Discrediting "Fiscal Conservatism"
Following up on Matt’s post, which takes up Andrew Sullivan’s challenge to discredit what has become the oxymoronic concept of fiscal conservatism at the national level, it’s helpful to look at the experience of Colorado. Operating since 1992 under the so-called Taxpayer’s Bill of Rights (TABOR) tax and spending limitation – what Grover Norquist has dubbed the “holy grail” – Colorado is the very model of what fiscal conservatives say they believe in. Each year’s state spending is constrained to the previous year’s outlays plus the rate of population growth and inflation. (In the event of an economic downturn, like the 2001 recession, the baseline drops back down to that year’s lower level in determining future spending limits – the so-called “ratchet effect” that exacerbates TABOR’s impact but is only a secondary flaw in the law).
Colorado has the 10th highest per capita income in the country. Here’s only a small taste of what fiscal conservatism under TABOR has produced there:
- The state ranks near the bottom in the share of low-income citizens covered by Medicaid – the federal-state health insurance program. Between 1992 and 2004, the portion of low-income children lacking health insurance doubled in Colorado (from 16 percent to 32 percent) even as it fell in the nation as a whole (from 21 percent to 18 percent). Colorado ranks dead last among the 50 states in covering low-income children. The percentage of low-income adults under 65 without health insurance rose in Colorado from 31 percent in 1992 to 46 percent in 2004, sinking the state’s overall ranking by that measure from 20th to 48th.
- One apparent connection between that austerity and public health in Colorado has been the impact on pregnant women. Largely because of reductions in Medicaid coverage and relatively meager support for health clinics, Colorado’s national ranking in access to prenatal care declined from 23rd in 1990 to 48th in 2004. Only 67 percent of Colorado’s pregnant women received adequate care, compared to the national average of 76 percent. Over that same period, the share of pre-term births and low birthweight babies increased substantially so that Colorado now ranks sixth worst nationally.
- Colorado ranked last among all states in vaccinations for 2-year-olds in 2002 and 2003, with coverage rates of just 63 percent in 2002 and 68 percent in 2003; its ranking increased modestly to 44th in 2004. Medicaid coverage and state funding for health are not the only factors determining immunization rates, and Colorado tracked just below the national average until 2002. But TABOR was clearly responsible for the state’s decision to suspend its requirement that students be fully vaccinated against diphtheria, tetanus, and pertussis (whooping cough) between April 2001 and October 2002. During that period, a national shortage of the vaccine led most states to purchase higher-priced vaccines with state funds. The incidence in Colorado of whooping cough, which is life threatening in children under six months, began to soar well ahead of the national average in 2002 and has continued to increase. In 2005, more cases of whooping cough were reported in Colorado than in any other state except Texas, which has five times the population.
- Colorado has fallen since the early 1990s from the middle of the pack in per pupil K-12 spending to 40th among the states. In terms of “tax effort” – the percentage of income devoted to K-12 education – the state is 33 percent below where it was 15 years ago and ranks 47th in the nation. The average student-teacher ratio in Colorado is now eleventh highest in the country. The ratio of teacher salaries to average private-sector earnings is lower in Colorado than in any other state. Eighty percent of high school freshmen never receive a college degree, even though the state has the highest concentration of college-educated residents. The state ranks 48th in the country in sending minorities on to college.
Not surprisingly, Colorado’s voters in 2004 transformed both branches of its legislature from Republican to Democratic majorities. And last year, they approved a referendum that bypasses TABOR’s restraints for five years.
If you want to explain the problems with the alternative to borrow-and-squander conservatism that renegades of the Right like Bruce Bartlett and Andrew Sullivan are selling, tell them about Colorado.





Sounds like the program was performing perfectly (killing government). Too bad the People didn't buy it. A beautiful theory laid low by ugly fact.
Conservative "thought" is wishful thinking. Since wishful thinking doesn't get you far in academia is it any wonder that guys like Norquist are appropriately rare at university level?
