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ALEC spells out its goals in a “State Budget Reform Toolkit,” which it released in January 2011. Within weeks, tea-party legislators in Minnesota sponsored dozens of bills to turn ALEC’s shopping list into reality.
The “Toolkit” relies on narrow-minded assumptions about state government. These assumptions help explain why legislators spend so much time attacking public spending and public employees. Some examples of their mindset:
- “States face structural deficits created by overspending.” ALEC does not consider that structural deficits can be the result of lost revenues caused by tax cuts.
- States should not resort to “economically damaging tax increases.”
- “Thousands of state employees” perform work that is “commercial in nature and could be delivered by private-sector firms at a lower cost and higher level of quality.”
- “State budgets resemble an iceberg, with decades’ worth of spending unseen and unexamined.” ALEC obsesses about spending, but fails to even consider cutting “tax expenditures,” which deprive Minnesota of billions of dollars of potential revenue each year.
- The private sector is “the wealth-creating sector of the economy.”
- Policymakers should “learn from the private sector, and continually work to reduce taxes and regulations.”
- State budgets are on “autopilot” and “will just continue to expand over time” unless they implement “priority-based budgeting.”
The cost of tax breaks
296: Deductions, loopholes and other preferential tax breaks that Minnesota gives to certain individuals and businesses.
$24 billion: How much revenue Minnesota expects to lose as a result of tax breaks in the current budget.
$34 billion: Minnesota’s total general fund budget.
Source: Tax Research Bureau
Adapted from Council 5's Stepping Up magazine, September-October 2011
