Movement for State Spending Caps Picks Up Momentum

Published November 1, 2006

Millions of Americans across the country this November will have an opportunity to decide the course of their states’ financial future, opting for controlled government growth and financial responsibility … or business as usual.

That is the choice in a series of ballot initiatives known by a variety of names but sharing the aim of limiting growth in taxes and government spending.

While there are differences from state to state, all of the spending cap initiatives seek to limit annual state spending increases to the rate of inflation plus increases in state population, a measure known as P+I.

Following a P+I formula, the caps would not force a budget cut in real dollars in lean years. State governments would be able to spend at least as much in any given year as they did the year before. Excess revenue would fill reserve funds that would be used only during budget crises. Remaining excess revenue would be returned to taxpayers annually.

In many states, government is growing at a rate much faster than the economy. When aligned with the P+I index, government spending as a percentage of gross domestic product (GDP) would remain stable.

Initiatives Coast to Coast

The states where voters are considering spending caps are a diverse bunch. They range from Maine in the Northeast to Oregon in the Northwest and include Michigan, Missouri, Montana, Nebraska, and Oklahoma in between.

At press time, the Missouri measure was tied up in court, awaiting a ruling from the state supreme court on whether to put the measure on the ballot. In mid-September a tax and spending limitation in Nevada was struck down by that state’s supreme court.

“We are shocked that these big government union front groups were able to muscle their way past the will of the people,” said Bob Adney, executive director of the Tax and Spending Control Initiative (TASC) for Nevada. “Nevadans want TASC, and it shouldn’t be taken away from the ballot just because government unions and special interests will say and do anything to keep people from voting on this issue.”

While not everybody is a fan of imposing financial discipline on state governments, the various initiative efforts have quickly built momentum.

Petitions Well Received

“The measure has been received very well in Nevada,” said Adney. “We needed to collect 83,184 valid signatures to get on the ballot and we turned in 156,254. I think this shows just how popular the measure truly is.”

Scott Tillman of Michigan’s Stop Overspending Committee reported, “We had people lining up to circulate [petitions] and we had people lining up to sign.” His organization ultimately turned in 503,000 signatures when only 317,000 were required to achieve ballot status.

Likewise, Matt Evans, spokesperson for Oregon’s Rainy Day Amendment Committee, said, “the rainy day amendment is being very well received as we travel around the state discussing it. Oregonians recognize the need for the state government to be prudent, and set something aside for the inevitable ‘economic rainy day’ in our state.”

Oregon activists gathered 161,652 signatures–well beyond the required 100,840.

Government Unions Upset

Another common denominator among the spending cap efforts is the nature of the opposition. Evans characterized the main opponents of the Rainy Day Amendment as “the big government employee unions.”

Adney identified “the AFL-CIO and other government employee unions” as the major opponents in Nevada.

Tillman noted his main opposition was the Defend Michigan Coalition, which he described as “a coalition of people who spend tax dollars.”

The Defend Michigan Web site lists dozens of member organizations, prominently featuring both associations of government agencies and government employee unions such as the American Federation of State, County, and Municipal Employees and American Federation of Teachers.

NEA Spending Millions

Spending cap opponents have not been shy about committing major resources to the efforts to defeat the initiatives.

“The National Education Association recently pledged $2 million to defeating the Rainy Day Amendment,” said Evans.

“Our opponents have been brutal here in Nevada,” said Adney. “They’ve sued us every step of the way on everything they can throw at us. Also, they used ‘blockers’ during the petition gathering stage of the campaign. These were hired thugs that used intimidation, threats, coercion, slander, and even physical force to try to stop us. We finally had to ask a judge for a temporary restraining order against the group.”

Still, the campaigns report they believe they are winning the battle for public opinion.

Polls Encouraging

Before the Nevada Supreme Court’s decision to keep the TASC off the November ballot, newspaper polls showed the measure with a 54 to 59 percent approval rating with only 20 percent opposed and the rest undecided, Adney said.

“Our internal polling shows it in the 60 percent support range,” Adney said.

Michigan’s Tillman pointed to a recent newspaper poll that had initiative supporters “up by 10 points.”

Oregon’s Evans echoed his colleagues elsewhere, saying the Rainy Day Amendment enjoys a “substantial lead” in polling.

J.D. Tuccille ([email protected]) is a communications consultant for Americans for Limited Government.