False Assumptions in Revenue Restrictions Debate

In a recent post, Rick Esenberg at the Wisconsin blog "Shark and Shepherd" does a nice job of making some misleading points out of a comment I made on his blog yesterday.

My comment was about how the budgetary process in Wisconsin should privilege a discussion of the need and desirability of public services rather than solely considering cost (which shouldn’t be confused with the ability to pay, as I discuss below). Rick then goes on to suggest that the budgetary process, as it currently exists, is slated against the majority of people in the state because of the power special interests exert on the legislative process. The revenue restrictions amendment would, he claims, “balance the interests of those who pay against those who receive.”

Let’s just run through some of the false assumptions with that:

• Rick makes the misleading comment that consistently pops up in conservative rhetoric on this amendment issue—namely, that it’s about the state’s ability to pay. “Shouldn’t legislators be just as concerned,” Rick notes, “over what the state can afford?” Unfortunately for Rick’s rhetoric and that of other conservatives on this point, the amendment is not about the ability of the state to pay. The amendment restricts revenue to the rate of inflation plus population growth, which isn’t the same as the growth in state personal income.

• Rick assumes that discussions which privilege the need and desirability of a public service will inevitably result in the expansion of that public service. This couldn’t be further from the truth. If a honest and complete public discussion over a public service or public agency takes place, and the public decides—through the established legislative process—that a public service is too bloated or unnecessary based on its own merits, then by all means make the necessary cuts. It is probably true that most honest and complete discussions of most public services provided today by our state and local governments would result in at least maintaining the current level of service provided, but that only indicates the importance and desirability of our government programs to the public. And, as I mentioned above, public services in Wisconsin are not outpacing the public’s ability to pay for them. According to a Legislative Fiscal Bureau report (see page 63) from January 2005, the governmental revenue collected from Wisconsin sources (i.e., not including federal dollars) in 2001-2002 was the lowest it’s been relative to state personal income since 1982-1983.

• Rick makes an assumption that all, or at least the majority, of state money is dictated by special interests. I wonder what the people who are a part of the BadgerCare or Family Care programs think of that one—or the people who are represented by the Wisconsin Council on Children and Families (WCCF) organization which is opposing this amendment because of the harm it will do to necessary and desirable public social services. Or how about the parents in the North Shore suburbs of Milwaukee (where both Rick and I live), along with those in many other parts of the state, who reside there largely because of the top notch public schools and the excellent protective services provided. All of these social service programs, which benefit the less fortunate and more fortunate in our communities, would be negatively impacted by the revenue restrictions amendment. Indeed, how exactly do you quantify the costs of hampering or loosing necessary and desirable public services? Public money is most often used to protect and enhance the livelihood of the public, as well as benefit economic growth; it’s not vanishing down a special interest black hole, as Esenberg seems to be assuming. Besides, if the main concern here is special interests, then we really should be discussing campaign finance reform, not revenue restrictions. As I’ve said before, I’m completely on board with publicly financing the entirety of state and local campaigns--there would be no better way to ensure the interests of those who pay are balanced with the interests of those who receive than public campaign financing.

• Piggy-backing on the point above, Rick makes it seem like no special interest has anything to gain from the enactment of the revenue restrictions amendment—it would instead provide an alleged balance between those who pay and those who receive. This couldn’t be further from the truth. The BIGGEST SPENDING special interest group in the state—Wisconsin Manufacturers & Commerce (WMC)—has taken on this amendment as its primary advocacy issue, even spending thousands of dollars to produce and run ads in its favor throughout the state. Since the amendment would make government in Wisconsin an increasingly smaller part of the state economy, leaving more for the private sector, it’s no wonder WMC is pushing so hard for the amendment’s passage. Make no mistake, the WMC interest in the issue has nothing to do with balancing anything.

• Rick ends his post with this line: “My view is that the state will be better off in the long run because legislators will be forced to make the hard choices that they currently avoid.” The fact is the revenue restrictions amendment is about having the government do less, not work more efficiently. This point is made very clear through the current situation in Colorado, which is reeling from the negative impact the amendment has had on public services in the state since its TABOR amendment was passed over a decade ago; today Colorado hardly stands as a beacon of government efficiency.

If conservatives think a public service or agency is too bloated then they should focus the discussion on limiting that public service or agency. This would put the emphasis of the discussion on the need and desirability of the public service or agency; if the discussion leads us to make cuts, then cuts will be (and are) made. That was the point I was making when commenting on Rick’s blog. Implementing a one-size-fits-all solution with government finances is harmful to the public good because it puts cost (again, this is not synonymous with the ability to pay) ahead of need and desirability. We need more budgetary flexibility for our diverse state, not more rigidness.

UPDATE: I made one change to the language after re-reading Rick's post. The general points I made before are the same.