it is clear that the officials whose job it is to estimate how well the economy is doing and, therefore, how much revenue the state will collect, did a poor job in making their estimate for the current fiscal year. Because of the State Funding Board's over-optimism, the legislature has over-committed the state to the tune of at least $28 million this year. If the estimate continues to be wrong, the state could be over-committed by $60 to $90 million this year.

Some ascribe the mistaken estimate to ineptitude on the part of the Funding Board. Others say it is the Board's myopic refusal to hear from more than a small number of economists, one of whom (the University of Tennessee's Dr. Bill Fox) is an incessant cheerleader for higher taxes and more state spending. These critics note that there are several highly qualified economists in Tennessee that the Board ignores - and in each case those economists happen to be proponents of limited government and low taxes.

That story would more accurately reflect the truth about revenue estimates and the State Funding Board.

There is a solution: Base each annual budget on an estimate of zero percent revenue growth - in effect, the state would plan to spend next fiscal year exactly the amount of revenue it collected this fiscal year. Then, if revenue came in above that "estimate," - which, historically, it would do at least 95 percent of the time - the state would have a surplus.

For more on the State Funding Board, click here and here and here.

Why We're About To Go To War In Iraq

This photo ran in The Tenenssean on Sept. 18. It was taken outside the downtown Nashville Convention Center while President Bush was delivering a speech inside. This young Iraqi girl was clutching her American flag ever so tightly, while the nearby anti-war protestors were not holding American flags at all.

Photo by P. Casey Daley/Tennessean staff
Caption: Hoping to see President Bush, Safaa Albadran, 4, stands outside the downtown convention center under a banner held by her father, Karim, left, proclaiming "Saddam: Out - Democracy In."

December 4, 2002

The Sundquist Legacy

Here's a column I wrote last summer. You want to know what Gov. Sundquist's fiscal management legacy is? This is it:

A year ago, the Legislature grappled with how to balance the budget and found the state had enough state, federal and other money to spend $18.4 billion this fiscal year. A year later, we find our state spending an extra $500 million to $600 million. More than a year ago, Neel's predecessor was truthful enough to admit the extra millions the state found were "unbudgeted dollars." The state constitution prohibits the state from spending a dollar without the Legislature passing a law that specifically appropriates it, but the administration spends surplus funds anyway.

Given a chance to explain, Neel declined to answer. Yet he - and the governor he works for - want you to trust them with an income tax. Trust, however, grows best in the soil of credibility, and the soil in the executive branch is thin indeed.

December 3, 2002

More Income Tax Fallout

Republicans in the state House have replaced a crew of moderates - including their pro-income tax/cozy with-the-Democratic-speaker leader - with conservatives.

State Rep. Tre Hargett of Bartlett defeated Rep. Steve McDaniel as Republican Leader of the Tennessee House Monday in a GOP Caucus election that swept moderates from leadership positions. Hargett, 33, promised a more aggressive approach for the GOP in the House, where the Republican minority has been marginalized by the Democratic majority for decades. "This is about how we become a more proactive and relevant caucus," Hargett said, adding that he would like to reinstate policy work groups to develop policy ideas and legislation.

Dumping McDaniel in favor of Hargett is more fallout from the income tax debate, which has produced a more conservative and more anti-income tax state House and state Senate.

Here is the Tennessean story on it.