Conservative legislative leadership has held state spending growth in check over the last decade. This is a good thing, meaning that you are keeping and making decisions over more of the money you earn, and the government’s sway over the economy is smaller than it was under previous spend and tax regimes.
But such responsible budgeting is one election away from swinging back to the irresponsible, unsustainable spending sprees of the past.
That’s why a Taxpayer Bill of Rights (TABOR) is so important. A TABOR would establish annual limits to state spending growth tied to the rate of inflation and population growth. Important to note, a TABOR would not require spending to keep pace with inflation and population growth, but rather establish a hard cap on spending that could not be exceeded. Ideally, a TABOR would be added as an amendment to the state constitution to make it more permanent and binding. Other provisions in a TABOR often include voter approval over tax increases as well as rebates to taxpayers when revenue exceeds certain thresholds.
The chart below demonstrates just how crucial establishing a solid and permanent spending restraint is for North Carolina. It visualizes the reckless spending binges that previous leftist regimes embarked upon for decades prior to the last decade of conservative leadership.
In the three decades leading up to the Great Recession:
- North Carolina’s state General Fund budget more than tripled, even after adjusting for inflation
- By comparison, the state population grew by 61 percent
- In other words, real expenditures in North Carolina’s state budget grew at more than three times the pace as population
- Even if the inflation-adjusted state budget grew by 122 percent – or twice the rate of population growth – during that time, appropriations would have amounted to only $15.3 billion in 2008-09, $6.1 billion less than the actual approved budget that year. This level of spending would have proved to be sustainable even as the Great Recession severely curtailed revenue. State tax revenue alone totaled $16.8 billion that year (fees added hundreds of million more, while federal bailout funds helped the state balance its budget)
North Carolina taxpayers simply can not afford to return to the outrageous spend and tax policies of decades past. Adding a TABOR to the state’s constitution would ensure we don’t.