All This Crime, and High Taxes, Too!
Want another reason why big cities need to change their way of governing? The Detroit News finds that would-be residents who are willing to tolerate substandard services and blocks of devastated real estate must also be able and willing to fork over a large amount of money in taxes--higher sum than that extracted by some of the city's more attractive suburbs.

Says the News: "A Detroiter with a newly purchased $200,000 home will pay about $6,700 in property taxes. By comparison, a $200,000 home in Rochester has a local tax bill of $3,367, or in Utica that homeowner would pay $3,933 a year." (permalink)

Township Reverses Business, Gets Out of Entertainment Business.
After cost overruns of $70,000, Redford Township (suburban Detroit) is hiring a private company to manage its ice rink.

Good enough as far as it goes, though the township would be better off selling the facility outright. As the Detroit News notes in an editorial, "Cities and towns should concentrate their dwindling resources on providing adequate public services, not hockey rinks, community theaters and golf courses.

Labels: Golf

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Paying off a VISA Bill with the MasterCard
Illinois lawmakers are getting ready to add $1.1 billion in pension debt "after the Democrats who control state government were unable to agree on any other way to fix lingering budget problems," reports the Daily Herald. (Under the current schedule, the state must make $2.6 billion payment.)

This year's skipped payment could be followed up with another planned $900 million shortfall next year. Meanwhile, the retirement system's leaders say that $1 foregone now will require $13 in payments later.

So why the maneuver?

The Senate president says "We need revenue."

Actually, it's more like "We need to cut costs and find better ways of doing things."

Labels: Public employee pensions

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The Meltdown of Detroit Continues
The City of Detroit is on the edge of a fiscal cliff once again. The mayor's unpopular for some problems stemming from his personal conduct, and the budget, $300 million short, will be balanced in part with cuts in public safety. Is this any way to run a city?

Meanwhile, there's already talk of whether the State of Michigan will take over the city. Says the Detroit Free Press,

"State officials may not want to take over Detroit's finances, but under state law they would not have a choice if the city falls into complete disarray. Under the state's Public Act 72, the state treasurer would initiate a review of a city's finances if the city defaulted on a bond payment or pension obligation, or if it can't pay employees or vendors."

Labels: Public employee pensions

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Offshoring and Government Contracting: Easy to Posture.
It's easy to demagogue the issue of employment, whether the subject is the effects of regulation, unions, foreign competition, or these days, offshoring. The Reason Public Policy Institute concludes that offshoring is not the enemy of economic health.

Research by the Government Accountability Office, the California State Auditor, and the Florida Governor?s Center for Efficient Government, and even the Communication Workers of America all find virtually no government contracting work goes offshore. Yet we have seen over 200 bills introduced to ban or limit offshore work in government contracts. Even worse, it has tended to cost state and local governments that have terminated contracts with offshore work more than $100,000 per year per job ?saved.? Legislators could offer all sorts of generous severance and retraining packages and still come out with cost savings for taxpayers.

Offshoring creates more jobs than are lost. The savings from outsourcing don?t get burned in a bonfire, they are reinvested into making jobs here in the US. In fact the best available analysis says that every $1 sent offshore in outsourcing creates about $1.12 here at home.

RPPI's overview of the issue is available (PDF format) in Offshoring and Public Fear: Assessing the Real Threat to Jobs (permalink)

Health care: General Motors, or Whole Foods?
David Gratzer points to two very different corporate models for health care coverage. General Motors is sinking on the weight of its "welfare state" plan that requires very little financial involvement of employees.

Whole Foods, on the other hand, has "health plan based on health savings accounts and spends about half of the national average for employee health care."

Sounds like the two companies would make for a fascinating case study in health care financing.

I met the CEO of Whole Foods--forget his name--at a conference a while ago. As I recall, he reports rather good success in using consumer-directed plans for his growing business. (permalink)

Government Size: Arizona Ain't What it Used to Be.
Arizona may have a reputation as a state with a tight rein on public spending, but the folks at the Goldwater Institute point out some facts that put that belief in question.