March 23, 2006 7:09 AM | Reply | Permalink
Comparing fiscal conservatism at the Federal level to the state level does not work. Republicans, as we all know, favor the mantra of "State's Rights" as opposed to Federal bureaucracy. Republicans in Washington D.C. are merely trying to limit the power of the Federal government. By power I mean spending, taxation, and discretionary spending in general. Yes George W. Bush has severely strayed from this philosophy but he is somewhat of an enigma and the 2008 GOP will certainly be reverting back to its base platform. What a true Republican would desire is to see spending INCREASES at the STATE LEVEL. The philosophy, of course, is that problems can solved better and more efficiently at the most local level possible. The Colorado policy, as you highlight, is not something a majority of Republicans would agree with. That such a drastic policy happened to find success with one small group of voters (residents of Colorado) certainly does not insinuate that the deficiencies caused by the program in that state would be similar at a national level if "the Conservatives got their way." Republicans are not inherently against spending...they just wish to curtail Federal spending so that each state may better allocate their own resources. In other words, Republicans would be delighted if the Federal and State income tax withholdings on paychecks could be reversed. It is not the amount of spending the GOP despises, rather, it is HOW it is spent.
March 23, 2006 7:20 AM | Reply | Permalink
Gettysburg --
I'm afraid that's just ridiculous. I have never heard any republican anywhere say that they supported more taxes at the state level. Can you show us some public statements to demonstrate what you are suggesting?
The anti-tax mantra in republicans both at the state and federal level is unrelenting. The problem, of course, is that anti-tax is not a policy. Everyone wants taxes to be minimum. Policy is what rules you pass, and where you choose to spend money. The anti-tax movement has found a cheap trick -- separate the choices of spending (people generally like that) and the raising of revenue (people don't like that) and let the chips fall to the future. It's an effective, but incredibly selfish, tactic.
And, it's used at the federal level, and in every state as well.
Peter Schmitz
March 23, 2006 7:43 AM | Reply | Permalink
This is an interesting idea but not one that I have ever seen before in print. Can you provide a reference to any conservative authors, think tanks, elected officials, party platforms or other evidence to support this view? Also, wouldn't this really favor blue states which now transfer considerable wealth to red states?
March 23, 2006 7:44 AM | Reply | Permalink
Implementing "starve the beast" at the national level would have an even more deleterious effect than in Colorado, because at least Coloradoans have, in theory, the option of relocating to a neighboring state. Many states also have constitutions which require balanced budgets, so it's even harder for pols to implement tax cuts there. In order to deal with cuts in federal grants to states, states have recently taken to raiding localities -- grabbing increasing shares of local property taxes, for example, or insisting that local revenues offset state cutbacks to outlays to localities. Sorry, Getty, your argument just wouldn't fly even if it were true.
March 23, 2006 7:54 AM | Reply | Permalink
Madison idea, as you no doubt suspected you won't soon receive a meaningful answer from Fred Hiatt Gettysburg. His posts repeatedly prove that he comes from the facts-are-stupid-things shool of the Republican Party.
March 23, 2006 8:09 AM | Reply | Permalink
Though if the argument were true, blue-staters would be nuts not to vote for Republicans, at least on the national level. It's no big secret that the Federal budget transfers money from the coastal states to the souther and plains states.
March 23, 2006 8:44 AM | Reply | Permalink
Say what you want about Sullivan's wishlist (and I'd have trouble saying anything good), at least he's being explicit about what he'd do, and he's even asked for outside help in seeing whether the numbers work out. My guess is they won't. In any case, the prospect of Dem gains in November may have helped lift five years of paralysing partisan fog around fiscal decision-making. Maybe we're entering one of those rare moments - I'd say 1993-95 was the most recent previous one - when tax and spending issues are discussed jointly and with an eye to the impact on the deficit. Here's hoping, anyway.
March 23, 2006 8:47 AM | Reply | Permalink
When the Republican governor of Colorado sought to get out of the tax straight jacket his state was in Norquist and other rightwing anti-taxers, anti-government went wild. They called him a traitor and attempted to defeat his efforts.
