The Alaska Policy Forum recently exposed that the state’s legislature in 2011 and 2012 appropriated millions of tax dollars to finance a Laborer’s International Union of North America local’s facilities. 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 Clause’s 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.