May 23, 2005

A New Push to Limit State Budget Growth?

Tennessee state Sen. Raymond Finney, R-Maryville, writing in a newsletter to his constituents, notes that state government's budget under Gov. Phil Bredesen is growing by about $2 billion per year. Bredesen's predecessor, Gov. Don Sundquist, presided over annual spending increases of about $1 billion per year, eventually pushing the state into a fiscal crisis as his rapid spending build-up outstripped the growth of the state's economy and the ability of taxpayers to fund the spending without a tax increase.

Finney writes:

272-MILLION DOLLARS: The state collected 272-million dollars ($272,000,000) more last year in tax revenues than expected. Will you receive a refund check or reduced taxes? No. Governor Bredesen and legislative leaders already have decided how to spend this revenue bonanza. Plans announced this week would earmark two-thirds of this windfall for TennCare (approximately 180-million dollars) and the rest for a laundry list of items, including $4 million for the General Assembly to help replace the electronic vote-tallying boards in the Senate and House chambers and to replace the telephone system; a $50,000 grant to Tennessee History for Kids, a Web-based curriculum to teach Tennessee history to schoolchildren; $600,000 to study where to build a new Tennessee State Museum; and a permanent two percent (2%) raise for state workers. Next year, there will be a strong push in the General Assembly to enact TABOR – the Taxpayers Bill of Rights. TABOR, if adopted as a constitutional amendment, would return excess tax money to taxpayers by a cap on government spending, based on the previous year's budget (with increases for inflation and population growth). When there is a tax surplus, taxpayers would get it back in the form of individual checks or a reduction in the state sales tax the next year. TABOR at this point is not popular with many Democrats and some Republicans.

Bryson's proposal makes a lot of sense, both fiscally and from a marketing standpoint. The fact is, if state spending grows faster than per capita income, a tax increase is inevitable. And every single taxpayer across Tennessee should easily grasp the concept that state spending should not grow faster than their ability to fund it.