You forget that the tax revolt revolution did not start at the Federal level but in California. if too many Democrats don't remember that Americans really don't like taxes too many Republicans forget Americans like government programs at both the state and federal levels.
Daniel A. Greenbaum
March 23, 2006 8:51 AM | Reply | Permalink
madison idea
There are indeed several instances where state Republican leaders have favored spending increases. Just recently the Republican controlled Michigan legislature passed a minimum wage increase. The article can be accessed here:http://senate.michigan.gov/gop/senator/sikkema/news/march2006/30906.pdf
Additionally, California Governor Arnold Schwarzenegger has opted to promote several spending increases on everything from education, healthcare, worker training all the way to levee repairs.
Minnesota Governor Tim Pawlenty recently proposed a $10 million dollar increase in early childhood education initiatives.
Of course, I am not trying to say that there are not an abundance of Republicans at the state level which would not love to cut taxes and lessen the governmental burden at even the state level. Indeed, these far-right Republicans absolutely do exist. The point I am trying to make, however, is that the tax question in general (cut or raise) should be decided at the Federal level as seldom as possible. That is the fundamental difference between the parties on this issue.
March 23, 2006 9:00 AM | Reply | Permalink
While not perfectly clear, Mr. Gettysburg, I suspect that the question was really, "show me a public statement anywhere where Republicans support raising taxes at the state level (particularly income or payroll taxes)."
You did say that most Republicans wouldn't mind if the Federal and State tax witholdings were reversed. Show us a public statement where any Republican elected official has stated that they supported such a proposition.
Find the Truth. Do Justice.
March 23, 2006 9:34 AM | Reply | Permalink
Here's an interesting article on Republican tax increases. The rub: some would have a tax cut while a majority would have an actual tax increase.
http://www.burntorangereport.com/archives/003441.html
March 23, 2006 9:49 AM | Reply | Permalink
Maybe I'm missing something here. According to Greg Anrig's description of TABOR, spending is held constant at the rate of inflation and population growth. Presumably that doesn't necessarily mean radical cuts. Yet spending on services like Medicaid obviously did get cut if access to services by the poor went way down.
What am I missing here? Why would a TABOR-like law necessarily produce the deleterious effects that Greg described?
Also, in Sullivan's defense, unlike most conservatives he is trying to get to budget balance by looking at BOTH sides of the ledger, not just spending cuts. Ending tax loopholes, restoring the estate tex, imposing a higher gas tax. The radical right would howl in outrage. It's that, more than anything else, that discredits fiscal conservatism as it is now understood.
But most fiscal conservatives agree that most of the money would need to come from things like entitlement reform. And it's here that liberals need to come to grips with reality. Medicare is unsustainable in its current form. Social Security is less dire but still needs to be tweaked. Some kind of means-testing makes perfect sense and should be on the table.
March 23, 2006 10:46 AM | Reply | Permalink
Brad, The big problem with the TABOR formula is that the kinds of costs that consume the biggest chunks of state budgets -- particularly health care and education -- intrinsically grow much faster than the general inflation rate (that's true for the private sector as well as the public sector). So setting the limit in relation to overall price inflation causes bone to be cut before very long.
Re your last points on the federal budget, I agree but think we should stop calling responsible cost cutting "fiscal conservatism," and start calling it "fiscal progressivism" because we're the ones who really believe in effective government and getting the most bang per tax dollar. --Greg
March 23, 2006 10:58 AM | Reply | Permalink
Didn't the people of Colorado vote for an increase in education spending that was incompatible with TABOR?
Daniel A. Greenbaum
March 23, 2006 11:29 AM | Reply | Permalink
Yes, but that wasn't until 2000 after a lot of the damage had already been set in motion (I didn't even mention the severe deterioration in the physical condition of some of the schools). Those problems are what led to the vote to target more money to K-12. But that law only put further pressure on the rest of the state budget, because TABOR still held for total state spending. Similar to California, all of these byzantine tax and spending constraints passed through referenda are totally counterproductive. Peter Schrag's book Paradise Lost about California captures the problems beautifully. --Greg
March 23, 2006 11:45 AM | Reply | Permalink
Greg's exactly right; the Consumer Price Index is a very poor measure of inflation for the things government buys.
