Improving Student achievement
The Texas Public Policy Foundation, in a new report, offers the following themes for improving student achievement:

• focus on how funds are allocated rather than on the level of funding
• recognize there is no scientific way to identify adequate funding and no significant relationship between funding and student achievement
• strengthen the state's educational accountability system
• allow local communities to underwrite a greater share of education
• introduce competition through various means, including greater inter-school, inter-district choice and vouchers.

Though the report focuses on Texas, naturally, there are lessons for everyone.

The report, in PDF format, is here.

Labels: Education, School choice

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Wisconsin the Latest State to Help Residents Flout the Law
No, I'm not talking about so-called gay marriage, but rather, the importation of prescription drugs from Canada, in violation of federal law and sound policy.

The state has set up an official web site that provides links to Canadian pharmacies from which residents can purchase drugs at cheaper prices, thanks to Canadian price controls. Governor Doyle is not impressed at the fact that his government is thereby encouraging lawbreaking (as well as short-sighted policy).

"There are currently thousands of people who buy drugs on the Internet. The federal government has said they are not going after these people.” (permalink)

Bread and Circuses
Minnesota, like other states, has professional sports teams. Now, there's nothing wrong with millionaire players and multi-millionaire (or even billionaire) team owners. They're providing something the public wants. Given that the number of players able to compete at the highest level number in the low thousands, and that millions of fans attract dollars from free-spending advertisers, I don't begrudge their ability to profit from their skills.

Unfortunately, an appreciation for athletic skills sometimes translates into a desire to expend tax dollars on what are in reality small, privately-owned businesses. Of course I'm talking about stadiums here. (Stadiums, arenas, and so forth can also be used for schools, public events such as concerts and monster truck shows and what have you, but the big selling point is "Now we will be a major league city.")

Minnesota's going through the same debate as other states--will tax Wanda Waitress and Paul Pipefitter so that wealthy footballers such Randy Moss can play in a brand-new NFL-style stadium? (A similar debate is going on for baseball, but I am hard-pressed to name a single member of the Twins; baseball doesn't interest me that much.)

The St. Paul Pioneer Press runs a story this morning about revenue projections for state government. "Few know what the forecast will say when it is released Friday. But if it is shockingly bad ? on the order of a $500 million deficit ? Gov. Tim Pawlenty and lawmakers could be forced to cut education, health, transportation and other crucial programs.

That would make the chances of subsidizing half-billion-dollar homes for the Twins and Vikings very slim, because it plain won't look good to many voters around the state ? except to political opponents preparing election brochures."

Indeed, spending taxpayer money on the bread and circuses that is professional sports isn't a good idea when education, health, and other spending programs are cut. Actually, it's not a good idea, period. (permalink)

Thieves among Airport Screeners
Writing in the suburban Chicago paper, the Daily Herald, Chuck Goudie recounts his tale of woe. He suspects that government workers in the TSA (Transportation Security Agency) pilfered his checked luggage, robbing him of an expensive short-range radio, a cellphone charger, and a cigarette lighter, which was empty.

We won't know conclusively, of course, but the response of a TSA representative brings to mind the response of "How much more would we hear of this if it happened with a private company in charge?" Since 9/11, the official response which has involved the greatest number of personnel has been the war in Iraq. The mass firing of contract screeners and the creation of the TSA has been the second largest response. While the war has rid the world of a, well, world-class tyrant, the beneficial effects of a new bureaucracy are less than certain.

Here are the relevant excerpts from Goudie's essay:

When TSA agents open your suitcase and dig through your socks and underwear, they are supposed to leave behind a piece of paper that states, "We were here." ...

On the day that my items were removed, there was no note left behind as required by the regulations. ...

[A TSA representative] said that because no TSA note was left behind, it was obvious that a TSA inspector never opened my bag. ...

TSA later fired 1,200 federal screeners after background checks revealed they had lied on their applications or had criminal histories including felonies. ....

I could file an airline claim to receive a maximum of $2,500 for stolen luggage. But all the airlines exclude things such as electronics, cash, jewelry and anything else attractive to unscrupulous employees.

Meanwhile, the Reason Public Policy Institute has offered several worthy proposals on how to increase aviation security.

Labels: Transportation

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Beware of Convention Center Miracle Cures
All over the country, cities are chasing after fortune and a hot reputation by luring convention business. In 1989, for example, Detroit's Cobo Hall got a $200 million renovation.

Today--15 years later-- the facility still carries $140 million in debt, but according to one report, it is among the country's worst fiscal performers. Now the mayor wants to spend $1.3 billion the city doesn't have for a totally new facility. (permalink)

Hospitals Free to Cut Prices
One obstacle to injecting a cash-for-service model into health care (taken to the greatest degree by groups such as SimpleCare) has been the question of what prices hospitals should charge to people without insurance.

