1. The Wisdom of a Government Spending Amendment
By Ed Robinson
The Utah Legislature considered this session whether to put on the November ballot a government spending amendment (GSA) to the state constitution. It would limit each year’s state government spending of our tax dollars to what was spent in one of the previous five years (year to be chosen by the Legislature), plus or minus percentage changes in population and inflation. The Legislature would be allowed to exceed this limit only via a 60 percent majority vote. The GSA would also require that revenues that exceeded the spending limitation amount in a given year be put into various contingency funds, so that the state could more easily weather the economic downturns that occur regularly. After those funds were filled to the levels set by the Legislature, any remaining excess money would be returned to taxpayers.
One of the major underlying goals of the GSA is to restrain special interests from influencing legislators toward spending whatever they have on hand in boom times, even if doing so creates a virtual certainty that the new expenditure levels will be impossible to maintain in weaker economic times. This untenable position leads to great disruptions for those who have become dependent on such expenditures, often when they need them the most. By tying this restraint goal to the mandated contributions to the contingency funds, the GSA should both limit the growth rate of government spending, and moderate the negative effects of downturns on the beneficiaries of government spending.
There are numerous other benefits to having a GSA in place. Today, I’d like to address a conceptual benefit to the discussion of the GSA. One tactic of the opposition is to focus on the limitations put on the Legislature by the GSA as the government tries to fix whatever problems it perceives to need fixing. It’s amazing how we, as a society, have come to view our governments as the proper source of fixes for problems, whatever those problems may be. Maybe it’s time to revert to an earlier, foundational, American view of our governments.
Maybe we should accept that we as individuals, families, and members of communities should bear the responsibility for fixing most problems, either acting alone or through voluntary organizations (charities, churches, community groups, etc.). Not only does that approach put the solver closer to the problem, but it also creates a marketplace of sorts, in which entities strive to find the best way to solve the problem, growing if they succeed, and closing their doors if they fail. Compare that with government programs, which virtually never go away, whether they succeed or not. In fact, how many government programs even try seriously to measure success?
In addition, virtually everyone from conservative to liberal agrees that government isn’t very effective or efficient at most of the things that it tries to do. Why then ask an inefficient and ineffective institution to do things that other entities can do better? If the thing needing doing is something that only a government can do, and it needs to be done by someone, then let the government fund the activity, but have it performed by private enterprise where possible, with different entities competing for the business of providing the necessary service, so that both the taxpayers and the beneficiaries of the services get the benefit of the innovation and lower costs that come from competition.
Let’s hope that the GSA gets passed next year by the Legislature, and eventually by the voting public, and that the related discussion gets us all refocused on the proper role of government.
To see a video of the Senate floor debate on SJR 22, click here.
The author, Edward N. Robinson, is director of Sutherland’s Center for Limited Government. He has been a financial adviser to corporations, a senior executive, and a management consultant. Prior to retiring in 2006, he operated Robinson Partners, consulting CEOs on corporate strategy and mergers and acquisitions. Before that, he was an executive vice president of Texas Commerce Bank (later Chase Bank of Texas and now JPMorgan Chase), where he ran the investment banking business, and then created and ran The Private Bank; was an executive director at Azurix, an international water utility business, responsible for corporate strategy and M&A; and was a managing director at First Boston (now Credit Suisse), running the firm’s Los Angeles office and the regional M&A practice. Mr. Robinson has a B.A. from the University of Michigan and a J.D. from New York University School of Law.
2. 2012 Legislature Wrapping Up Today
This year’s legislative session concludes later today, and the fate of a number of bills is unknown at this time. Check our blog tomorrow at http://www.sutherlandinstitute.org/news/ for updates on important legislation that Sutherland has been following.
3. Capitol Daily Video: Parental Rights and the State
By Alexis Young
Representative LaVar Christensen (R-Draper) sponsored a bill that would affirm parental rights and help prevent the state from unnecessarily removing children from their homes. The House and Senate passed HB 161. Watch this video report to learn more about the bill.