The other problem is that when the economy goes south, as it did in Colorado during the 90s, growth sputters. Under TABOR (which BTW limits revenue, not spending), the baseline revenue level is locked in at the worst revenue year forever - or until the voters approve an increase.
March 23, 2006 12:03 PM | Reply | Permalink
Doesn't this suggest that both left and right misjudge the American People? The public would like the obvious something for nothing. The old joke was Americans elected Republican presidents and Democratic Congresses to protect programs for themselves but prevent new programs for others.
Democrats in their desires for social programs run afoul of Americans who more often than not do not want to pay more taxes. But Republicans are, or at lest their ideologues, are completely deluded. Americans don't want small government or no goverment or oppose government programs that benefit themselves.
This is one reason why we have such a big deficit and why we have had deficits at the Federal level almost continuously since the end of WWII.
Daniel A. Greenbaum
March 23, 2006 12:07 PM | Reply | Permalink
Yes of course. Health and education costs are exploding.
Not sure the "fiscal progressivism" line works for me. Myself, I'd just prefer a return to the real meaning of "conservative" before it got perverted by the current lot in power. To me, conservatism means exactly what you say - getting the most bang for the buck and paying as you go. Being a fiscal conservative is ENTIRELY compatible with being a progressive.
I think we would do better to try to re-brand the spend-and-borrow policies of the GOP to make their irresponsible, nonsensical nature quite clear. Instead of calling them fiscal "conservatives", I think we should call them "fiscal terrorists". That way, Democrats can be strong on security and strong on economics at the same time. A twofer!
March 23, 2006 12:46 PM | Reply | Permalink
As I easily predicted, Gettsyburg failed to find a single Republican who has publicly argued that the States as a matter of general policy should increase taxes to replace federal taxes (the cited Web site quotes no Republican on any matter).
Gettysburg should indeed be challenged to furnish examples to support his claims of fact, as he was challenged here, but everyone should realize that Gettysbug's job as he perceives it is to pollute and sidetrack the entire discussion by barfing up one preposterously false claim of fact after another. He tries to sound objective and knowledgable but in every single one of his posts hs is neither. Gettysburg is a Republican troll, period, and an amazingly ignorant one to boot.
March 23, 2006 12:52 PM | Reply | Permalink
This is a good point. Subsidiarity is good. The problem with it is the "race to the bottom" ie the "race to Delaware" problem. If the state raises taxes, corporations can easily relocate to lower tax states. Yes, a corporation can relocate outside America, but not near so easily.
A possible solution might be a focus on block grants to the states allocated per capita according to census estimates--allow the revenue to be collected at the federal level, but spent by the states. How do you think fiscal conservatives would feel about such a plan?
March 23, 2006 2:27 PM | Reply | Permalink
...more specifically, WHAT it is spent on. This Republican majority and president have shown us that all the complaining during the decades when they were in the minority was less about the dollars spent, than what they were spent on, and the fact that they had no say in the allocation. Once they got control of the purse strings, it was Hoover Dam with the floodgate full open, and we have the deficits and debt to prove it.
March 23, 2006 3:57 PM | Reply | Permalink
The main thing screwed up in this discussion is the idea that citizens are behind all these draconian tax limitation laws. Demagogic politicians are the irresponsible party who dream up these stupid ideas. After 3/4 a century of TV advertising (and plenty of naive behavior before that), citizens are conditioned to believe any good news advertising that is sold to 'em. But it is self-interested politicians who do the selling.
It is, unfortunately, the case that citizens do NOT learn by experience. When told that the government can trim down, even when government is already underperforming due to underfunding, citizens are gullible enough to swallow it. Also, citizens tend to forget what government actually does for them until someone takes it away.
What I would like to see would be for governments to respond to TABOR laws by taking away services that affect the politicians who dream them up. Stop services that help the well-to-do. For example, cut back on investigation of white collar crime, and specifically avoid those crimes that only the well off experience in the first place, eliminate tax breaks expenditures for cultural centers, charge banks a user fee equal to actual costs to audit them, provide zero state support to schools in above median income communities, with a little creativity this demagoguery can be turned arround on its proponents.