Says the Institute,

The $8.2 billion budget signed today by Gov. Janet Napolitano is a 12 percent increase over last year's budget, a growth rate more than four times higher than the population growth rate of 2.6 percent. Excessive spending that outpaces the population means individual taxpayers shoulder a larger tax burden and sets the state up for fiscal crisis in times of economic slowdown.

When there are more people around, the demands on government are bigger: more roads, more cops, even more tax collectors to process more tax forms. But as the Goldwater Institute notes, increasing funding beyond that required to account for increased population (and inflation) sets the stage for disappointment later on. (permalink)

Cigarette Tax Increase: Supporting a Permanent Increase in the Size of Government.
Governor Pawlenty's proposal to impose a "health impact fee" hike in the cigarette tax isn't playing too well in some circles.

You might now call the governor of Minnesota Tim "No New Taxes*" Pawlenty. Margaret of ourhouseblog offers the critique of a realistic but still disappointed partisan. She detects a shortage of political skill on the part of the governor and his staff.

It's time to bring back the discussion to policy, and that means pointing readers to an essay I wrote for the Mackinac Center for Public Policy. Nearly 18 months, Michigan took the "easy way out" of a budget problem by raising its cigarette taxes. The short message of the Mackinac piece: tax increases cause economic harm, and remove an opportunity to shape up, reinvent, and reduce government. Oh yes, there's a bonus feature to the Mackinac essay: officials interested in promoting health should actually reduce tax rates on some form of tobacco.

That was January of 2004; today, Michigan is still in the dumps; it has the highest unemployment rate in the nation.

The trouble with increasing the cigarette taxes goes beyond the immediate economic impact, however. It has long-lasting implications. As King, a professional economist who runs SCSU Scholars points out, the unpopular status of smokers means that increases in the cigarette tax are more permanent than most other tax increases. So with a jump in the tax on smokes, "You've made sure that government gets permanently bigger. That is not just a 'bad thing', that is the baddest thing when you are a fiscal conservative."

(Not that this should matter, but here's a point in full disclosure: I've never had much interest in tobacco products of any kind, so you're not reading the special pleading based on somebody's personal habits.) (permalink)

Education: Utah Leaves Behind "No Child Left Behind"
... and that's a good thing, says the Cato Institute. (permalink)

Only Bad People Oppose Tax Increases.
As Minnesota's regular session of the legislature comes to an end, the theme of "taxes = virtue" comes to life again.

A review of two Minnesota legislators, published by the Minneapolis-Star Tribune compares the House and Senate chairmen of their respective tax committees.

Rep. Phil Krinkie's approach is described this way:

The tax bill he has produced contains no major increases in state sales or income taxes. It features deep cuts in a property tax refund program for renters and a "turbocharged truth-in-taxation" measure that gives extra clout to property owners who want to challenge local spending increases. Critics say it's part of an overall budget that's mean-spirited and further diminishes Minnesota's traditionally generous public sector. [emphasis added]

Extend this logic far enough, and a "generous," moral society has a 100 percent tax rate.

When this approach has been applied in the real world, the results have been very "mean-spirited" indeed. (permalink)

Back to BRAC.
John Fund gives a review of the BRAC process, or as the headline puts it, In Praise of Buck-Passing. (permalink)

Re-Open Adoption Records?
Here's a classic fight of principles: if state government implicitly promised anonymity to parents who place their children for adoption, should it set aside that promise in the name of providing useful and potentially life-saving medical information?

The issue plays out in New Jersey, among other states. (permalink)

Another Social Security Reform Plan
Blogger Dan Morgan of NoSpeedBumps.com sent the PolicyGuy a plan he advocates, which might be called RSA+HSA+EFT.

As the alphabet soup nature of the plan indicates, it's a comprehensive, but ambitious proposal.

#1 ? Begin mandatory Retirement Savings Accounts (RSAs) and phase out Social Security

#2 ? Begin mandatory Health Savings Accounts (HSAs) and achieve universal health care coverage, phase out Medicare and Medicaid

#3 ? Implement a loophole-free Effective Flat Tax (EFT) that has a completely flat perceived rate

Give Morgan credit for seeing that our retirement system, health care financing system, and tax system have related problems.

