Tags: America's Forum | Grover Norquist | red states | blue states | budgets

Grover Norquist: High-Tax Blue States May Drown in Red Ink

By Sean Piccoli   |   Thursday, 22 May 2014 06:30 PM

Democrat-run states trying to tax their way out of budget gaps face financial ruin — and sooner than they think — due to spending habits, ballooning pensions and an exodus of earners to lower-tax territory such as Texas, Americans for Tax Reform President Grover Norquist said Thursday on Newsmax TV.

Norquist spoke with "America's Forum" hosts JD Hayworth and John Bachman about his organization's new report,  which finds the 13 states with Democratic governors and legislatures hiked their spending more rapidly than 24 states controlled by Republicans.

Comparing their 2011-2013 budgets, Norquist said ATR found total general spending rose by about 10 percent in the Democrat-dominated states — a group including California and Illinois — and by about 6 percent in the states, such as Texas and Florida, with unified Republican control of the governor's mansion and the legislature.

The difference was even larger in total 2011-2013 expenditures, climbing 5.6 percent in the 13 all-Democrat states and 1 percent in the 24 all-Republican states, said Norquist.

"There is a huge difference in spending changes," he said.

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Norquist said the pattern also extended to taxes if one looks just at governors and not legislatures. In 2011-2013, he said, total taxes rose by $58 billion in states with Democratic governors and fell by $38 billion in states with Republican governors.

These trends are leading Democratic states toward serious crises, according Norquist.

"It could happen in the next 10 years. We're seeing an acceleration of people — talented people, young people — leaving Illinois, leaving New York, leaving California," he said. "Maryland had a millionaire's tax and then the millionaires moved or they stopped working. You saw them disappear from the tax rolls.

"People do respond to changes in the tax code. They will move to a state with no death tax, they will move to a state with no income tax, they will decide to quit working earlier. Their children leave. They never become taxpayers in those states because there aren't jobs in the first place," said Norquist.

As a result, he argued, lower-tax states that have cut spending and reduced pension liabilities can change the behavior of the higher-tax states that are seeing their earners move away.

"I do want to suggest though that Texas and Rick Perry's governing policies are going to save California," said Norquist. At some point, he added, "even very left-wing Democrat governors and state legislatures in California and Illinois will have to do reform and turn around and govern differently because of Texas and Florida."

He also said some of those governors are "good news for the country[and] for the Republican party" in 2016.

"There's not one, two or three, but there are four, five or six Republican governors who could look you in the eye and convince you that they would do an extremely good job as president," said Norquist. "Not because they give a good speech, but because you can look at the last three, four, five, 10 years of their being governors."

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