If its good for me it must be Good 4 A MericaMarch 23, 2006 6:24 PM | Reply | Permalink
Michigan's minimum wage increase is a sham to avoid a referendum driven stepped increase linked to inflation.
As for taxes, John Engler former GOP Guv did indeed hike the sales tax. Unfortunately the sales tax is, by far, the most regressive of all taxes.
March 23, 2006 7:16 PM | Reply | Permalink
Rhetoric Buster
Would you care to list any citations to back up your claims? It would appear from the surface as if you employ the same intellectual crime in your post as you accuse me of doing.
March 24, 2006 6:55 AM | Reply | Permalink
I am not sure what you think Americans don't understand. They certainly know they do not like taxes. It many not be their first thing they don't like but generally Americans prefer lower taxes. If you mean they do not fully understand the conflict created by they desire for various programs and lower taxes that would seem to be right on the mark.
Daniel A. Greenbaum
March 24, 2006 7:45 AM | Reply | Permalink
Daniel
There definitely is a misunderstanding among a serious portion of Americans with regard to taxation and its purposes. With that being said, most complaints about taxation fall along the lines of wasted money or poor distribution of funds. Someone in Wyoming, for instance, is likely not thrilled that a good portion of their tax money goes to, say, pave roads in California or fight street gangs in Chicago. If a preponderance of tax dollars could be kept within the borders of the states where the people pay it, it would seem likely that a great deal more people would consent. For example, if the man in Wyoming knew his tax dollars were going towards paving roads in Wyoming (as opposed to California) not only would be lose a substantial part of his argument against taxation, but the possibility exists that he might favor the system. As Federal taxation increases, state taxation is almost forced to decrease. It would be better if the opposite were true.
March 24, 2006 8:35 AM | Reply | Permalink
And once again Gettysburg shows his complete seperation from reality.
It has been well documented many times that large states, notbaly CA, NY, MA, etc are taking back less from the federal gov than they pay in taxes and small states like WY are getting more than they pay.
Implimenting your scenario would bankrupt states like WY.
March 24, 2006 10:46 AM | Reply | Permalink
This argument would be more convincing were it not for the fact that the blue states tend to be net donors of federal tax money. That is, the citizens of those states pay more in federal taxes than they get back in the way of services. The red states tend, on average, to be net recipients of federal tax dollars. Most of this is due to the simple fact that blue states are on average wealthier.
Much of the opposition to federal spending is of course rooted in simple selfishness. If I am not personally benefitting from this or that government service, then why should I support it? This is also why the GOP had such a hard time with Social Security. Everyone in the country benefits from it, so they don't want crazed ideologues monkeying around with it. Sadly, no such broad constituency exists for other programs.
But while selfishness may explain some, it doens't explain all of the anti-government sentiment in this country. For that, you can only blame Republican propaganda. This has taken a number of forms.
First, place undue emphasis on parts of the federal budget that are tiny but which can be exploited for propaganda purposes, like welfare spending or foreign aid. Reagan was the pioneer of welfare demagoguery, but it's a conservative staple still. Foreign aid is a miniscule part of the budget, but in some surveys some people think its the largest item in the budget. Another product of Republican dishonesty.
Second, label any government activity at all oppressive. This was another Reagan innovation. Reagan's rhetoric made it seem like we were living in a socialist paradise, with an oppressive state that was hell bent on squashing all business activity and innovation. Just get the government "off peoples' backs" and all will be well. I suppose it's better than racial scapegoating, but it's just as dishonest.
Third, never ever praise the good job that many of our dedicated civil servants do (unless they're in the military). Denigrating the bureaucracy is hardly unique to America, of course, but Republicans used to talk about "public service" as something worthy and noble. You hardly ever hear that anymore.
