Cap on state, local spending proposed

Kirsten Searer

Tuesday, Dec. 21, 2004 | 11:03 a.m.

Sen. Bob Beers, R-Las Vegas, is proposing a cap on government spending similar to a Taxpayers Bill of Rights passed 12 years ago in Colorado.

Beers is suggesting a constitutional amendment to cap increases to state and local government spending at the rate of inflation plus the rate of population growth.

Beers, who already has proposed refunding taxpayers part of this year's surplus, said he is concerned the government will grow uncontrolled without a cap on spending.

"Government is a big enough percentage of the economy today," he said. "Last session, we increased the scope of our state government three times faster than the underlying economy increased.

"Thus, on a relative level, we made our state government bigger than it was before."

Under Beers' proposal, if the state population were to grow 2 percent, and inflation were set at 2 percent, the state government could increase spending by 4 percent.

Any excess revenue would be refunded to taxpayers, though Beers said he's unsure exactly how the money would be returned. In Colorado, lawmakers have reduced personal income or sales taxes.

Because Beers is proposing an amendment, both houses of the Legislature would have to pass Beers' measure in two consecutive legislative sessions before it could go on a state ballot for approval.

If the measure does not pass the Legislature this year, Beers said he would probably organize a group to collect signatures and put the idea on the next state ballot.

Skeptics say the idea has been tried before, and while it sounds good in theory, it's difficult to pinpoint how much each person moving here will cost the state.

Sen. Bob Coffin, D-Las Vegas, said he looked into a similar measure years ago but found that different populations require different benefits.

"No number works, and that's the sad truth because a number is an empirical thing," Coffin said.

If, for example, about 50,000 people move to the state, they might have different needs depending on who arrived, Coffin said. A population of 50,000 seniors is different than a population of younger families, he said.

Guy Hobbs, a longtime budget consultant who now sits on Clark County's Growth Task Force, agreed that different demographics cost different amounts. Plus, he said, the consumer price index isn't tied to some of government's most expensive increases such as health care costs and education.

Clark County already has a Taxpayers Bill of Rights that, in part, limits increases in budget expenditures at the rate of population growth plus the consumer price index, and Clark County Manager Thom Reilly said he's open to talking about Beers' idea.

But the county doesn't have to pick up the bulk of the tab for health care and education costs as the state does, Hobbs pointed out.

Leonard "Pat" Goodall, chairman of the Clark County Growth Task Force and a former UNLV president, said that, "in principle I think it makes sense to have some kind of external limits."

But Goodall, a retired professor of management and public administration, also pointed out that a cap makes it difficult to take care of costly one-time expenditures associated with growth such as police stations or highway projects.

Under Beers' plan, state legislators could go to taxpayers and ask that excess funds be directed toward major projects such as increasing teacher pay or building a new facility, Beers said.

In Colorado, taxpayers also can vote to exempt government entities from the restrictions for a set number of years when extra revenue is needed.

Nevada passed a bill designed to cap government growth in the 1970s, but it has proved ineffective, said Carole Vilardo, president of the Nevada Taxpayers Association. Her taxpayers rights group supports the concept of Beers' idea, she said.

"You're double-barreling the factor by including both population and CPI," she said. "With CPI you're taking care of what might be the increases in the amount of services, and with the population you've got your growth factor."

Some critics of Colorado's amendment, nicknamed "TABOR" to signify a Taxpayers Bill of Rights, say that transportation costs and other major expenditures have suffered under the bill.

The state experienced enormous growth in the 1990s, but the state's electronics and telecommunications industries slowed in 2000, and personal income grew at a slower rate than most states in the nation.

Voters also passed a measure in 2000 requiring the state's General Assembly to boost per-pupil funding, putting an additional burden on state coffers.

While some in Colorado have called for reforms of the measure, Beers said it makes sense now in Nevada.

"I think most students of government in the United States believe that what we've developed over the last 225 years is a far larger percentage of our economy than our founding fathers had in mind," Beers said. "It would appear that its natural tendency is to continue to grow, presumably until we've reached full-blown communism or socialism."