On the other hand, trying to achieve something this comprehensive may doom the plan to deals and amendments that will make it unworkable.

Labels: Medicaid

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Minnesota Governor: It's Not a Tax, It's a Fee.
Gov. Tim Pawlenty of Minnesota said "I won't raise taxes." Now he proposes a state-mandated increase in the price of cigarettes, but says "I'm not raising taxes."

From the Minneapolis Star-Tribune: "After months of saying he would not agree to any statewide tax increases, Gov. Tim Pawlenty on Friday said he would break the budget stalemate with a proposal to increase the cost of cigarettes by 75 cents a pack, with the money going to health care and schools."

Is this a tax increase? It looks like a tax, but the governor is calling it a "health impact fee."

Even after accepting the dubious logic implied in this term, it's hard to see how it is health related; $380 million from the expected new revenue is targeted for K-12 spending, giving it a 9 percent boost.

On the other hand, Pawlenty loads up the proposal with conditions that could make it unacceptable to the wanting-to-increase-taxes Senate. Two conditions are a ban on strikes by public school teachers, another is a measure to enhance school choice.

The Senate's majority leader showed that two can play the verbal game, remarking that a proposed increase in the gas tax--recently vetoed by Pawlenty--might get new life as a "gasoline wholesale fee."

Labels: Education, School choice

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Education: Judging District Efficiency.
Though the cry from the education establishment is always the same, More, Please, some public school districts do a better job than others.

Cheri Pierson Yecke, former top-level education official in Virginia and Minnesota, takes the data on Minnesota districts for a whirl. (The study, Efficiency and Effectiveness in Minnesota School Districts, is available in PDF from the Center of the American Experiment.)

Effectiveness, as measured by the study, is the graduation rate of each districts. (Standardized test scores may be better, but they may have been too hard to get, or fraught with data problems.)

Both the graduation rate and the per-pupil costs of a given district are compared with graduation rates and costs of other districts in the state. The analysis divides the districts into four quartiles based on income. The latter step is an attempt to respond to the claim that wealthy schools have a built-in advantage over poorer schools.

Among the findings: wealth has a slight advantage across quartiles, with the average graduation rate for the wealthiest schools being 95.5 percent, and the poorest quartile checking in at 90.5 percent.

On the other hand, per-pupil spending (without taking debt service into account) is $9,512 in the poor districts (those with the highest concentration of "free lunch" students), compared with $7,488 in the wealthiest districts.

Even a 27 percent advantage isn't enough to pull the poorest districts up to the level of the wealthiest quartile.

Perhaps that is a call for even more funding.

Or more likely, a call to look for improvements, especially but not only in the poorest districts.

Labels: Education

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Entitlement Reform Needed to Head of "Argentinization" of U.S.
"Eggheads of the left and right got together yesterday to warn both parties that ... the United States is turning into Argentina."

So says Washington Posts's Dana Milbank, who noted that "Stuart Butler, head of domestic policy at the conservative Heritage Foundation, and Isabel Sawhill, director of the left-leaning Brookings Institution's economic studies program, sat down with Comptroller General David M. Walker to bemoan what they jointly called the budget 'nightmare.'"

With "startling unanimity," Butler, Sawhill, and Walker agreed that the U.S. faces several choices, all unpleasant:

• pay more for the same level of government services (higher taxes);
  
• pay the same and get less (budget cuts);
  
• pay more and get less (higher taxes and budget cuts);
  
• finance government spending with very high debt levels and interest rates (the "Argentina" option)

Each participant had a unique way of presenting the implications of past choices.

EUROPEAN-STYLE TAXES?
Walker, of the GAO, "put U.S. debt and obligations at $45 trillion in current dollars -- almost as much as the total net worth of all Americans, or $150,000 per person." As a result, achieving a balanced budget in 2040 (assuming it is desirable) might mean cutting spending by 60 percent, or raising taxes 2.5 times today's rates.

Butler, of Heritage, said that by 2030, discretionary spending would have to be cut by 25 percent. The alternative is European-style taxation. (And, I would add, European-style slow-growth and stratification.)

