Last Thursday was Americans for Tax Reform’s 2010 Cost of Government Day (COGD) – the day when “the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government at the federal, state, and local levels.” This year’s COGD fell a full 231 days into the calendar year.
Compared to COGDs in the past, this year’s date marks a milestone of sorts in that taxpayers have never before had to work so far into the year to pay for their share of government. In fact, only one other time in the history of calculating COGDs has the date fallen so far into the year, and that was last year – August 11, 2009. Prior to that date, COGDs typically fell in June and July.
Though this year’s COGD estimate isn’t entirely surprising given the recent trillions spent on TARP, ARRA, ObamaCare, the $26 billion state bailout, etc., it should sound the alarm that the rate of growth in federal, state, and local government spending is accelerating far faster than in the past, making it increasingly difficult for the economy to recover and jobs to return.
We heard great things about the state’s energy efficiency program. However, there was very little focus on the costs to consumers. Since 2002, Texas consumers have paid $591.1 million to support the state’s energy efficiency program, and the program’s estimated cost for 2010 is $114.8 million. A recent increase to the program by the Public Utility Commission of Texas will probably double these costs. And legislative proposals could increase the annual cost to over $500 million. All of this would be okay, of course, if the state’s energy efficiency program saved consumers money through reduced consumption of electricity. However, there is simply no way to properly determine the efficiency of the state’s energy efficiency program. But an educated guess is that it costs more than it saves.
This same flaw also plagues the state’s subsidies of renewable energy through the renewable portfolio standard, CREZ lines, and tax breaks. Several people testifying today were asking the legislature to give them subsidies for technologies like solar, biomass, and geothermal. But Sen. Chris Harris captured the problem with these subsidies when he asked, “How can I justify going to my constituents and tell them that I voted to give you money?” Sen. Mike Jackson also pointed out that solar projects are much like wind projects in that we give them credits for economic development but after the installation there are very few jobs left. Renewable energy generation simply costs more than generation from conventional sources.
The results of these two green programs stand in stark contrast to the history of energy use. Market-based energy efficiency has for centuries made electricity less expensive to use so that we could use more of it. This makes sense because there is almost a one on one correlation between the increased wealth and health of society and the increased use of energy.
In the last four weeks Texas has set four new records of peak electricity demand, i.e., we’ve used more electricity recently than ever before. But rather than fret about this and create more government programs, we should receive this as good news that clearly shows that the market can handle the increased demand for electricity in the state. It also shows that what Texans want is more, less expensive electricity, not less, more expensive electricity.
If Texas wants to reduce energy costs and save money for Texas consumers, it needs to go back to the drawing board and make significant changes to the energy efficiency program and eliminate the Renewable Portfolio Standard.
For the second time in a week, Texans have set a new record for electricity use. According to ERCOT, power use for the hour ending at 5 p.m. yesterday was 63,830 megawatts. This tops the peak record of 63,594 MW set just last week.
Looks like Texas’ competitive electricity market is performing exactly as promised—delivering plenty of electricity to Texans when they need it at prices they can afford.
A recent National Sheriffs Association report states that one is three times more likely to find a mentally ill person in jail or prison than in a hospital. In Texas, the odds are even more pronounced: 7.8 to 1. A Texas county official is quoted: “[T]he combined cost of incarcerating and treating the mentally ill is $87 million annually” and “[t]he jails have become the psychiatric hospitals of the United States.”
During the 1950s, popular sentiment and litigation mounted against mandatory institutionalization in state-sponsored psychiatric hospitals, and those institutions were closed. However, the states never created a replacement, and so the mentally ill have been funneled into jails and prisons for lack of a better place to send them. The emphasis on incarcerating the mentally ill presents several problems:
a) Recidivism is high. In L.A. County Jail, 90% of mentally ill inmates are repeat offenders.
b) Mentally ill inmates are more expensive. In Texas, the average prisoner costs about $22,000 per year. Mentally ill prisoners cost between $30,000 and $50,000. They also cost more because they stay longer, partly because their illness often worsens behind bars.
c) Mentally ill inmates are more prone to commit suicide. Half of all prison suicides are by seriously mentally ill inmates. In California, about 77% of all attempted suicides involve the mentally ill.
d) Mentally ill inmates are sometimes abused as they confound correctional staff. One correctional officer justified punching a mentally ill inmate: “[y]ou need to instill fear in these inmates or they won’t listen to you.... Especially crazy inmates.”
Most recommended solutions in the report would require more funds. However, in tough budgetary times, measures that divert suitable mentally ill offenders from lockups to treatment, including home-based care, can actually produce net savings. Outsourcing to private mental health providers that are more efficient and cost effective is another promising strategy. Clearly, public safety and offender accountability must remain paramount, but relying almost exclusively on prisons to solve this perpetuates a revolving door that is costly for victims and taxpayers. Instead, we must break the cycle of illness and crime.
- A.J. Smullen
Intern, Center for Effective Justice
So much for one cap-and-trade scheme. The acid rain cap-and-trade program is frequently praised as an effective market-oriented regulatory mechanism to reduce sulfur dioxide (SOx) from power plant emissions and as a model for carbon cap-and-trade. On July 6, EPA finalized new rules that tighten limits on SOx and virtually eliminate trading. The market for allowances to emit one ton of SOx collapsed from a high of $1,600 per ton in 1995 to $3 per ton in early July. Millions of allowances held by utilities and investors are now worthless.
In the early years, EPA’s SOx cap-and-trade program worked well. Since 1995, the program led to a 50 percent reduction in these emissions. EPA initially allocated a set number of baseline allowances to electric power companies. These utilities then had to “pay” for each ton of SOx emitted with one allowance. By switching to low-sulfur coal, increasing plant efficiencies, and investing in pollution control technology, electric generators reduced emissions. With reduced SOx emissions, the utility then sold allowances or reduced the number of purchased allowances needed each year. The emission reductions and market for trading SOx credits grew until late 2005 when litigation undermined the certainty of EPA’s rules. In 2008, the DC Circuit Court finally vacated portions of the rule and ordered a revision.
