State Budgets
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.
Smart 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.
Model Policies
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Draft Act to Identify Coercive Federal Funds in the Budget of [INSERT STATE] Final
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 [_____] …
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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.
Press Releases
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2018 State Economic Competitiveness Rankings Reveal Upward Standings tied to Federal Tax Reform
FOR IMMEDIATE RELEASE Contact: Anna Tarnawski [email protected] 973-879-2273 Arlington, VA (April 17, 2018) — The American Legislative Exchange Council (ALEC) today released the much anticipated …
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New Report Analyzes Governors’ Economic Policy Proposals
FOR IMMEDIATE RELEASE Contact: Taylor McCarty [email protected] 734-752-5646 New Report Analyzes Governors’ Economic Policy Proposals State of the State addresses reveal free market …
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Annual Report Highlights Nine States That Cut Taxes in 2016
For Immediate Release Contact: Taylor McCarty [email protected] 202-309-1274 Arlington, VA (March 1, 2017)—Nine states substantially cut taxes in the 2016 legislative session, according to a …