TASC: Reagan’s gift to Nevada

Much of Nevada’s Tax and Spending Control initiative originated with the Gipper

By Steven Miller
  • Thursday, January 5, 2006

Like so many things that make liberals’ blood pressure percolate, TASC—the Tax and Spending Control initiative recently filed with the Nevada Secretary of State—actually began with Ronald Reagan.

Twenty years before 1992, when Coloradoans passed their Taxpayer Bill of Rights, and five years before Californians passed Proposition 13 by a more than two-to-one majority, there was Ronald Reagan’s Proposition 1, that set them all in motion.

Indeed, a look at Prop 1, and then a look at TASC, shows the clear parental relationship.

First, a bit of background: By 1972, Reagan had been governor of the Golden State for four years. He himself, in order to deal with a deficit left by Pat Brown, had supported a tax increase. Now revenue was coming in at a record clip. The fundamental problem, it was clear, was that California government was simply too big. Moreover, it was government-fostered interest groups that that kept government swinging between feast and famine—feast for spenders, when taxes had been raised, and looming famine for government programs during economic downturns, when all the money had been spent.

Reagan brought a frame of reference to the problem that is usually missing today—a recognition that the explosion in American government’s size, at all levels, was an historical anomaly. As recently as the mid-1920s, total government taxation and spending at all levels had been at 10 percent of the national income—3 percent federal, 7 percent state and local.

Reagan also understood something else—the incrementalist agenda of the the Left. Having battled explicit communists in the Screen Actors Guild for years, he did not fail to notice the effectively socialist agenda being implemented incrementally in state government through always-higher spending and always-higher taxes.

So in 1972, then-Governor Reagan established a tax reduction task force. One of his young lieutenants, Lew Uhler, organized the effort, seeking out the advice of Milton Friedman at the University of Chicago. Other advisors to the task force would include James Buchanan, who would soon win a Nobel prize for his work in public choice economics; Bill Niskanen, currently chairman of the Cato Institute; Martin Anderson, currently a senior fellow at the Hoover Institution; and the late Peter Drucker, of the Claremont Graduate University.

The task force recommended a constitutional amendment to limit the growth of taxes and spending year-over-year. Reagan said yes—and the state tax and expenditure limitation movement was born.

While the policy concept had the green light, however, the actual language of the proposed amendment was another story. Uhler, writing in 2003, recalled that the language went through 44 drafts while the Reagan administration “struggled with the details over several months of often rancorous debate within the Cabinet and among key gubernatorial advisors.” The principal drafter on the project was one Anthony Kennedy, a constitutional law expert at Sacramento’s McGeorge School of Law. Today he is a Justice of the U.S. Supreme Court.

Reagan presented the final language to the California state legislature on March 13, 1973.

“Government must realize,” Reagan told lawmakers, “that it cannot indefinitely tax the people at constantly increasing levels without destroying the people’s ability to support themselves and their families. In the end they will wind up defenseless, at the mercy of a vast special interest-oriented government bureaucracy they unwittingly helped to create....”

Reagan’s “Revenue Control and Tax Reduction Initiative” appeared as Proposition 1 on a special election ballot that November. Slightly ahead of its time—California taxpayers weren’t yet at the level of pain they were five years later, when Prop 13 passed—Prop 1 lost narrowly. “The reasons,” says Uhler, “had more to do with campaign strategy and tactics than with the popularity of the TEL (Tax and Expenditure Limitation) concept. All the big-spending interests, led by the public education establishment, spent millions of dollars against the measure and resorted to massive, outrageous misrepresentations.”

Nevertheless, the tax limitation movement had been launched. And Reagan had shown the way with numerous provisions that would appear in many TEL measures around the country in coming years—including Nevada’s TASC:

  • Limit state government growth;

  • Limit local government growth;

  • Closely define the tax and spending bases;

  • Require legislative super-majority votes on taxes;

  • Return tax revenues over the spending limits to taxpayers;

  • Set aside an emergency fund;

  • Allow the people to vote to exceed the tax/spending limit; and

  • Stop the state legislature from imposing unfunded mandates on local government.

Thank you, Governor Reagan.

Steven Miller is policy director for the Nevada Policy Research Institute.

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