WHEREAS:

The passage of Proposition 13 in California in 1978 touched off a tax revolt that has affected nearly every state and many local governments throughout the country. Numerous jurisdictions have been subjected to arbitrary cuts in a single revenue source, like property taxes; broad-based revenue rollbacks, to expenditure ceilings tied to rigid formulas or some combination of all of these. Just the threat of a taxpayer revolt has prevented many legislative bodies from raising taxes sufficiently to keep up with the rising cost of providing public services; and

WHEREAS:

The deep recession of 1981-82, coupled with billions of dollars in federal aid cuts, forced many state and local governments to raise tax rates to compensate for their declining tax bases. These tax increases encouraged another round of the tax revolt; and

WHEREAS:

Tax limitations will be on the ballot in several states this November, including Hawaii, Oregon, Michigan, and California; 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, 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 supermajorities, the will of the majority of the electorate on government policy can be easily thwarted by a well- organized minority; and

WHEREAS:

Rising tax burdens and regressive tax structures that have given rise to these limitation movements must be dealt with in a rational manner. 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 like Jarvis II in California in 1980, the Phillips initiative in Oregon in 1982, and more recently, the SET initiative in Ohio last November. 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.

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