John Buell

Taxpayer Bill of Goods

Across the country, right-wing groups are in the process of mounting state-level initiatives to impose a straitjacket on state governments' ability to tax and spend.

Maine citizens will be asked this fall to vote on a so-called Taxpayer Bill of Rights (TABOR). TABOR is an attempt to respond to the anxieties many working- and middle-class citizens have regarding the burden that property and income taxes place on them. Nonetheless, this measure reduces the art of fiscal management to a simple formula and in the process deprives these same citizens of fundamental democratic rights. TABOR needs to be rejected, but at the same time progressive forces need to do a better job explaining why the burdens on state and local government are growing and what steps can be taken both to reduce demands on the state and to redistribute this burden.

If enacted, TABOR would impose a set of fixed limits on taxation and spending by the state, municipalities and school districts. For the state this formula is the change in population and the Consumer Price Index, a national average for inflation. For municipalities the formula is change in population and inflation or the change in assessed value, whichever is smaller. For schools this formula is the change in inflation and enrollment. These requirements could be waived, but only if legislatures or town councils first override them by a two-thirds majority and then submit them to a referendum.

The requirement that local governments limit growth in spending and taxation to population increase and inflation seems appropriate until we take a closer look at these concepts. Changes in the composition of a population can be more significant than changes in mere numbers. A population that shows little change in total numbers but has a dramatic increase in the number of very young or aging residents will require more spending just to retain the same level of expected services.

More broadly, this seemingly benign fiscal formula imposes severe limits on state and local governments in the face of dramatic changes in circumstances. Hurricanes and ice storms impose substantial unexpected burdens on governments. TABOR's provisions for overriding limits are cumbersome and antidemocratic. TABOR advocates claim that it is more democratic to impose tax increases through a referendum than through actions by town councils or state legislatures. Yet even before a referendum can be initiated, a two-thirds vote must first be achieved, thereby allowing a minority to block the process. Just as fundamentally, it is hard to picture referenda in Maine as more democratic than our elections for the state legislature. Campaign finance reform has not been perfect in Maine, but it has gone a considerable way toward leveling the playing field. Referenda can play an important role in the democratic process, but they are no substitute for campaign finance reform. Money plays too large a role in the politics of most states, but TABOR only makes it easier for well-heeled minorities to achieve their ends.

Those inclined to back proposals like TABOR might want to consider the following hypothetical. Imagine that a group of bleeding-heart liberals were somehow to take over state politics and impose its own Welfare State Protection Act. This act would forbid any representative body from cutting funding of a state program without first securing a two-thirds vote and then submitting the bill to referendum. I believe that even many TABOR advocates would see the antidemocratic implications of such a proposal.

Rather than trying to limit spending to imperfect and rigid formulas, citizens should take a closer look at why some of these government burdens seem to grow. As an example, Maine faces growing costs for Medicaid, transportation and home heating assistance. Yet Medicaid, which covers some of the health costs of our elderly as well as our poor, grows in costs in part because increasing numbers of citizens have received inadequate care in the years leading up to their eligibility for Medicare, which itself has gaps. A federal program of Medicare for all ages would reduce both the total social burden of health costs and relieve one of the biggest burdens on state spending.

Unfortunately, however, many of the advocates of state fiscal straitjackets have also managed to impose massive cuts in spending and taxation at the Federal level, leaving major Federal deficits and immense pressures to reduce federal contributions to a range of discretionary state programs. Tax cuts, reductions in many discretionary Federal programs and massive growth in military spending have left us with an extraordinarily weak economic recovery, pressure to reduce federal spending even more and major shortfalls in aid to state governments. Progressive taxation, more easily achieved at the Federal level, combined with expanded federal assistance for conservation, transit alternatives, education and childcare would create jobs, make our states and federal economy more productive and lift some of the burden from local taxpayers.

These steps, however, remain at least an election or two off, but in the meantime TABOR would only make us a less democratic community. It addresses symptoms rather than root causes and will end up making the patient worse.

John Buell lives in Southwest Harbor, Maine, and writes on labor and environmental issues. Email

From The Progressive Populist, October 15, 2006

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