Public money should be spent for the most effective pursuit of clear public benefits or to encourage beneficial behaviors undervalued by the market. Taxes should be fair, reliable, transparent, and guided by policy goals rather than political deals. Budgeting should similarly be open, accountable, and follow long-term planning.
1. Prevent special-interest giveaways — Public monies
should be used only for clear public benefit. Taxpayers should not
subsidize or privilege projects that narrowly benefit special
interests. Public subsidies should be systematically scrutinized and
should be paid back if promised results are not delivered. Audits
should be required of large economic development projects with random
audits conducted for smaller projects.
2. Increase transparency and accountability — The
public should know how their tax dollars are spent and how much
corporations pay in taxes. Tax expenditures should come under as much
oversight and scrutiny as direct government spending. Information
related to the use of taxpayer dollars for private partnerships should
be publicly available no less than when public agencies are entrusted
with program functions. Budget negotiations should be open to public
debate, with committee and roll-call votes publicly recorded.
Contractors should bear the risks of cost overruns.
3. Eliminate wasteful and short-sighted
expenditures — programs should be cut and red tape reduced. Policies
should address market failure by providing private incentives to
encourage socially beneficial behavior (e.g.: waiving tolls for
carpooling) or imposing costs on harmful behavior (e.g.: “polluter pay
for permits”). Cut expenditures that are harmful to the public health
or environment. Don’t fund long-term commitments with short-term
solutions. Avoid excessive public debt that will limit future budgetary
flexibility. Budgeting for preventative maintenance will save money for
infrastructure in the long term. Mechanisms should ensure that rainy
day funds will be allocated during prosperous times and drawn down
during recessions. – Spending should deliver the greatest “bang for the
buck,” while recognizing that all government activities advance
multiple aims, not all of which can be measured in dollars. Ineffective
or redundant
4. Make taxes fairer — Revenue burdens should be
distributed according to recognized principles such as who uses, who
benefits, and who has the ability to pay. At a minimum, government
revenue sources should not increase income inequality among state
residents. States should analyze the distribution of taxes and the
incidence of new proposed taxes. State funding instruments to aid
localities should reduce disparities between communities in the
provision of public services such as education. Budget crises should
not be solved by shifting fiscal burdens onto future generations or
local jurisdictions. Similar activities should be taxed similarly –
unless compelling reasons exist for doing otherwise.
5. Sustainable state budgets — Revenue sources should
ensure enough resources to maintain public services and take advantage
of future opportunities. Arbitrary spending or revenue caps should be
avoided. When funding for enforcement is otherwise unstable, it may be
appropriate for funding to come from stable dedicated sources such as
licensing and user fees. Diversion of these dedicated funds should be
strongly discouraged and rules should prescribe when such temporary
diversions are justified and the timeline for their repayment. Revenue
sources should be diversified. States and localities can compete with
one another through the excellence of their infrastructure, education,
and quality of life, rather than using spending and tax expenditures to
outbid other jurisdictions for private investments.