It's been common for hospitals to have very high list prices that are then discounted for HMOs, governments, and other third-party payers. The prices are in some ways artificial, since they are almost always discounted. However, people without insurance, or who would pay cash (say, from a Medical Savings Account) face the prospects of prices beyond their reach.

Hospitals have defended the practice, saying that federal rules require it. This week, the Department of Health and Human Services has said not so. In a letter to the American Hospital Association, Secretary Thompson responded to that interpretation:"Your letter suggests that HHS regulations require hospitals to bill all patients using the same schedule of charges and suggests that as a result, the uninsured are forced to pay 'full price' for their care. That suggestion is not correct and certainly does not accurately reflect my policy."

He further writes "hospitals can provide discounts to uninsured and underinsured patients who cannot afford their hospital bills and to Medicare beneficiaries who cannot afford their Medicare cost-sharing obligations. Nothing in the Medicare program rules or regulations prohibit such discounts."

The implications have yet to be worked out, but this is promising. It means that rational (not dictated by government) pricing can develop. Analogies always imperfect, but consider this: what would happen if half of all auto repairs were covered by a government insurance program, and you tried to pay for a new muffler outside that program? You may be looking at a bill of, oh, $900, simply because that was the "list price" set before government discounts.

Labels: Health care

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Formularies Cut State Medicaid Cost
The Boston Globe reports that after putting more bureaucratic restrictions in place, Medicaid spending on prescription drugs is down. Doctors now have to plead with MassHealth, the state Medicaid agency, for permission to dispense drugs that are not generics, or prescription drugs not on a preferred list.

This has brought some cost savings in prescription drugs, but one wonders about other costs this may impose.

"The process takes time, a precious commodity in many busy practices. Beyond that, said Modest, patients often have to wait a day to get the drugs they need. Some give up rather than wait and wind up going without their medicines." Says one doctor, ""For some patients this can be a disaster."

Money saved now may bring higher costs later.

Labels: Medicaid

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Outsourcing Out of Control?
I've been meaning to write some things about outsourcing, or as it is sometimes called these days, off-shoring. I've also resisted doing so. One reason: it's not exactly an issue of state-level policy, which I focus on here. There are plenty of other things to keep me occupied.

Another reason: there's not much that can be done about it. Sure, states can make symbolic gestures--no contracts to companies that then use offshore employees for, say, call centers. Off-shoring is the continuation of ages-old process of global economic change, in which the U.S. becomes proficient in one industry, loses its edge as another country takes over, and then develops new industries in the process.

What's got people set on edge these days, though, is the fact that global competition is becoming a fact of life for white collar workers--as when Reuters announced it would hire journalists in India to write some stories on the U.S. market. For the chattering classes, the closure of the steel mill was something to talk about. But now that their own jobs are threatened, well, now it's a lot more of a compelling story. And of course, politicians find that railing against greedy corporations for "sending jobs overseas" is a good way to demonstrate empathy and burnish populist credentials.

Anyway, in today's Spectator, William Tucker says that contrary to the claims of some, dead economists did anticipate today's controversy.

The charge: in the 19th century, "major factors of production -- soil, climate, geography and even most workers -- could not be moved to other countries. But today's vital factors of production -- capital, technology and ideas -- can be moved around the world at the push of a button."

Says Tucker: "Did you follow that? It's like saying force may not equal mass times acceleration anymore because Isaac Newton didn't envision automobiles.

Ricardo never argued or even imagined that soil, climate and geography would or wouldn't be moved from country to country. His point was that the factors of production could be duplicated."

Tucker then draws on the history of the Corn Laws, which were a political issue in Britain at one time. They were repealed ... and disaster did not strike. Markets changed, people adjusted, and overall, the country was better off. Same with off-shoring today, he argues.

Some critics of off-shoring, such as Robert Reich, former economic advisor to the president, argue that key to any response to off-shoring is getting people ready to adjust to new realities, to take on new jobs. Tucker agrees that human capital is critical, and notes "There is one danger lurking in all this, of course, and this is that competition from India and China will expose America's glaring weaknesses in public education. ... It remains an idle curiosity that we rank only 19th in math and science (just behind Latvia), but someday this is all going to come home to roost."

Also today, the Detroit Free Press says that General Motors is eliminating some white collar contractor jobs. In itself, that's nothing new. But the measure is drawing fire because the company recently opened a white collar work center in Bangalore, India.

Tom Bray, a Freep columnist, says it is time to "Cool the hot rhetoric about exporting jobs." He notes that today's unemployment rate is about the same it was 25 years ago, when off-shoring was not an issue.

Meanwhile, Bruce Bartlett of the National Center for Policy Analysis, defends a current presidential advisor who has come under fire for saying that off-shoring has some beneficial effects.

