NFIB study shows state spending out of control

By Valerie Bollman

NFIB regional communications manager

Washington, D.C.

An NFIB national study examining how state spending has dramatically increased in the past two decades has added fuel to the argument against tax hikes. NFIB/Missouri, the state's largest small-business advocacy group, vows to fight any state tax increase proposals.

Noting that state spending -- not low taxes -- has caused a budget deficit, the group has called on the Missouri Legislature to hold the line on spending.

"Obviously, the general trend in state legislatures, including Missouri's, has been to increase spending without regard for the long-term consequences," said NFIB/Missouri state director Brad Jones. "Small-business owners and their employees should not have to pay for the state's spending spree by paying more in taxes to clean up our budget mess."

The NFIB study found that total states' expenditures rose from $191 billion in fiscal year 1977 to $1 trillion in fiscal year 2000. The sharpest growth occurred in the past 15 years of the period with a 40 percent increase between 1986 and 2000. However, Missouri showed an increase in the past 15-year period of 60 percent, well above the national average.

"This study proves that our budget woes are a result of spending beyond our means," said Jones. "We need to cut spending, not increase taxes on our state's largest employer, small businesses, which if given the opportunity, will expand businesses and create more jobs."

Jones said there has been much debate in the Legislature on how to solve the budget crisis, and small-business owners definitely have an opinion. A recent NFIB/Missouri survey revealed that because more than half of small-business owners pay their state income taxes as individuals, a majority said that reducing the individual income tax would be most helpful to their business.

"Missouri's Main Streets will continue to work hard to convince legislators that the fastest way to fix the state's budget crisis is to cut spending not increase taxes," said Jones.

The National Federation of Independent Business (NFIB) is the nation's largest small-business advocacy group. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its 13,000 members in Missouri and 600,000 members in Washington and all 50 state capitals.