As you may know, for the past several weeks I have been delineating the ten rights of the Nebraska Taxpayer’s Bill of Rights, which I plan to include in legislation for the consumption tax in January. Today I will complete the Nebraska Taxpayer’s Bill of Rights by explaining the tenth right.

The tenth right in the Nebraska Taxpayer’s Bill of Rights says, “The State of Nebraska shall live within its revenue means in the same way that a citizen lives within his or her revenue means.”

This final right in the Nebraska Taxpayer’s Bill of Rights may actually be the most important right of all. Nebraska needs to switch to the consumption tax precisely because this right of the taxpayer has never been acknowledged or regarded by lawmakers in our state.

One of the main reasons that property taxes have run out of control in our state is because lawmakers have given tax asking authority over to local units of government, such as K-12 public school districts, community colleges, and natural resource districts (NRDs). Each of these local units of government may increase their budgets and raise the mill levy, regardless of the taxpayer’s ability to pay for the increase.

Seldom do local units of government ever decrease the size of their budgets. Consequently, local units of government never feel the pain that the taxpayer feels when household incomes go down. Because they never feel the pain of less household income, there is no reason for them to ever tighten their belts. Each year they can ask for more money without any regard whatsoever for the plight of the taxpayer.

Whenever a family’s household income decreases, so does the family’s budget. A family must live within their means. So, the new truck dad was saving up to buy gets sacrificed in order to pay the mortgage and to put food on the table. This is how family budgets work. Shouldn’t it be the same for local units of government? Why do local units of government get a free pass to spend more money when the income of the average taxpayer has decreased?

A similar problem exists at the state level. State agencies, such as the Game and Parks Division, the University of Nebraska, and the Department of Health and Human Services never feel the pain of the average taxpayer. Consequently, every year they can ask the state for more money. The only difference between state agencies and local units of government is that the Legislature has some control over how much money state agencies can spend, because their budgets must be approved by the Appropriations Committee, of which I am a member.

The consumption tax is the remedy for out of control spending. The consumption tax would force all local units of government and state agencies to finally live within the means of the state in the same way that a family must live within their means. Once the income tax, the property tax, the state sales tax, and the inheritance tax are all repealed and all that is left is the consumption tax, state spending would suddenly become tied to consumer spending. In other words, the state would not be able to go shopping until the taxpayer goes shopping first.

Under the consumption tax the State of Nebraska would have a lot more money to spend, not less. The consumption tax would make Nebraska the most desirable state in the union to move to. Both citizens and businesses would want to move here in order to take advantage of our unique tax structure, and as they come, Nebraska will have a lot more money in its coffers, not less. So, the notion that schools or community colleges would have to reduce their budgets or lay off teachers under the consumption tax ignores the fact that the consumption tax will grow our state exponentially, not shrink it the way our current tax structure does.