March 27, 2004

Amend the Amended Taxpayers Bill of Rights?

State Sen. Jim Bryson has responded to my criticisms of the amended version of the propsoed Taxpayers Bill of Rights amendment to the Tennessee state constitution. My criticism, in brief, were these: The new version uses a measure of economic growth that allows for maximum government spending growth and, because it is defined by the legislature and based on estimates the legislature can manipulate rather than a set of hard data, it is itself a loophole for higher spending. And it allows for caps on taxes and spending to be broken without a vote of the people. And it allows for new taxes to be imposed without a referendum if the legislature declares the tax reform package to be "revenue neutral."

Sen. Bryson responded...

"Economic Growth" is basically defined as personal income so the legislature cannot set its own rates whenever it pleases. The Copeland Cap has been overridden 11 of the past 20 years. It now requires a majority vote to override. Getting a 2/3 vote is very difficult yet allows for an override when there is consensus on the need. The point is that we need a has to be a hard cap that counts, yet gives some room for overrides when there is a consensus. This maintains that cap. Though the cap is arguably higher (about 1-2%/year) it is still a cap that will place a control on spending. I can't argue with you too significantly about the "tax neutrality" issue. Admittedly that is a potential loophole but it also gives the legislature the ability to address tax fairness. I hope we are still on the same side on this issue. Lets talk about it sometime soon.

We are still on the same side on this. I still like the TaBOR - just not as much. (But, then, I want a TaBOR with the local provisions like Colorado has!) I'll post part of your email below as a response to what I wrote, although I didn't see how it is defined as personal income. (Personal income is a lousy stat to use. Per capita income would be much better. Per capita income adjusted for inflation would be the best.) I think the tax neutrality issue is significant in that it opens a way for an income tax without a referendum. Perhaps you could alter that section to say that the legislature could adjust EXISTING taxes without a referendum provided it was revenue neutral, but new taxes would have to be voted on.