TABOR bill: Trick or Treat?

I never imagined I’d see the day when Pennsylvania’s most liberal Democratic state Senators would quietly vote for a bill that’s a dream come true for Grover Norquist and the Club for Growth. But that’s exactly what happened this week, when two bills cleared the state Senate known as “TABOR” or taxpayer bill of rights.

While the title is as mom-and-apple-pie as it gets, TABOR is fiscal policy at its worst. TABOR locks the state into spending caps that may not be realistic to meet the state's current obligations to citizens, let alone respond to future needs.

Click "read more" below to find out why TABOR is so bad.

TABOR uses a complicated formula to set the state spending limit, and could lock us into tight budgets even when there's plenty of tax revenue to go around. A similar law on the books in Colorado since 1992 has devastated state services. For example, Colorado has over 80,000 children that are eligible for the state's Medicaid program, but they can't enroll them because of spending limits.

And funding for higher education in Colorado has been devastated because of TABOR. In fact, experts predict that Colorado public universities will not receive one dollar in state assistance by the end of the decade. These kinds of cuts in higher education funding for public colleges over the last few years has led to tuition increases of an average of 31% for Colorado students.

The Center on Budget and Policy Priorities, a Washington D.C. fiscal policy think tank, published this excellent report (click here) on the negative impact TABOR’s had in Colorado.

What's so frustrating is that Colorado officials have money to fund better health care for children, or support higher education at public colleges. But TABOR forbids them to use it. Instead, they have to send the money back to taxpayers in the form of rebates -- even as taxpayers are calling for better state services.

That's not smart fiscal policy. When citizens don't have access to health care, it costs us all more in the long run as we pay for more expensive emergency care. When students can't get a quality education, they lack the skills to be employable, or leave the state for good. When government can't respond to needs for new services -- such as spending on homeland security or to prepare for a potential natural disaster -- we put ourselves at great risk.

And when the public supports spending tax dollars on important programs or services, their elected officials should be able to respond. But TABOR ties their hands.

Colorado officials and experts are now calling TABOR a mistake. Even Colorado Governor Bill Owens -- one of the most ardent supporters of the law -- is asking voters to approve a ballot measure there this week to suspend TABOR for a few years to get the state back on track. Quoted on NPR’s All Things Considered (you can listen here), Owens said “The only way to save TABOR is to abandon it temporarily. Tabor will break in the next few years.” A large coalition of organizations has joined Owens in urging voters to approve measures C & D this Tuesday

So, even though one of the most conservative Republican Governors in the nation acknowledged that he can’t run his state with TABOR policy in place, every single Republican and Democratic state Senator in Pennsylvania voted to approve an almost identical policy. And Governor Ed Rendell has not decided whether or not he’ll sign the measure.

Our state government can do a better job of spending our tax dollars more wisely. But the best way to save money is to cut special interest subsidies that are awarded to politically connected corporations, close corporate tax loopholes that benefit a few large corporations at the expense of everyone else, and eliminate wasteful perks used by some politicians. Locking the state into a spending cap won't end those subsidies, but will pit public services against each other.

The two TABOR measures passed this week are virtually identical, but one (Senate Bill 884, which passed 42-8) would take effect immediately. The other, Senate Bill 4, would amend our state's constitution to include the rules and passed 50 - 0. Also outrageous is that the public had no opportunity to comment on these measures, as no public hearings were held, and the bills were rushed through in a matter of hours.

The House may consider TABOR bills as early as Monday, October 31st. House members and the Governor must understand that TABOR is a frightening policy, and will only leave taxpayers holding the bag. That’s no treat.

This post was written by Beth McConnell, Director of the PennPIRG Education Fund, www.pennpirg.org. You can contact Beth at mcconnell@pennpirg.org

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