"One would have a hard time finding a reputable economist anywhere who disagrees with this analysis. No nation has ever gotten rich by forcing its citizens to pay more for domestic goods and services that could have been procured more cheaply abroad. Nations get rich by concentrating on doing the things they do best and letting others produce those things they can produce better and more cheaply. It is called the specialization of labor and it is the foundation for economic growth. That is why even Democratic economists like Janet Yellen, Laura Tyson, Brad DeLong and Robert Reich have come to Mr. Mankiw's defense."

Bartlett reminds us that job relocation has a long history in the U.S. -- South Carolina textile firms now under competitive pressures from other countries got planted there because the work could be done more cheaply there than in New England. He concludes "It would be grossly unfair to say that it is OK to move manufacturing wherever production is cheaper, but wrong to subject information technology services to the same competition." Given the increased accessibility of communications, he says, it's also impossible to stop by fiat.

In other words, there's not much government can do, except make sure that people are getting educated so that they can be more productive. As I was saying .... (permalink)

Abolishing Co-Pays is a Step in the Wrong Direction
Lawmakers in Connecticut may abolish co-pay requirements for enrollees in Medicaid. Bad move. Doing so would turn Medicaid into a "free" program, in which beneficiaries--some truly poor, others, not--are passive participants in a government bureaucracy.

In short, the problem with eliminating copays is not, in itself, the extra amount that taxpayers will have to pick up. (Co-pay amounts are minimal). It's that it gives beneficiaries no financial stake; health care is back to being "spending someone else's money." Simply giving each person in the program a bank account they can draw on (vouchers), something similar to Medical Savings Accounts or the new Health Savings Accounts, would be much better than eliminating co-pays, or even keeping them in an unchanged system.

Labels: Medicaid

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New Blogs at Heritage
The conservative Heritage Foundation has two blogs running: the Policy Weblog and over at TownHall, C-Log, which is taken up with politics. (permalink)

Less Chance of Prison Time in Michigan?
Governor Jennifer Granholm is proposing, as part of a budget package, that "First-time offenders convicted of low-level crimes such as car theft or property destruction could be sent only to a county jail, community corrections program or probation." (If you 've ever been the victim of a car theft, as I have, you may not think of it as a "low-level crime," but that's for another day.)

Of people convicted of crimes in the lowest 5 categories in the state's sentencing guidelines, only 7 percent see time in a state prison, so it's not obvious that this measure will save a lot of money in the larger scheme of things. Still, officials in the Corrections department say that this could save them "tens of millions of dollars." (permalink)

TennCare, the Program that Ate Tennessee
Tennessee's version of Medicaid, called TennCare, has generally been a fiscal and policy disaster. In 2000, the Heritage Foundation criticized the plan for dramatically raising state costs, driving managed care organizations out of the state, and filled with fraud--including being populated by 16,500 people who lived out of state.) A report by the consulting firm McKinsey & Co estimated that 90 percent of new state revenue between 2004 and 2008 would have go to into the program just to keep it going as is.

Now, Gov. Phil Bredesen is set to announce a plan to keep the program at one quarter of the state budget, instead of the 40 percent it is on target to reach in a few years.

Among the changes: restrictions on use (10 doctor visits a year for some people, strong bias towards generic drugs) and increased co-pays. TennCare beneficiaries average over 30 prescriptions a year; for everyone else in the state, that number is closer to 10.

While they're at it, policy makers ought to consider where consumer-directed care fits into the mix.

Labels: Medicaid

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State Budget Situation Still Bleak
According to this account by Stateline, states around the country still face a bleak budget situation. Among the reasons: the economy isn't wildly soaring as it was in the late 90s, weakness in the manufacturing sector, and the one-time fixes have been used up (securitizing the tobacco settlement, accounting gimmicks, a federal bailout).

The Center for Budget and Policy Priorities (which leans towards expanding government) suggests that states will, collectively, have a $41 billion deficit by mid-year.

Of course, tough times are great opportunities for being forced to make hard and necessary decisions. A cynic would say that they are about the only time when officials actually do the right thing. There will be plenty of opportunities, it looks like, to streamline government, jettison poorly working or unwise programs, and rely on smart contracting measures.

On the other hand, as the National Association of State Budget Officers point out, there will plenty of groups asking for more and more from the public purse once they see a substantial recovery in budget numbers. "Pent-up demand," the group calls it. Sounds like the same-old business to me. (permalink)

States Seek to Game Medicaid System, Feds Push Back
States have engaged in various gimmicks and schemes to get more federal money for their Medicaid budgets. (One such example is a tax on hospital stays; the state collects the money, gets rewarded with federal money, and then gives the tax amount, and more, back to the hospitals.) The National Council of State Legislatures calls this an example of a "Medicaid maximization" strategy.

Another example? A nursing home borrows money, gives it to the state, which then launders it through counties, who repay the bank. The state then claims that it has spent the money on medical services, enabling it to get more federal matching funds.

