Anti-tax pledges harm policy debate, could crimp road-funding effort

23 Jan 2017 1:05 PM | John Ketzenberger (Administrator)

A football coach who has pledged to forsake running the football on offense has severely limited his options for success. The same could be said for legislators who’ve signed onto the Americans for Tax Reform’s Taxpayer Protection Pledge.


There are 27 legislators in Indiana, or nearly one-fifth of the General Assembly, who have signed and filed a document that pledges they “will oppose and vote against any and all efforts to increase taxes.” It is the key part of an effort spearheaded by Grover Norquist that dates to the Reagan administration.


In the 30 years since the pledge was introduced it has helped harden sentiment against instituting new taxes or raising existing rates as a means to solve government problems. While this is understandably attractive from a political point of view, it’s limiting from a policy perspective, which makes it difficult for lawmakers to have full and frank discussions. In the end, public policy suffers when options are limited and lawmakers feel forced to hedge.


The pledge could prove problematic for Indiana lawmakers scheduled to consider a comprehensive transportation measure, House Bill 1002, beginning Tuesday in a joint committee meeting. The bill includes a 10-cent per gallon increase in the state’s gasoline tax and other revenue increasing mechanisms that run afoul of the pledge. Norquist asserts the pledge is valid for as long as a lawmaker remains in office and has vowed to use the resources of Americans for Tax Reform to oppose anyone who violates the terms.


There are 21 members of the House, all Republican, who have signed the pledge, including Ways and Means Committee Chair Rep. Tim Brown, R-Crawfordsville, and Vice Chair, Rep. Robert Cherry, R-Greenfield. Three other members of Ways and Means also signed the pledge: Rep. Steven Davisson, R-Salem, Rep. Todd Huston, R-Fishers, and Rep. Sharon Negele, R-Attica.


When HB1002 was introduced during a news conference earlier this month, Indiana House Speaker Brian Bosma, R-Indianapolis, was asked about the pledge and its consequence for the transportation bill. “We have to work through that issue because we have some people who signed those many years ago, and it’s being held over their heads like a blood compact,” Bosma said.


“I’ve had discussions with Mr. Norquist about both the advisability of the pledge and its efficacy—is it into perpetuity or is it for two years?” he added. “So, we’ll have to leave that to individual members to make a determination and we’ll work with them like we worked through that last year.”


The General Assembly enacted a comprehensive measure last session to fund transportation improvements. The act shifted tax-revenue splits, such as redirecting local option income and sales tax proceeds, but it did not increase any tax rates to generate additional revenue. Last year all but one of the House members who signed the pledge were among the 91 who voted for the transportation funding bill. Only Rep. Wes Culver, R-Goshen, was one of five to vote against it.


(NOTE: Rep. Cherry did not vote on the bill since he missed most of the session for health reasons.)


It’s unclear the outcome of deliberations on HB1002 will be this year, but it’s likely to include at least one tax increase as lawmakers try to find about $1 billion in new annual funding for transportation needs. The bill could pass even if all 21 House members and six Senators who signed the pledge voted against it, but it would make the path to enactment much more tenuous.


Aside from practical considerations, it’s worth noting that forsaking any tax increases before any deliberations severely limits the policy discussion. What may be effective on the campaign trail does not enhance the debate over policy later. Lawmakers should be free to consider—and ultimately adopt or reject for their own considered reasons—tax increases to fund the needs of government.


Their options should not be limited by a pledge that does not consider the fiscal circumstances of the times. Otherwise lawmakers may win elections, but the state could lose.


Indiana Fiscal Policy Institute

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