What is So Bad About TEL? SOURCE: American Policy Roundtable April 11 2006
TEL stands for Tax Expenditure and Limitation. The idea is to pass an amendment to the state constitution that will limit the ability of the legislature to increase state spending. At first glance the idea looks attractive. Theoretically, anything that will stop the growth of government looks pretty attractive, especially in states such as Ohio where state spending has skyrocketed since 1990. However - and this is no small point - WHENEVER we, the people are asked to amend the Constitution we must look very carefully at the words, meanings and implications of the proposed amendments. We must consider the history of the matter as well. Here are several considerations about the TEL measure that Ohio voters will face at the polls in November 2006.
TEL runs against the intention of the Constitution. Both the Federal and Ohio Constitutions place the responsibility for government spending in the legislative branch. It is the responsibility of elected officials, mostly the House of Representatives, to battle out the budget. Placing an artificial mechanism like TEL in the Constitution limits the ability of state lawmakers to do their job. Some people have given up hope on the Legislative process and think TEL is a better idea. Will trying to run the budget off a constitutional amendment really work? If it could, why didn't the Founders just write the process for formulating the state budget in the Constitution in the first place?
TEL does not really stop growth in state spending. The Ohio proposal sounds good but the details are tricky. TEL permits state lawmakers to increase the size of state government to match the rate of inflation every year up to a limit of 3.5%.That means if inflation is 2% for the next two years, the next two-year state budget can be from 2% to 3.5% larger. Increasing a $54 billion budget by 3.5% is a whole lot of money. In essence, TEL is a guaranteed Cost of Living Allowance (COLA) for state government. Think about it -- why would state lawmakers in Ohio, who have outspent inflation almost every year since 1990, ever spend less than the 3.5% increase guaranteed by the TEL COLA?
TEL bullies local governments. The Ohio amendment does not limit tax increases at the state level. It does make it harder for local governments to raise taxes. This is not a balanced approach. Just as the federal government should not place undue burdens on the states, the state government should not attempt to micromanage the finances of every locality. This kind of top-down command control is not the way good government works. By demanding special elections for tax increases at the local level, TEL places an unfair, unbalanced and unfunded mandate on local government.
Ohio already has a way to stop out of control state spending. Ohio is a "line-item veto" state. The Governor can veto any line item of spending to reduce the budget. The legislature can override the veto but it takes a two-thirds majority. Maybe Ohio should elect a Governor committed to reducing the size of state government first -- before placing an artificial device in the Constitution that won't really work.
The facts behind the Ohio TEL Campaign Other states have tried this idea in various forms. It appears to be working in Michigan. It was a failure in Colorado and voters repealed the measure in 2005. The Ohio idea came forward as a campaign project of Secretary of State Ken Blackwell. He led the paid signature drive to place this measure on the ballot in 2005. When the filing deadline for the 2005 ballot arrived, the Blackwell TEL campaign was out of money and could not muster the funds for a major ballot fight, so they moved the measure to 2006. Mr. Blackwell is now running for Governor and claiming TEL as his major economic platform.
An interesting side note - The last two year budget passed by the Ohio General Assembly was smaller in growth than the rate of inflation - without TEL.