Surely, but slowly, the feds are catching on, which is not good news for state managers. Last year, the General Accounting Office issued a report, Major Management Challenges and Program Risks, which identified Medicaid as one of several federal program "at high risk due to either their greater vulnerabilities to waste, fraud, abuse, and mismanagement or major challenges associated with their economy, efficiency, or
effectiveness." Further, it concludes that "Limited oversight has afforded states and health care providers the opportunity to increase federal funding inappropriately."

(Let's see. If that sort of activity happened at WorldCom, Enron, and .... Well, we know what would happen, but this is government, not the private market at work.)

Stating the obvious, perhaps as a warning shot, officials in HHS now say that states are shoring up their Medicaid budgets with "phantom dollars" in an attempt to attract federal matching funds.

While it's good to know that someone is paying attention in DC, the NYT says that the desire to approve a number of innovative, much needed (market-oriented, consumer-directed) reforms "has bogged down as federal officials try to ferret out improprieties in Medicaid financing."

It's all heading for a state-federal showdown. The Bush team wants states to document the source of state-effort funds before releasing more federal money. State officials, of course, object to the requirement--perhaps on federalism grounds, and perhaps because they fear that their schemes will be found out. But all this demonstrates the fact that federal funding comes with strings attached.

Labels: Medicaid

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If You Think We've Not Spent Enough on Education
An editorial in the Wall Street Journal (available here) compiles government numbers that suggest the problem with education is not a lack of sufficient funding. Two charts, comparing K-12 spending and reading scores, speak volumes. (permalink)

Time to Overhaul Teacher Training
The Teaching Commission recently released a report calling for an overhaul of teacher training. Among the highlights:

• Link pay to performance. Currently, successful teachers are paid in the same way as lesser-effective teachers: by years of service and number of college credits.


• Pay teachers more if they are in an academic field (math, science) with a shortage of teachers


• Emphasis academic qualifications of teaching candidates


• Streamline the procedures for getting a teaching license

The commission includes a teacher union president (who has tried to downplay many of the suggestions) and former education secretary under Clinton, so the proposals aren't as revolutionary as they could be. But it's a good start.

As the Wall Street Journal noted in an editorial on the report, "There is a long tradition of professional journalists, poets and others teaching college writing. But today Langston Hughes would be banned from instructing a Harlem high school English class until he obtained the proper New York licensing."

Labels: Education

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The Perfect is the Enemy of the Good (Again)
Rising premiums for medical malpractice insurance--driven in large part by lawsuits--have meant that some patients who sue in the future won't be getting large payouts. They may get little at all, even.

The January 28 edition of the Wall Street Journal notes that a growing number of doctors and other health care providers are "going bare," or foregoing malpractice insurance. In effect, they are saying "So sue me." They're not stupid, of course. Five percent of doctors in Florida, knowing that their homes an annuities are protected from creditors by state law, and able to shelter their assets in trusts, are without insurance. (In Miami-Dade county, it's one-in-five.)

The downside for physicians: they may have trouble getting hospital privileges, or on the roster of an HMO.

Seeing the trend, the American Medical Association (AMA) no longer, as an official policy, recommends that physicians carry malpractice insurance.

Labels: Health care

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Politicians Go Blogging
It's easy to overstate its significance, but here is the first instance that I have found of a politician-written blog. It appears to be a combination of commentary as well as reports along the lines of "I met with this committee and we talked about this." Of course, there's some feel-good stuff, too, like a report of an Eagle Scout ceremony.

Cox's announced opposition for the next election, has his own blog, by the way. (permalink)

I'd Like to Buy a Vowel, or Why Health Care is So Expensive
One reason why health care is so expensive is that there's so much administrative overhead. An official list of acronyms used by the web site of the Centers for Medicare and Medicaid Services (the official agency of Medicaid and Medicare) runs approximately 166 pages--in 8 point Times New Roman font. If you'd like to choke your computer, you can look at the entire list here.

Remember, that collection is just the guide to the alphabet soup of bureaucratic, the tip of the iceberg that's going to sink the ship of state and federal budgets.

Labels: Medicaid

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Illinois Mortgages "Quirky" Building
The State of Illinois has secured a $200 million mortgage on the Thompson Center, a state-owned office building in the Chicago Loop. (Here's one photo, best I could find in about 30 seconds.)

The state, which is looking for more cash, will get the $200 million, and make payments of $14 million for 10 years, after which it will have to refinance or pay up the balance.

There was talk of perhaps selling the building outright, but as the Sun-Times puts it, the design--made possible, most likely, by the fact that it was purchased by taxpayer dollars--was off-putting to potential buyers. "Because of the quirky architectural character of the building at 100 W. Randolph, where large amounts of space are consumed by an atrium, it was not a ready-made choice for a business seeking a splashy Loop presence. Potential buyers shuddered at the atrium's costs, and the open floors of the 17-story building deter tenants that want privacy and security."

The Illinois Policy Institute had called for the sale of the building, and possibly having the state lease it back. The Sun-Times says that there is not enough time to go through that route, which comes with a June 30 deadline imposed by the legislature.

