The TASC (Tax and Spending Control) initiative petition now being circulated is being supported by a broad-based coalition of voters looking for a way to control the growth of government. It would limit increases in state spending to the total of population growth, plus the rate of inflation. For example, if the state population grows 3 percent and the inflation rate is 2 percent, then government spending is limited to 5 percent more than the previous year. Any excess taxes collected are returned to the taxpayers, after setting aside a percentage for a “Rainy Day Fund.”
Petitions are being circulated now, and if enough signatures are gathered, the measure will be put on the November ballot. If it passes in 2006 and also in 2008, it will become an amendment to the state Constitution.
If we had passed a TASC amendment years ago, how would it have affected our state? Let’s take a look at some numbers. According to the National Conference of State Legislatures, state spending in Nevada increased by 147.5 percent between 1994 and 2005. If we had used the TASC limits (inflation plus population growth) the number would have been 93 percent. The other 54.5 percent increase in spending (therefore in taxation) was simply growth in government, whether increasing entitlement programs, paying for legislators’ pet projects or adding more layers of bureaucracy.
Who pays for this growth? Nevada doesn’t have a personal income tax, and there are limits to how much sales tax we are willing to pay. Whenever talk of raising taxes comes up in the Nevada Legislature, a recurring theme is taxation of the business community – let’s raise tax rates on gaming, pass a gross receipts tax, a payroll-based tax, or a special tax on one industry, as happened to the banks during the last session. Make no mistake about it – the business community will be the ones funding future growth in government – and then business will pass it on to their customers, the general public.
No wonder business people across the state are attracted to the idea of controlling taxes and spending. Many look to the example of Colorado, which passed a TABOR (Taxpayer Bill of Rights) bill in 1992. According to Paul Jacob of Townhall.com, “In the decade before TABOR, government jobs [in Colorado] increased by 21 percent and non-government jobs grew only 18 percent. But in the following decade, government job growth rate dipped slightly to 20 percent, while non-government job growth more than doubled to a whopping 38 percent.” Between 1992 and 2002, the average Colorado family paid about $16,000 less in state taxes than in the decade prior to TABOR’s implementation, and the Colorado economy improved in national rankings at the same time.
But, what about last November’s vote in Colorado? Opponents of TASC would like people to believe that the experiment has failed and that voters rejected the new system. Nothing could be further from the truth. When Colorado voters supported Referendum C, they were simply fixing a problem in the original law to make it more efficient.
Other states are looking at similar measures in an attempt to give control of spending back to the people, where it belongs. Initiatives in Maine and Oklahoma have already gathered enough signatures to place TABOR/TASC measures on their state ballots this fall. In addition to Nevada, five more (Michigan, Missouri, Montana, Ohio and Oregon) are going through the process of gathering signatures.
The Nevada business community should support any reasonable measure that restricts uncontrolled government spending, and that certainly applies to the TASC. Therefore, it was surprising to hear that the Las Vegas Chamber of Commerce recently took a position against it. Their reasoning had to do with the large liability represented by obligations owed by PERS (Public Employees Retirement System). Yes, it’s an unfortunate and troubling fact that the state retirement system owes much more than it can afford to pay its retirees. However, this should not affect the TASC initiative. In fact, it should serve as a good example of what happens when legislators are allowed free rein to spend our money and to obligate us for future expenditures.
Some people are afraid TASC will give Nevada less flexibility to raise funds for a real crisis. Here’s a reply from the initiative’s official Web site, tasc4nevada.com. “TASC’s spending limit formula will not ratchet backwards during a recession, and during recessions, shortfalls in revenue are offset from budget stabilization funds. In fact, TASC allows the government to do a much better job of preparing for tough times ahead. Without it, politicians have the ability to spend every penny that comes in the door. With TASC, they are forced to save, budget, and prepare in case there are tough times ahead.”
Save? Budget? Let’s give these revolutionary concepts a try. Perhaps the TASC initiative isn’t 100 percent perfect, but it is going 99 percent in the right direction. We’ve tried the other way of controlling state spending for over 100 years, and look where it’s gotten us.
The governor of Colorado recently wrote a column in defense of his state’s tax-control program, and posed a question we should be asking ourselves: “If families and businesses have to live within a budget, why shouldn’t a state? It’s a question the voters should be allowed to decide for themselves.” Now is Nevada’s chance to decide, and it’s up to businesses to lead the way.
The first thing to do is to sign the petition yourself, to ensure it gets on the November ballot. Then encourage other registered voters to sign as well. For further information on TASC, or to download a copy of the petition, go online to: www.tasc4nevada.com.
