Monday, August 07, 2006

Taxes & Spending: When the Legislative Process Fails

Here in Nebraska, citizens have approved via referendum the addition of a ballot initiative to limit state spending. The constitutional amendment, entitled Stop Over Spending (SOS), will limit the growth in state spending to the increase in prices as measured by the consumer price index and population as calculated by U.S. Census estimates.

While I think this is the wrong method of attacking excessive government spending, Nebraska’s executive and legislative branches have provided their citizens with no other alternative to stop escalating spending. In fiscal 1991-92, Nebraska ranked 23 among the 50 states in terms of total tax burden. In this case the burden is calculated as total state and local taxes per $1,000 of personal income. By 2005, Nebraska had moved ahead of New Jersey’s 14 ranking to rank 13 among all states.

Moving from 23 to 13 is troubling enough, Nebraska’s real problem is how it stacks up against its geographic neighbors. 2005 ranking were, Colorado 45 (35h in 1991), Iowa 35 (15 in 1991), Kansas 17 (34 in 1991), Missouri 42 (50 in 1991), South Dakota 47 (47 in 1991) and Wyoming 4 (3 in 1991). Furthermore, Wyoming and South Dakota have no income tax and Wyoming exports most of its tax burden to non-residents via taxes on coal and natural gas.

Opponents of the lid (SOS) have not provided an alternative solution that slows the rapid growth in Nebraska taxes. Thus with no legislative session between now and the November elections, Nebraska voters are left with no other option to slow the rapid growth in taxes. When representatives fail, voters will take control. The question to my fellow bloggers is, why does a conservative state like Nebraska find itself with “big spending” representatives? What are the more sensible choices for voters? I disagree with the heavy hammer of a constitution amendment, but I will be voting for the amendment.


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