EN FR

Saving taxpayer dollars

Author: John Carpay 2002/08/12
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. In a referendum held along with state-wide elections, the majority voted in favour of the proposed law, which went into effect in 1995.

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.

While government programs have continued to receive adequate funding, taxes have been coming down.

Moreover, Washington state's tax cuts in the mid-1990s and late-1990s 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 able 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 today is in the same situation Washington was in before it had a spending control law. Alberta's spending on government programs has risen from $12.8 billion in 1996 to $18.6 billion in 2002 - an increase of 45%.

But during the same period Alberta's population grew only 12% and inflation was 13%. By how much will Alberta's spending rise next year? Will taxes go up again?

Unfortunately Albertans do not have the right to put a spending control law on the ballot for consideration in a referendum.

However, nothing stops MLAs from passing a spending control law in 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?

A Note for our Readers:

Is Canada Off Track?

Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.

Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?

You can tell us what you think by filling out the survey

Franco Terrazzano
Federal Director

Hey, it’s Franco.

Did you know that you can get the inside scoop right from my notebook each week? I’ll share hilarious and infuriating stories the media usually misses with you every week so you can hold politicians accountable.

You can sign up for our Action Update emails

Looks good!
Please enter your first name
Looks good!
Please enter your last name
Looks good!
Please enter a valid email address
Looks good!
Please enter a valid postal code. Ex. K1K1K1

We take data security and privacy seriously. Your information will be kept safe.