Politicians often blame budget imbalances on revenue shortfalls, arguing that taxes fail to bring in the dollars to pay for the government services they claim are essential.
Yet at virtually all levels, money flowing into government coffers is growing by leaps and bounds. Whether at the county level (Coconino County, for instance, has seen a 9 percent increase in general fund revenues this year), the state level (according to the Arizona Republic's Robbie Sherwood, "state revenues are flowing in like water through a broken dam") or the federal level (where revenues in the first seven months of fiscal year 2005 climbed by 13.6 percent according to today's Wall Street Journal), government is hardly suffering from an "income" problem.
Experience and history show that politicians, faced with thousands of competing interests who lobby the government for each of their "essential" services, will spend whatever money comes in the door.
And that's the rub. Special interests have an incentive to pay lobbyists to spend weeks at the legislature to make sure they get their piece of the pie. But the average taxpayer, working to earn a living and raise a family, hardly has the time or incentive to make a case against each and every special interest budget item.
So expenditures increase, and next year the tax burden grows with it.
There's hope, however, in the form of a Taxpayer's Bill of Rights. Passed in Colorado in 1992, the constitutional amendment allows the budget to grow, but only in proportion to inflation plus population growth. That has given Colorado economic strength. Between 1995 and 2000, Colorado ranked first in the nation for gross state product growth, and Colorado taxpayers have received over $3.2 billion in tax refunds. Had Arizona enacted a similar measure in 1992, taxpayers would have received $4.5 billion in rebates.
It's time to raise a glass of wine. The Supreme Court this week declared unconstitutional state regulatory schemes that allow in-state wineries to ship directly to consumers, but ban out-of-state wineries from doing the same. The Goldwater Institute filed an amicus curiae brief in the case, arguing these anti-competitive laws violate the Commerce Clause and cannot be saved by the 21st Amendment, which ended Prohibition.
The effect of the Court's ruling on Arizona's statute is unclear, however, since the state claims that its statute doesn't discriminate between in-state and out-of-state wineries, prohibiting both from shipping to consumers in Arizona. But the legislature could remove all doubt and allow for the direct shipment of wine to consumers. Doing so would end an arbitrary and antiquated system that privileges a few wholesalers, who have special licenses authorizing them to buy wine from vineyards and sell to consumers. Consumers should be allowed to benefit from the plethora of choices, lower prices, and greater convenience afforded by a booming wine industry and an Internet that allows Arizonans to shop online.
President Bush may use his veto stamp for the first time as the 2005 federal transportation budget heading for his desk has burgeoned to $295 billion, $11 billion more than the limit he set previously. But is $284 billion really more reasonable.
Sure, states benefit from federal transportation funding.
About 85 percent of federal transportation funding comes primarily from the federal gas tax, which amounts to more than 18 cents a gallon at the pump. So, that $75 million in light rail funding came out of your pocket. It seems pretty silly to send all that money to
Repealing the federal gas tax is a potential solution. And Arizona could very well come out ahead if we replaced the federal tax with a lower state tax that went directly to Arizona road projects instead of first routing tax dollars through
Profligate projects like light rail might be more palatable when it seems someone else is paying for them. But reach far enough into that bag of money the federal government is handing out and you will find your hand in your own pocket.
To some extent, it's understandable that when policymakers see a problem, they ambitiously aim to solve it. Arizona has long been known as home to a significant supply of methamphetamine production, and it turns out some cold medicines can be used in that production. Voila! Lawmakers set out to restrict how and how much non-prescription cold medicine customers can buy, and mistakenly think they have helped to curb the problem.
There are a number of things wrong with this attempt, manifest in the proposed legislation, SB 1473. First, it fails to understand substitution effects. With any purchase, there are transaction costs which are essentially all the costs of doing business that are not explicitly reflected in the price. This proposed measure increases the transaction costs of purchasing certain cold medications, giving meth producers reason to find alternative sources, such as other states where such restrictions are not in place.
Another problem with this misguided attempt is its presumption that commerce should be restricted as a default, with those affected needing to prove the restriction is unnecessary. That thinking is backwards. Besides specious claims that a similar measure has been successful in Oklahoma, it behooves policymakers to prove this measure is necessary for the public good, and that retailers would not voluntarily take cautionary measures, as they have already begun doing.
If meth production is deemed to be a growing problem needing attention, a greater portion of limited law enforcement resources should be targeted toward strictly enforcing existing drug statutes, rather than restricting access to cold medications and adding new burdens onto retailers and consumers.
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