Right-Wing Policy Shop: Busted Budgets, Giveaways to the Rich Coming to a State Near You

February 22, 2013

It’s one of the most powerful lobbying organizations in the United States today, exercising an outsized influence in the Republican Party and driving policy decisions in state houses and governors’ mansions across the country.  And chances are you’ve never heard of it.

The American Legislative Exchange Council, a ultra-right wing policy organization based in Washington, D.C., has been on a roll, successfully recruiting lawmakers to sponsor hundreds of ALEC authored anti-worker bills in the past few years – from Wisconsin Gov. Scott Walker’s law stripping teachers, firefighters and other public workers of their right to collectively bargain to Michigan Gov. Rick Snyder’s right-to-work-for-less legislation passed last December.

Financed by wealthy billionaires and big CEO’s, ALEC provides model legislation on everything from energy deregulation to shredding campaign finance law.

As Progress Missouri puts it in its analysis of the organization, which has been particularly active in promoting right-to-work-for less in the Show Me State:  

The American Legislative Exchange Council (ALEC) is a corporate bill mill that is exerting extraordinary and secretive influence in the Missouri legislature and in other states. Through ALEC, corporations hand Missouri legislators wish lists in the form of "model" legislation that often directly benefits their bottom line at the expense of Missouri families. Numerous ALEC model bills are crafted behind closed doors by corporations, for corporations. Elected officials who are members of ALEC bring ALEC legislation back to Missouri as their own ideas and important public policy innovations, without disclosing that corporations crafted and pre-voted on the bills at closed-door meetings with legislators who are part of ALEC.

ALEC’s priorities include:

• Privatizing education
• Eliminating collective bargaining rights for public workers and passing right-to-work laws
• Restricting voting rights
• Slashing health and safety regulations
• Removing restrictions on corporate lobbying and campaign giving

Numerous states are now considering ALEC’s tax and budgetary policies, which many economists say would slash funding for vital government programs and infrastructure investments, while shifting more and more income to the wealthiest Americans.  

Erica Williams and Nicholas Johnson, policy analysts with the Center on Budget and Policy Priorities, sum up the effects of ALEC’s fiscal proposals on state budgets in a Feb. 12 report. They write: 

These policies 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.

Cuts called for by ALEC could have a particularly harmful effect on job creation, eliminating needed investment in infrastructure improvements and job training.

One state that has signed on to ALEC’s full program is Kansas. Last year, Gov. Sam Brownback hired ALEC-affiliated economist Arthur Laffer to sell the organization’s fiscal agenda to the legislature. Laffer promised that massive tax cuts would be an “adrenaline shot” to the economy.

Lawmakers ended up slashing taxes by $700 million; skewed primarily to those in the upper end of the income scale, while raising the sales tax and eliminating tax credits that benefit middle- and low-income Kansans. 

Williams and Johnson write:

To date, the promised “adrenaline shot” has not occurred – the state essentially created zero net new jobs in the second half of 2012 – so the state faces a large budget shortfall. The governor has proposed closing it by continuing to underfund K-12 education and an extension of a higher sales tax rate.

On the other side of the spectrum, California is seeing some of the fastest job growth in the country, despite a tax increase for wealthy residents to patch up a massive budget shortfall last year.

Jim Tankersley at the Washington Post writes:

Many Golden State economists say the tax hikes won’t drive away companies. A Stanford University study last year found no link between tax rates and wealthy Californians’ decisions to leave the state, and the state has a history of tax increases not affecting growth, including under a Republican governor — Ronald Reagan.