The EPA’s new Clean Air Transport Rule devalues SOx emission credits accumulated or purchased under the previous rules, and substantially limits, if not precludes, trading of emission allowances. The final cap in the previous rule was 8.65 million tons of SOx per year. The new rule shrinks the annual SOx limit to 4.1 million tons.
Beware of EPA-created markets. Genuine markets are dynamic. Supply, demand, and price respond to the ever changing dynamics of free exchange. In contrast, markets created and controlled by government are volatile, fragile, and subject to fraud. When the government creates an artificial market for trading emission allowances, i.e. government permission slips, one new EPA edict can nullify the market and vaporize the value of emission credits.
When most people think about the benefits of financial transparency—the timely, meaningful, and reliable disclosure of government budget and spending information—they tend to think of the intangibles: educating the public, knowledgably engaging their elected officials, and so on. But a growing body of evidence is beginning to show that transparency has a much more concrete benefit: saving money.
As a result of the Texas Comptroller’s efforts to post detailed spending information online as well as conducting a top-to-bottom review of her agency’s expenses, the Comptroller’s transparency efforts have “saved taxpayers a projected $10 million” over the last few years. A pretty good return on investment considering the initial cost for Texas’ spending website, Where the Money Goes, was only $310,000.
Transparency’s money-saving ability extends beyond just that example though—state and local governments have also been able to see big savings from TexasSmartBuy, an online ordering system that leverages the state’s purchasing power to boost competitiveness among vendors and cut costs. In the short time that TexasSmartBuy has been up and running, Texas’ state and local governments, as well as the taxpayers who support them, have seen “over $50 million in annually reoccurring savings.”
And there are numerous other “success stories” are out there detailing how governments in Texas are benefitting financially from their transparency efforts, be it by reducing open records requests, saving on printing, or other ways. So the next time you think about how transparency may benefit you, just think about all the money you could be saving.
Recently, I toured the Bill Logue Juvenile Probation Center in Waco and the McLennan County Juvenile Correctional Facility in nearby Mart.
At the probation facility, McLennan County officials highlighted measures intended to reduce recidivism and increase the effectiveness of various rehabilitative methods. Although boot camp programs have been considered generally ineffective at deterring recidivism by juvenile offenders, the McLennan County C.O.R.P.S. program has been modified to contain a roughly 40% military emphasis and 60% therapeutic emphasis, which county officials say has increased the program’s effectiveness. In addition, officials spoke about Quickscreen brain scanning, which used brain imaging to identify signs of behavioral or learning disabilities in juveniles, enabling treatment strategies to be better tailored to the youth.
At the Texas Youth’s Commission’s McLennan County Juvenile Correctional Facility, a new feature is the “grievance” system. Drop boxes are placed in hallways throughout the facilities for youths to place forms detailing any complaints regarding other youths, TYC administration, or even if they just want to say that lunch wasn’t served hot enough.
This system seems to provide a method for youths to report misconduct like that which led to the TYC crisis in 2007. However, when asked, the youths distrusted the grievance system. Youths reported that, even though the grievance form promises a response within 24 hours, a response often takes up to two weeks. Additionally, a youth cannot remain anonymous, which may discourage complaints due to fear of retaliation if an administrator is the subject of his grievance.
Youth also reported that they had only received about four days of in-class education during May. Officials stated that this was mostly due to staffing shortages, including the recent death of one of the GED coordinating educational personnel. As youths entering TYC are on average several grades behind, they clearly need more than a half week of school per month.
My visits suggest reasons to be hopeful about the future of Texas juvenile justice while also indicating that there is still much room for further progress.
- A.J. Smullen
Intern, Center for Effective Justice
The nation’s out-of-control spending problems persist, despite President Obama’s earlier assurances that the federal government would strive to live within its means.
According to a mid-year review by the Office of Management and Budget (OMB), this year’s projected deficit will top $1.47 trillion and is projected at $1.42 trillion next year. Starting in 2013, the nation’s deficit projections are slightly rosier, ranging in the hundreds of billions rather than in the trillions, but their cumulative effect will be to push the amount of debt held by the public to nearly $19 trillion, or 77.4 percent of GDP, by 2020.
Fiscal irresponsibility of this magnitude and duration is not without risk. In a newly released brief, titled Federal Debt and the Risk of a Fiscal Crisis, the Congressional Budget Office (CBO) warns that if present conditions are allowed to continue, the U.S. could face “several negative economic consequences,” including potentially higher interest rates, lower economic output, and an increased probability of a “sudden fiscal crisis.” Though it is impossible to know just when a fiscal crisis of this sort might arise or how long it may last, it would almost certainly have a lasting impact on everyone’s finances.
Risking this kind of fiscal crisis because of persistent deficits and a gargantuan national debt is reckless, to say the least. If we are to avoid future calamity, meaningful budget reforms are needed now.
In the private sector, falling demand and cheap competition lead a business to conclude that it must find efficiencies, right-size, and adjust to survive. In the public sector, the same circumstances commonly lead officials to conclude just the opposite: raise prices.
Case in point: the U.S. Postal Service. Earlier this month, it announced plans to increase the price of a first-class stamp to 46 cents and raise the price of a postcard to 30 cents starting in January 2011. The proposed rate increases come as the agency faces a projected $7 billion shortfall for the next fiscal year.
Whether or not raising prices in a recessionary climate amid plummeting demand and in the Age of the Internet is a well-reasoned idea is yet to be seen—though I would strongly suggest it is not—but what can be said for certain is that the Post Office is in need of long-term solutions, like privatization, to help the agency solve its ongoing fiscal crises.
For some, the call to privatize the nation’s mail delivery service is unthinkable—after all, who would trust the “greedy” private sector with such an important task. But for others, the move to privatize the Post Office is commonsensical, as it has already proven a success in other countries, like Great Britain, where officials are “considering a 100 per cent privatization.” Profit, in this case at least, seems to be the right motivator for delivering the mail and offering a better product.
