BackboneAmerica

By Bill Moloney

States with constitutional and/or statutory restraints on taxing and spending have strong financial foundations because those restraints greatly militate toward the positive business climate and robust economy that invariably generate increased revenues across the board.
Colorado, which has had such restraints since 1992, is a prime example of their great benefits. California — today having the nation’s most disastrous state economy — once had such restraints but cast them aside some years ago and consequently has become the poster child for what happens to states that fall into the trap of unrestrained taxing and spending.

Editor: Last week, contributor Bill Moloney took the TABOR success story on a speaking tour of Maine, where taxpayer advocates are fighting for passage of a similar amendment on Nov. 3. Here is the rest of his message from that trip:

Prior to my decade as Colorado’s Education Commissioner I served as a senior school administrator in five other states-Massachusetts, Rhode Island, New York, Pennsylvania, and Maryland- and in all of them had extensive experience regarding the interplay of taxation and spending and how they impacted the financial health of my district, and the state as a whole. These experiences over thirty years in rural, suburban, and urban settings led me to the firm convictions stated above.

In a nation wracked by recession, ballooning budget deficits and soaring public debt the issue of fiscal restraint has an urgency greater than at any time in our history.

Attempts to promote fiscal restraint through constitutional or statutory means however have been a guarantee of bitter political conflict in every state they have occurred.

An ordinary citizen might ask: “Who would be against fiscal restraint, particularly in these perilous economic times?”

The answer is: All special interests that profit greatly from unchecked taxing and spending, most prominently giant labor unions like the National Education Association (NEA), and the Service Employees International Union (SEIU).

The main tactics of these special interests opposing efforts at fiscal restraint are always the same i.e. Predict devastating hardship if voters or legislators irresponsibly support mechanisms of fiscal restraint, and flood the state with money from their national organizations to be spent on saturation media advertising, direct mail etc. aimed at scaring people about the dire consequences of any legal barriers to unchecked taxing and spending.

The dire consequences are skillfully invented and invariably include impoverished schools (“This will hurt the little children”) and the disappearance of critical public services like Meals on Wheels (“This will hurt the poor senior citizens”).

These tactics are the equivalent of resisting restraints on a local school budget by threatening the abolition of the band and the football team. Amazingly when citizens restrain the budget anyways the band and the football team somehow survive thus exposing the scare tactics as just that.

In 1992 when Colorado voters were presented with a constitutional amendment- Taxpayers Bill of Rights(TABOR)- to limit the growth of state revenue and spending to the sum of inflation plus population growth they were bombarded with special interest media advertisements predicting a doom and gloom economic future if TABOR passed.

When the voters went ahead and passed TABOR not only did the “dire consequences” fail to occur but instead Colorado entered a period of economic growth and prosperity unequalled in its history.

Since 1992 Colorado has gone from a boom-and- bust-prone economy overly dependent on the energy industry to one that is much more stable, balanced, and diversified. This rapid transformation derived from the state’s growing reputation as a low tax business and investment friendly environment that was generating economic opportunity for companies and citizens alike. A particular success story was the burgeoning high tech industry that ironically owed much of its rapid growth to companies fleeing Silicon Valley owing to California’s steady undermining of those very same fiscal restraints that had been a model for Colorado’s TABOR law.

Among the principal beneficiaries of this new prosperity were the schools of Colorado which had known wide spread hardship during the energy industry bust of the nineteen eighties. After 1992 school district revenues surged owing to the growth and job creation fueling local and state prosperity in the wake of TABOR.

Today following the national economic meltdown of 2008 Colorado is facing the same kind of severe challenges as every other state. However, absolutely none of those challenges are traceable to TABOR.

On the contrary because of the enduring benefits of TABOR Colorado’s economic challenges are markedly less than most other states, and disproportionally less than those states-like California- which have ignored the clear track record and economic wisdom of fiscal restraint.

William Moloney was Colorado Education Commissioner,1997-2007, and is now an international education consultant as well as a Centennial Institute Fellow. His columns have appeared in the Wall Street Journal, USA Today, Washington Post, Philadelphia Inquirer, Baltimore Sun, Rocky Mountain News and the Denver Post. His e-mail address is moloneyvision@aol.com