May 13, 2007

Surplus Story

The Sunday Tennessean covers the state's burgeoning revenue surplus. It's a pretty good story - the paper even acknowledges what it failed to acknowledge during the four-year income tax battle in the late 1990s, that the state routinely collects more tax revenue than is needed to balance the state's budget.

One element missing from the story: the state constitution's cap on the year-over-year growth of state spending. The state has a surplus of hundreds of millions of dollars this year but, by law, it may only spend $100,000 of it unless the legislature first passes legislation to authorize exceeding the spending cap. Details here.

For some reason - I have never understood why - the mainstream media in Tennessee rarely explains the Copeland Cap to its readers and viewers, and never tells them that the Copeland Cap is routinely exceeded, resulting in higher spending - and higher taxes for Tennessee taxpayers. For a more detailed understanding of the Copeland Cap, how it works, and what it costs taxpayers when the legislature breaks the cap, read Spending Spree: The Bipartisan Assault That is Killing The Constitutional Cap on the Growth of Tennessee's State Budget.