Three lawmakers on the Joint Revenue Committee missed a committee meeting about new options for the state’s fiscal situation in Buffalo in order to attend a convention on changing the U.S. Constitution in Phoenix this week.
Their travel to Phoenix was funded by a group backed by conservative policy institutions including the American Legislative Exchange Council.
The Arizona State Legislature held the meeting to discuss potential rules for a convention of the states at which conservatives would attempt to amend the U.S. Constitution. Some state legislatures have been pushing for a constitutional amendment requiring Congress to balance the federal budget. Conservative think tanks like ALEC have given the idea force, according to reporting in the New York Times and elsewhere. A convention of the states could be either a bargaining chip to force a stalled U.S. Congress to act, or a way to circumvent that body and add the amendment without them.
Rep. Dan Laursen (R, HD-25, Powell), the ALEC state chairman for Wyoming, traveled to Phoenix with Senate Revenue Committee Chairman Ray Peterson (R, SD-19, Cowley) and Sen. Jeff Wasserburger (R, SD-23, Gillette).
A Florida-based nonprofit organization called the Balanced Budget Amendment Task Force paid for the Wyoming lawmakers’ travel, Laursen said. On its website, the nonprofit lists ALEC and the Heartland Institute as partner organizations. Both groups are known for pushing business-friendly legislation, deregulation, and smaller government, and both have seen funding and support from the conservative Koch brothers.
“I’m not sure who specifically contributed to the fund that the BBA organization uses for this effort,” Peterson said in an emailed response to questions. “I’m sure they have a number of different contributors.” No state money was appropriated for the trip, Peterson said.
Article 5 of the U.S. Constitution provides that a constitutional convention can be called by a two-thirds majority of the states. Twenty-seven states have passed resolutions doing so for the balanced budget amendment. The Wyoming Legislature passed such a resolution last session. There was lengthy debate on the floor of both the House and Senate on the measures, though it was mostly debate between conservative lawmakers on how to best craft the resolution to ensure tampering with the U.S. Constitution be limited to the budget amendment. That concern is a focus of the convention in Phoenix, Laursen said, speaking to WyoFile from Arizona.
This year, the Arizona Legislature passed a resolution that the state would host a “planning convention” to adopt rules for the eventuality of a constitutional convention. The rules proposed in Phoenix would serve as a working document were an actual constitutional convention called, Laursen said.
There was no ethical conflict in accepting the Florida nonprofit’s scholarships to travel to Phoenix, said Senate President Eli Bebout (R, SD-26, Riverton). Lawmakers were “acting within the fiduciary responsibility to attend the convention” on issues that could affect the state, he said, and there was “nothing illegal or wrong or a violation in any form.” Lawmakers often travel with scholarships, or even on their own dime, to attend conventions relevant to Wyoming government, he said.
Bebout was not familiar with the Balanced Budget Amendment Task Force’s partners, he said, but he knew the group had been pushing the issue in states around the country. “Nobody likes ALEC except those of us who appreciate what they do,” he said when told of that organization’s involvement.
The Task Force lobbied for Wyoming’s resolution last session, and was in Cheyenne to help advise on the bill and speak before committees, said Rep. Tyler Lindholm (R, HD-1, Sundance), who sponsored the resolution.
Bebout and the lawmakers in Phoenix voiced strong support for the budget amendment, saying the federal government is $20 trillion in debt. “We cannot keep going this way,” Laursen said. “We should be worried about our kids and grandkids.”
The Congressional Budget Office puts the total debt held by the public at $14.7 trillion as of June, but “intragovernmental debt” moves the figure over the $20 trillion mark, according to a an article in The Hill this week.
For the convention in Phoenix, Bebout selected senators who had spoken eloquently and passionately during debate over the resolution last session, he said. It was an unfortunate coincidence that both senators served on the Revenue Committee, and that there was a scheduling conflict. “It would’ve been nice to have them in both places,” he said, but added there are other meetings to work on the state’s revenue problems.
Wasserburger agreed, saying any legislation drafted in Buffalo will be reviewed by the committee later. “This is the time of year to miss meetings,” he said.
The convention in Phoenix was “historic when considering the last state’s [sic] convention was over 100 years ago,” Peterson wrote.
Economists critical of the balanced budget amendment say it could tie the U.S. Government’s hands in the face of any future economic depression. Stimulus packages like those used to stave off disaster following the 2008 recession would be completely out of the question, said David Super, a Georgetown Law professor who has been studying the issue.
“It sounds alluring to people,” he said, “families have to balance their budget and so people think the federal government should have to too, but families and states are not responsible for managing the economy.”
