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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Statement of Principles on Sound Rainy Day Fund Practices Final
Guiding Principles of State Rainy Day Funds The American Legislative Exchange Council (ALEC) is committed to developing state budgetary policies that foster an economy that works for all, empowering people to earn success and realize their potential. One way that a legislature can ensure this goal is by preparing for …
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Resolution in Support of End-of-Year Fiscal Responsibility Final
WHEREAS: Waste, fraud, and abuse occur frequently in agency budget processes WHEREAS: Congress has the responsibility to ensure agency waste, fraud, and abuse is minimized and taxpayers are protected from agency mismanagement WHEREAS: In the last quarter of the fiscal year (Q4), federal agencies spent 25.4% more than previous months …
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Resolution in Opposition to Federal Bailouts of State Budgets Final
WHEREAS, the national debt surpassed $27 trillion in October 2020; WHEREAS, states – like the federal government – have demonstrated a lack of spending restraint, with state and local government direct general expenditures increasing by nearly 90% over the past 40 years when accounting for inflation and population growth; WHEREAS, …
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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.
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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 …
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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 [_____] …
Press Releases
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Unfunded Liabilities in State Pension Plans Total Nearly $5 Trillion, Threatening Taxpayers Nationwide
FOR IMMEDIATE RELEASE Contact: Alexis Jarrett [email protected] Unfunded Liabilities in State Pension Plans Total Nearly $5 Trillion, Threatening Taxpayers Nationwide Public …
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The States Applaud the New Presidential Budget Proposal
FOR IMMEDIATE RELEASE Contact: Dan Reynolds Email: [email protected] The States Applaud the New Presidential Budget Proposal ARLINGTON, VA – (FEBRUARY 10, 2020) Today, President Donald Trump released his …
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Unfunded Health Care Benefits for Retired Public Employees Leave States and Taxpayers at Risk
FOR IMMEDIATE RELEASE Contact: Dan Reynolds, ALEC Public Affairs Email: [email protected] Phone: 571-782-5038 Unfunded Health Care Benefits for Retired Public Employees Leave States and Taxpayers …
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ALEC Scholar Dr. Arthur Laffer Receives Presidential Medal of Freedom
FOR IMMEDIATE RELEASE Contact: Daniel Reynolds [email protected] ALEC Scholar Dr. Arthur Laffer Receives Presidential Medal of Freedom Sound economics recognized by the President …
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Rich States Attract More Residents, Poor States Make Them Leave
Contact: Dan Reynolds [email protected] Rich States Attract Residents, Poor States Make Them Leave ARLINGTON, VA – (April 15, 2019) The American Legislative Exchange Council (ALEC) releases today, Rich States, …
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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 …