July 23, 2007

City Paper: State Budget May Violate State Constitution

The City Paper becomes the first mainstream news outlet to report on the likelihood that the Tennessee state government has repeatedly violated the state constitution and state law in how it calculates the annual cap on the growth of state spending.

Some state budget hawks are questioning whether the state has repeatedly violated how the constitutional cap on state spending is calculated. A state attorney general’s opinion has been requested relating to the so-called Copeland Cap, written into the state constitution in 1978, and how it should be computed.

The Copeland Cap says that state spending cannot exceed the growth of the economy - which is measured by personal income growth - within a fiscal year. The cap was named after its legislative sponsor, former state Rep. David Copeland (R-Chattanooga).

In calculating the Copeland Cap and how much the state budget can grow, officials have been using tax revenues. But some spending watchdogs say the state constitution and law requires that state appropriations - not tax revenues - be used to calculate the baseline from which the budget can grow. State appropriations would provide a much lower amount.

Because almost every year the state ends the fiscal year with a surplus of revenue over the amount of state tax revenue appropriated in the official state budget.

While The City Paper deserves praise for doing the story, reading it reminds me of why I prefer blogging. Reporter John Rodgers writes, "some spending watchdogs say the state constitution and law requires that state appropriations - not tax revenues - be used to calculate the baseline from which the budget can grow."

The phrasing makes it sound as if the assertion is in dispute. No one who reads the state constitution and relevant state law will honestly dispute that the state constitution and relevant state law clearly and explicitly say the baseline is to be calculated using appropriations, not revenue.

Article 2 Section 24 of the Tennessee constitution says:

In no year shall the rate of growth of appropriations from state tax revenues exceed the estimated rate of growth of the state's economy as determined by law. No appropriation in excess of this limitation shall be made unless the General Assembly shall, by law containing no other subject matter, set forth the dollar amount and the rate by which the limit will be exceeded.

There is no ambiguity here.

Instead of couching it all in passive-voice, CYA-speak - "questions have been raised," "some observers say" - the news media should report the undeniable truth: State Treasurer Dale Sims admits the Bredesen administration has been using total revenues rather than appropriations from state revenues as its baseline (see video), and that the constitution and state law unequivocally say the baseline must be calculated based on appropriations from state tax revenues.

Report the facts - and let the chips fall where they may.