With its hands tied by a balanced budget requirement, Super said, the federal government would take actions that emphasize the ups and downs of the economy instead of seeking stability: “It would respond in exactly the wrong way,” he said. When the economy was rising and tax revenues along with it, congress would cut taxes and spend more money, raising the risk of inflation. But when the economy fell, revenues would fall and the government would have to cut spending, taking more money out of the economy and hurting those reliant on social security and other government programs just when they needed them most.
Conservatives concerned about the federal deficit shouldn’t seek a balanced budget year-in and year-out, Super said. True stability would be represented by surpluses in a good economic year, and deficits in a bad one, he said.
People waiting on Congress to restrain spending had waited long enough, Peterson said. “How’s that working out for us so far?” he wrote.
Wyoming has a unique relationship with the federal government. It has a large proportion of federally owned land, leading to a high number of federal employees participating in the local economy. It also relies heavily on federal spending — in fiscal year 2014, 35.5 percent of Wyoming’s state revenue was federal aid, according to the conservative-leaning Tax Foundation.
“Wyoming would be very vulnerable under a balanced budget amendment because those federal dollars would have to stop when the economy turned to a recession,” Super said. At the same time the state could see federal employees laid off and even increased user fees for those dependent on federal lands as the government sought to raise money, he said.
Super visited Phoenix before the convention, and said Arizona state legislators had been lobbied and pushed to call the planning convention “to an extent that they had never experienced before,” he said. “There’s a lot of money and a lot of well-connected people behind this effort.”
Companies like the Koch brothers’ sprawling conglomerate stand to benefit from diminished regulatory agencies overseeing the environment, health and consumer protection.
As worrying as the effects of a balanced budget amendment, Super said, is the possibility of a convention to tinker with the Constitution. While Laursen said the legislators in Phoenix were writing rules to prevent a “runaway” convention from making changes other than the balanced budget amendment, he noted those rules were not official.
“This meeting in Phoenix has no authority to do anything,” Super said. “They’re promoting the convention idea and they want to assure people,” by drafting rules they have no ability to enforce.
He worries that if a convention were called, the rich and powerful would try to rewrite the country’s founding document in their favor, he said. “If an actual convention is convened we will see an outpouring of special interest money like this country has never seen,” Super said.
Revenue Committee shorthanded?
The Joint Revenue Committee will meet two more times this interim period, one of which will be a meeting with the Select Committee on School Finance Recalibration. The committee is tasked with searching for new revenue sources as the state grapples with a deficit in public education funding estimated at around $360 million a year, including money for school construction and maintenance.
Peterson has often referred to the committee’s work — looking at unpopular tax increases — as doing a tough job that is needed for the benefit of the state. “You’ve got a pretty conservative committee which is biting a pretty ugly part of the job here,” he said at the last Revenue Committee meeting, on Aug. 2-3 in Thermopolis.
But missing this week’s meeting was worth it to be apart of the convention in Phoenix, he wrote. He had also missed other meetings, he said, including one of the Select Committee of Capital Financing and Investments, on which he also serves. “I’m sure there are those that disagree with the effort of acquiring the needed 34 states and their applications for a state’s constitutional convention,” he wrote “but … developing the rules that will govern such a convention and ensuring that our state is involved in that planning … is critical as we approach the necessary number.”
With three out of fourteen members missing, the revenue committee presented a diminished front on Tuesday and Wednesday but considered issues including a tax on the tourism industry, improving the state’s collection of unpaid taxes, and revenue streams to cities towns and counties.
One motion to draft a bill passed in Buffalo by only one vote this week, meaning the outcome could have been different had the full committee been present.
Representatives of counties, and mayors from several Wyoming towns and cities, had attended the meeting to ask for the Revenue Committee’s support for the continuance of a $105 million distribution from the general fund to towns and counties. The money is distributed by the Legislature as a separate appropriation, and is not included in the overall state budget.
It’s a fight every year to get the distribution through the Legislature, Pete Obermueller, executive director of the Wyoming County Commissioners Association, told lawmakers. It’s particularly vulnerable as legislators eye the education funding deficit, he said.
At the same time, sales taxes, the chief funding source for towns and counties, have been hit by the energy downturn. While a bill to appropriate the money usually comes from the Joint Appropriations Committee, proponents of the towns and counties hoped the Revenue Committee would shore up support with a backup bill to maintain the distribution.
The motion to draft such a backup bill passed six to five. With two more votes against it, the idea would have died and the towns and counties would not have had the revenue committee’s support. It would not have come up at an additional committee meeting without a new motion.