TEL issues

The 3/21/05 Akron-Beacon Journal editorializes about JKB's TEL. The first paragraph coorectly summarizes the TEL's thrust, but the 2nd-paragraph's analysis strikes out. The editorial reads,

Blackwell's amendment would reduce budgeting at all levels of government to this formula: a spending increase of 3.5 percent a year or the rate of population growth and inflation, whichever is greater. To go beyond those limits would require voter approval.

That sounds reasonable enough. But from 1996 to 2005, actual rates of state spending exceeded the TEL limits in all years except 2003. In most years, because of low inflation and low population growth, the TEL limit would have been set at 3.5 percent.

Gov't spending is bad. Gov't spending below 3.5% is good. Remember that Voinovich-Taft raised Ohio's state Tax burden to 3rd in the country because high spending required more taxes to pay for it. Knowing of this high tax burden, people fled the state. Had the high tax-rates been low, the income-earners would have stayed, had familes and then gov't spending would have gone higher. If health care spending becomes too high, make gov't employees pay a co-pay. That is what happens the real world.

The one problem with TEL is it's Keynesian rebates. The rebates should permanently lower either the state sale's tax rate or income tax-level by .5% - 1%. This would be a supply-side tax-cut.

Please e-mail the Editor-in-Chief with any questions.