ALEC Prescription Bad Medicine for States
States that follow the economic policy agenda promoted by ALEC risk weakening state economies and harming middle class families. That’s the message of a new report by the Center on Budget and Policy Priorities, which outlines American Legislative Exchange Council’s policy recommendations and their negative effects.
ALEC is a network of conservative state legislators and lobbyists that works to influence state legislation in a variety of policy areas, including budget and tax policy. According to CBPP, ALEC’s proposals would:
cut taxes deeply for wealthy individuals, investors, and corporations; shift tax burdens substantially from well-to-do to middle- and low-income households; and impose strict constitutional or legal limits on revenues or spending that would severely limit states’ ability to provide adequate funds for education, health care, and other priorities, and impair state economic growth.
Many of the recent changes made to Wisconsin’s tax and budget system follow ALEC’s recommendations. For example, the Wisconsin state legislature has passed several new tax cuts that primarily benefit corporations and well-off individuals. At the same time, the legislature made deep cuts to a tax credit that helps working families stay in the middle class, thereby increasing the amount of taxes these families pay. And a new requirement that any tax increases must be approved by a two-thirds majority of the legislature hurts Wisconsin’s ability to continue to make investments in education, the health of the workforce, and community safety.
The bad news for Wisconsin is that states that follow ALEC’s agenda fare worse than other states. States with minimal public services, tax systems that favor the rich, and weak or non-existent unions – all of which are favored by ALEC – fared worse economically during the recession compared to other states, according to a report from the Iowa Policy Project. Residents in states that adhered most closely to ALEC’s agenda were more likely to experience rising poverty rates and falling incomes.
By increasing taxes on working families, cutting taxes for the wealthy, and tying the hands of legislators responsible for making tough budget decisions, Wisconsin is shortchanging our future. Instead of following ALEC’s agenda and risking economic stagnation, Wisconsin should work toward building a state economy in which prosperity can be broadly shared.