Center for Limited Government Newsletter – Oct. 13, 2011

1. Government Programs: Not the Only Way

By Edward N. Robinson

In the Utah Legislature, Representative Carl Wimmer has proposed HJR 37, which would enact a state spending growth limitation (the Government Spending Amendment, or GSA) in the Utah Constitution and which he will be pursuing in the 2012 legislative session.

In creating this proposal with the help of Sutherland Institute, both he and Sutherland are aiming to give the Legislature freedom to fund all of Utah’s critical governmental needs and to change its priorities as the people desire; and also to require the Legislature to stockpile rainy day and emergency funds so that economic downturns don’t have to lead to immediate serious cuts in core governmental services.

On the other side of the equation, we’re trying to be sure that, in boom times, the state doesn’t use new tax revenues to grow government just because money is available, thereby creating new dependencies, and new burdens when cutbacks occur in lean times.

Our proposal basically says that the Legislature can increase government spending in any year based only on changes in the cost of living and in population. If growth in tax revenues exceeds that year’s spending growth limit, then the excess must go toward paying off government debt or into rainy day and emergency funds to protect against negative consequences from natural disasters and revenue shortfalls in future years. If those savings priorities have been fulfilled, then any remaining revenues would be split between critical infrastructure needs and taxpayer refunds.

As with many serious issues, a spending limit requires compromises. In the past, the Legislature could create lots of new programs in boom times without having to cut back on old programs. That will no longer be possible. But the Legislature can still decide that a new program is more valuable than a specific old program, and cut the latter in order to create the former.

Seeing this impact from a spending limit, some have argued that it means that we will no longer be able to solve social problems. In other words, the argument goes, if we are no longer spending large amounts of taxpayer money on new government programs, community ills will simply continue to plague society. But this contention rests on the false assumption that the solutions to social problems must come from the government, and ignores an alternative, better way: the free market and private institutions of civil society.

Before our governments became as socially active as they are today, many social problems were solved by private actions. For example, individuals helped their families, and both supported charities that helped other people in various kinds of need. This approach had the advantages of being voluntary and allowing for competition between charities to find the best solutions to problems. Its biggest limitation was that the charities sometimes weren’t funded well enough to solve fully the social problems at issue.

We are, in general, more affluent today than we were before the government became so socially active, meaning there are more resources for the private sector to draw upon for both charitable and non-charitable solutions to social problems. Further, the reduction in taxes that would eventually result from the GSA would give families and businesses additional disposable income, making the private sector an even more viable source for solutions to social problems. Finally, even with a GSA, there would be a role for public policy in helping to encourage and coordinate private sector activities in order to maximize their effectiveness.

The free market and the private institutions of civil society are the source of genuine solutions to social problems, and in many cases are the only place to look for real solutions. When the free market, families, individuals, businesses, charities, and religious institutions work to solve community problems, they do so without creating the problems of inefficiency and government dependency that run rampant in most government-driven “solutions.” Further, they most often seek to preserve the freedom and individual liberty on which they depend for their existence, rather than restrict it as government “solutions” so often do. In a state like Utah, which boasts some of the highest rates of volunteerism and charitable giving in the nation, the prospect of private sector solutions should be one of hope, not concern, for citizens.

Certainly, the free market/civil society alternative would require additional effort from citizens and private civil institutions. But the preservation of freedom and liberty has never been easy. Once we get people thinking about it, they’ll realize that lots of voluntary, market-driven efforts to solve social problems will be more effective than any single government-imposed “solution,” especially since such government “solutions” are rarely measured subsequently for success or efficiency, and they frequently create their own host of problems. It will probably turn out that we can solve more social problems, and at a lower cost, once we get the government out of that business. Wouldn’t that be something – people spending less on voluntary charity than they used to spend on mandatory taxes, and yet accomplishing more in the social arena!

The author, Edward N. Robinson, is director of Sutherland’s Center for Limited Government.

2. Limited Government = More Jobs, Higher Incomes, Better Services

By Derek Monson
Would you support an amendment to the Utah Constitution that means thousands more jobs for Utahns, lets Utah families keep more of their income, and ensures that important state government services are prepared for natural disasters or emergencies?

An amendment to enact reasonable limits on growth in state government spending, based on growth in population and inflation, would deliver exactly that.

Based on an academically peer-reviewed research article authored by Sutherland Institute policy staff and recently published in the scholarly journal Public Budgeting and Finance, enacting such a government spending amendment in 1990 would have given Utah families an extra $2,663 in 2009, from better economic performance and tax rebates. This amount of money is equivalent to an extra month’s pay for a new public school teacher in Utah at the average beginning teacher’s salary. Cumulatively between 1990 and 2009, the average family of four would have had more than $31,115 in extra income – enough for four years of college at the University of Utah, with almost $4,000 to spare. …

To read more of this post on the Sutherland Daily blog, click here.

3. Utah’s Fuel Act: Helping Gas Stations at Your Expense?

By Alexis Young
Many people – citizens and lawmakers – would think it ridiculous for government to prohibit R.C. Willey from giving away hot dogs and soda Saturday mornings as an enticement for passers-by to look at furniture. They might also object to a prohibition on pedicure discounts designed to get women into salons to buy top-grade nail polish.

For some reason, though, many of these same people do not object to a law that forbids gas stations from giving similar direct discounts to Utahns on gasoline. When it comes to cheap gas, they are fine with telling business owners what they can and cannot do – directly impacting the wallets of Utah drivers.

Since the Utah Legislature is considering whether to reauthorize a law that attempts to control gas prices (the Motor Fuel Marketing Act), we interviewed several people who voiced their opinion on whether the Legislature should renew the law or repeal it. Watch our video report to find out what they said …

4. A Herd of Timid and Industrious Animals

By Dave Buer
Nearly two centuries ago, French historian and political philosopher Alexis de Tocqueville described a potential future state that is a strikingly accurate description of our current era:

I would like to imagine with what new traits despotism could be produced in the world. I see an innumerable multitude of men, alike and equal, who turn about without repose in order to procure for themselves petty and vulgar pleasures with which they fill their souls. …

To read more of this post on the Sutherland Daily blog, click here.

5. Forging Consensus on Immigrants in Mountain West

Leaders from business, law enforcement, faith and government plan to meet Wednesday, Oct. 26, at the City Center Marriott in Salt Lake City to discuss the importance of immigration and immigrants in the Mountain West. Participants will come from Colorado, Wyoming, Idaho and Utah to develop a common understanding of the issues. Speakers will include Utah Attorney General Mark Shurtleff and the Most Rev. John C. Wester.

For more information, click here. For questions or to RSVP for this event, please or call Maria Castro at 202-383-5994.