Sawhill, of Brookings, said one option would be to grow government taxation and spending as a share of the economy by 25 percent. (Leading again, to European-style growth.)

So just how large a role will government play in the economy? Butler hoped for taxes to represent no more than 20 percent of GDP; Sawhill preferred up to 25 percent.

To put this into perspective, the Tax Policy Center reports that in 1944, when the country's focus on a global war was at its greatest, federal tax receipts were 20.9 percent of the economy.

While structural reforms may not be a magic bullet, we ought to be moving towards greater use of market incentives and less of bureaucracy-driven approaches. (permalink)

A Policy Guy Runs for U.S. Senate
No, not this PolicyGuy, a different one.

Jerry Zandstra, a program officer at the Acton Institute for the Study of Religion and Liberty, will be a candidate for the U.S. Senate, hoping to challenge incumbent Debbie (D-MI) Stabenow. (So says the Detroit News.) Joining him the pursuit of a nomination to federal office is Cheri Yecke. With her

The campaign already has a website available, with a long paper trail on topics ranging from tort reform to the religious framing of environmental issues.

If Zandstra succeeds in his s long-shot campaign, he would join Rep. Tom Tancredo (R-CO) and Rep. Jeff Flake (R-AZ) as former think tank executives who made the jump from talking about policy to making it.

Joining Zandstra in the pursuit of a nomination to federal office is House candidate Cheri Yecke, a senior fellow with the Center of the American Experiment. She's one of several candidates in a crowded Republican primary field in a district anchored by St. Cloud, Minnesota. (permalink)

Education: Only Funding is Guaranteed to Increase.
My friends at the Illinois Policy Institute point out that while school performance is not guaranteed, increased spending on schools is nearly so.

Here's their latest:

In the news last week was word of an agreement between two sides of the debate over education funding reform. The compromise was hailed as a great step forward. Unfortunately, no one seemed to notice that the only ones left behind were the students.

In any business proposal that’s on the up and up, there’s some concern about deliverables, the measurable evidence on which customer satisfaction will be based. In other words, what do you get for your money? You wouldn’t pay more for a new house without some assurance that it was somehow better than the old one (i.e. bigger, newer, in a better neighborhood, etc.). But deliverables are conspicuously absent from the education funding reform debate. In fact, there’s been very little talk about education at all.

The taxpayers of Illinois, already burdened by two years of recession, are being asked to spend $2 billion more each year on education. What are the deliverables? They don’t exist. There are no improvements being made to the system whatsoever. There are no guidelines put in place for how the new dollars should be spent. There’s not even a guarantee that the money will be spent in the classroom where it belongs.

Only 59.5 cents of every dollar spent on education in Illinois actually goes toward instructional expenditures, while the other 40.5 cents is soaked up by "support services," construction, and district level administration. We rank 38th in the nation by this metric. The national average is 61.5 cents on the dollar, which is itself short of inspirational. Elsewhere in the country there’s a movement to mandate 65 cents of every education dollar be spent on instruction related expenditures. In Illinois we don’t even get the courtesy of an empty promise. Instead we get tax increases, economic decline, and political graft befitting the UN … ah yes … and a property tax rebate too!

Meanwhile our students are suffering. Our 8th grade reading proficiency rates fell by more than 4 percentage points between 2002 and 2003, as did 11th grade and 3rd grade proficiency rates (though by smaller margins). At the same time overall expenditures had increased by $1,000 per pupil between 2000 and 2002! [Emphasis added - ed.] What did we get for our money? Even still, so-called reformers in Springfield turn their heads to real problems, instead holding out their hands for the self-serving "Please sir, may I have some more?"

Indeed, the only compromise in the education funding reform debate was the future of Illinois’ students.

Labels: Education

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Education: New Site for Comparing Schools.
School Matters is a new web site that helps address one problem with education policy: too much information.

School Matters let you get state-level information as well as look at district-level numbers. More interesting is the "Compare States" feature.

Labels: Education

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Controversy Hits Detroit Newspaper.
Another scandal in the mainstream media? Call it a blip. A well-known sports columnist for the Detroit Free Press faces an internal review. The Freep's rival, the Detroit News, has the goods. (Since the News runs commentaries from the PolicyGuy on its politics blog, you might say I have an interest in the controversy.)

