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Thursday, April 20, 2006

TABOR: Back to the beginning

While the left Cheddarsphere is trying to hold back our giddy giggles about Wisconsin Republicans' tax-amendment coalition's falling apart, it's important to take a step or two back to the beginning, and remember why any TABOR-like amendment is a bad idea in the first place.

What it is
Every version of TABOR, from the original Taxpayers' Bill of Rights to the TP Amendment to the other 32 flavors of amendment (every Republican seems to have his own, now), would place a section into the state constitution that would limit, for all units of state and local government, increases in spending or revenue (or both) to the size of the increase of inflation, personal income, growth, or some combination thereof. If it sounds complicated, it really isn't: Legislators basically want to peg one number (and whether they call it "spending" or "revenue" you, the voter, are supposed to hear "taxes") to another, unrelated number. They want to create a constitutional correlation where no such correlation currently exists.

It is, in short, a gimmick, an election-year sop for the masses. It is not based on anything more than a desire to capitalize on well-founded tax dissent in this state for political gain.

You know it's a gimmick because the amendment is not derived from sound policy, history, or experience. Nowhere in these United States has TABOR or TABOR-like legislation been an unqualified success. In Colorado, for example, TABOR so damaged the state's schools and infrastructure that in 2004 voters finally revolted against the arbitrary limits. The 8-page TP Amendment (try squeezing that on the ballot!) is so cumbersome in part because its authors tried to account for every flaw ever pointed out by anyone from previous versions, including lessons supposedly learned by Colorado. Our legislators can't tell you--ask 'em!--what state we should model our TABOR-style amendment after, because no such state exists.

Where it's from
I've written about this before, but it bears repeating. The genesis of TABOR and like movements around the country is not grass-roots tax revolt. Rather, the origins lie with ALEC. Some of the links are dead in that two-year-old post I linked to, but there is plenty to Google up about ALEC. ALEC is the American Legislative Exchange Council, an outfit whose sole purpose is to sell model legislation to its members--state and local lawmakers--who then try to get those bills passed at home.

This may not sound much different from any other lobbying organization, but it is. It's like lobbying in reverse, as ALEC members--state and local lawmakers--have to pay them for legislation, not the other way around. You might wonder why any legislator would want to be on that end of the stick, but it's really very simple: Consider who pays more.
Corporations influence ALEC because they foot a large part of the bill and they dominate the information flow. While legislators pay only $50 for a two-year membership, ALEC's 300+ corporate sponsors pay annual membership dues ranging from $5,000 to $50,000.
The list of corporate sponsors is enlightening, as well:
ALEC is supported by many right-wing foundations and organizations, including but not limited to: National Rifle Association, Family Research Council, Heritage Foundation, Sarah Scaife Foundation, Milliken Foundation, DeVos Foundation, Bradley Foundation, and the Olin Foundation.

ALEC has over three hundred corporate sponsors. Some corporations and trade groups that have strong ties to ALEC include: Enron, American Nuclear Energy Council, American Petroleum Institute, Amoco, Chevron, Coors Brewing Company, Shell, Texaco, Union Pacific Railroad, Pharmaceutical Research & Manufacturers of America, Phillip Morris, R.J. Reynolds Tobacco, others.
So it makes sense that
ALEC has proposed that many public services be taken over by for-profit private businesses, including schools, prisons, public transportation, and social and welfare services.

One of ALEC’s central concerns is government regulations of businesses, especially regulations that protect the environment and/or public health.
I could go on about ALEC, but that's not the point of this post. Just ask yourself, if TABOR and its ilk originated with a group like ALEC, whose interests were really at heart when the idea was hatched? Probably not yours.

Why it won't work
Any TABOR-like amendment, whether it explicitly limits spending, or limits spending by limiting revenue, places a cap on how much state and local governments can buy. This is bad for a variety of reasons, but the real danger lies in how that cap is derived.

As I said above, the amendments try to peg the one number--spending or revenue--to another, unrelated number. Whether that second number is the rate of inflation, rate of growth, or rate of increase to personal income (or even a combination), that second number does not and cannot accurately reflect what state and local governments spend money on. Inflation, for example, is determined by changes in the consumer price index (CPI), which is based on the kinds of goods and services people buy, not what governments have to pay for. The rate of growth does not always reflect the cost to local governments to support that growth (building a new school, for example, or extending utilities and roads).

Government's primary expense, though, is people. Consider the fortunes of Milwaukee County. We are in trouble here not because our parks are so expensive or because the buses are too shiny, but because the cost of employing people keeps going up. Whether that cost comes from unfunded pension obligations, the staggeringly expensive health care market in Southeast Wisconsin, or the need to pay better to attract better workers, there is no question that the price of keeping a steady workforce increases faster than any of the numbers a TABOR-like amendment would allow Milwaukee County to follow.

Consider also the Milwaukee Public Schools. The district has declining enrollment, mothballed buildings, and a shrinking staff, but every year its budget is bigger. Why? Because people cost more than a gallon of milk or a pack of cigarettes. Period.

And herein lies TABOR's (and all of TABOR's derivatives') biggest weakness: It is backwards.

TABOR and its ilk do nothing to control costs. If the cost to provide the same level of service increases faster than the artificial revenue or spending limits, then state and local units of government are forced into a lose-lose proposition: Either cut the level of services they provide, or cut the rate of pay to those providing the service. How little can we pay Milwaukee County bus drivers before we can't find any to hire? Before the ones we can find to hire stop being safe?

In their alternate to the TP amendment released yesterday, State Senators Sheila Harsdorf and Ron Brown recognized a key factor in all of this: health care. Yet every attempt to control the costs of health care at the state level in recent years has been stymied by the same people who now insist that constitutional limits are just the ticket for what ails your wallet. For every post on a conservative Wisconsin blog supporting the TP amendment, you can probably find just as many dismissing the Gielow/ Richards health care plan as socialized medicine.

How we can fix our problems without it
For one, we can stop electing people who insist that they can't control their own spending without a constitutional amendment. For another, the state can act to decrease costs of health care. For a third, stop passing insane tax loopholes like this.

But more importantly, the state needs to look at taxes--who we tax, how, and how much. Because, let's be honest, when we talk about high taxes in this state, we are almost always talking about the property tax. Because we have below-average sales tax, and because we have below-average per capita income to tax, and because we have low corporate and business taxes, the property tax carries us. See the chart below, from this state report (.pdf), for example.

After finding ways to hold down costs, we need to look at tax fairness in Wisconsin. That discussion will never happen in the current climate of gimmicky fixes and party in-fighting.

It's time to change the legislative leadership in Wisconsin and have a real debate about the costs of governing and the best ways to pay for them.

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