NTF EDITORIAL ON TAXPAYER BILL OF RIGHTS
In its yearly routine, the Nebraska Legislature placed responsibility for erasing $355 million of a $741 million deficit on taxpayers. As the chill hint of recession blew across our state, senators continued their profligate spending habits, reassuring themselves that increasing revenues would adequately feed their spending appetites. The recession hit, and revenues plummeted. Lay blame squarely on senators for the resulting deficit, which, according to economist Dr. Ernie Goss of Creighton U., will continue to haunt us for several more years because of automatic pilot spending. Per capita state spending rose at a much faster rate than our annual state inflation rate, 48.3% versus 16.4% for the last 10 years, according to the Small Business Survival Committee. In state and local spending per capita, we ranked 14th highest, and we ranked 18th highest in state spending growth, from 1992-2000 in state rankings.
A trim here, from the state historical society, a slice there, from NETV, does not substitute for grasping a boning knife and carving out numerous instances of institutionalized waste and non-essentials in state government. Playing musical chairs with agency cash fund transfers provides only a band-aid for a deep fiscal wound.
Legislators have spared cuts for the University system, K-12 education, and highway construction, bestowing sacred cow status on them. Sacred cows make the best hamburger. Redesign the academic organization of the university, an antiquated system that shows duplication in a multi-campus operation. In the dozens of colleges and departments, many overlapping administrative positions could face elimination. Base state aid to school districts on average daily attendance instead of enrollment. Privatize highway construction and maintenance.
The legislature should appropriate funds only when agencies and departments can demonstrate through performance audits that they implement efficiencies and cut costs.
Our taxpayers group developed a list of 109 suggested budget cuts from which legislators could choose to further shrink the deficit. The list included the following: 1) remove all funded programs from annual autopilot formula spending increases, and 2) require every state agency to implement zero-based budgeting, which mandates justifying all spending every fiscal year.
If we allow legislators to raise taxes to cover continuing deficits, senators will raise them annually with impunity.
We no longer can trust our legislators to unilaterally determine our taxation. Despite repeated complaints about the unfairness of our tax system, senators have not initiated comprehensive tax reform. Despite promises that the 2002 tax hikes would serve as temporary measures, legislators continued them, reinforcing belief that there is no such fiscal fixture as a temporary tax. Nebraskans now pay the highest sales and fuel taxes (8th highest in the nation) and highest range of personal income taxes than residents in all 6 adjacent states. According to the Tax Foundation, in 2002, our state and local tax burden ranked 13th highest of 50 states and D.C. Nebraskans toil at their jobs for 39 days per year, 2 days longer than the national average, to pay state and local taxes, which consume 10.8% of Nebraska personal incomes.
High personal income, corporate income, and sales taxes make Nebraska less attractive for business expansion and location for subsidiaries of out of state companies that regard Nebraska as an allergen. The Small Business Survival Committee pegged NE 34th in its ranking of business tax climates in 50 states and D.C. Our corporate income tax, its top rate 7.81%, is higher than 4 surrounding states, Wyoming having no corporate income tax.
Within the mathematical set of Nebraska citizens, taxpayers comprise a numerous subset, compared to those populating smaller subsets of special interest spending lobbyists. The latter have greater influence, however, because they are well-organized and well-funded. Angry taxpayers can “shock and awe” legislators only by propelling an avalanche of letters, emails, faxes, phone calls, and personal visits to senators, demanding additional budget cuts and support of gubernatorial vetoes of higher taxes. Taxpayers must act in unison.
If senators rebuff our pleas, our only recourse is to amend the state constitution with a petition for a Taxpayer Bill of Rights (TABOR) as done in Colorado, allowing citizens to approve higher or new taxes. We have readied such petition in answer to another tax boost.
Doug Kagan, chairman NE Taxpayers for Freedom