Spending cap push expected in Missouri

~ The underlying assumption of the proposal is that politicians can't be trusted to control their spending impulses.

JEFFERSON CITY, Mo. -- A "tabor," according to the dictionary, is a small drum. And when used as a verb, the word means to beat as if on a drum.

So perhaps it is appropriate that some fiscal conservatives in Missouri continue to tabor for passage of what in political jargon is called the TABOR -- the Taxpayers Bill of Rights.

Voters in Colorado, the model state for the constitutional tax-and-spend restrictions, dealt TABOR supporters a blow last week when they voted to temporarily suspend its limits so the state could spend a projected $3.7 billion that otherwise would have been refunded to taxpayers.

Opponents of the spending caps point to the Colorado vote as evidence they don't work.

Yet undeterred supporters have pledged to beat on in their efforts to enact similar restrictions in Missouri. In fact, says House Speaker Pro Tem Carl Bearden, the beat will get louder during the legislative session that starts in January.

"I hope it's the year to pass it," said Bearden, R-St. Charles, who guarantees the proposed constitutional amendment will at least get debated in the House. The past two years, it never made it that far.

The underlying assumption of the proposal is that politicians can't be trusted to control their spending impulses. So voters must put a cap on what they can spend.

In Colorado, the annual spending cap is calculated by adding the rate of inflation to the percentage change in population over the last year. So, hypothetically, if the inflation rate was 3 percent and the population growth 1 percent, then the state could spend 4 percent more than it spent the previous year. (One key exception: voter-approved tax revenue are exempt from the cap.)

But the Colorado cap did not make an exception for economic recessions and recoveries.

Assume, for example, that Colorado previously was capped at spending $1 billion (a round hypothetical number), but revenues fell because of an economic downturn and the state had only $900 million to spend the next year.

When the economy and tax revenues again improved, Colorado couldn't spend all of the money. The hypothetical spending cap of 4 percent, for example, would have allowed the state to spend just $936 million the next year -- even though the state had once been at the $1 billion level.

The bottom line is the Colorado restrictions prevented spending sprees in good times but slowed the state's budget recovery after poor financial times.

"What's happened in Colorado is a clear indicator that TABOR does not work," said Amy Blouin, executive director of the Missouri Budget Project, a St. Louis-based group that analyzes state fiscal issues with a concern for how they affect the poor.

To the contrary, Ray McCarty insists that the Colorado limits worked just fine. McCarty is executive director of the Taxpayers Research Institute of Missouri, a recently revived division of the Associated Industries of Missouri. When there was desire for the government to be able to spend more money than the limit allowed, the issue went to Colorado voters, who granted their consent by a 52 percent majority.

"I think that shows that people who support efficient state government can still be reasonable when it's apparent the state needs more money to operate on," McCarty said. "I don't think that should be the end of those types of proposals."

Bearden said it is his intent to avoid the scenario that troubled Colorado. Under the plan he will sponsor next year, when state revenues fall, the base for the spending cap would remain at its previous high. So "if we saw the recoveries, we could jump immediately back to the high level of spending we had before," Bearden said.

Missouri revenues did fall during the 2002 and 2003 fiscal years. And it wasn't until 2005 that they finally surpassed their high of 2001.

Bearden, a former House budget chairman, contends Missouri politicians spent too much when tax revenues were robust. That's why he insists Missouri needs a spending cap, in addition to the 1982 voter-approved revenue cap that already exists in the constitution. State budget experts agree that the recent recession essentially rendered the Hancock amendment's revenue cap moot -- at least for the near future.

Yet some of Bearden's predecessors fear a spending cap is poor public policy.

"If you look at the situation today, I think it's pretty obvious we don't need a cap on anything," said former Sen. Wayne Goode, D-St. Louis, a longtime appropriations committee member barred from seeking re-election last year by term limits. "The state has suffered through six years of revenue shortfalls. Almost everything we do is underfunded."

Bearden says his proposal is "an accountability issue" for taxpayers.

Goode suspects the spending cap "is politically driven" to appeal to the voter "who has no idea what Missouri spends or doesn't spend or needs."

California voters are deciding Tuesday whether to enact their own state spending limits.

But don't look for Missouri politicians to be heavily swayed by either Colorado or California voters. The drum beat for Missouri's own spending cap seems certain to go on.

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EDITOR'S NOTE: Capitol Correspondent David A. Lieb covers Missouri government and politics for The Associated Press.