From the News:
Instead of leading with the ethics violations, the headline and lead of the Monday story in the Free Press emphasized that no pattern of deception had been found.

"There's a sports metaphor for this -- it's called pulling a punch," said Kelly McBride, ethics group leader for The Poynter Institute, a journalism think tank.

The Detroit News does not link to a story about the review that appeared in the Free Press.

Here's part of what the Free Press had to say:
In roughly five hours of interviews, Albom vigorously defended his integrity and approach. He said editors approved using quotes without attribution -- which his sports editor acknowledged -- and he said other columnists operate similarly around the country. (permalink)

The Progressive Case for Vouchers.
Generally speaking, advocates of school vouchers are politically conservative, while those on the other side of the ideological divide want to put more money into the status quo.

A few years ago, Charles L. Glenn offered the Progressive Case for Vouchers. He points out that a number of countries firmly in the "social democratic" camp make heavy use of schools funded but not run by government: Canada, Australia, Britain, France, the Low Countries, Germany, Spain and Denmark.

"The question for Progressives," he says, "is whether they will join in the discussions through which these programs are shaped, or persist in a state of denial while others make all the running."

So why should progressives endorse school choice?

The first reason, Glenn says, is freedom: "Parents have a fundamental right, in a free society, to decide about the values that their children will be taught in school."

An additional motivation for school choice, Glenn argues, is justice: "Justice demands that we support and promote it, especially for low-income families and those otherwise condemned to send their children-under mandatory attendance laws-to schools which they are convinced are doing or will do them harm."

(Hat tip to SCSU Scholars)

Labels: Education, School choice

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More Money in the Classroom.
First Class Education wants to require every school district "to spend at least 65 percent of its education operational budgets in classrooms."

Sounds reasonable enough, doesn't it? The student-teacher interaction is a fundamental, some would say the fundamental element of education.

The economics professor who publishes SCSU Scholars isn't so sure this proposal is a good idea.

Labels: Education

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Free Speech Threatened by Campaign Finance Reform, Again.
John Samples, of the Cato Institute, says that Your Blog Will Be Investigated Soon.

Samples does this in an amusing and horrifying fashion, by writing a post-dated "letter" from the Federal Elections Commission to the King of Bloggers, claiming that he made illegal campaign "contributions" to the two major party nominees of the 2008 presidential contest. (permalink)

Will Supreme Court Ruling on Wine Lead to Increased Consumer Choice?
The U.S. Supreme Court struck down laws in Michigan and New York that allowed in-state wineries (and only them) to ship wine to state residents. Out-of-state wineries, and their potential customers, had previously been out of luck. The Court overturned the laws, saying they were an unconstitutional barrier to interstate commerce.

Good for the Court, and good for interstate commerce. And good for consumers, who may now enjoy more choices. I say "may" because the states that now allow some direct-to-consumer sales now have two options. One option is to allow all wineries to make catalog, telephone, and Internet sales to consumers. Another option, preferred by Michigan’s top alcohol cop, is to ban all direct-to-consumer shipments altogether. If Michigan chooses that latter course, consumers will be in worse condition now, and the state’s small wineries will lose an important marketing tool.

The discriminatory treatment of out-of-state wineries, now unconstitutional, offers at least two lessons on law and economics. One lesson is that businesses are not uniformly anti-regulation. Some businesses, such as wholesale distributors of wine, thrive on regulation. They supported the ban, and benefited from it.

Another lesson to be learned is that for all the images of corporate wrongdoing government officials who create laws and regulations can harm consumers just as easily as business owners.

For the legal eagles in the crowd, Professor Bainbridge of UCLA offers some thoughts on the very unusual coalition of justices that produced the majority. (permalink)

More on Social Security.
I'm continuing to write about Social Security reform for the Detroit News.

Though it's not the only topic I discuss over there, it's the dominant one. And it's been an enlightening (though sometimes baffling) subject. One member of the peanut gallery (click on "web feedback"), a former member of the blogging panel, seldom responds to the substance of my arguments, and instead relies on name-calling and insults: liar, Bush shill, shell-game advocate, and most remarkable of all, selfish. Yeah, selfish, for advocating a plan (personal savings accounts) because I think it will make other people rich makes me selfish.