The Thompson building has always reminded me of the Centre Pompidou in Paris, though admittedly, it's not as ugly. (permalink)

California Targets Pharmaceutical Companies Again
While Iowa is inhibiting the ability of citizens to make bulk purchases of cold medicine, California wants to make it easier to buy drugs, by making it easy to buy drugs from Canada. It also hopes to strip away the confidentiality of several contracts that state agencies have with different companies, thereby increasing the leverage of all state purchasers. (permalink)

Do You Have a Cold, or Are You Looking for a Rush?
A committee in the Iowa House has voted to forbid the sale of more than two packages of cold medicine at a time.

If you're planning on stocking up on allergy medications before all the pollens enter the air, watch out: you could be guilty of a misdemeanor, and subject to a $100 fine.

So why would the people's representatives stand in the way of good health? The measure to forbid the sale of "more than two packages of medicine that has pseudoephedrine as the active ingredient" was described as a way to make it more difficult to make methamphetamine.

The home-made drug kings will, of course, find ways around the ban. Simply shopping at a few more stores--or going back to the same stores the next day, or even the next hour--may do the trick. On the other hand, law-abiding citizens will face one more nuisance, all in the name of the war on drugs. (permalink)

Breaking the Education Monopoly Through Blogging
A 14-year old girl broke with political correctness, and argued in a school paper that the goals of historic feminism had been achieved. This didn't sit well with her teacher, who turned the paper into an occasion to accuse the girl of racism, in front of several classrooms. The girl wrote about the incident, and was swamped with messages of support from blog-readers around the world.

Her mother writes about all this for National Review, saying "I suppose that tales of students humiliated by teachers for dissenting from the prevailing groupthink always touch a chord."

More? "The traditionally small, closed world of high school can no longer be so small and closed — not when any kid can find countless informed opinions that differ from what the teacher thinks with just a few mouse clicks."

Of course, the Internet, and blogdom, is not all high virtue and good intentions; pedophiles and other creeps use it as well as every one else. In general, though, high school education could stand a little more shaking up. At least when it comes to looking at social and political questions, too many students get fed a warmed-over version of whatever is the prevailing wisdom at the time. It's too late to go back to the time of teacher-as-Socratic guide. We might as well use the tools at hand to enrich the educational experience. Not all students are up to this, but those who are could benefit.

Labels: Education

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How To Deal With Traffic Congestion? Buy a Good Stereo
Anthony Downs, writing for the Brookings Institution, says that "Peak-hour traffic congestion is an inherent result of the way modern societies operate." To make things worse, people will use autos more and transit less as income increases.

He dismisses peak-time pricing, saying that most Americans would reject them because they "favor wealthier or subsidized drivers." That's not entirely true--toll lanes are used by all economic groups, and even all-Lexus lanes would take cars out of lanes used by everyone else, a win-win situation.

Expanding roadways to accommodate all peak traffic, on the other hand, is "prohibitively expensive." As for mass transit, it represents only 17 percent of all commuters, even in the most densely populated regions. Tripling transit capacity isn't cost-effective, either. It would reduce morning commuting trips by 8 percent--not nothing, of course, but not much. Finally, "living with congestion" is, Downs says, "the sole viable option."

"For the time being," he laments, "the only relief for traffic-plagued commuters is a comfortable, air-conditioned vehicle with a well-equipped stereo system, a hands-free telephone, and a daily commute with someone they like."

Labels: Transportation

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Have I Got a Bridge for You
One tradition I've never been part of, but hope to join some day, is the annual walk over Michigan's Mackinac Bridge. The annual walk draws up to 70,000 people, and by tradition, it's lead by the governor. The newish governor, Jennifer Granholm, wants to add a run before the traditional 5-mile walk.

A spokesman says that the governor wants to provide an option for people "excited about health and fitness." I suppose that's fine, as long as she lets me eat my occasional quarter-pounder in peace and quiet. (permalink)

This Little Piggie .... State Government Waste
Citizens Against Government Waste publishes an annual Pig Book, detailing wasteful spending at the federal level--you know, things such as teaching walleye how to hum.

The Oklahoma Council of Public Affairs, sadly for the citizens of Oklahoma, has found enough material in that state's budget to come up with a piglet book of its own. Among the examples: subsidizing golf, at $6 per round.

Labels: Golf

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Coming to a Store Near You: Higher Taxes on Booze
First it was a delay in the planned cut in state income taxes. Then it was a proposal to hike the cigarette tax. Governor Granholm now hopes to increase taxes on Michiganders again by increasing taxes on alcoholic beverages. Since 1994, taxes on cigarettes have been increased $1 a pack, in the name of school funding. Death will become even more expensive for some people, with talks of imposing an inheritance tax "to replace a levy that is expiring."

She doesn't plan to rely totally on increasing taxes to deal with another anticipated deficit. There's also an accounting gimmick or two, and no increases in municipal aid. On the other hand, modest cuts to K-12 schools and universities will be restored.

