Sunday, October 17, 2010

Shrill Hysterics Distract from Debate over Spending Cuts

The following article by Linn and Ari Armstrong originally was published October 15 by Grand Junction Free Press.

"Armageddon." "Pure anarchy." Really? We think restrictions of political spending deserve serious debate, not hyperventilating hysterics. Yet the same Denver Post editorial that cries "armageddon" over ballot measures 60, 61, and 101 also quotes Attorney General John Suthers calling them anarchistic.

We'd find it easier to take the critics of the measures more seriously if they didn't remind us of Chicken Little, the boy who cried wolf, and the street-corner drunk with the "end of the world" sign all rolled into one.

Plus, we've met some real anarchists, and frankly they'd be insulted to be linked to these measures, which operate squarely within existing legal procedures and in the scope of things alter little.

That said, we're not in love with 60 or 61. They're complicated, and their implications are difficult to predict (especially if passed together), perhaps reason enough to vote against them.

Plus, the organizers of the measures have been anything but transparent about who wrote them and financed them. The measures' shadowy origins have turned off many voters and led to a disorganized, ineffective campaign on their behalf.

Still, the measures should be debated on their own terms, apart from the personalities involved.

Amendment 60 would have a couple of main effects. First, it would "de-de-Bruce," or, as the Blue Book puts it, "repeal the current voter-approved authority of local governments to keep property taxes above their constitutional limits." ("De-Brucing" was named after Douglas Bruce, a major supporter of the Taxpayer's Bill of Rights or TABOR.) This makes sense if you don't think past voters should be able to saddle future property owners with permanently higher taxes.

But Amendment 60 does something else that alarms us. It would reduce property taxes for K-12 government schools, and "state aid shall replace that revenue yearly." As Ben DeGrow points out, "the result would be dramatically greater state funding of, and control of, K-12 education." DeGrow is hardly a tax-and-spend leftist; he works on education issues for the free-market Independence Institute.

Amendment 61 would limit borrowing by state and local governments. We asked Jeff Wright, a long-time TABOR advocate who supports this year's measures, about this proposal. He said, "For most of the history of road construction and maintenance programs they were completed through annual revenue collection and expenditure, not borrowing."

However, the left-wing Bell Policy Center's Rich Jones retorted, "The capital projects currently financed in Colorado have long useful lives, in many instances 30 to 50 years. ... It would be near impossible to build a large scale project such as a bridge one year at a time and pay for it with annual revenues." (See FreeColorado.com for Oct. 4 and 6 for the complete comments of Wright and Jones.)

We don't see the problem with debating the financing mechanisms on a project-by-project basis.

Finally, Proposition 101 is admirably straight-forward: it would cut taxes on vehicles, income, and telecommunications. We like this proposal. Critics argue that the vehicle tax helps finance roads, but we prefer a use tax, such as the gas tax, to pay for roads (so long as they are government owned).

As we said, we think there are good reasons to vote against 60 and 61. But there are also a lot of bad reasons.

All of the dire budget predictions about the measures rest on one basic assumption that, incidentally, is totally false. The assumption is that, if the three measures pass, voters will never again pass spending increases.

If passed, this year's measures would phase in spending cuts over many years. During that time, voters could pass as many countervailing spending hikes as they wanted.

We asked four people involved in the debate over the measures whether voters can in fact support any number of spending hikes, even if the three measures pass.

Wright dodged the question. Dan Hopkins of Coloradans for Responsible Reform, which opposes the measures, never got back to us before our deadline. Jones first said "no," but then conceded, "voters could... approve revenue increases." So, in other words, "yes."

Our friend Ralph Shnelvar, who has publicly supported the measures, offered the clearest answer. We asked, "Even if these measures passed, isn't it possible for voters to approve spending at the same rate as if the measures weren't passed?" Shnelvar answered, "As I understand it, yes."

"Armageddon," indeed.

As for claims that the measures would destroy jobs, we encourage those making such claims to read Henry Hazlitt's "Economics In One Lesson," the single best antidote to such economic illiteracy.

As Hazlitt points out, cutting political spending indeed cuts political jobs. But that money doesn't just evaporate; those who earn it spend it elsewhere, thereby creating jobs that are generally more productive.

We understand if you vote against Amendments 60 and 61. Just do it for the right reasons.

1 comment:

  1. The proponents campaign may appear to be disorganized but it is actually a matter of money. The opposition is being generously funded ($6.5 million with 98% coming from organizations that feed at the government trough) and can afford a coordinated campaign of mailings, TV, radio and 3 color yard signs. They are paying speakers as much as $10k/mo to visit every school, Kiwanis club, etc. They are paying folks to drive around and pull proponent yard signs. (Westword reported on the systematic slicing up of all of their larger road signs.) The proponents have a few dedicated volunteers who are taking time away from work and family to hand out fliers and put up yard signs. The opposition is spending millions to get billions. The proponents are concerned individuals attempting to slow the slide to California-like fiscal disaster.

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