Betsy
Chapman:
Lower taxes, more students?
Have
you noticed how each future student population estimate seems to project
fewer students in the decade ahead? New Hampshire’s student population
is growing, so what is going on? Many would say our public policy is
what is wrong in Maine.
It is time to take a long look at Maine’s public policy and its
relationship to Maine’s falling behind. Not individually or combatively,
as we have so often in the past, but collectively and cooperatively.
It is time we recognized that whatever our disagreements in the ongoing
policy debate, our goals, in the end, are the same. We all cherish the
ideal that everyone can thrive in Maine. Our public policy should help
us build a bright future, but time is running out.
When we look at the effect of our public policy over the past decades,
the need for rethinking is clear. Maine has many challenges, not the
least of which are:
- Poverty is growing faster in Maine than any other state
- Personal income lags behind the nation and region
- Our tax burden is far too high
- Maine lost 22% of its young people in the 1990s.
Our elected officials, supported by the voters, have lacked fiscal discipline,
although we have had glimmers of responsible action. In the mid 1990s,
the legislature passed an income tax cap, only to have the next legislature
repeal it! If that cap had remained in place, citizens of Maine would
have kept millions of dollars of their earnings over the past decade.
The solution for Maine is real tax reform that has worked elsewhere,
such the Colorado Taxpayer’s Bill of Rights (TABOR) passed in 1992.
The impact on the government and economy of Colorado has been a stunning
success:
- Private sector job creation doubled
- Public sector job creation grew at a constant rate
- $3.25 billion excess tax revenue was rebated to taxpayers
- The number of school age children increased substantially.
Jobs grew in the decade following the passage of Colorado’s TABOR.
In the 1980s private sector jobs grew 18.1%, but after TABOR, the rate
of growth doubled, creating 34.6% more jobs. Government jobs grew, 21.1%
pre-TABOR and 20% post-TABOR. The state needed many new teachers for
the growing student population.
Data source: Fred Holden, “A
Decade of TABOR”
www.IndependenceInstitute.org
The number of school children increased as well. The State of Colorado saw a dramatic increase in the number of kindergarten through twelfth grade students. In the decade of the 1970s and 1980s K-12 student population remained below 600,000 students. But in the years following the passage of the Colorado Taxpayer’s Bill of Rights, student population exploded as enrollment increased to 708,109 in the 1999-2000 school year. The state hired substantially more teachers to meet the needs of these students.
Data source: American Legislative Exchange Council
For Maine the time has come to implement the same successful policy
and an effective Taxpayer’s Bill of Rights:
1. Limits the growth in government spending to the increase in population
and inflation.
2. Is a constitutional amendment.
3. Applies to government spending at all levels; state, local, and county.
4. Permits greater tax increases with a 2/3 vote of the body.
5. Establishes a budget stabilization fund and true emergency fund.
There is no reason that Maine can’t turn its economy around and
start growing. Colorado is an example of doing just that, and New Hampshire
exemplifies the potential for prosperity in New England.
But we must be prepared to consider entirely new approaches to economic
growth. If we really care about solving the serious problems of our weak
economy, we will have to look beyond our feelings and restrict ourselves
to policy proven to result in long term prosperity.
As you talk to legislative candidates, ask them about their goals for
shared prosperity for all Maine people, ask them their position on the
Maine Taxpayer’s Bill of Rights, and urge them to support this
proven success.
“Government must realize that it cannot indefinitely tax the people
at constantly increasing levels without destroying the people’s ability
to support themselves and their families.”—Ronald Reagan, 1973,
then Governor of California.
For more information see “A Decade of TABOR” http://independenceinstitute.org/article.aspx?ID=559
Betsy P. Chapman is with the Maine Public Policy Institute (www.maineinstitute.com),
a non-partisan non-profit research and education organization devoted
to promoting a healthy Maine economy. She resides in Hampden, Maine.
Contact her at <BPChapman@adelphia.net>.