SPENDING LIMIT NEEDED TO STABILIZE NEW MEXICO'S BUDGETARY GROWTH
December 7, 2007
Sen. Kent Cravens (R-Albuquerque) and House Minority Leader Tom Taylor (R-Farmington) have introduced legislation that, if enacted, could stabilize spending growth in New Mexico and prevent these surges in the size of government. The idea, known as the "Taxpayer Protection Act," would constitutionally limit the growth of New Mexico\'s General Fund to 3.6 percent annually plus the rate of population growth, says Michael J. New, an adjunct scholar with the Cato Institute.
The limit established by the Taxpayer Protection Act would allow New Mexico's state government to:
- Expand in real terms; with inflation rates holding steady at about 2.5 percent annually (well below the 3.6 percent limit prescribed by the Act), government in New Mexico would continue to grow on a yearly basis.
- Grow at a consistent and limited rate, much like your family\'s budget.
The effectiveness of constitutional spending limits has been demonstrated in other states:
- Currently, 30 states have some kind of fiscal limit in place and the most well known of these limits, Colorado\'s Taxpayer\'s Bill of Rights (TABOR) has enjoyed considerable success at limiting state government.
- TABOR\'s requirement that surplus revenues be returned to taxpayers resulted in $3.2 billion in tax rebates between 1997 and 2001.
- Not surprisingly, Colorado led the nation in economic growth from 1997 to 2001. Washington State\'s I-601 and California\'s Gann Limit are other examples of state spending limits that have enjoyed success in limiting government growth.
A similar approach could certainly work well in New Mexico, says New.
Source: Michael J. New, "Spending limit needed to stabilize NM budgetary growth," Las Cruces Sun-News, December 4, 2007.
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