It’s Time for State Government to “Kick” its Wasteful Spending Habit

July 2, 2006 8:46PM

By Drew Johnson and Daniel Phillips The Tennessee Center for Policy Research recommends a “kicker law” —an innovative way to restrain state government spending—in the opinion section of Sunday’s Johnson City Press. On Saturday, July 1, the State of Tennessee began a new fiscal year by implementing a record-shattering $26.3 billion budget—that’s $4,411 in state spending for every man, woman and child in Tennessee. Some of this alarming amount funds justifiable government expenditures guaranteed by the state constitution such as education and roads. Billions more, however, finance questionable programs and pork projects approved by our elected officials in Nashville. The waste, fraud and abuse of Tennesseans’ tax dollars is reaching new heights, thanks largely to a $300 million state budget surplus created when taxpayers overpaid for the cost of state government. Rather than giving taxpayers their money back—something that happens everyday in the private sector when cashiers give customers their change—state legislators went on an outrageous bipartisan spending spree. The result is a state budget that includes a 6.4 percent increase in General Fund spending over the previous year, nearly double the rate of inflation. To put state spending into perspective, the Tennessee state government spends $330 in time it takes to blink. In the time it takes to read this sentence, the state will spend $2,084. The state consumes more money in 45 seconds than the average family makes in an entire year. If the 26.3 billion one-dollar bills the state will spend this fiscal year were laid end-to-end, they would stretch to the moon and back five times. Among the pork projects that led to Tennessee’s staggering budget is a $1 million program to encourage state employees in Nashville to take the bus to work, a $123,000 grant to the Stax music museum in Memphis and $50,000 for a Tennessee-focused online encyclopedia. Tennessee legislators also approved spending $10 million to subsidize filmmakers, $4 million to subsidize the purchase of soybean crushers and about $1.3 to subsidize golf courses. State lawmakers, even those promising fiscal restraint, have proven woefully incapable of controlling wasteful spending. Luckily, there is a promising option to rein in state spending known as the “kicker” law. The law, which has reduced waste in the Oregon state budget for more than 25 years, gets its name because it would require the state to “kick” surplus funds back to taxpayers. Under the kicker, if tax collections rise beyond General Fund estimates, any surplus amount remaining after topping off the state’s rainy day fund would be refunded to taxpayers. This would be done by removing the sales tax on groceries for as long as the surplus allows. Since the sales tax on groceries generates approximately $1 million per day, a $30 million surplus would give Tennesseans a month-long grocery tax holiday. Turning the kicker law idea into reality gives Tennessee’s lawmakers a chance to prove their commitment to fiscal restraint while serving taxpayers by potentially saving every family in the state hundreds of dollars in taxes every year. Here’s the real kicker: if the kicker law were in place now, Tennesseans wouldn’t pay sales taxes on groceries for eight months—from today until the beginning of March.