There's not enough time this morning to review the back-and-forth of the last few months, but here are a couple of observations.

One, a common rejoined to private accounts is that if they are so great, people are already free to open IRAs and such.

True enough. But Social Security takes 12 percent of a person's compensation for retirement funding. That's a large chunk out of the paycheck of a low-wage earner, who may, after that line for FICA on the W-2, has very little left over for an IRA. In other words, the middle-class and the wealthy can (to varying degrees) "afford" throwing away money on Social Security taxes and still build a nest egg through prudent investments. The poor cannot.

Two, some opponents of personal accounts have an unrealistic view of risk. They vigorously object to personal accounts in which the value of bonds and stocks vary from day to day. These accounts are "unsecure," "risky" and so they are bad, very bad.

Yet the "secure" method they defend--tax from today's workers, give to yesterday's workers, and hope in the face of demographic trends that the approach will continue to work into the future--is not so secure. Congress has over the life of Social Security raised the payroll tax rate, raised the amount of income subject to the tax, raised the retirement age, and imposed income tax obligations on benefits. Four major changes, all of which undermine the predictability and stability of the current approach.

And yet that is somehow more secure than investing in the world's greatest economy, which over any lengthy period of time (i.e., a career of working and saving) will produce income for retirement that is superior to what can be provided by today's scheme, which, like a multi-level marketing scam, depends on ever more people entering the system. (permalink)

Let's Make a Deal: Gay Marriage for School Choice.
Education reform guru Andrew J. Coulson make a proposal: Gay Marriage for School Choice.

If you’'re conservative, would you relent on the gay marriage issue in return for a school choice program that lets parents get exactly the kind and quality of schooling they seek? If you'’re liberal, would you go along with a universal public and private school choice program in return for the right of gays to marry?

Such grand sweeps occur only in parlor games, as Coulson would tell you. Still, the proposal is a useful way for people of many persuasions to examine their own convictions, and what the current political situation is giving them.

Labels: Education, School choice

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Wine to Go: Better than "Drain the Bottle."
The Michigan legislature has passed a measure allowing consumers to take home bottles of wine they don't finish while dining at Michigan restaurants.

It's about time. The practice would fix the current situation. People who purchase a bottle of wine at a restaurant right now have an incentive to polish off the bottle before they leave, since they can't take it home. And that can lead to drinking too much, which puts everyone on the road at risk.

Will this lead to an increase in wine consumption? Obviously that's what wine merchants and restaurant owners hope for. But will that lead to an increase in drunk driving incidents? Over 25 states already have similar laws; if anyone can point to studies comparing before-and-after consumption and arrests, drop me a line. (permalink)

Spending Limit Measure Popular in PA
Though the professional political class may not like, it a new survey shows (again) that citizens favor limits on government spending. Here's the latest from yet another state. It's a variant of the Taxpayers Bill of Rights model, which limits increases in state spending and income to the inflation rate plus population growth.


Harrisburg, PA ? Pennsylvanians want increases in state government spending to be limited to their ability to pay, according to a recent statewide survey of citizens by Susquehanna Polling & Research, Inc. The poll?conducted for the Commonwealth Foundation for Public Policy Alternatives and Americans For Prosperity Foundation?found that 69% of citizens ?favor? restrictions on increases in state government spending as proposed in the ?Taxpayer Fairness Act? (Senate Bill 4) and only 18% ?oppose? such limitations.

The ?Taxpayer Fairness Act??introduced by Senate Majority Leader Chip Brightbill and co-sponsored by a majority of Pennsylvania Senate members?would limit the growth in state government spending to either (a) the average rate of change for the three preceding years of inflation plus state population growth, or (b) the average rate of change for the three preceding years of personal income growth in Pennsylvania, whichever is less. Lawmakers could exceed these limits in the case of declared emergencies or a two-thirds majority vote in both houses of the General Assembly.

