Ever since the Idaho Freedom Foundation published the Freedom Index for the 2016 legislative session, we have heard full-throated cries denouncing the index and, more generally, IFF.
Opponents of the Freedom Index, including many current legislative candidates, like to paint us as an organization that opposes almost all government. Such critics forget a number of things. The index rates individual legislation, using the current size and scope of government as its starting point. So, at this point, growing or shrinking government is not like starting at zero on a number line.
Let’s take Idaho General Fund spending as an example. In fiscal year 2011 Idaho was just beginning to recover from the recession; General Fund spending had been pared back to $2.384 billion. At the conclusion of the 2016 legislative session, $3.273 billion was appropriated for the General Fund for fiscal-year 2017. So, in six fiscal years spending grew more than 37 percent.
That spending growth represents a compound annual growth rate of 5.4 percent. Now, did you get a 5 percent raise each and every year for the last six years? Few did I would bet.
Let’s look at this a bit differently. What would 2017 fiscal-year spending look like if the Legislature had held annual spending increases to 3 percent per year these past six years? Well, spending in 2017 would be $2.847 billion, or about $426 million less spending over 6 years.
Had the Legislature taken the conservative, fiscally responsible path, growing tax revenue could have covered millions in road repairs, plus provided Idaho families and small businesses with significant tax relief.
A 3 percent year-over-year increase in general fund spending sounds very moderate to me.
We can’t undo the spending splurge of the last six years. However, we can ask current legislative candidates to act like fiscal moderates and regain control of spending.
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