What Republicans discovered of course is that this sort of propaganda is extremely hard to counter. No one wants to come out in favor of bureaucrats. No one wants to defend how great the government works. No one wants to robustly defend welfare and foreign aid. That's why demgoguery of this sort works so well. It's always more difficult being the guy who has to get up and explain why taxes are sometimes necessary or why foreign aid is a good idea or why some regulation makes sense etc. It's so much easier to pander to the base instincts of the electorate.
March 24, 2006 11:05 AM | Reply | Permalink
EWK
It did not slip my mind that some states have larger populations, thus more money, than others. Naturally states like Wyoming would rely on some Federal assistance because, as you point out, they do not have nearly the assests with which to work as states like California or New York. The point I was trying to make, however, revolves around the idea that taxation at the Federal level should be curbed at every possible corner. I already mentioned that funding for national security, military, and certain entitlements such as Social Security would have to remain a Federal concern. But with limited assistance from Washington, even smaller states like Wyoming or South Dakota would be much better off because their legislature would have more control over budgets and resource allocation. For once problems could be solved in a timely, efficient manner--something which will NEVER happen as long as they are dependent of Washington for every red cent (much like a child asking his father for a dollar).
March 24, 2006 1:29 PM | Reply | Permalink
Your point still doens't hold up.
Wyoming would have to raise their state taxes substantially to make up for the lost federal dollars to pay for the services they already get from the federal government. Let alone deal with any of these new problems your talking about.
If what your saying is that all the money WY gets from the federal government is wasted on things WY doesn't need, then show us your examples.
March 24, 2006 2:16 PM | Reply | Permalink
Rhetoric Buster made no assertions [other than that you did not back yours] for which he needed to provide a citation. At least not here.
March 24, 2006 3:20 PM | Reply | Permalink
RogerGathman
The interesting thing about red states is how their conservatism makes them dependent on truly productive states, which are now nearly all blue. By cutting taxes and investing nothing in regulatory infastructure or human resources, states like Colorado become parasites on states like New York -- depending on inflows, for instance, of educated people who were educated in states where they actually care about education and pay for it.
Texas is the quintessential dependent state. In the eighties, its regulatory infrastructure was so poor that it literally let 50 to 100 billion dollars escape in the great s & l swindles -- and the money that made up for that came from blue states with real and functioning regulatory infrastructures.
One has to stop thinking of conservatism as an ideology. It is, rather, a type of parasitism -- an attempt to cast free-rider status as a noble anti-statist cause. It is no surprise that Bush conservatism has ballooned spending and cut taxes -- this is the freerider credo par excellence. Eventually, the burden of supporting the red states is going to seriously impair the U.S. as a whole. One notices that, fifty years after Mississippi bribed industry to come to the state by awarding massive tax breaks to, in essence, shift the cost of industry to poorer third parties, this is still the only policy red states can come up with. This is why they will never, ever be anything but hotbeds of illiteracy, poverty, and Republican party fanaticism -- the iron triangle.
March 25, 2006 11:42 AM | Reply | Permalink
BradDad's last reminds of the atmosphere when I was younger, when people respected the government, when public servants had respect, and there wasn't the whining talk about taxes. There was tax talk of course, there was discussion of which programs to fund, of course, but the idea the government was the enemy is still nonsensical to me. I just can't put myself into the state of mind where I can conclude that.
I can feel that a given administration or Congress is acting against my interests, but that's politics.
Brad listed some of the techniques used by anti-tax campaigners, but one he didn't mention is the "local control" trick, raised by Gettysburg. The highway issue is a good test--it is because the interstate highway system was developed as a strategic asset that it receives federal funds. If we decided the nation (as a whole) needed the highway system, we had to implement it as a federal program setting standards, at the least. Land use is basic to any nation and standards and restrictions on exploitation of resources is wholly appropriate as a national program.
March 25, 2006 1:50 PM | Reply | Permalink
Having worked for the government for 20 years and taught government for 10, I wait for DEMOCRATS to step up to challenge these tactics. Sadly, I don't see them do this.
If its good for me it must be Good 4 A MericaMarch 25, 2006 2:23 PM | Reply | Permalink