The case for a government spending amendment

 

Utah state government, as measured by government spending, has grown dramatically over the last several decades. This growth habit is easy to see when comparing growth in inflation-adjusted state spending to growth in state population – real state spending has grown nearly five times as fast as Utah’s population since 1953 (1,432% vs. 296%).1

In more relatable terms,

  • Forty-two years ago (1969), the median-income Utah household would have needed five years to earn what the Utah state government spent in one hour
  • In 2010, the median-income Utah household required 25 years to earn what the state spent in one hour – a five-fold increase
  • By comparison, Utah’s total population grew only 2 ½ times over that time span

For those who value freedom and limited government, this is a disturbing trend. As government grows in size and scope, it means Utahns have less money to support their families; employers have less money to grow their businesses; and government programs usurp the roles of important social institutions such as the family, religion and local communities.

In addition, despite many good years of tax-revenue surpluses, state and local governments are regularly caught un­prepared for hard economic times, creating real, human costs. Recently, the small city of Morgan, Utah, cut its police protection in half; Jordan School District laid off 200 teachers and increased class sizes; and state government cut funding to state health care services that families in extreme need depend upon. In each case, the spending cuts resulted from an overextended government facing hard economic times.2

To further illustrate,

  • During the dotcom/post-9/11 recession, revenue shortfalls forced the state to cut spending by $346 million in 2010 dollars – roughly the cost of providing a 32GB iPad to every one ofUtah’s 576,000 public-school students
  • The current recession has forced more than $1.5 billion in spending cuts (2010 dollars) – the cost of purchasing a 32-inch LCD flatscreen TV and Blu-ray player for all 2.8 million Utahns, with change

Of course, government should not buy flatscreen TVs and iPads for everyone, but the point is that the cost of overextending government with dramatic spending increases is significant. Fortunately, policymakers do not have to settle for the “dramatic growth/draconian cuts” pattern of government spending. There is a better way.

In order to protect Utahns’ freedom from dramatic growth in government, and to create stability in government services that Utahns depend upon, state policymakers should amend the Utah Constitution to limit growth in state government spending to inflation plus growth in population. The amendment creates stability in important government services by holding back spending in good economic times, with a requirement that most surplus tax dollars be saved to be used during recessions and for natural disaster recovery.

The amendment should contain provisions to make the policy workable, such as provisions to: (1) increase government spending beyond the growth limit if there is a broad legislative consensus (more than a simple majority) to do so, and (2) give special consideration for things like critical infrastructure needs and the need for a public safety net during economic downturns. Further, in recognition that all tax dollars belong to taxpayers, not government, the amendment should require that a portion of surplus tax dollars be returned to Utah taxpayers.

Peer-reviewed, scholarly research shows that such a government spending amendment will smooth out the peaks and valleys of Utah’s current government spending policies. As shown in the chart below, with a spending amendment in place, state spending since 1990 (blue line) would have grown at a stabler pace compared with the rise and fall of actual spending (red line). In addition, there are many economic benefits for working Utah families from such a policy.

By enacting such fiscally responsible policies, which rein in state government spending growth in good years and save for hard times, Utah lawmakers will protect Utahns from arbitrary economic winds that harm families and communities. Further, they will ensure that Utah remains one of the best-managed states in the nation.

For more information about Sutherland’s government spending amendment proposal, see this webpage.


1 For citations and more information on how dramatic increases in government spending hurt Utahns, see Smoothing Out the Peaks and Valleys

2 For citations and more information illustrating government growth in Utah, see Taming the Beast of Government Spending

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