The director of the House Fiscal Agency, when asked how the budget could be balanced without raising taxes, said "I don’t know how you do it."

For starters, the Mackinac Center for Public Policy has identified over $2 billion in possible savings. (permalink)

Shocked! I'm Shocked!
Take a look at this headline from the Chicago Sun-Times: State pork creeps back into budget.

You don't say.

"Only about $15 million of the total equates to new state spending. The rest of the package involves money budgeted in the past for legislative pork and federal funds earmarked for Medicaid.

It includes $1 million to fund grants for the Illinois Arts Council, headed by Shirley Madigan, wife of House Speaker Michael J. Madigan (D-Chicago)."

Labels: Medicaid

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Another Lesson in the Golden Rule
We're not talking about the teaching of Jesus here, but the idea that "he who has the gold makes the rules." Mitt Romney, governor of Massachusetts, wants Medicaid patients to stop seeing physicians at hospitals for routine care, and instead go to community health centers. One concern of the governor: people spending too much money at teaching hospitals. This Boston Globe article cites several physicians who object, saying that the proposal may be inappropriate for people with complicated medical histories.

As for the patients themselves, the possible denial of choice is yet another reason why states need to move to consumer-directed health care, such as using health security accounts, wherein individuals, not officials, weigh and make decisions on where to seek treatment.

Labels: Medicaid

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Utah Snubs "No Child Left Behind"
The Utah House of Representatives has voted to prohibit that state's education department from spending state money to implement No Child Left Behind. Among the concerns: NCLB infringes on federalism, and is inadequately funded.

The measure is symbolic at this point (it's not law yet, and the state is not opting out of NCLB entirely). Utah joins Vermont and Virginia, which have made complaints of their own about the measure.

UPDATE:
In the lead editorial for February 12, the Wall Street Journal chides the states, saying that "this convenient rediscovery of federalism [comes] now that the federal education dollars come attached to some accountability for results."

Even more useful is a pair of charts. Chart one shows "Total funding for K-12," from 1990 through 2003. Total government spending (federal, state, local) on K-12 was roughly $230 million in 1990. Now it's close to $500 million. Correction. Change those millions to billions. What have we got for all that spending? Chart two shows the progress of fourth-grade reading scores on the National Assessment of Educational Progress during that same time. They're flat. In other words, a lot more money for the same old (inadequate) results. (permalink)

Bring Back 55?
Eric Peters, who often writes on automotive issues, says that a group of state highway officials is calling for the bad old days of the 55 mph speed limit. Why? The number of highway deaths in 2002 (last year for which statistics are available) was the highest since 1990.

Despite this scary statistic, things aren't getting out of control. In fact, "the overall fatality rate per 100 million vehicle miles traveled has not gone up at all."

Given the increased number of cars, and number of miles traveled by car, traffic safety is actually greater now than it was in 1990--under 55. (permalink)

Cigarette Smuggling to Increase in Indiana, Ohio
Expect to hear about reports of increased smuggling of cigarettes in Ohio and Indiana. Why? Michigan's governor wants to plug a deficit hole by raising the tax to $2 a pack. Too bad she isn't doing more to use this budget situation as an opportunity to reform Michigan government, to do less with less.

Back in 1998, by the way, one federal official warned that smuggling was likely to increase as states raise their taxes. (Adobe Acrobat Reader required) (permalink)

Great Acts of Civil Disobedience?
From another article in Stateline, "Republican Gov. Tim Pawlenty of Minnesota is brazenly bucking federal law by using the World Wide Web to help Gopher State residents buy less-expensive drugs from Canada." (permalink)

The Lure of Light Rail
As a skier, I noticed this article in Stateline about the difficulties that Denver-area residents face while trying to get to their state's fine ski resorts. The drive has become like rush hour. The solution, according to some is more transit, especially monorail.

(Sorry, but this reminds me of Marge versus the Monorail, a classic episode of The Simpsons. As the official web site for the show summarizes the episode, "Mr. Burns is forced to pay a $3 million fine for illegally dumping toxic waste under trees in the park. At a town meeting where Springfield's citizens discuss how to best use the new funds, Lyle Lanley, a charismatic traveling salesman convinces them to build a completely useless monorail. Marge is the only one in town who disapproves of the project and when the monorail is complete disaster, her reservations are proved correct.")

Meanwhile, ski area owners are responding to the problem with private-sector solutions. "Some ski areas are coming up with ways to cope with bad traffic: overnight hotel accommodations cheap enough to keep metro-area skiers from commuting home after a day on the slopes, and flex-time skiing with a half-day lift ticket that can be used any four hours of the day."

Labels: Transportation

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George W. Bush: Wartime Leader in the League of FDR
John Lewis Gaddis, a historian of the Cold War, is giving President Bush more credit than most academics. He puts Bush in the same category as FDR and John Quincy Adams.

