Arizona's Legislature just finished the special session adjusting spending to revenue in order to fix a deficit for 2002 that was about $800 million short and is now attacking a 2003 deficit of about $1 billion. This budget crisis is a product of irresponsible and out-of-control government spending during previous years.
I maintain that spending has exceeded population growth and inflation since 1995 by over $650 million. This budget deficit is not the result of tax cuts (letting you keep your own money) during the '90s. The legislature only returned $1 for every $3 increase. The legislature grew government beyond population and inflation combined.
I have introduced HCR 2027, the "Taxpayers Bill of Rights," which would limit General Fund spending to no more than the rate of population growth plus inflation unless approved otherwise by the voters. The surplus tax revenue would be given back to the folks who earned it. This would keep government in check and responsive to taxpayers.
Arizona's spending habits mirror national trends. Now we have a duty to solve the budget woes without hurting taxpayers in the long run.
The tax cuts of the 90's did not keep up with the great economy surpluses. Over the past several years, the trend has been to sharply increase spending, creating new programs or expanding existing programs.
In fact, the budget grew from 1990 to 1999 by over 50 percent per capita, according to a study by Stephen Slivinski, director of tax and budget studies at the Goldwater Institute. Now that the economy is slowing down, spending sprees have lawmakers fearing fiscal crises.
Actually, even with the crisis we are not spending less; we are just stopping growth. If we just cut the budget to the 2000 level, we would almost break even.
Those who would blame the fiscal crises on tax cuts of the 1990's (mostly Democrats) ignore the fact that government has been increasing spending faster than it has been returning revenue surpluses to taxpayers. In fact about $2 of every $3 of surplus have gone into new spending, not tax reductions.
The problem is that Arizona is spending and taxing too much.
If spending had been kept down and increased at the rate of population growth plus inflation, we would have had a $675 million smaller budget going into 2002 and would not have had this crisis.
The spending spree was the result of a tidal wave of revenue that poured into the state treasury and lack of discipline on government's part to give it all back to those who earned it.
Now is the time to allow the voters to vote on restrictions on budget growth and enact the "Taxpayers' Bill of Rights" to control the growth of government-to allow it to grow the rate of population growth plus inflation.
There must be a better way to manage the growth rate of government. As the Goldwater Institute puts it, "services can be ascertained by the increase in the number of people that the state government needs to serve coupled with an adjustment for purchasing power of the dollar. In other words, a broad measure by which spending growth can be justified is the change in population and inflation."
Colorado has a very effective version of this type of spending limitation, the "Taxpayers' Bill of Rights," which won approval in 1992. TABOR amended the state constitution to restrict the growth of General Fund spending to population growth plus inflation.
TABOR also requires surplus tax revenue to be refunded to taxpayers. Spending limits can only be lifted for a year at a time by popular vote.
The success of TABOR has been astounding. Between 1997 and 2001, the Colorado government has refunded more than $2 billion to its taxpayers.
We must fix the budget problem by cutting spending and not through borrowing (bonding), gimmicks or tax increases. We must make responsible decisions that do not harm the taxpayer in the long run.
The so called "loopholes" are nothing but political speech by the left to raise taxes, by taxing services and products that have never, ever been taxed before. The liberals would thrust a greater burden on families and business than already exists.
Over 50 percent of a family's income goes to taxes. We desperately need a "Taxpayers' Bill of Rights."
State Rep. Russell Pearce is a Mesa Republican.