When the average consumer considers making a major new purchase like a home or automobile, most do their homework before they actually commit themselves. Too much time and money is at stake to do otherwise.
Like consumers, higher education students also tend to do a bit of “comparison shopping,” evaluating professors and classes as they create their schedule for the semester. However, unlike consumers, students only have a very limited amount of information available to them before making their “purchases.” That is, until recently.
A new state law, HB 2504, goes into effect beginning this fall that requires Texas’ public colleges and universities to post faculty and course information online aimed at helping students make more informed decisions. The newly available information includes course syllabi, student evaluations, and professors’ curricula vitae, as well as departmental budgets.
While most consider giving students access to more information about their higher education choices a good thing, some university officials have begun to express their dismay, citing cost concerns and issues with manpower—a familiar tune, it seems, whenever new transparency initiatives are launched.
No matter how much hullabaloo is raised by officials though, the fact of the matter is that the average Texas undergraduate invests upwards of $80,000 in pursuit of a four-year degree and they have every reason to know what they are putting their money towards. Plain and simple.
With a projected budget shortfall of several billion dollars looming over next session, some have begun calling for the creation of a new state personal income tax as a way to help solve the state’s budget mess and aid economic recovery. But as the Foundation has argued in the past, a personal income tax would do more harm than good.
First, creating a new revenue stream would shift the focus away from the state’s real budget problem: government spending. With state government spending having increased by 81 percent since 2000 – compared to just a 43 percent growth in population plus inflation – it is hard to argue that the state lacks revenue.
Next, and perhaps most importantly, much of Texas’ past economic success has been based on the state’s commitment to a low-tax, business-friendly environment that attracts employers, creates jobs, and encourages investment. A state income tax puts that success in jeopardy.
As noted in the Foundation’s previous research, economic growth in the nine states without an income tax has greatly exceeded economic growth in the nine states with the highest marginal income tax rates over a 10 year period.
Finally, the creation of a broad-based personal income tax lets policymakers off the hook and shifts the burden to workers and their families. At a time when most Texans are making cuts to their family budgets, policymakers should be leading by example and making the same kind of tough decisions.
The Financial Times recently reported that the small southern California city of Maywood, population 28,137, is handling its budget woes in a rather unusual way: by firing all of its employees and contracting out essential services, including its police force.
Maywood, a city chronically troubled with its police department\'s insurance program, was finally driven to the edge when its insurance rates and pension obligations increased, while its property and sales tax revenues declined. In response, the city has pulled out all the stops in an effort to find cost-savings and identify unnecessary expenses in everything from school buildings to fire departments.
From the looks of things, it appears city officials are taking to heart an oft-repeated slogan in national politics: \"Treat government more like a business.\"
The city\'s distress shows that a government need not provide all those services itself – and in fact, it shouldn\'t. Every organization has a \"comparative advantage\" – a service it is best suited to providing. When local government acts as the direct provider of public goods, it foregoes the comparative advantages of private firms. If a local government instead simply acts as a bargaining agent on behalf of citizens, it can capitalize on the comparative advantages of the private organizations to provide services to citizens more efficiently.
Local governments can go further, of course, and use opportunities like this to make long-needed reforms of labor and pension rules. At the very least, they should recognize that Maywood\'s reaction to its fiscal distress is a viable strategy to improve municipal services while reducing costs.
- Andrew Glidden
Intern, Armstrong Center for Energy and the Environment
Building on last year’s Heller decision, the Supreme Court voted 5-4 on June 28 in the McDonald v. Chicagocase to incorporate the 2nd Amendment’s protection of gun ownership onto the states via the 14th Amendment. During the Reconstruction Era, relying on the controversial Slaughter-House case, the Cruikshanks, Presser v. Illinois, and Miller v. Texas decisions had expressly stated that the 2nd Amendment did not apply to the various states even though it was binding on the federal government.
The Reconstruction Era Court did not believe that the 2nd Amendment right to bear arms was a privilege or immunity of citizenship as contemplated by the first clause of the 14th Amendment. A plurality of the present Court – Alito, joined by Roberts, Scalia and Kennedy, and with Scalia writing an additional concurrence – navigated around the Reconstruction Era opinions by declaring that the right to bear arms extended onto the states via the Due Process Clause of the 14th Amendment.
The decision to extend using the Due Process Clause is merely a plurality, rather than a majority, because Thomas voted to directly overturn the Slaughter-House-Cruikshanks line and extend the 2nd Amendment via the Privileges and Immunities provision. What this means for us is that, while the Court’s decision to incorporate is binding against the states, there is technically no settled authority on the precise scope of gun regulations that will still pass muster.
Nevertheless, those of us who consider the 2nd Amendment to stand for a defense of individual liberty and self-determination are now more secure in our right to self-defense that was so important to our nation’s founders.
- A.J. Smullen
Intern, Center for Effective Justice
“When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, … a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”
When we see these opening words of the Declaration of Independence, it can be easy to skim over them in the rush to get to the really exciting part about equality, unalienable rights, and life, liberty, and the pursuit of happiness.
Yet, if we do this, we miss something important.
These opening lines talk about “one people … declar[ing] the causes which impel them to the separation.” But if you look at who signed the declaration, it wasn’t an anonymous group, but 56 individual men who actually declared these causes and thus put their lives on the line.
Signing the Declaration wasn’t like signing a simple ballot petition in our country today. It was instead declaring to England—the greatest military power in the world at the time—intentions that would be treated as treason should the fight for independence fail.
These men put their honor, fortunes, and lives on the line for the good of their country.
Today, 234 years after the Declaration was signed, where does this leave us?
Free, for one thing. The sacrifices they made so long ago are still bearing fruit in the lives of all Americans today. For this we should be ever grateful.
However, all is not as it should be. The United States is now ranked only “mostly free” in the 2010 Index of Economic Freedom from the Heritage Foundation and The Wall Street Journal. Seven countries, including Canada, now rank as Free ahead of us. Our health care system is on the verge of a complete federal takeover—and collapse. And excessive spending and regulation seem to be driving our economy towards years of economic malaise.
