Following developments in city government and politics, I’ve been intrigued with how frequently the word “conservative” gets used. Of the two candidates in the one competitive council race, one describes herself as a “true conservative,” the other boasts of his “proven conservative record geared toward the best possible community services and a low tax rate.” Meanwhile, the Mayor has also written of how the council wants to continue to take “a conservative, yet innovative, approach to provide outstanding services to our community.”
But what is a “conservative” approach to public policy making, other than that it produces policies that are “innovative,” “outstanding,” and “the best possible,” yet financed with “a low tax rate?”
Since the 1980s self-proclaimed conservatives have argued that a low tax rate can generate enough economic growth to produce enough revenue to adequately finance government without the need for tax hikes. There’s some truth to their assertions. For example, the Reagan-era tax cuts of 1981 were followed by economic growth of about 4.1% throughout the 1980s, as well as by an increase in revenue. But unfortunately, spending on national defense, Social Security, and Medicare increased more rapidly than the increase in revenue, causing deficits and the national debt to explode (Fun fact: the 1993 tax increases supported by Bill Clinton were followed by a 3.9% increase in economic growth, which generated enough revenue to allow Clinton, working with Newt Gingrich and John Kasich, to balance the federal budget, eliminate deficits, run surpluses, and reduce the national debt—but I digress).
Now, deficits and a growing national debt are legally and politically possible for the federal government, given that there is no constitutional requirement that it balance its budget (or that it even have one). But in Texas local governments must balance theirs. If government revenue from taxes and service fees rises more rapidly than the cost of services, governments may be able to happily cut tax rates and spend more money anyway at the same time. But what if the cost of services goes up more rapidly than the revenue needed to pay for them? Then, under most circumstances, the government must either raise taxes and fees, or cut services, or implement some combination thereof.
One can hope, of course, that the implementation of yet-to-be created economic development polices will accelerate economic growth, thereby producing yet even more revenue without the need to raise taxes or fees. But real conservatives do not rely on wishful thinking to solve their problems. Rather, in the words of conservative public policy analyst Rhett Butler, they prefer “to look things in the eyes as we call them by their right names.” So, if our Mayor and those who want to serve on the council want to be considered conservative, they should be prepared to discuss what policies they would favor if a “low tax rate” fails to generate enough revenue to keep financing existing services, much less finance road repairs, a new community/convention center, etc. Will they accept a tax increase, and if so, to what rate? Will they implement rate hikes for water, garbage, and sewer service? Will they cut existing services, and if so, where?
It’s all very well to say one’s for low taxes and outstanding services, and it may be possible to have both, with the right level of economic growth. But if we don’t have that growth—then what? Shouldn’t we know the answers before we have to vote? Real conservatives will supply the most honest and realistic answers possible.