Observations about Initiative 423

Today I had the opportunity to chat with my friend Gene, who like me, was raised in rural America but now makes his living in the urban world. Gene is well-educated and a thoughtful person, but neither politics, economics, or academics is his main occupation. However, he reads the newspaper often and pays attention to the issues of the day. Our topic of discussion today: Initiative 423.

We went back and forth on the substance of this initiative, which would cap spending growth in Nebraska by reference to inflation and population growth. One thing that impressed me here is how much thought a citizen was putting into knowing something about this issue. Moreover, he reported being asked to vote against this initiative by another family member (who happened to be a teacher). Thus, other people were getting involved and interested in this issue.

Ultimately, it seems to me that the Initiative boils down to whether you wish to have discretionary decisions by politicians or whether you want a rule-based constraint on spending. Ideally, discretion can often produce a better particular result than a rule, since it is difficult to identify in advance all the factors that should be considered and their relative weights in that consideration. The rule will thus provide less than a just result in some cases, but it serves an important function of constraint.

Constraint here has proven difficult to achieve. Spending growth of government has persisted, despite the rhetoric of our political leaders. Some of this, particularly on the local level, is a function of personnel costs which include healthcare benefits, which have been increasing dramatically higher than inflation. Query whether this pattern can continue as health costs eat up a significantly higher portion of our spending. Given this history, it is a little like asking an alcoholic to tend bar. Politicians just like to spend, and they can't help themselves. Moreover, citizens like to spend, too, as evidenced by how many of them are lining up against the initiative.

One good result from the presence of this initiative on the ballot, however, is the level of public discourse coming out on these important public issues. Of course, there is some distortion - like the claims regarding rising property taxes as a consequence of passing this limit. But there is also genuine, thoughtful conversation. That is a good thing.

By comparison, we've had tens of millions of dollars spent on the Senate race in Nebraska. I don't know about you, but I have yet to hear a clear and sensible discussion of the issues from either candidate. All that money has not purchased much of an education benefit for the citizens of the state. But it has made many of them disgusted and glad to see the campaign season coming to a close.

EAM