We are seeing these impacts first hand in Texas. The mandates of ObamaCare may force many changes to our system unimaginable only six months ago, not to mention billions of dollars of new spending. These costs, along with the impact of federal stimulus spending and the recession, have us facing a budget shortfall next biennium of as much as $18 billion.
We all have a lot of work to do.
We’ve wasted no time in getting started at the Foundation. Two of the leading architects of Texas’ successful 2003 effort to close a $10 billion budget gap without increased taxes—former state representatives Talmadge Heflin and Arlene Wohlgemuth—are now heading up our unprecedented budget project. Over the next few months, our entire policy team will put their regular research work on hold in order to scour the budget of every single state agency looking for ways to save taxpayers money.
We also recently launched our Center for Tenth Amendment Studies led by former Texas Solicitor General Ted Cruz and former Texas Supreme Court Justice Scott Brister. They are looking for ways where Texas can just say “No” to the federal government—its money and the strings that come attached to it.
We are fortunate to live in a country where pledging our lives to liberty doesn’t involve the level of sacrifice it once did here—and still does in too many countries around the globe. That is all the more reason we should all redouble our efforts in the name of liberty.
Thank you for joining us in the fight for freedom.
State Farm, the state’s largest homeowners insurance company, recently raised its rates; as a result, some policyholders began to shop around for less expensive alternatives. This appears to come as a surprise to advocates of increased regulation of homeowners insurance. It shouldn’t.
Consumers are able to help themselves in a competitive marketplace. In today’s competitive insurance market, where the voluntary nature of markets forces attention to the needs and desires of consumers, consumer-protection laws generally just get in their way.
As Bill Peacock points out in his recent study on consumers, competition, and homeowners insurance, consumer-protection measures generally seek to replace consumer preferences with those of the regulators and other intervening parties. This does not mean there is no place for government intervention, but it does mean intervention should be carefully targeted toward unethical, rather than competitive, behavior.
When it comes to wind energy, Texas would be wise to keep an eye on China.
China, the world’s second-largest consumer of energy, is turning to renewable sources – primarily wind. According to Bloomberg New Energy Finance, China invested $34.5 billion in low-carbon technologies in 2009, compared with $18.6 billion in the US. In 2009, China invested $110 billion – 2.2% of its gross domestic product – in power construction projects, increasing wind projects by 44%.
What has China received in exchange for its spending on wind power? Overcapacity. Over the last nine years, China’s government has launched several subsidy programs designed to support domestic manufacturers. These subsidies have flooded the market with more turbines than needed to meet demand.
According to Asia Times Online, many internal experts have pointed to potential waste in China’s large-scale wind power development. China will require extensive upgrades to its power grid to support these large-scale wind farms. These were costs not anticipated, nor accounted for, in the original investment plans.
These problems are the same that Texas will experience. As explained in our sunset report on the Public Utility Commission of Texas, the below market price of wind – due to state and federal subsidies – floods the system with more wind than it would otherwise have, increasing the challenge of maintaining system reliability and the costs of ancillary services. Not only could this have a detrimental impact on system reliability at peak loads, it could also threaten the success of Texas’ energy-only market.
Texas should look to China as an example of the failure of wind power and reach a similar conclusion –namely that “investment in large-scale wind development has created large-scale waste, and the sustainability of such projects is brought into question.”
Teacher quality is an important factor in student success in the classroom in both public and higher education. The proposal to use student evaluations as part of an effort to reform Texas higher education recognizes this fact and seeks to reward the best educators. In the past couple of days, criticism from outside the state hasappeared – criticism which ignores several key parts of the proposal.
• The program is voluntary. Faculty members are not required to participate. The plan rewards those teachers based upon evaluations and the number of students taught. This encourages faculty to teach as many students as possible.
• Existing evaluation forms submitted at the end of the year are used to rate the teachers. These evaluations are typically conducted before final grades are awarded. Multiple studies have shown that students’ ratings are not biased by their likely grades, thus limiting teachers’ incentives to award higher grades in an effort to secure a higher evaluation and thus, a bonus. Additionally, all faculty members are encouraged to agree to limit high grades and grade inflation when first joining the program.
• Studies show that student evaluations are effective measures of teacher performance, especially when the goals and expectations for a course are clearly laid out.
• These bonuses would be available to all teachers, not just tenured professors. As we showed in a 2009 article, 70% of courses taught in public universities are taught by non-tenure-track faculty, including graduate teaching assistants. The average tenured professor teaches fewer than three courses per year. Non-tenured faculty normally earn far less than tenured faculty, often as little as $10 per hour. Those teachers who do the most and best work of educating our youth should be rewarded for such.
The criticisms of student evaluations also ignore the fact that these are only one part of a much larger reform plan that encourages students, parents, and taxpayers to become more involved in improving higher education at public universities.
The Foundation has no problem with sound academic research; after all, we are researchers ourselves. But as important as academic research is, it is secondary to the primary goal of educating students. These are public universities funded by public tax dollars established to educate our citizens.
So while there may be value to “highly qualified scholars working on problems that may have no practical payoff except the unquantifiable payoff of advancing our understanding of something in philosophy or nature that has long been a mystery,” the public should rightly expect accountability from these institutions for the tax dollars being spent. And unlike the students who the critics say “may not realize [the value of a course] for decades, the public is pretty savvy at understanding immediately the value it is getting in return for its money.
Washington D.C.’s addiction to spending may be worse than you think.
This year alone, the federal government will spend more than $30,500 per household, according to a new report from the Heritage Foundation. This figure, up $5,000 per household from just a few years ago, is expected to grow to more than $35,600 per household by the year 2020.
As outrageous as this growth of government spending is, it is even more obscene considering what our tax dollars are being spent on. Here is just a short catalogue of the wasteful spending items identified in the report:
- Washington spends $25 billion annually maintaining unused or vacant federal properties;
- The federal government made at least $98 billion in improper payments in 2009;
- Because of overstaffing, the U.S. Postal Service selects 1,125 employees per day to sit in empty rooms. They are not allowed to work, read, play cards, watch television, or do anything. This costs $50 million annually;
- Washington will spend $2.6 million training Chinese prostitutes to drink more responsibly on the job;
- The federal government owns more than 50,000 vacant homes; and
- The National Institutes of Health spends $1.3 million per month to rent a lab that it cannot use.
