Think Twice Before Signing Petitions
By: Source: AARP.org Date Posted: 2007-11-12 15:50:24.789891-05:00
AARP North Dakota is urging voters to think twice before signing petitions that would put two measures on the ballot. One of the measures would cut corporate and individual income tax rates, while the other would restrict government spending increases. Those objectives may sound appealing, but AARP opposes both measures because they would hamper state and local governments' and school boards' ability to respond to emergencies or shifting priorities.
"The rule of thumb is if something sounds too good to be true, it probably is," says Linda Wurtz, AARP associate state director for advocacy. "We encourage members to look beyond the one-line selling points for these petitions to the long-term impact they would have on North Dakota."
The income tax measure, introduced by "Americans for Prosperity," would lower corporate income tax rates by 15% and the adjusted state individual income tax rates by 50% beginning in 2009. This is a statutory initiative and requires 12,844 signatures.
The second measure restricts annual spending increases to no more than the rise of the consumer price index. If adopted, 60% voter approval would be required to exceed the spending cap. That would affect the Legislature's ability to govern, as well as city councils, county commissions, school boards and other local governing boards. This constitutional amendment requires 25,688 signatures to get on the ballot.
"We are asking our members to think twice before signing any petitions that will affect their taxes and the ability of government to function," Wurtz said.
Tax Policy Principles to Consider
Income taxes are typically the most progressive of state taxes, that is, they are based on one's ability to pay. Sales and excise taxes, however, are usually regressive, taking a higher proportion of income from low-income people than from high-income people. Property taxes are the most burdensome for retirees because they continue to increase over time.
State fiscal experts advocate a balance among these "big three" revenue sources as a way of avoiding the severe revenue fluctuations of business cycles and limiting competition between neighboring states with different tax rates.
If income taxes are reduced, the burden for running the state will be shifted to the other two primary revenue sources.
Spending Caps
Rigid caps on spending are deceiving. They do not necessarily stop wasteful spending, and could make it more difficult for our elected officials to govern. In the state of Colorado, caps led to potholed and unfinished roads, vital public services like the department of motor vehicle offices and libraries closed for hours or days per week, and fees increased for everything from parks to marriage licenses.
Spending caps just shift the burden elsewhere. By cutting the muscle and not the fat, taxpayers will feel the pain somewhere else, in rising out-of-pocket costs to receive services formerly provided for free or at lower cost.
Spending caps will pit North Dakota programs and services against each other for limited funding and reduce our ability to address unmet or emerging needs when there is an economic downturn and the inevitable budget shortfall.
Spending caps will restrict flexibility to deal with the unexpected. The effects of a major tornado, flood, or a severe recession will be magnified by the need to pass emergency legislation to override the caps, wasting valuable time and possibly allowing the emergency to worsen.
Related Articles
- AARP Bulletin State News
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Other Resources
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A listing of all pending ballot measures.
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