WHEREAS:

The tax revolt movement that began with the passage of Proposition 13 in California in 1978 is an impediment to responsible state and local fiscal policies. Numerous jurisdictions have been subjected to arbitrary cuts in a single revenue source, broad-based revenue rollbacks, revenue or expenditure ceilings tied to rigid formulas, or some combination of all of these; and

WHEREAS:

The overhanging threat of taxpayer revolts still exerts a significant influence of fiscal decisions. In the belief that voters will not support responsible fiscal policies, several states enacted tax cuts, based on temporary post-recession surpluses. Those tax cuts have proved to be imprudent as the economy slows down and federal aid continues to decline; and

WHEREAS:

Where they have been enacted, tax and expenditure limitations have often forced cuts in essential public services vitally needed by low-income families, the elderly, school-age children, and the disabled. Many of the public services that make a significant contribution to the quality of life, like parks, recreation programs and public libraries, are also among the first to be cut; and

WHEREAS:

Many tax revolt schemes have resulted in major shifts of the tax burden, from corporations to households and from wealthy families to working families. Governments subject to these revenue limitations have also tended to compensate by raising user fees and sales taxes, which can be among the most regressive means of raising revenues; and

WHEREAS:

Tying the level of public taxation and spending to arbitrary formulas limits the ability of the government to respond to the changing needs and circumstances of its citizens. If the growth of expenditures, is tied to the growth in state income, the jurisdiction will have an especially difficult time during recessions, when income growth is slow yet claims for public assistance increase dramatically. Formulas hold down spending without regard to the cost of providing services, the demand for services, or the ability of taxpayers to fund them; and

WHEREAS:

Many states have put themselves in a particularly untenable situation by enacting expenditure ceilings that do not allow them to compensate within their own budget structure for the massive cuts in federal assistance by the Reagan Administration; and

WHEREAS:

Where tax or spending limits apply to local governments, their effect has often been to shift political power away from local control and toward state legislatures, making local governments dependent on the politics of state aid; and

WHEREAS:

Where tax or spending limits have override provisions requiring super majorities, the will of the majority of the electorate on government policy can be easily thwarted by a well organized minority; and

WHEREAS:

Where tax burdens are too high, or regressive tax structures fail to spread the burden fairly, rational tax reforms should be enacted. Arbitrary limits only lock in unfair tax structures and reduce vital public services; and

WHEREAS:

AFSCME has played a major role in defeating dangerous tax and spending limitations throughout the country Since 1982, limitations have appeared on the ballot in Ohio, California, Michigan, Oregon, Arizona, Nevada, Louisiana and Madison, Wisconsin — and all have been defeated. AFSCME has shown that well-organized campaigns that educate the public about the real consequences of these limitations can succeed, even where public support initially is overwhelmingly in support of the limitation; and

WHEREAS:

Despite these recent successes in preventing new limitations, the anti-government tax revolt forces have not abandoned their efforts. New battles must be fought on 1986 ballots and beyond. Federal tax changes also have the potential for spurring the state and local tax revolt, if the federal deductibility of state and local taxes is modified or ended.

THEREFORE BE IT RESOLVED:

That AFSCME will continue to oppose vigorously the rigid tax and spending limitation approach to reducing tax burdens. AFSCME will continue to promote real state and local tax reform, which is the only equitable way of relieving excessive tax burdens on working Americans, while maintaining needed public services.

SUBMITTED BY:

International Executive Board