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Constitutional
Amendment To Hold Back State Government Growth Would Be Fraught
With Problems, Economist Cautions December 9, 2003 -- In an era of troublesome state and federal budget deficits, the 2004 General Assembly may well see the introduction of new bills to constrain the growth of Virginia government spending by proposing an amendment to the state constitution. More than half the states now have some type of limit, with the most popular being a constitutional amendment that ties government spending increases to such variables as population growth and inflation. Such a permanent straightjacket, however tempting on the surface, would be a simplistic and dangerous move for Virginia, one of the state’s best known economists warns. While some critics blame the state’s current fiscal crisis on government-spending growth in flush years of the 1990s, according to John L. Knapp, director of economic research at the University of Virginia’s Weldon Cooper Center for Public Service, much of that growth was driven by programs with wide public support to meet social needs or was used for re-building programs weakened by the 1990-91 recession. Fully
16 percent of growth in Virginia’s spending
between 1998 and 2001 was for reimbursing localities for the politically
popular rollback of the car-tax,
Knapp writes in the A
constitutional amendment limiting growth in spending could mean
that creative new initiatives couldn’t be undertaken or that needed existing
programs couldn’t be strengthened, “In the past, Virginia has launched important and expensive new programs such as the community college system, the state share of Medicaid, new highway construction, and aid to local law enforcement. Without the flexibility to address new demands, state government will either have to ignore them, make cuts in other important programs, or circumvent the constraints with budgetary gimmicks.” In the last session of the General Assembly, seven bills were introduced that provided for an amendment limiting the growth of state spending. More bills are likely to draw increased attention in the future, Knapp predicted. Tax and spending limits have been widely promoted nationally by such groups as the Cato Institute, a conservative think tank, he noted. A constitutional amendment would be “fraught with technical and policy problems,” such as how to estimate population growth or which inflation or income formula to use, Knapp said. “There is no need to overlay the traditional budget process with a new constraint,” he said. It “assumes that today’s decision makers and voters know better than future generations what will be best for them. This breathtaking assumption is incorrect.” Contact: Bob Brickhouse, (434) 924-6856 |
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FOR
ADDITIONAL INFORMATION: Contact the Office
of University Relations at (434) 924-7116. Television reporters
should contact the TV News Office at (434) 924-7550. 2002
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