In this Boston Globe profile, he says that preemptive war, unilateralism, and American hegemony, elements of the Bush strategy, have been part of U.S. policy since Adams, who was Secretary of State during the War of 1812.

After 9/11, Bush became one of the few presidents to develop a grand strategy, foreign policy in its broadest form, laying out the country's mission, interests, and priorities. At the heart of "the vision thing" (as Bush 41 may say) is a renewed interest in stopping nuclear proliferation, and a push to bring democracy to the Middle East.

Especially gratifying in this article is the vindication of my own views, which were in the distinct minority in my graduate program: "Gaddis argued that the Cold War emanated from the very nature of the Soviet Union: from the way it coerced satellite states into its orbit; from its brittle, inflexible alliances; from Stalin's paranoid and confrontational personality; from the ''geriatric over-exertion'' of aging Kremlin bureaucrats who fancied themselves great friends of Latin American revolutionaries; and from genuine ideological romanticism that blinded Soviet leaders to their own interests."

ADDENDUM: While on the subject of the Cold War ... it's still being fought among academic historians. So says the Chronicle of Education. Thanks to Milt Rosenberg for the link. (permalink)

The Tax Mix Makes a Difference
Also from the Goldwater Institute is a new report on that state's tax system. It examines three alternatives for reform. One eliminates the personal and corporate income tax and expands the transaction privilege tax. A second repeals current income and sales taxes, and replaces them with a different sales tax regime that excludes intermediate business inputs. (This has the best outcome of the three plans: $24 billion in personal income growth over 15 years, and 14,100 new jobs per year.) A third includes a higher sales tax rate.

Says Debra Roubik, author of the report, "Ample evidence exists that lower taxation rates are preferable to higher rates. Simpler taxes with low compliance costs are preferable to complex systems, and consumption taxes are preferable to taxes on income. The study demonstrates that Arizona taxpayers can gain enormously from reform without impacting total government revenues.” (permalink)

Reforming Unemployment Insurance
The Goldwater Institute calls for a reform of the unemployment insurance program. While it focuses specifically on Arizona, the group's study may have lessons for other states.

Author William Conerly argues that the current UI regime discourages work. Putting more emphasis on face-to-face contact between beneficiaries and program administrators could help, he says. He also chides the feds for diverting money to unrelated programs (yes, they do get involved, even though this is largely a state program), and calls for increased flexibility for the states. (permalink)

Low-Cost Housing is Costly
In one of those strange paradoxes that is government policy, it actually costs more to build housing that costs less to tenants. Why? Government regulations. Chief among them, according to a study in California, prevailing wage (union scale) requirements and a need to spend more to buy off middle-class opposition. For the complete study from the University of California, get your Adobe Acrobat in tune and click here. (permalink)

Despair.Com - A Twist on the Motivational Industry
Tired of those same old motivational lithographs in corporate America? Check out Despair.Com's collection. Some are purely cynical, but others have a lot of wisdom. And others, of course, have both.

For example, this print features a group of skydivers, holding hands in a circle. The slogan? "Idiocy. Never underestimate the power of stupid people in large groups."

OK, so this doesn't have much to do with public policy, though some may associate it with propaganda. I just thought some of the collection was humorous and worth passing along. (permalink)

Subsidize Students, Not Universities
Barry Poulson, a professor at the University of Colorado, argues the case for using subsidizing university students rather than universities. Direct aid to public universities breeds inefficiency and inequities, as lower-income households subsidize higher-income ones through state support of certain universities. Better, Poulson says, to end direct subsidies to universities and give the money to students.

No state, that I know of, has yet to implement a plan like this, though some states do have minor aid programs specifically targeting students enrolled in private colleges. (permalink)

Cross-border tax competition
A new study from the Atlantic Institute for Market Studies points out the cost of taxes, especially for border areas of states. While the border counties of Vermont and New Hampshire have seen similar population growth, Vermont's sales taxes have, not surprisingly, been a boon for businesses on the other side of the Connecticut River, in New Hampshire.

"If Vermont had not implemented its sales tax, Vermont’s border counties would have 1,900 more retail jobs and $322.7 million more in retail sales than existed in 1997."

To read A RIVER DIVIDES IT: A Comparative Analysis of Retailing in the Connecticut River Valley of Vermont and New Hampshire, click here (Acrobat reader required.) (permalink)

Conceal-Carry Measure Fails (Again) in Wisconsin
The Assembly passes a conceal-carry measure, which would put Wisconsin in the same group as the vast majority of states. But then it failed to override the governor's veto. Anyone who says "there ain't a dime's worth of difference" at stake in an election doesn't know what he's talking about. I suspect (ok, going on a limb here) that the measure would have been in place by now had the gubernatorial election last time out had a different result. (permalink)

Why McDonalds Wants You to Use the Stairs, not Elevator
Fast-food purveyor McDonalds has started a "Healthy Choices" program that gently nags people to walk more often, use push rather than powered lawn mowers, and so forth. Fine. When done properly, exercise is good.