Congress passed a 2,700-page bill on health care reform. How can Congress possibly know all of the details in this bill? Much less, how can U.S. Health & Human Services Secretary Kathleen Sebelius—to whom an unprecedented level of deciding power is allocated in this bill—possibly know and understand the laws set forth in the bill that is quickly catching on as “ObamaCare”?
In reading just a 35-page section of ObamaCare that outlines the establishment of state health care exchanges, the Secretary of Health and Human Services – an appointed official, mind you – was listed 110 times as the recipient of certain powers that originally would have belonged to Congress. The authority granted to Secretary Sebelius borders on violating the non-delegation doctrine, the principle that Congress cannot delegate legislative powers to anyone else. Considering the significance of this law – the violation of federalism and interference into the daily lives of all Americans – ObamaCare does not provide anything resembling sufficient guidance for the Secretary.
Out of the 110 times this small section delegates power to Secretary Sebelius, there are five that are particularly striking. Secretary Sebelius has been given authority to (1) certify health plans, (2) determine whether a state will have its required exchange fully operational by January 2014 lest the federal government take over the operation, (3) investigate the affairs of an exchange and require yet more reports, (4) establish geographically adjusted premium rates from Washington, and (5) set provider reimbursement rates.
The federal government is usurping what is intended to be the states’ responsibilities, only to hand it to an unelected official.
- Caitlin Buck
Intern, Center for Health Care Policy
The late Austrian economist Joseph Schumpeter popularized the term “creative destruction” to define the process by which a free market abandons less efficient means of production for more favorable ones, thereby creating greater value for society on a whole. Oftentimes, this means the destruction of businesses through competition. But fair competition comes from other businesses, not government regulations.
The fear that Obama Care would stifle business as opposed to encourage it has now become reality. On June 2, Virginia-based nHealth announced its decision to cease operations, citing “uncertainties in the regulatory climate coupled with new demands imposed by national health care reforms.” Few people doubt that private enterprise is more efficient than government bureaucracy. However, the government, through legislative or administrative means, can establish an environment where no amount of innovation can succeed, a feat diametrically opposed to the free market.
nHealth described the new minimum loss ratios – the amount of money paid out to claims in relation to the amount kept for overhead and profit – as being particularly detrimental to their business. By restricting flexibility on these loss ratios, the federal government has directly legislated how much profit an insurance company can make.
Since the Code of Hammurabi, the earliest known codified rule of law dating back to 1790 B.C., governments have in some way regulated business, but rarely before in American history has our federal government taken such a direct and destructive role in business. Rest assured nHealth will not be the last casualty in the Obama Administration’s takeover of the health care industry.
Former U.S. House Speaker Newt Gingrich, now affiliated with the American Enterprise Institute, is taking a few pages out of an important new book, “The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America’s Future.” Gingrich, who has been excerpting the book by AEI President and social scientist Arthur Brooks in his recent speeches, says the thesis of the tome is that “the new culture war in America is not over guns, gay marriage or abortion, but instead between a socialist redistributionist minority (the 30% coalition) and a massive free-enterprise, work-ethic, opportunity-oriented majority (the 70% majority.)”
Among the key themes of the book is: “Free enterprise is not simply an economic alternative. Free enterprise is about who we are as a people and who we want to be. It embodies our power as individuals and our independence from government. In short, enterprise is an act of self-expression – a declaration of what we truly value – and a social issue for Americans.”
This insight helps explain the paradox of both Austin and Hollywood. How many times if you heard folks on the liberal end of the spectrum say they love Austin but couldn’t live anywhere else in Texas? In the latest issue of Austin Monthly, former Mayor Gus Garcia said the thing he likes most about Austin is “the spirit of liberalism that prevails.”
Do you think these folks recognize one of the reasons Austin has become a magnet for musicians, artists, and other creative individuals is that there is no state income tax and that the cost of living here is half to a third of New York or San Francisco? What is a more powerful form of self-expression than selling your own songs and art and, hopefully, getting to keep the vast majority of what you earn? While some people attribute Texas’ prosperity simply to oil, it is the relative economic freedom in our state policies compared with other states that also helps explain why Austin is rated America’s best city for small business.
While many conservatives have had legitimate bones to pick with Hollywood over the years, conservative author David Horowitz – who founded an organization for conservatives in Hollywood – has argued that the capitalist lifestyle depicted in movies and music also played a role in the desire of Russians and Eastern Europeans living under communism to become more like America. Interestingly, both Bibles and Beatles records were smuggled into communist regimes.
Perhaps the reason economic freedom is a tough sell is you can never prove the great inventions, businesses, and creative advances that would have happened had there been fewer taxes and regulations. But we do know that the free market system does more than just create wealth; it unlocks human potential.
A recent study in Spain showed that for every “green job” created by the Spanish government through subsidies, 2.2 jobs were destroyed elsewhere in the economy. The reason, as explained in the study, is because the re-allocation of resources to “green jobs” was centrally directed rather than rationally, as in a market economy.
These results are not unique to Spain. In Italy, the losses were worse. Each “green job” created cost 4.6 jobs across the entire economy. It is this Spanish/European-style green jobs agenda that is being pushed so heavily in the United States, both at the federal level and right here in Texas.
These findings mirror those found by our study on the impact of climate change legislation and economic growth, which showed a direct correlation between energy use and gross domestic product. Any policy that increases energy prices effectively decreases growth.
One does not have to be an economist to figure out that if each “green job” costs more jobs than it creates, then “going green” is not the answer to pull out of the recession. Although Texas has fared better than most states in terms of unemployed workers, pushing green jobs here will weaken—not strengthen—the job market.
