Schmudget or fudge it?

October 16, 4:56 PMSeattle Public Policy ExaminerJohn Barnes

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Interesting tidbit today on Schmudget, the blog of the statist Washington State Budget & Policy Center.  According to the Center and its parent organization, the DC-based Center on Budget and Policy Priorities:

Initiative 1033 proposes to limit revenue collections at the state, county, and city levels according to a formula based on the rate of population growth plus inflation. A key feature of Colorado’s TABOR amendment, this formula is deeply flawed because it fails to keep pace with the costs of providing essential public services such as health care and education. Under I-1033, the inflation component of this formula would limit revenue growth according to the “implicit price deflator for personal consumption expenditures” (IPD).
 

But according to Washington state's Office of Financial Management:

The IPD measures the prices of a much wider group of goods and services than the CPI. For example, the IPD includes all consumption of health care rather than just out of pocket expenses and consumer purchased insurance measured in the CPI. The IPD is based on current economic conditions and consumer expenditures, tastes and preferences. It is frequently used to adjust state economic and revenue data. The state expenditure limit is based on the IPD as well as inflation adjustments in the state's biennial budget.

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