In addition to supporting state government spending limits, 55% of Pennsylvanians say they are ?more likely? to vote for a candidate who supports such restrictions and only 7% say they would be ?less likely.? Thirty-one percent say a candidate?s position on the legislation would make ?no impact/no difference.?

Although Pennsylvanians support the spending limits in the ?Taxpayer Fairness Act,? they also want surplus tax revenues to be returned to taxpayers. Under Senate Bill 4, excess tax revenues would be placed in a reserve fund, where they can be spent at some future date. However, 78% of Pennsylvanians want policymakers to return all or a majority of any surplus tax revenues to taxpayers. Only 16% of Pennsylvanians support the current provision in Senate Bill 4 that would place all excess tax money in a reserve fund.

Fifty-four percent of Pennsylvanians support returning 85 percent of excess tax money to taxpayers through a personal income tax reduction and placing the remaining 15 percent in a government reserve fund. A little more than 24 percent of Pennsylvanians want all excess tax money returned to taxpayers through a personal income tax reduction.

Support for state government spending limits cuts across party lines and regions of the commonwealth. Seventy-five percent of Republicans favor the proposal while 64% of Democrats do. Only 15% of Republicans and 20% of Democrats oppose such limitations. Independents and others favor the measure 59% to 27%.

Strongest support for the ?Taxpayer Fairness Act? comes from the Northwest region with 79% in favor and only 9% opposed. However, the least supportive region of the state, Philadelphia, still favors the proposal by 51% with only 26% opposed.

?The sentiment of Pennsylvanians is clear: State government spending needs to be limited,? said Matthew J. Brouillette, president of the Commonwealth Foundation. ?This year, Harrisburg will spend $4,178 for every man, woman and child in the commonwealth?$450 more per resident than it spent in 2003.?

Brouillette noted that despite the increased spending, key economic indicators demonstrate Pennsylvania?s ?inability to tax, borrow, or spend itself to prosperity.? Over the last two years, Pennsylvania was 38th in the nation in job growth, 41st in personal income growth, and 45th in population growth.

?Pennsylvania?s lack of strong fiscal guardrails has allowed the commonwealth to veer off an economic cliff,? said Brouillette. ?The ?Taxpayer Fairness Act? will go a long way toward putting Pennsylvania back on the road to fiscal health and economic prosperity.? (permalink)

Michigan Governor: Let's Try Same Old Path to Prosperity.
Michigan is a high-cost state, with a special tax--the Single Business Tax--that no other state applies on business.

So what does Governor Granholm, who wants to boost the state's economy, want to do? Make even more businesses subject to the tax.

Perhaps one reason why Granholm doesn't eliminate the tax entirely is the money would be useful for the latest experiment in industrial policy under a plan in which the state would directly invest in companies.

State ownership of the means of production.

I heard there's a name for that .... (permalink)

Election Reform: Some Good, Some Bad in Michigan.
Michigan held school elections yesterday under some new rules, some good and some bad.

Under a new state law, school elections are limited to specified days in February, May, August and November. They must also be conducted by county and municipal clerks.

That's the good news. With fewer rather than more choices, school districts are less able to manipulate the electoral calendar in hopes of achieving success at the ballot box.

Another part of the new law states that most voters over 60 years old will get applications for absentee ballots in the mail. Automatically.

The more in-person requirements we impose on voters, the less likely we are to have voter fraud.

One interesting political note: older voters are historically more skeptical of school funding requests the population at large. Will the new measures, which would favor the elderly, mean more scrutiny for millage requests?

Labels: Education

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If You Move to the Country, Expect Pig Smells.
The latest version of "We're new here, now you change" is afoot in the Minnesota legislature.

As the St. Paul Pioneer-Press explains, "As the population of the Twin Cities continues to spread, gun clubs often find themselves surrounded by angry neighbors.

In a late-session hearing, a Senate judiciary committee discussed a contentious piece of legislation that would protect shooting ranges and preserves from the demands of neighbors, who have long objected to the noise and activity. In return, the clubs would be subject to a few new restrictions and noise monitoring."

On the other hand, the old-timers are causing some trouble of their own. One club, for example, installed lights for nighttime shooting practice, and introduced the use of more noisy guns.

