The Alaska Policy Forum recently exposed that the state’s legislature in 2011 and 2012 appropriated millions of tax dollars to finance the facilities of a Laborers’ International Union of North America local. As is the case with numerous state government spending initiatives today, it violates the state’s Gift Clause — a constitutional protection in 47 of 50 states that forbids government from allocating tax dollars to private entities for non-public purposes.
The origins of the Gift Clause stem from the legal jurisprudence known as the public purpose doctrine, which is a similar commonsense principle safeguarding the public purse. In the 1874 U.S. Supreme Court ruling Loan Association of Cleveland v. Topeka, which affirmed the public purpose doctrine, declared, “Taxation… can only be used in aid of a public object, it cannot, therefore, be exercised in aid of enterprises strictly private, for the benefit of individuals, though in a remote or collateral way the local public may be benefited.”
Whereas the public purpose doctrines teeth have been defanged by subsequent court decisions, state Gift Clauses are making a comeback of sorts. In previous posts, I have noted the heroic strides taken by the Goldwater Institute for restoring the strength of the Gift Clause in Arizona, and the need for other fiscally troubled states to replicate their efforts to cut state costs by ending government largess to private parties.
The improper appropriations revealed by the Alaska Policy Forum fail to meet the criteria for public spending laid out in the Gift Clause. The details of the union handout:
The 2011 capital budget includes $4,000,000 to help construct a training facility in the Anchorage Bowl for training laborers throughout Alaska. The total project cost is estimated at $14,500,000. The 2012 capital budget includes an additional $2,000,000 to construct a dormitory to house trainees. Construction on the training facility was to have begun in the summer of 2011 and be completed by summer of 2012. Only a master plan and utility realignment have been completed at the new location in the Chugiak Industrial Park. So far, the State has only funded $31,000 for completed work. However, the remainder of the appropriated money is available for future work.
Clearly, the public aid given to the union violates Alaska’s constitution Article IX Section 6, which reads, “No tax shall be levied, or appropriation of public money made, or public property transferred, nor shall the public credit be used, except for a public purpose.”
Gift Clauses exist for a reason. Spending millions of tax dollars solely for the benefit of a union local contradicts the edict set forth by the states constitution. The public spending provides neither an equal value nor service to taxpayers in return for their money. Now Alaskan taxpayers need to uphold their Gift Clause to end the reprehensible abuse of government spending. If not, politicians will continue to use public monies to reward their political allies.