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House Co-Sponsorship Memoranda
House of Representatives
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | January 11, 2023 04:09 PM |
|---|---|
| From: | Representative David H. Rowe |
| To: | All House members |
| Subject: | Responsible Budgeting Act |
| State officials’ most basic governing duty is to enact a responsible budget each year while avoiding structural deficits and the buildup of debt. Yet current practices often interfere with holistic budgeting and distract policymakers from adding as much long-term value as they otherwise could. Today’s poorly designed budget rules tend to promote excessive short-term tinkering that crowds out other priorities. Annual balance is the most common budget goal in the states. This legacy rule is simple to explain, but it has many pitfalls. It encourages excessive spending during good years, and during recessions it forces policymakers to choose between immediate spending cuts and tax hikes, evading the balance rule, or being open to federal bailouts. Rules-based structural balance is a promising alternative. It provides policy stability even in a dynamic economy. The resulting increase in policy predictability promotes economic growth and reduces stress for policymakers and the public. Policymakers can focus more on higher-value policy than reacting to frequent economic and fiscal shifts. Well-crafted tax and expenditure limitation policy promotes stability for core state government functions even with a volatile economy while encouraging thoughtful stewardship of taxpayer resources. The Responsible Budgeting Act is a proposal designed to accomplish these objectives. The Act includes a spending limit that reflects trend economic growth with a deficit brake, limits on raising revenue, a reserve fund, and provisions for emergency spending and disposition of excess revenue through tax rebates and debt reduction. Please join me in sponsoring legislation to ensure long-term fiscal stability in our great Commonwealth. |