Year after year states build their budgets around what they expect to raise in tax revenue for the upcoming fiscal year. This means that states budget revenue for programs and services with money they currently do not have. More often than not, their estimates come up short and politicians resort to further tax increases to pay for what they consider “shortfall.”

 

No where else do we see this kind of behavior. Individuals don’t budget and spend money they think they’ll have in the coming year. And if they do realize their estimates were wrong they don’t use force to extract money from other people to make up for their mistake.

 

Minnesota Governor Tim Pawlenty has a proposal that will solve over spending through constitutional amendment. The “Spending Accountability Amendment” will align government expenditures with current revenues. In other words, it would cap the state general fund budget at the level of revenue actually received in the previous two-year budget period. The advantages of this proposal are numerous: limiting state government spending, ensuring balanced budgets, and forcing lawmakers to prioritize limited resources.

 

Tax and Expenditure Limitations (TEL) such as this are effective tools to put the power of government back into the hands of taxpayers. Without these provisions, politicians have an unending desire for more programs and more spending that ultimately hurt the taxpayer and the economy.

 

In order to be placed on the ballot for consideration during the general election on November 2, 2010, the measure must first be approved by the Minnesota legislature, which is predominately controlled by Democrats.

 

Click here to view ATR’s press release.

It's good to see a politician acknowledge that, more often than not, governments can't help themselves: they love to spend money. Pawlenty's proposed amendment, though unlikely to pass, is a step in the right direction by putting the brakes on runaway spending.
>> PJP Tuesday, November 17, 2009 10:21 AM

I just don't understand why states can't be forced to only spend what they have in the bank. I mean, they should be aware by now that in a recession tax revenues are going to decrease, and they should save up some money in a rainy day fund or something--but not raise taxes on an economy that is already suffering. The way that I keep my personal books is to spend less than I earn, stay away from debt, live within my means, and save a little for a rainy day. Why is it different for the government?
>> Jacky Tuesday, November 17, 2009 11:16 AM

While it's good that it politicians are discussing sane financial practices, these measures are more important than that: they limit government. Making sure they don't raise taxes, making them think before they spend, etc., are all good, but it is fundamentally a good thing to put constraints on the growth of government.
>> Jeffrey Hosten Tuesday, November 17, 2009 11:25 AM