Politicians rarely plan for the future. Instead, they spend today and worry about tomorrow tomorrow.
We saw that cycle at work in the 2009 budget crisis. After years of spending growth, the state went bust in 2009 when the recession collapsed state revenue. North Carolina faced a $3 billion deficit, the 12th biggest in the country.
The Democrats raised taxes and cut education to plug the hole.
But there is a way to control the cycle of spending booms that inevitably lead to busts. Pass the Taxpayer Protection Act.
The Taxpayer Protection Act puts a leash on politicians by capping their power to increase spending to their heart’s content. The Taxpayer Protection Act limits spending growth to no more than inflation plus population growth. It stops politicians from overspending in good times so we can avoid drastic cuts in bad times .
According to the Tax Foundation, the state spent $240 billion in the decade before the 2009 recession, jacking up annual spending 65%. Under the Taxpayer Protection Act, the budget could have grown 42% and spending in 2008 would have been $6 billion lower. The budget crisis would have been avoided.
Politicians can’t be trusted to control spending in good times. Put a leash on them with the Taxpayer Protection Act.