Alberta can learn from Washington state
Author:
John Carpay
2002/08/15
For many years, taxpayers in the state of Washington watched in frustration as their government grew and grew, bigger and bigger, year after year. From 1980 to 1995, Washington's population grew at an average rate of 1.2% per year, and average annual inflation was 4.5%. Yet politicians increased government spending by 8% per year! Fed up with ever-rising taxes, voters decided to attack the root cause: excessive government spending.
Making use of their right to initiate and vote in referendums, citizens put a spending control law on the ballot, to limit annual increases in government spending to population growth and inflation. Opponents of this proposal warned that people would get "hurt" and vital services would cease to exist. But most voters knew that politicians needed to focus spending on high priorities, and simply say "no" to all the rest. The majority voted in favour of the proposed law.
Since 1995 the state's spending on health care, education, prisons, welfare and other programs has risen steadily, to keep pace with inflation and population growth. With fair and reasonable budget increases, people didn't get "hurt" - and the sky did not fall - contrary to what big government advocates always say.
Since 1995, politicians have been forced to choose priorities, find efficiencies, and make programs more effective. Washington's spending control law provides a permanent, year-round incentive for politicians and bureaucrats to look for ways of spending smarter rather than spending more. An independent study by the University of Washington's Institute for Public Policy and Management calculated that this spending control law, only four years after going into effect, was already saving taxpayers $700 million per year.
With spending finally under control, Washington state cut taxes in the mid-1990s and again in the late-1990s. These tax cuts have remained in place, unlike Alberta's 2001 tax cuts which were partially reversed in 2002. That's because the only foundation for permanent tax cuts is reducing growth in government spending.
Washington's law also requires that a referendum be held on any new taxes or tax increases. This puts the onus on politicians to explain and justify why more tax dollars are needed. In Alberta, the onus is on taxpayers to explain and justify why we should be allowed to keep more of our own hard-earned money. Alberta's politicians can increase taxes whenever they like - even after promising before an election that "the only way taxes are going is down."
Alberta's spending on government programs is up 45% from six years ago, in contrast to only 12% population growth and 13% inflation. By how much will Alberta's spending rise next year Will taxes go up again in 2003
Unfortunately Albertans do not have the right to put a spending control law on the ballot for consideration in a referendum. Even though 79% of Albertans want the right to initiate and vote in referendums, Premier Klein did not support direct democracy legislation introduced in 1994, 1996, 1998 and 2001.
Nothing prevents Ralph Klein's government from passing a spending control law for Alberta, to provide adequate funding for core programs and create a foundation for permanent tax cuts. It's worked for Washington state. Why not use it to benefit Alberta taxpayers