As with most property disputes, this one's better resolved at the local level, with a presumption given to existing practices--and some non-political resolution of differences. (permalink)

Education: Enrollment Up, Spending Way Up.
The education establishment in Texas (like anywhere else) says it needs more money. So what has it done with the generous increases of the past?

Writing for the Texas Public Policy Foundation, Chris Patterson notes that operating costs at Texas schools rose $11 billion dollars from 1997 to 2004. "Only $6 billion of this increase," she writes, "can be accounted for by enrollment growth, inflation, and increased costs associated with a growing population of economically disadvantaged students."

Where did the rest of the money go?

In large measure, to increased staff--support staff (41 percent increase), central administration (35 percent) campus administration (32 percent), and teaching staff (17 percent).

Overall, staff pay went up 17 percent after inflation during those 8 years, exceeding income growth of state residents as a whole. So much for not appreciating teachers?

What did taxpayers get in return? Not much, either in terms of inputs or outputs. The percentage of money spent in the classroom actually went down, from 57.9 percent to 51.8 percent. On the outputs side, the percentage of students graduating was largely unchanged. (permalink)

Education: DC Choice Program Draws a Crowd.
The DC Choice Incentive Act of 2003 brought some measure of school choice to the District of Columbia. So what's happened since?

The Independence Institute offers these observations

• 1,366 scholarships were awarded, and by September 2004, 1,027 had matriculated into their preferred school. This "usage rate" of 75 percent is at the high end of the range for similar programs.
  
• 433 public school students who would otherwise have been attending schools "in need of improvement" under No Child Left Behind were awarded scholarships.
  
• Applicants to the program are substantially more economically disadvantaged than are DCPS students overall.

The U.S. Department of Education has preliminary report.

While only 4 percent of the schools in the Cleveland voucher program have no affiliation, that number is 28 percent for the district of Columbia program.

In its Education Notebook, the Heritage Foundation points out that the DC program has garnered a greater response than the Milwaukee program, the first public voucher program in the country. (For an analysis of the Milwaukee, see here.) Either the DC schools are worse, school choice is catching on, or some combination of the two factors is at work.

Looking forward, the Foundation notes that "This year, 2,702 families have applied for scholarships for the 2005-06 school year. Meanwhile, 13 additional private schools will open their doors to voucher students."

Labels: Education, School choice

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Education: Alternative Plan Thwarted
Benjamin DeGrow tells the story of a tenure reform plan that couldn't, in (PDF) The Ignacio Market Driven Compensation Plan.

In 2003, Ignacio School District in southwestern Colorado offered an innovative proposal for teacher compensation. Under this voluntary arrangement, teachers could trade tenure for a higher salary track: less protection for bad performance, and greater reward for outstanding performance.

Remarkably, the district obtained the required permission of the state board of education, but the arrangement was rejected at a public vote that was forced by the teachers union.

DeGrow concludes, "As long as current teacher dismissal procedures remain, making the removal of poorly-performing teachers extremely difficult and costly, the chain of accountability is incomplete."

Labels: Education

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Education: Use the Military.
Many students leave high school ill-suited for the future. Some can be helped by the armed forces--even if they never step a foot on a military base.

Writing for the Pacific Research Institute, Lance T. Izumi points out that the Armed Services Vocational Aptitude Battery (ASVAB)can help students contemplating vocational education find a suitable program.

ASVAB, which has no military (as in "shoot 'em up") component, can help the student interesting in comparing "skills with the requirements of the career or occupation in which he or she is interested."

Contrary to what the name of the test suggests, no military service is required, though students will, Izumi says, get a one-time request for an appointment with a military recruiter. The student can always say No.

But by simply taking the test, a student can gain some useful information. "Few entering students know what they want to do," said Izumi. "Many also have an unrealistic view of occupations and little idea of the skills actually needed for those jobs. Since the test is without cost, it helps open the job world to students of all incomes."

Sounds like a fine idea; not everyone wants to or should attend a 4-year college. But if this suggestion gets a lot of attention, expect some loud disruptive noises about "militarization" and "no blood for oil" from the anti-military crowd.

Labels: Education

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