Old Dominion University in Virginia is seeking to use its eminent domain authority to seize land. Why? It wants to build a shopping mall. How can it do this? The University is declaring the area “blighted.” Under Virginia law, if an area is blighted, regardless of whether that particular unit of land is blighted, eminent domain can be used to take the entire area of land.
So what is this terrible blight next door to the university? The land being taken belongs to a defense contractor that has been repairing the Navy’s communication systems at that location for 50 years. The company has been in business for 75 years. I doubt this is the kind of taking that was intended when the Virginia legislature enacted its eminent domain statutes.
Texans used to be subject to this same kind of taking. However, with the passage of a constitutional amendment last year, a blight designation can still be used to take a property, but it has to be done one property at a time; which makes it harder than it was in the past to take property in this way. Texas’ eminent domain laws still require more work, but at least we are moving in the right direction.
The U.S. Environmental Protection Agency’s (EPA) Endangerment Finding that carbon dioxide (CO2) is a pollutant harmful to human health is a prime candidate for a rarely used authority in the U.S. Senate to overturn a regulatory decision. A shrewd plan to use this authority is under way. Alaska Sen. Lisa Murkowski, ranking member of the Energy and Natural Resources Committee, has scheduled a vote on a resolution of disapproval under the Congressional Review Act.
A resolution under this law is privileged, meaning that the Senate must vote on it. Passage needs only a simple majority of 51 senators. Before concluding this will never happen with the current makeup of the Senate, remember that 10 Democratic Senators recently wrote a letter to EPA Administrator Lisa Jackson requesting that she suspend implementation of the Endangerment Finding. An unavoidable vote to veto EPA’s finding will provide a record of votes on a key issue in this November’s elections.
The Endangerment Finding, broadly criticized by both parties, has been used by the Obama Administration as a political tool from the start. EPA coincidentally adopted the finding on the first day of the international conference in Copenhagen to finalize a binding international treaty on carbon caps. A final Endangerment Finding enabled President Obama to claim, at this meeting, that the U.S. had full legal authority to force reduction of CO2 even without new legislation.
By officially declaring that CO2 and other greenhouse gases (GHG) are harmful pollutants, EPA triggered the command and control authority to regulate under the existing Clean Air Act. Proponents and opponents of GHG reduction agree that the act is wholly unsuited to regulate a compound as ubiquitous as CO2. The cap and trade bills set a regulatory threshold at 25,000 tons of annual CO2 emissions, but the act sets this threshold at 250 tons. At this low level, churches, hotels, schools, and large homes would be subject to complex and costly EPA mandates.
Last February, the state of Texas legally challenged EPA’s Endangerment Finding in the D.C. Circuit Court. Sixteen other states have followed suit. This litigation challenges EPA’s reliance on flawed global warming science now discredited by the Climategate disclosures of data manipulation, error, subversion of basic peer review, and violation of Freedom of Information laws.
Sen. Murkowski’s resolution raises another fundamental question appropriate for elected representatives to answer. Should unelected agency staff make decisions as monumental as EPA’s Endangerment Finding? Has EPA usurped the prerogative of the U.S. Congress, acting a lawmaker instead of an implementer of those laws enacted by Congress?
The legal authority created by EPA’s Endangerment Finding is used as a cudgel to force passage of new cap and trade legislation, misleadingly pitched as a more market-friendly regulatory mechanism. That strategy is not working. Polls show increasing majorities of voters oppose carbon mandates. The same polls show voters want a genuine energy bill – to facilitate plentiful, affordable and reliable energy—not more taxpayer subsidized green gimmicks.
Sen. Murkowski’s resolution to disapprove (nullify) EPA’s Endangerment Finding is scheduled for the week of June 7. Sen. Lindsay Graham, a cap-and-trade supporter who has also co-sponsored Murkowski’s resolution, told the New York Times late last week he believes the resolution will pass.
Dallas TV station WFAA recently discovered that Super Bowls aren’t quite as super as they might seem.
The Super Bowl’s $611 million economic impact on North Texas – as claimed in a study commissioned by the North Texas Super Bowl XLV Host Committee – doesn’t seem to hold up very well under examination. It appears that the spending by fans used to attain the $611 million impact are simply assumptions, as actual fan spending at previous Super Bowls or related events was not examined.
For instance, the same firm that produced this study did a similar study projecting the economic impact of the NBA All Star game in Arlington. It estimated that NBA All-Star fans would spend more than $13 million on rental cars in North Texas over the five days of the event. However, WFAA discovered that airport figures show just $17 million in rentals for the entire month of February. The story contains multiple examples like this shedding doubt on the projections.
This shouldn’t surprise anyone. Government claims of the benefits of “economic development” are always overstated.
A recent Foundation paper, Economic Development: Texas Style, shows that the best approach to growing the economy is through low taxes and less government spending – not through enterprise funds, Super Bowls, and programs that pay employers money for hiring workers. It is much better to leave money in the hands of the people and employers and let them use it rather than to funnel it through the government. Not only does government have to take its cut as the money passes through, but it redirects the money from more productive to less productive uses.
While most of us enjoy watching the Super Bowl, that enjoyment may be tarnished a bit as we think of the $31 million or more that our state government is going to spend on hosting it.
There are 66 cities/metro areas in the United States with a population of at least 450,000. Five are in Texas – all of which rank in the top seven nationally. Austin, Houston, and San Antonio take the top three spots, while Dallas comes in fifth, and Ft. Worth seventh. Texas dominates the landscape.
The results are quite similar when the smaller cities/metro areas are included. Of the 397 U.S. cities ranked, 24 of the 26 Texas cities place in the top half, with 21 in the top quartile. The only two in the bottom half are Victoria and Wichita Falls.
Surely Texas must be doing something right to achieve these results. I’d like to think that our ranking near the bottom of most spending and tax categories—thus allowing folks to keep their money and create new jobs with it—has something to do with it. Our oil, natural gas, and coal resources certainly help. And though we can’t credit free market policies as the reason we have energy resources where others don’t, it must also be noted that Texas isn’t the only state with fossil fuel resources. And unlike several of those other states—California and Florida come to mind—Texas is pursuing free market policies that allow those resources to be extracted.
