FITSNews Exclusive (Updated) – McConnell To Push Revenue Cap

STATE SPENDING COULD BE SCALED BACK, TAXPAYERS REBATED UNDER PLAN

FITSNews – March 5, 2008 – State Sen. Glenn McConnell is working behind the scenes to pass a revenue cap that would constitutionally limit the amount of money state government could legally take in during a given year. McConnell’s proposal, which aims to slow South Carolina’s out-of-control government growth (illustrated above), would require a two-thirds vote of both the House and Senate to get on the statewide ballot for voter approval. Ordinarily, that would be a longshot given the leftist lean of the South Carolina Senate, but McConnell says the rising tide of voter dissatisfaction with wasteful spending could force the issue during an election year.

“Timing is everything,” McConnell told FITSNews. “And the only way we’re going to get at this problem is to cut off the spigot.”

Different from spending caps – which legislators have routinely adopted and then exploited in the past – a revenue cap would actually keep money from flowing into the state’s coffers. Which basically means that legislators wouldn’t be able to get their grubby little paws on as much of your money as they currently do.

According to documents obtained by FITSNews, McConnell is looking to build support for one of two plans that would place constitutional limits on South Carolina’s revenue intake.

One plan would place a 10% cap on annual revenue growth, while the other would implement a 15% cap. Any revenue that came into state coffers above that amount would be placed in a “budget stabilization fund,” which would then provide rebates to taxpayers as economic conditions permitted.

Under the 10% plan, taxpayers would have received approximately $1 billion in rebates over the past nine budget years, and no state agencies would have been forced to cut their budgets during the lean economic years that hit South Carolina and the rest of the nation between 2001-03.

Of course those estimates are conservative, because State Economist Bill Gillespie has reportedly admitted to McConnell that the rebate amount would have been even higher given the stimulative effect of putting more money into the economy.

Yeah, bozos in Columbia still haven’t figured out that giving taxpayers more of their money back actually produces more revenue growth for the state. Not to mention steadier revenue growth.

Under the 15% revenue cap, approximately $652 million would have been rebated to the taxpayers over the same nine-year time frame, although again those estimates do not include the stimulative effect of the rebates on economic and revenue growth.

Personally, we’d like to see McConnell place a tougher cap on incoming revenue than what is currently being proposed, but then again there’s a rumor going aroung that we hate government. Or something to that effect.

Yet whatever we think of the actual figures, McConnell (like Gov. Mark Sanford before him) is to be commended for figuring out that spending caps just don’t work, and that the only way to really start getting a handle on the waste in Columbia is to cut a big chunk of that surplus revenue off before legislators get their hands on it.

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