Like Water through a Broken Dam

Posted on May 23, 2005
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Politicians often blame budget imbalances on revenue shortfalls, arguing that taxes fail to bring in the dollars to pay for the government services they claim are essential.

Yet at virtually all levels, money flowing into government coffers is growing by leaps and bounds. Whether at the county level (Coconino County, for instance, has seen a 9 percent increase in general fund revenues this year), the state level (according to the Arizona Republic's Robbie Sherwood, "state revenues are flowing in like water through a broken dam") or the federal level (where revenues in the first seven months of fiscal year 2005 climbed by 13.6 percent according to today's Wall Street Journal), government is hardly suffering from an "income" problem.

Experience and history show that politicians, faced with thousands of competing interests who lobby the government for each of their "essential" services, will spend whatever money comes in the door.

And that's the rub. Special interests have an incentive to pay lobbyists to spend weeks at the legislature to make sure they get their piece of the pie. But the average taxpayer, working to earn a living and raise a family, hardly has the time or incentive to make a case against each and every special interest budget item.

So expenditures increase, and next year the tax burden grows with it.

There's hope, however, in the form of a Taxpayer's Bill of Rights. Passed in Colorado in 1992, the constitutional amendment allows the budget to grow, but only in proportion to inflation plus population growth. That has given Colorado economic strength. Between 1995 and 2000, Colorado ranked first in the nation for gross state product growth, and Colorado taxpayers have received over $3.2 billion in tax refunds. Had Arizona enacted a similar measure in 1992, taxpayers would have received $4.5 billion in rebates.

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