No State Bailout
No State Bailout
No State Bailout
Over the past few weeks, you’ve been asked to lend your official support for a new spending
plan that would provide bailout funds to states and localities. On behalf of the undersigned
grassroots organizations, we urge caution in moving forward with such a plan. State and local
government budgets should not be balanced on the backs of federal taxpayers. Doing so would set a
horrible precedent, discourage responsible budgeting in the future, and place a greater strain on
America’s hard-working families and businesses.
On the whole, state outlays have grown at a fast – some would argue unsustainable – clip
over the past decade. Indeed, spending is up 124 percent over where it was 10 years ago. During
this same time frame, state debt increased by 95 percent. Clearly, some states and localities allowed
themselves to be caught up in the borrow-and-spend mania.
Now that the economic picture doesn’t look as rosy as it once did, some want to continue
this upward spiral on the federal taxpayer’s dime. We believe that if troubled state and local entities
seek lasting relief and stability, they should restructure their activities the way millions of families
have had to restructure their budgets.
In his October 29, 2008 testimony before the House Ways and Means Committee, South
Carolina Governor Mark Sanford urged Congress to “accept that there may be better routes to
recovery than a blanket bailout, including offering states like mine more in the way of flexibility
and freedom from federal mandates instead of a bag of money with strings attached.” As Dr.
Richard Vedder from ALEC’s Board of Scholars has said, “A federal bailout is the wrong solution
to the wrong problem.”
We concur that reducing expensive mandates – which have cost states $131 billion over the
past four years – would be one way the federal government could reduce pressure on state and local
governments without spending more taxpayer dollars.
Sincerely,