ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, December 6, 1996 TAG: 9612060010
SECTION: EDITORIAL PAGE: A-18 EDITION: METRO
THE NEW Congress will have a choice. It can continue to work with President Clinton toward a balanced budget - preparing for the day when baby-boomer retirements will stress entitlement-program finances.
Or it can, over the president's objections (but not subject to his veto), pass a balanced-budget amendment to the Constitution.
Congress may not be able to do both. That's because a balanced-budget amendment, if approved by Congress and ratified by the necessary 38 states, might work against rather than toward the goal of balanced budgets.
This prospect may seem counterintuitive. But it is strongly suggested by a Columbia University law professor's new study, sponsored by the Twentieth Century Fund, of state balanced-budget requirements.
Though touted by advocates as models for a federal balanced-budget amendment, the various state requirements at best do little to actually balance state budgets, Richard Briffault found. At worst, they can inspire the kind of fiscal ledger-demain and avoidance mechanisms that camouflage the true condition of a state's finances to the detriment of political accountability and fiscal soundness.
Briffault's analysis helps answer a question that amendment proponents don't like to confront: If balanced-budget constitutional provisions are so effective, why do states without them fare no worse fiscally, and often better, than states with them?
Backers of a federal amendment often suggest that almost all states have similar constitutional requirements. In fact, only about two-thirds of the 50 state constitutions have balanced-budget requirements. The number is imprecise because of the ambiguity of the language in many of the state constitutions.
Some states have statutory requirements for balanced budgets. But such requirements are essentially meaningless, because they can be repealed at any time by the same lawmakers who approve the budgets.
Many states also have debt-limit provisions in their constitutions, which frequently are counted as balanced-budget provisions by supporters of a federal amendment. But they're not the same thing. Indeed, they highlight the fact that "balanced-budget" states routinely run deficits under the federal definition, when they borrow money for capital outlay. Moreover, Briffault observes, states' constitutional debt limits tend to spur the same avoidance mechanisms - creation of quasi-autonomous authorities, for example - that balanced-budget requirements encourage.
What do constrain the states from budgetary excess, Briffault found, are the bond marketplace and the competition among states to lure business and industry that provide jobs and boost tax bases. Those constraints operate somewhat less effectively for the federal government, with its power to print money and to seal borders.
All the more reason for Congress to continue down the path of genuine budget balancing rather than get sidetracked by constitutional fiddling.
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