Ohio Groups Push for Limitation on State Taxes and Spending

Published June 1, 2005

A determined group of Ohio citizens, led by Ohio’s Secretary of State, is moving forward with an effort to take a tax and expenditure limitation (TEL) measure directly to the voters.

The push for such a measure in Ohio began in 2002, when the Columbus-based Buckeye Institute released an article suggesting Ohio policymakers should consider following the successful model of Colorado, which has a Taxpayers’ Bill of Rights that limits taxes and spending.

Three years later, many Ohio legislators remain opposed to the idea, but members of Citizens for Tax Reform (CFTR), an organization directed by Ohio Secretary of State J. Kenneth Blackwell (R), have unveiled plans for a tax and expenditure limitation ballot proposal.

Constitutional Limits Proposed

“We must put in place enforceable spending and tax restraints to restore fiscal discipline in our state,” said Blackwell in an August 17, 2004 article published by Gongwer News Service. “CFTR will lead a constitutional amendment effort to establish fiscal restraints on government.”

CFTR hopes to place the measure on the November ballot.

In January of this year, The Buckeye Institute and The Independence Institute in Colorado jointly released a report titled “Should Ohio Limit Government Spending and Taxes?” The report argues a TEL is needed if Ohio is to get back on sound economic footing.

Tax Burden Soars

Ohio has struggled to maintain control of its spending. In its “Comparison of State and Local Tax Burdens Across the Nation, 1970-2005” report, the nonpartisan Tax Foundation in Washington, DC reports Ohio has gone from nearly the lowest state and local tax burden per capita–47th in the nation in 1970–to seventh highest this year.

“Without a binding budget constraint at the constitutional level that will force policymakers to make tough choices,” the report states, “there is little hope that the recent trends will improve.”

The Ohio House of Representatives issued a document in January 2005 showing that if a TEL had been in place since 1997, $19 billion less would have been spent by state government and dramatic budget cuts would have been made. According to House Chief of Staff Scott Borgemenke, quoted in a January 19, 2005 editorial in the Akron Beacon Journal, little funding would remain beyond mandatory spending on Medicaid and corrections.

“We will become an insurer and an incarcerator,” Borgemenke said.

Rewritten for Flexibility

Faced with that prospect, Gov. Bob Taft (R) and some legislators considered offering alternative tax and expenditure proposals that would allow for more spending flexibility. Ultimately, CFTR agreed to loosen the language in its proposal. The latest version includes measures to address flexibility.

The revised petition retains annual spending limits tied to the growth of inflation and population, but adds a provision allowing for at least 3.5 percent spending growth. That provision is meant to avoid spiraling declines in spending during recessionary periods.

The updated version also replaces a requirement for a three-fifths legislative majority to seek voter approval for exceeding annual spending limits with a less-stringent simple majority. The proposal also now contains language that forces any efforts aimed at repealing the TEL to state clearly to voters that they would be voting on whether to remove a constitutional limit on taxation.

According to CFTR spokesman Gene Pierce, the concessions prove Blackwell is “mellowing a little bit. It shows he can negotiate.”

The revised proposal was recently re-filed with Ohio Attorney General Jim Petro (R). Pending Petro’s approval of the wording, CFTR expects to begin collecting petition signatures to include the ballot proposal in the November elections.

House, Senate Have Proposal

Identical proposals also are moving forward in the state House and Senate. Hearings are expected to begin soon on House Joint Resolution 4, sponsored by Rep. Linda Reidelbach (R-Columbus).

Given the progress of those proposals, Ohio may very well become ground zero in the effort to bring fiscal discipline to state budgeting this November. Recognizing that, detractors are stepping up their attempts to discredit the concept.

The Coalition for Ohio’s Future, for instance, invited former Colorado Rep. Brad Young, a Republican who has been outspoken in opposing Colorado’s Taxpayers’ Bill of Rights, to speak against the Ohio proposal.

“It was sold as something that magically creates accountability, eliminates waste, and forces the legislature to set the right priorities,” Young said at an April 29 news conference sponsored by the coalition. “Well, it simply doesn’t do those things.”

In response, The Buckeye Institute scheduled a May 17 legislative orientation briefing in Columbus, Ohio to feature former Colorado Senate President John Andrews, who supports the Taxpayers’ Bill of Rights, offering a contrasting perspective.

“This is a fundamental conflict of vision,” Blackwell told The Plain Dealer as saying. “I envision a growing economy that produces more tax dollars. They believe that you can tax and spend your way into a growing economy.”

Matt Hisrich ([email protected]) is a policy analyst at The Buckeye Institute.