March 8, 2004

Five Reasons Liberals Should Support The Taxpayers Bill of Rights

The proposed "Taxpayers Bill of Rights" which goes before the Tennessee legislature's Senate Judiciary Committee on Tuesday, is generally viewed as a conservative policy proposal that would reign in the size and cost of state government - and Tennessee liberals are already attacking it as a threat to their hopes for higher taxes and a state income tax. I addressed some of their specific anti-TaBOR claims in this post and will have more to say later about some of other erroneous and deceptive claims being made by "Tennesseans for Fair Taxation" about the Taxpayers Bill of Rights, but right now I want to give you five reasons liberals should be in favor of TaBOR.

1. TaBOR will cause the state to manage its resources more wisely and set priorities - reducing wasteful spending.
2. TaBOR will shield existing programs from deep cuts during future economic downturns.
3. TaBOR will foster more grassroots political involvement and encourage better communication between citizens and their elected representatives.
4. TaBOR will foster more trust and confidence in government.
5. TaBOR will make it easier to pass a state income tax.

Let me briefly explain the Taxpayers Bill of Rights, and why it will do those things. The Taxpayers Bill of Rights as proposed in Tennessee has four basic parts:

1. Cap the rate of growth of state government spending to a reasonable growth rate based on population and inflation.
2. Require excess tax revenue above the amount sufficient to fund that budget growth by rebated to taxpayers via a temporary tax-rate reduction or tax rebate, while reserving some of the excess to maintain a healthy reserve fund.
3. Allow the legislature to spend the excess revenue via "an alternative allocation or expenditure plan approved in advance by a majority of voters in a statewide referendum authorized by law."
4. Require tax increases and new taxes to be voted on by the people.

Now, here in greater detail are the reasons liberals should favor that simple amendment.

TaBOR will cause the state to manage its resources more wisely and set priorities - reducing wasteful spending. By limiting the annual growth of state spending (a limit the legislature can break in emergencies, by the way), TaBOR makes legislators focus spending on programs that matter the most - and matter to the most people - such as healthcare, welfare and education programs.

TaBOR will shield existing programs from deep cuts during future economic downturns. As proposed, the Tennessee Taxpayers Bill of Rights forces the legislature to build a large "rainy day" fund with surplus revenue before ever rebating the first dollar to the first taxpayer. That large reserve fund would be mandated for use during economic slumps and revenue shortfalls to cushion existing programs against damaging spending cuts.

TaBOR will foster more grassroots political involvement and encourage better communication between citizens and their elected representatives. By requiring public approval in a referendum on spending surplus revenue or raising taxes, TaBOR will create more citizen involvement in government and cause legislators to diligently communicate with citizens about the reasons for a proposed tax increase or a proposal to spend surplus revenue rather than rebate it.

Think that's pie in the sky?

In 1992, the Rocky Mountain News urged Colorado voters to reject a Taxpayers Bill of Rights amendment when it was on the ballot for voters in that state - but but seven years later, when voters in Washington state had the chance to pass the similar Initiative 695, the newspaper published an editorial urging Washington staters vote "Yes," saying TABOR "strengthens the political process rather than destroys it."

The newspaper added:

Shifting responsibility for taxes from politicians to the public hasn't resulted in automatic rejection of every spending plan. 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."

TaBOR will make it easier to pass a state income tax. I list this one last, but it is perhaps the primary reason liberals who favor reforming Tennessee's tax code and implementing an income tax should favor the Taxpayers Bill of Rights.

You see, the Taxpayers Bill of Rights, as proposed, is neutral on the question of what kind of tax code Tennessee has, and - don't tell the anti-income tax folks - having TaBOR in the state constitution creates an easier path for passing a state income tax in Tennessee. Currently, those favoring an income tax must try to pass a constitutional amendment - a difficult and time-consuming process - or try to pass an income tax statutorily. The latter path takes less time, but is fraught with difficulty. Some legislators believe an income tax to be unconstitutional. Others simply don't want to run for re-election having voted for one.

But TaBOR's referendum provision for new taxes and tax increases would be a new and shorter constitutional route for amending the constitution to create an income tax. Income tax advocates would no longer need to convince a majority of legislators to vote to create an income tax - they would merely need to convince a majority of legislators to put a tax reform/income tax proposal on the ballot, a much easier sale.

And because TaBOR puts a premium on citizen involvement and requires a statewide referendum, income tax advocates would seek to craft a tax reform proposal that would appeal to the majority of Tennesseans, to enhance its chances of passage.

As I documented in this white paper, liberals in Colorado hated the Taxpayers Bill of Rights when it was proposed, and fought it tooth and nail - but later used the referendum process to pass what amounted to a permanent tax increase dedicated to public education. And it did pass - proving that, even under a Taxpayers Bill of Rights, voters will approve higher taxes and larger government spending, if they approve of the proposal and are given a chance to vote on it.

I urge you to call legislators and encourage them to support the Taxpayers Bill of Rights. Below I've listed all nine members of the Senate Judiciary Committee, including their phone and fax numbers and email address. They are the most crucial legislators in this debate as of right now - TaBOR, also known as Senate Joint Resolution 88, goes before the Senate Judiciary Committee tomorrow.

Senator Doug Jackson-D
District 25 – Dickson - Giles, Hickman, Humphreys, Lawrence, and Lewis counties
Phone: (615) 741-4499 or 1-800-449-8366, x14499
Fax: (615) 741-4324
Email: sen.doug.jackson@legslature.state.tn.us

Senator David Fowler-R
District 11 - Signal Mtn - Part of Hamilton County
Phone: (615) 741-1764 or 1-800-449-8366, x11764
Fax: (615) 253-0280
Email: sen.david.fowler@legislature.state.tn.us

Senator Tommy Kilby-D
District 12 – Campbell - Fentress, Morgan, Rhea, Roane, and Scott Counties
Phone: (615) 741-1449 or 1-800-449-8366, x11449
Fax: (615) 253-0237
Email: sen.tommy.kilby@legislature.state.tn.us

Senator Larry Trail-D
District 16 - Murfreesboro - Bedford, Moore and part of Rutherford Counties
Phone: (615) 741-1066 or 1-800-449-8366, x11066
Fax: (615) 253-0204
Email: sen.larry.trail@legislature.state.tn.us

Senator Steve Cohen-D
District 30 - Memphis - Part of Shelby County
Phone: (615) 741-4108 or 1-800-449-8366, x14108
Fax: (615) 253-0179
Email: sen.stephen.cohen@leqislature.state.tn.us

Senator Joe Haynes-D
District 20 - Nashville – Part of Davidson County
Phone: (615) 741-6679 or 1-800-449-8366, x16679
Fax: (615) 741-2533
Email: sen.joe.haynes@legislature.state.in.us

Sen. Curtis S. Person, Jr. - R
District 31 - Germantown and part of Shelby Co.
Phone: (615)741-2419 or 1-800-449-8366, x12419
Fax: (615) 741-7200
Email: sen.curtis.person.jr@legislature.state.tn.us

Sen. Mark Norris - R
District 32 - Dyer, Lauderdale, Tipton, and part of Shelby Co.
Phone: (615)741-1967 or 1-800-449-8366, x11967
Email: sen.mark.norris@legislature.state.tn.us

Sen. Michael R. Williams - R
District 4 - Jefferson, Grainger, Union, Claiborne, Hanckock, and Hawkins Co.
Phone: (615)741-2061 or 1-800-449-8366, x12061
Fax: (615) 253-0286
Email: sen.michael.williams@legislature.state.tn.us