Michael Shires, the author of the rankings, writes that while energy is certainly helping Texas, our response to past crises is the key to our current success. He cites the restrictions we have “limiting home equity lines” as one example. While this is hardly a free-market measure, it did insulate Texas from the damage the out-of-control U.S. government-created mortgage lending crisis inflicted on so many other states. I believe our moderation in resolving the 2003 budget crisis through spending restraint rather than new taxes is even a bigger factor in our current economic health.
Shires says that moderation is the best response to the current crises, pointing out that the “current pace of government spending is unsustainable.” Additionally, “governments at all levels need to reduce their cost structures.” And we need to avoid measures such as “California’s aggressive climate legislation, for example, and the mixed signals it is sending businesses across the state’s 28 MSAs.”
We conservatives sometimes don’t like the word moderate, but in this case I believe Shires is right on. Some moderation in taxes, spending, and regulation is exactly what Texas needs to see it through the budget crunch the Texas Legislature will face in 2011. For instance, the top three areas in Texas for growth are College Station-Bryan, Killeen-Temple-Fort Hood, Austin-Round Rock-San Marcos. While I am glad these cities are doing well, and there is no doubt that being in Texas with our small-government climate has helped them, these rankings would lead me to believe that another thing we are doing well is spending a lot of money on universities and the military. We can’t do anything about military spending in Texas, but we ought to take a closer look at higher education spending come January to see if there is a little room for moderation there to help us balance the budget.
There is obviously a lot going on at the federal level right now worthy of attention, but don’t forget what is happening in Texas. We have proven that we can keep things humming along pretty well here despite what goes on in Washington. Stay tuned to www.texaspolicy.com to keep on top of what’s going on here in Austin at the Pink Dome.
Last month, the Center for Economic Freedom hosted a primer on the technology industry and its impact on jobs and growth in Texas – and Austin in particular.
In this “Quick Take” feature from the TPPF YouTube channel, Braden Cox, policy counsel with the Association for Competitive Technology, discussed how Texas has succeeded in fostering innovation. Cox explained that, among other things, having a system of limited regulation while ensuring consumer protections has created an environment that attracts new entrants in the high-technology sectors. The results speak for themselves. Texas is leading the way in job growth, innovation, and competition.
The battle for control of your Internet is far from over.
The federal government’s layout of the national broadband plan has become the fallback mechanism for proponents of net neutrality. Although the recent appeals court decision in Comcast v. FCC struck a blow against government regulation of the Internet, the opinion did not entirely kill the possibility.
The D.C. Circuit Court of Appeals unanimously ruled that the FCC did not have either direct or ancillary jurisdiction to regulate broadband. This decision was, however, narrowly tailored to specifically exclude broadband from the FCC’s jurisdiction as it is currently classified; thus leaving the door open for the FCC to simply re-classify broadband as a telecommunications service. By doing so, the FCC would then have regulatory jurisdiction, since the FCC has jurisdiction over telecommunications. In effect, re-classification would nullify the judicial decision.
Re-classification to allow FCC regulation is only a small part of the national broadband plan for your Internet service. Recommendation 4.20 (page 58 of the 294-page plan) is for an Internet tax. The proposal for the tax states “the federal government should investigate establishing a national framework for digital goods and services taxation.” Proponents argue that an Internet tax would reduce uncertainty and “remove one barrier to online entrepreneurship and investment.”
This rationale presupposes that there are barriers to entrepreneurship and investment. But as I pointed out in my comments to the FCC, more than 96% of U.S. zip codes are served by two or more broadband providers. Those companies have invested huge sums in the Internet infrastructure, including $70 billion last year alone.
Clearly, the current competitive marketplace has already unleashed private investment, innovation, low prices, and a myriad of competitive options. Disrupting the competitive climate will only bring uncertainty and confusion.
So why do this? The stated goal behind the recommendation is to allow federal, state, and local governments to unleash private investment, innovation, lower prices, and give better options for consumers. There is no indication in the recommendation, however, on how these goals will be accomplished by instituting a new tax.
Regardless, the national broadband plan initiative is still being pushed at the federal level. The battle over line management will continue for the foreseeable future.
The Dallas Police Department’s mission statement is “to reduce crime and provide a safe city,”, but innumerable local ordinances often overcriminalize the city’s own residents. Recently, Dallas resident Sandra McFeeley was arrested and charged with a felony for pruning overgrown foliage in the community park.
Undoubtedly, McFeeley violated local ordinances of the Dallas City Code, as the law states: “It shall be unlawful for any person to cut, injure, mutilate or destroy any shrub, plant or tree in the city, in or upon property not belonging to such person, without the permission of the owner of the property.” McFeeley faces a possible $10,000 fine and up to two years in jail.
Overcriminalization is nothing new to government officials on a local, state, and national level. According to Time to Rethink What’s a Crime: So Called Crimes are Here, There, and Everywhere, Texas lawmakers have made more than 1,700 criminal offenses that reside outside the traditional crimes written into the Penal Code or local ordinances such as these.
Let’s hope she receives community service rather than a jail sentence. Then she can use her “green thumb” to lend a helping hand to her community once again.
- Brittany Wagner
Intern, Center for Effective Justice
Last Friday, the chief actuary of the Centers for Medicare & Medicaid Services, an office in the U.S. Department of Health & Human Services, sent out a detailed memo analyzing President Obama’s newly passed health care law and the results were not encouraging.
Among other things, the report suggests the new law will lead to higher costs, increased spending, disastrous coverage issues, and still leave 23 million uninsured by 2019. Here are details from the report:
• Higher consumer costs: Billions in new fees and taxes on manufacturers and importers “would generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums.”
• Increased government spending: For fiscal years 2010 through 2019, “federal expenditures would increase by a net total of $251 billion” as a result of the new law.
• Medicare cuts unlikely: Cuts to Medicare “could become unsustainable even within the next 10 years, and over time the reductions in the scope of employer-sponsored health insurance could also become an issue.”
