As the midnight Tuesday end to the special legislative session draws near, senate Republicans continue to hold a budget deal hostage to non-budget policy measures—perhaps the stupidest and most harmful being a proposal to limit all future non-education spending growth to population plus inflation, a policy critics have dubbed "education by starvation."
If it sounds familiar, it's because it's largely the same flawed policy that Rob McKenna made a cornerstone of his failed gubernatorial campaign. But that wasn't the first time voters roundly rejected the idea. Tim Eyman's 2009 Initiative 1033 would have imposed this same bullshit population-plus-inflation limit on all state and local spending; it was defeated in a landslide, 58 to 42.
Republicans are attempting to hold a budget deal hostage to a policy that voters have already rejected twice in four years. So much for "the will of the people."
So why the political hardball on such an unpopular measure? It would be easy just to dismiss the concept as simplistically misguided. The population plus inflation spending formula (sold in other states as the Taxpayers Bill of Rights, or TABOR) sounds like it makes sense, but it has nothing to do with the actual cost of running government. As I have discussed at depth on numerous occasions, the cost of providing government services at constant levels rises faster than core inflation, largely due to the nature of productivity: You can't automate or offshore a classroom or a fire department the way you can a factory or a call center, thus productivity rises more slowly in professional services than in the larger economy as a whole. And professional services is largely what government provides.
The formula also inflexibly fails to account for economic cycles and shifting demographics. For example, our aging population means that longterm care caseloads are expected to rise between 4 and 5 percent annually, while population plus inflation would cap growth in longterm care spending at about 2.6 percent. Meanwhile, even under the rosiest scenarios, health care costs will continue to rise at two or three times the rate of inflation.
(Over the long run, the metric that more closely tracks growth in the cost of government services is growth in personal income; thus a more rational cap would be to peg state government spending to a percentage of the state economy as a whole, while allowing for some flexibility to deal with economic cycles. Of course, that would require a revenue structure that kept pace with the economy. You know, an income tax. So lawmakers won't go there.)
For these reasons, population plus inflation is a formula for shrinking state government over time, both as a percentage of the state economy, and in terms the level of services and investments it is able to provide.
True, some of the lawmakers backing this measure simply don't understand this. So you can blame their support on naiveté. But some of them fully understand the consequences, and for them, this is an effort impose their drown-government-in-a-bathtub agenda on future budgets as a condition for agreeing to a fiscal cliff-averting budget deal now.
And that's a deal that responsible Democrats simply cannot afford to take.