But as Andrew Stuttaford puts it, the effort is yet another corporate attempt to appease the ideologues and money-grabbers. While reminding people of the value of exercise is fairly harmless, a better response to the fast-food police (motto: "we have got to move beyond personal responsibility") is the direct attack. "The company's most effective response to potential plaintiffs is the (entirely reasonable) argument that its meals are safe. If some folk choose to overindulge, the consequences are their responsibility, and theirs alone: It is not up to Mickey D's to police how much people choose to pile onto their trays. " (permalink)

I Gave at the MS-Office
Jay Nordlinger makes a good point about business and charity--a point that bears repeating multiple times. Businesses that provide wanted services and goods are already serving the public good. (A few exceptions, such as murder-for-hire, come to mind.) They don't need to apologize for making money, or extol grand charitable programs.

"When he [Bill Gates] talks about his philanthropic endeavors, he's just a little squishy — talking about "giving money back to society." I want to tell him: "You didn't take it from society to begin with, baby. It didn't exist there. You made it, earned it, benefiting all of humanity in the process."

Though it is sport in some circles to scorn the quality of Microsoft products, the larger point remains dead-on. Someone else could have done it, but "someone else" didn't. We don't need to pay excessive fealty to any company, but we should acknowledge that doing business IS doing good. (permalink)

Keeping the Separation of Church and State--Through Tax Policy
The recent suggestion by Michigan's governor, Jennifer Granholm, that Christian duty requires the payment of (yet) higher taxes brings to mind the controversial Alabama governor who tried (unsuccessfully) to convince the voters of his state that the answer to the question "What Would Jesus Do?" would be "raise tax rates."

In researching another topic, I came across a useful piece by Doug Bandow, titled Taxes for God?

Bandow takes on the confusion that arises when the God-given duties of the state and the civil society are conflated. He quotes and then responds to Governor Bob Riley:

"According to our Christian ethics, we're supposed to love God, love each other and help take care of the poor." True, but what does that have to do with government levying higher taxes?

Is government supposed to love God? Should it tax everyone to establish a church? Should it create a special religious order dedicated to loving God?

And imagine government attempting to make us love one another.

Imagine, indeed.

There's a world of difference between loving one's neighbor, and paying more taxes. Private action is voluntary, involved with the individual, and generally produces more good than harm. Enacting government programs is involuntary, since it relies on higher taxes, collected with the implied (and sometimes real) use of force. Those who advocate higher taxes in the name of "love thy neighbor" actually say to their neighbor "Hey, Bob, I know that loving my neighbor, Joe, is important. So I want you to pay higher taxes so that Joe can have his job training program."

As Bandow says, "Scripture does command us to 'help take care of the poor.' But that is us. It is not other people, through the state." (permalink)

In Search of Quaint Cities
How would you like to be able to ride a bike or walk to everywhere you need for work, shopping, and so forth? OK, so neither one sounds very good during this midwestern deep freeze. Yet at other times, it sounds pretty handy: no traffic jams, businesses where you know the owners, and so forth. Such is the dream of "neotraditional" urban planners. You may not have heard of it, but it's the pursuit of "quaint," and it may be coming to a town near you.

The tool: more restrictive zoning. Randal O'Toole argues a point you won't find in many places this day: that's just calling for more of what got us in trouble.

"Some planners recognize that zoning is the true cause of urban "blight." Says Randall Arendt, a planning professor at the University of Massachusetts, zoning is why America looks the way it does. The law is the major problem with the development pattern."

O'Toole heads up the Thoreau Institute, which has a lot of data and provocative ideas on land use, urban planning, and transportation.

Labels: Transportation

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Sick States
Privatization Watch, a publication of the Reason Public Policy Institute, reports on the fiscal health of states. The bad news (PDF format): they're sick. How did this happen?

1. Expenditures rise to meet income. This happens in all bureaucratic organizations, but it is especially so in public organizations, which don't face the threat of actually going out of business. Governments, by contract, will be tempted to raise taxes at just the wrong time--when the economy goes south.

2. Legislatures that are in session the longest are more likely to raise taxes, as legislators who meet longer are more willing to give in to the pleas of special interests groups for more taxpayer money.

3. It's easy to focus on sensational examples of fraud, waste, and abuse, but the largest elements of spending are those things that people, even legislators, don't understand well. Medicaid is a prime example.

Labels: Medicaid

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Tax Limitation Measures
Budget & Tax News, a fairly new publication, gives a quick survey of tax and expenditure limitation (TEL) measures. Simply put, they tell government "you can spend this much, but no more." Alternate versions focus on revenue rather than spending.

This is as good a time as any to point out that Michael J. New has written a number of papers on the topic for the Cato Institute. Here's the most recent, on the occasion of the 25th anniversary of Proposition 13, the California ballot measure that got everything going. (permalink)