• Coverage but trouble getting care: Increased demand for health services “could be difficult to meet initially with existing health provider resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low reimbursement health coverage.”
• Tens of millions still uninsured: In 2019, the report estimates 23 million people will be uninsured, 5 million of which will be illegals. The remaining 18 million will simply choose to pay the fine rather than get coverage.
Jobs. Jobs. Jobs. That is the four letter word on the mind of every lawmaker worth his salt. But while most officials agree that more should be done to help spur job creation, not everyone agrees on the best way to do it.
For some, the best approach for creating jobs is by keeping taxes low and controlling the growth of government to stimulate private sector growth. For others, the best job creation strategy is through increased government spending and public sector-driven demand.
To find out which approach has yielded the best results so far, Reason.tv put together a short video, "More Taxes or More Jobs? California Shows We Can’t Have Both," documenting the Golden State’s recent attempts to create jobs.
Last week, White House economic advisor Paul Volcker said that a Value Added Tax (VAT) “was not as toxic an idea” as it had been in the past and that “if at the end of the day we need to raise taxes, we should raise taxes.”
Controversial as Volcker’s comments were, they have generated a great deal of interest in the new tax scheme, with Doug Elmendorf, Director of the Congressional Budget Office, saying that his agency has fielded “a lot of questions” about the VAT from members of Congress.
As the idea begins to pick up momentum—as it almost certainly will given the government’s inability to control spending—it is important that American taxpayers understand what a VAT is and how it operates. For this, we turn to Dr. Dan Mitchell of the Cato Institute:
Some Austin residents who have made improvements to their properties just got a jolting message from their city government: pay up or become criminals.
According to the Austin American-Statesman, the City of Austin recently unleashed a torrent of code compliance letters threatening 76 homeowners in the working class Fairview neighborhood in South Austin with criminal prosecution for alleged violations of the voluminous City Code. A follow-up piece reports that residents, along with former state Senator Gonzalo Barrientos, are asking the mayor for relief.
Dozens of unsuspecting homeowners were warned of criminal prosecution if they do not come into compliance, including possible fines of $2,000 a day and disconnection of their utilities, which must be provided through the City-owned monopoly. If misdemeanor fines aren’t paid, arrest warrants can be issued.
Just what kind of mischief have these prospective political prisoners been up to? Dale Flatt, a 24-year city firefighter on medical leave, and his wife received a violation alleging that the City didn't have a permit on file for a garage conversion at their home. This update was made before Mr. Flatt’s deceased mother-in-law purchased the house in 1968. Nonetheless, the Flatts paid $123 for a building permit to come into compliance only to get another notice last month that their carport was too close to the street.
Another area resident, Margaret Raupe, got a violation notice concerning the conversion of her garage into a living room, which was done some 23 years ago before she bought the home. Now, the City is requiring that they obtain a permit (cost: up to $700) or face criminal prosecution.
Whatever happened to the statute of limitations? If no one was bothered for two decades by whatever improvement was made to the property, why is the City taking these homeowners to the woodshed today? And to make matters worse, the City office that these residents must deal with is only open three hours a day.
This assault on the property rights of area homeowners evidently stemmed from one anonymous complaint. Because the code enforcement process is complaint-driven, one person who may harbor a personal disagreement with a neighbor can literally hold an entire neighborhood hostage to the endless and almost indecipherable alphabet soup of city regulations.
Does this represent a lack of respect for private property rights, the growth of criminal law beyond its traditional scope, a stimulus package for lawyers, an abandonment of common sense – or all of the above?
A majority of Americans believe they pay more than their fair share of taxes to federal, state, and local governments, according to the latest Rasmussen Reports poll.
Of those surveyed, 66 percent of voters nationwide said they considered themselves overtaxed, while only 25 percent said they were not.
Interestingly, the poll found that “lower income voters (were) more likely than others to believe the nation is overtaxed,” which comes as a bit of a surprise considering last week’s revelation that only half of Americans pay any federal income taxes at all.
When asked what the appropriate level of taxation should be, three-fourths of respondents said that “the average American should pay no more than 20 percent of their income in taxes” – markedly lower than what most Americans believe they pay in taxes now, 30 percent or more.
This weekend’s finding that Americans are unhappy with the nation’s rising tax burden dovetails with the results from earlier polls that show that “two-thirds of voters prefer a government with fewer services and lower taxes” and “46 percent of voters nationwide favor an across-the-board tax cut for all Americans.”
With such a strong outcry for lowering the tax burden at every level of government, I guess the only question now is whether our political leaders are listening.
Over the last year, teacher unions have been on the defensive. Folks from all points along the philosophical spectrum are saying that teacher unions and the policies they back are a big reason for our nation’s high dropout rate and lack of academic progress.
Typically, teacher unions fight for job protections and higher pay and benefits for their members. But does preventing ineffective teachers from being fired or paying every teacher with the same number of years under their belt the same salary regardless of performance help or hurt kids? The court of public opinion is moving away from teacher tenure and rigid teacher salary schedules and towards empowering principals to make personnel decisions and pay top teachers more money with performance pay.
Watch this fun debate between education reformers and top teacher union officials. Intelligence Squared recently hosted this live debate in New York City and had audience members vote before and after the debate on the motion, “Do Not Blame the Teachers Unions for Our Failing Schools.” If you don’t think teacher unions are to blame, then you voted for the motion. If you think teacher unions are to blame, then you voted against the motion. Interestingly, many of those who began the debate as “undecideds” voted at the conclusion that teacher unions were worthy of blame.
California is notorious for its fiscal mismanagement, but even by the state’s own standards, the latest mishap to hit the Golden State is a doozy.
According to a new report from the Stanford Institute for Economic Policy Research (SIEPR), the state’s three major public pension funds—CalPERS, CalSTRS, and the UC Retirement System—face future unfunded liabilities of more than $500 billion.
The bulk of this shortfall exists because, as researchers believe, state officials have understated the size of future pension obligations by relying on rosy growth projections. