Commentary

Powerful graph explains how ALEC-inspired constitutional amendment ignores reality

At the heart of the Senate’s controversial “TABOR” constitutional amendment is the notion that state spending growth would be limited from year to year to the combined rates of population growth plus inflation growth. Inflation is defined as the percentage rise in the federal Bureau of Labor Statistics’ Consumer Price Index (CPI).

At first blush, this may strike some as reasonable. This is, after all, one of the best known and most respected measures of inflation.

But here’s one of the critical problems with such a formula: the costs of the many of the things that government buys don’t follow the CPI.  As the chart below demonstrates, the cost of things like health care and education have been rising much faster than inflation for years. Indeed, over the last decade and a half, the cost of medical care has risen more than 60% while the overall CPI has risen less than 40%. Education costs have more than doubled during that same period.

TABOR2015 - Groups Relying on Govt Spending Growing Faster than Total Population

 

In other words, to the extent TABOR limits spending in those areas to the CPI inflation rate, it builds in structural shortfalls — shortfalls that are cumulative and increasingly destructive over time — right from the start.

3 Comments


  1. Sean D Sorrentino

    August 13, 2015 at 1:09 pm

    So let me see if I’ve got this correct. In your minds, because the cost of miseducating our children has risen far faster than the CPI, with nothing to show for the increase in funding, then we should not limit the rise in school funding? Circular argument, much?

  2. gregflynn

    August 13, 2015 at 1:28 pm

    In 2000 the NC high school graduation rate was 62.1%. In 2014 the NC graduation rate was 83.9%, the highest recorded in the state’s history.

  3. LayintheSmakDown

    August 14, 2015 at 4:23 pm

    Sooooo, you are now against basing budgets on a metric pegged to PG & I….after being for it. Next week you will be again for it. You really have to have a scorecard to understand progresso lunacy, it really defies any principles of logic or rational thought.

    Love your comment Sean. I always see the schools or other government entities as a black hole that could suck up every dollar in the economy and still need another million dollars. Kinda like all the fat people at the Golden Corral Buffet.

    Nice statistic Greg. We are now graduating more people ill prepared for life, let’s throw them more money!

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