|
Testimony of Senator Alex X. Mooney SB:
601 Taxpayer Bill of Rights The Maryland Taxpayer Bill of Right's will guarantee that we legislators will not be saddled with the debt from overspending in previous years. According to the Department of Legislative Services, Maryland will face a two billion dollar deficit in four years if we continue state spending at our current rate. For far too long we have balanced our budgets with gimmicks and one-time fixes rather than limiting spending. Maryland's current fiscal mess was not caused by a recession but by government spending run amuck. A CATO institute study found that our budget went from 6.6 billion in 1994 to 10.9 billion in 2002 an increase of 65%. I have enclosed a copy of this study with my testimony. Many have argued that our revenues have decreased because of the severe recession we experienced. I would argue that the economic downturn we experienced was rather mild compared to recessions in years past. In the recession of 1990, Maryland lost 5% of its private and public sector jobs, but in 2001 and 2002 Maryland actually added jobs according to the Department of Legislative Services. The same study also showed personal income also rose from 2001 to 2002 by an average of 4.5%. Despite the shallowness of Maryland's recession, we still went from reporting a 500 million dollar surplus in 2001, to reporting a 1.2 billion dollar deficit in 2002. There is a way to control government spending and hold the line on taxes. The Taxpayer Bill of Rights would not allow the state to increase spending by more than inflation plus population growth. For example if inflation rose by four percent and the state's population grew by two percent the state would be allowed to increase spending by six percent. This formula would limit Maryland's excessive spending to a more realistic level. The Taxpayer Bill of Rights will also give voters more say over taxes. Voters, not legislators, will approve state and local tax hikes. Voters will also be allowed to vote on what should happen to government surpluses. According to Colorado's Independence Institute, between 1997 and 2002 the citizens of Colorado were rebated 3.25 billion dollars or $3,200 for a family of four. The CATO Institute found that if Maryland had abided by the spending limits that the Taxpayer Bill of Rights calls for starting in 1990, by the year 2001 it would have saved taxpayers almost one billion dollars. This spending limit alone would have almost virtually eliminated the 1.2 billion dollar deficit we faced in 2002. The state of Colorado who enacted this legislation over ten years ago has benefited because of the Taxpayer Bill of Rights. Colorado has a thriving economy and a highly educated workforce. According to the American Electronics Association, Colorado has the most technical workers per 1,000 of any state. Colorado was also listed first among states for income per-capita growth in the 1990's. Colorado should serve as a model as to what the business community can do when the government limits its spending and steps out of the way. Colorado has also been able to maintain high education standards while limiting spending. A study done by the American Legislative Exchange Council found that Colorado high school students out preformed Maryland student on both the American College Tests (ACT) and on their Scholastic Aptitude Tests (SAT). There is a precedent for passing a constitutional amendment because of government overspending. In 1916 when Maryland faced a large deficit the General Assembly passed a constitutional amendment to give the Governor more power over the budget. This bold move taken by the legislature almost one hundred years ago has helped our state maintain an AAA bond rating to this day. Unfortunately over the last decade this amendment that limits the legislature's spending ability has not been enough. I urge the Senate Budget and Tax Committee to pass the Taxpayer Bill of Rights. For the sake of future generations it is imperative that we rein in our excessive state spending. We, as a legislative body, should not continue to pass un-funded mandates and budgets, which increase spending faster than state revenue increases. I ask that we pass Senate Bill 601, so that the State of Maryland is required to limit spending just like any business or family. |