January 31, 2004

Excellent Taxpayers Bill of Rights Information

The Heartland Institute has published the first two parts of a three-part in-depth series on tax-and spending limitation laws (TELs) such as Colorado's Taxpayers Bill of Rights. Part 1 is titled State Budget Problems Lead to Renewed Interest in TELs and begins this way:

Thoughtful leaders in many states are fed up with the fiscal roller coaster they have experienced during the past decade and want to smooth out the ride. The result in many states is new interest in constitutional tax and expenditure limitations (TELs) and efforts to improve limits where they currently exist. States are paying a heavy price for allowing rapid tax revenue growth during the 1990s to fuel an unsustainable expansion in spending. Between fiscal years 1990 and 2001, state tax revenue grew 86 percent. Inflation and population growth grew at a combined rate of 55 percent during that same period.

If states had limited spending growth to the rate of increase in inflation and population, according to analysts from the Cato Institute, state budgets would have been $93 billion smaller by FY01 than they actually were. The savings are roughly twice the size of today’s state budget gaps.

In the 1990s Colorado experienced one of the most rapid rates of economic growth in the country. But state revenues increased even faster than the growth in personal income. Before TABOR kicked in, the state went on a spending spree, building highways, prisons, university buildings, and other projects at an unsustainable rate.

When TABOR was triggered that spending spree came to a halt. Over the three years from 1997 to 2000, TABOR limited spending growth to inflation and population increases, generating more than $3 billion in surplus revenue that was used for taxpayer refunds, rebates, and tax cuts.

Memo to Tennessee media: You should read it. The Taxpayers Bill of Rights movement is growing fast in Tennessee.