Cutting up the state credit card

With Tax Day in five days (it's April 18 this year because April 15 is Emancipation Day in the District of Columbia), the Tax Foundation does a valuable service with its TABOR Calculator -- a calculator that compares what state and local spending would have been like with a Taxpayer Bill of Rights instead of our current flood of red ink.

The TABOR calculator computes actual spending vs. spending limited by one of the common spending limits -- the inflation rate, inflation plus population growth, inflation plus a percentage, inflation plus population growth plus a percentage, and growth in nominal gross state product.

Data is available since 1977, and that year is instructive because the late '70s were the last time the state's per capita income growth exceeded the nation's. So what would have happened to state spending had state and local governments followed the state Constitution's dictum that “The blessings of a free government can only be maintained by a firm adherence to justice, moderation, temperance, frugality and virtue, and by frequent recurrence to fundamental principles”?

Actual 1977–2009 state and local government spending: $1.09 trillion.
1977–2009 spending limited to gross state product growth: $963.2 billion, 11.63% less than actual spending.
1977–2009 spending limited to inflation plus population growth: $820.8 billion, 24.7% less than actual spending.
1977–2009 spending limited to inflation: $745.5 billion, 31.62% less than actual  spending.

How about during the last two of the Jim Doyle years, 2007 to 2009 (the last year for which data is available), when Doyle had a Democratic-controlled Legislature for the last year?
Actual 2007–09 state and local government spending: $49.1 billion.
2007–09 spending limited to gross state product growth: $48 billion, 2.24% less than actual spending.
2007–09 spending limited to inflation plus population growth: $48.5 billion, 1.22% less than actual spending.
2007–09 spending limited to inflation: $48.3 billion, 1.63% less than actual spending.

It should be noted that the spending levels are underreported because, as noted yesterday, of this state's heavy amount of state and local government debt. (Debt leads to debt service spending, which leads to future taxes.) Nevertheless, to paraphrase what U.S. Sen. Everett Dirksen (R–Illinois) supposedly said, a billion here and a billion there, and you can have much lower tax levels than our fourth highest state and local taxes in the U.S.

Imagine where our state would be if people and businesses had had another $269 billion in their pockets over the past 30 years. Imagine what our business climate would be with, over the past three decades, 25 percent lower taxes. Imagine the budget deliberations in Madison when the usual suspects clamoring for more spending are told that, sorry, the Constitution says spending can increase only 1.22 percent next year, so where would you suggest we cut to accommodate your spending increase request?

When TABOR first came up in Wisconsin (and damn the state GOP for not enacting it into law), I initially thought it made sense to tie government spending to gross state product, which could be termed the state's ability to pay. I instead believe that spending should be tied to inflation (the increase in the cost of things) plus population growth (which leads to increase in demand for government services), because the function of government is to perform government services, not grow based on the taxpayers' ability to pay for government services.

I have no doubt that our state's economy would be better off with TABOR in the state Constitution. Since no facet of our state's quality of life is attributable to government, I have no doubt our state would be better off with TABOR in the state Constitution.