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Rob Natelson: A Federal Lawsuit Threatens Constitutional Limits on the State Legislature

Most state constitutions limit the financial powers of the state legislature. They have to: In the 19th century several states nearly went bankrupt from bad fiscal practices.

Now a federal lawsuit puts those protections in danger.

The Montana constitution requires the state to run a balanced budget. And it requires that before the state can go into debt, the proposed debt must be approved either by 2/3 of each house of the legislature or by a vote of the people.

In 2011, a group of government employees and apologists sued the State of Colorado in federal court, arguing that the Colorado constitution’s limit on the legislature’s taxing, borrowing, and spending powers violates the U.S. Constitution. The plaintiffs argue that unless a state legislature has absolute power to tax, borrow, and spend as it wishes, that state does not comply with the U.S. Constitution’s requirement that it have a “republican form of government.”

The suit is ridiculous on a number of levels, as my co-author and I show in Independence Institute issue papers here and here. Nevertheless, last year an Obama-appointed federal judge refused to dismiss it, and ruled that it could proceed.

That judgment is now on appeal. On April 19 I’ll be in Helena on behalf of MPI to discuss the suit and how it threatens both the Montana Constitution and the fiscal health of Montana and the livelihood of her citizens. Keep tuned for more details.

Montana Taxpayer Bill of Rights (2008)

The following links examine how Montana would benefit from a more effective tax and expenditure limit. MPI is advocating policies that would: 1) limit the growth in state spending to the growth of population plus inflation, 2) ensure surplus revenue above this amount is invested in emergency and budget stabilization funds or returned to taxpayers, and 3) require voter approval for tax increases or any weakening of the amendment’s limits.

MT Taxpayer Bill of Rights 2008 MPI Policy Note

For Full TABOR Study: Montana TABOR Full Study 2008