Cronyism

State of the States Report: Pro-Taxpayer Innovation on the Rise

Nonpartisan fiscal watchdog group State Budget Solutions estimates total debt in the states is at least $5 trillion. Clearly, state governments need new solutions to address today’s fiscal problems. According to State of the States: An Analysis of the 2015 Governor’s Addresses, numerous governors proposed new ideas to help increase innovation, with Governor Terry Branstad of Iowa, Governor Jack Markell of Delaware and Governor Mary Fallin of Oklahoma being just a few examples in considering innovative pro-taxpayer reforms this session.

In Iowa, Branstad wants to increase transparency through establishing a Government Accountability Portal website. Directed by the Iowa Public Information Board, the website will provide information on public records and open meetings requests. Furthermore, the resource will respond to citizens’ requests within one business day. The governor explained, “As state employees, we are here to serve the taxpayers. This tool is yet another step towards a more customer-focused service for taxpayers.” The Taxpayer Transparency Act also recommends creating a website similar to the new portal where taxpayers can access vital government information, such as where and how their tax dollars are spent.

Markell recently directed state agencies to review current regulations as part of an ongoing discussion on decreasing Delaware’s compliance burden.  The governor stated, “We must strive to ensure that they [regulations] do not impose unnecessary burdens upon our citizens.” This review process led to the elimination or change of more than 100 regulations. Going forward, Markell wants to codify this executive review process as part of binding state law, which would also require impact statements for new proposed regulations.

Fallin proposed performance-informed budgeting as a way to increase efficiency in Oklahoma. Traditional budgeting focuses on inputs (spending) instead of efficiency, outcomes or effectiveness. Under the new performance-informed budgeting approach, however, government spending is tied to measureable goals. The governor worked with each state agency to set measureable goals last year, as she decided, “We need to produce a sustainable budget where every taxpayer dollar spent is justified and leads to a measureable outcome.” As a result, more than 160 key measureable objectives for Oklahoma’s government are posted online at www.ok.gov/okstatestat.The ALEC Center for State Fiscal Reform finds that policy focused on efficiency, outcomes and effectiveness, as in Oklahoma, can generate citizen-driven budgets that constructively address shortfalls. In fact, Washington state used a similar strategy in 2003 to close a $2.4 billion deficit without raising taxes.

State of the States demonstrates governors are looking for pro-growth, pro-taxpayer reforms, like those highlighted in the State Budget Reform Toolkit, which contains more than 20 different recommendations for addressing budget shortfalls without resorting to economically damaging tax increases. Increasing government transparency, thoughtfully reviewing regulations and creating new budgeting systems can help increase improve opportunity and growth for hardworking taxpayers across America.


In Depth: Cronyism

Cronyism in tax policy stifles innovation, hinders competition and introduces a deep temptation for corruption. The 2014 ALEC Center for State Fiscal Reform study, The Unseen Costs of Tax Cronyism: Favoritism and Foregone Growth, found that in the most recent year in which states published their respective tax expenditure …

+ Cronyism In Depth