Key Points
  • Tax and Expenditure Limitations, like Colorado’s Taxpayer Bill of Rights, have been shown to stabilize budgets over time.
  • Taxpayers deserve to know how their dollars are being spent. All levels of government should establish user-friendly websites, allowing citizens to search through a robust database of all financial transactions.
  • Governments should budget for outcomes, identifying core functions and measuring results.
  • In 2003, Washington State used outcome-based budgeting to close a $2.4 billion deficit without raising taxes.

SBS LogoSmart budgeting is vital to a state’s financial health. The ALEC State Budget Reform Toolkit offers more than 20 policy ideas for addressing today’s shortfalls in a forthright manner, without resorting to budget gimmicks or damaging tax increases.

One way to stabilize budgets over time is to embrace Tax and Expenditure Limitations (TELs). The most effective TELs, like Colorado’s Taxpayer Bill of Rights (TABOR), require voter approval to raise taxes, issue debt or spend surplus revenue. Policy reforms like TABOR give hardworking taxpayers more protection and ensure that state budget growth is stabilized at a reasonable level.

Restoring accountability to government spending is another way to mend state budgets over the long run. Since ALEC first adopted its model Taxpayer Transparency Act in 2007, nearly every state has launched a budget transparency website, allowing citizens to more easily find out how their tax dollars are spent. All levels of government, including school districts and municipalities, would do well to follow suit.

More fundamentally, government should budget for outcomes. This means identifying the core functions of state government and measuring results. In 2003, Washington State used outcome-based budgeting to close a $2.4 billion deficit without raising taxes.


+ All State Budgets Publications

Model Policies

  • Property Tax Appraisal Reform Act Final

    SECTION 1 Amends [INSERT STATE] Tax Code, as follows: If the appraised value of property in a tax year is lowered upon taxpayer appeal, the appraised value of the property as finally determined under that determination is considered to be the appraised value of the property for that tax year.

  • Truth in Taxation Act Final

    As used in this section: (1) “Taxing subdivision” means any political subdivision of the state that levies an ad valorem tax on property. (2) “Revenue neutral rate” means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous tax year …

  • Draft Act to Identify Coercive Federal Funds in the Budget of [INSERT STATE]

    An Act to create [section ______] of the statutes; relating to: [state legislative budget bureau] reports on federal funds in the state budget, and the conditions attached by federal law and federal regulation thereto, including related guidance. The people of the state of [state_____], represented in senate and assembly, do enact as follows: Section [_____] …

  • State Constitutional Amendment for a Balanced Budget Final

    BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF {insert state}: Section 1. The following amendment to the Constitution of the State of {insert state} is proposed and agreed to by this, the {insert name of state legislature}, and is referred to the next Legislature for reconsideration and agreement.

Task Forces

Tax and Fiscal Policy

The ALEC Tax and Fiscal Policy Task Force is dedicated to researching and promoting sound policy aimed at creating a …

Press Releases

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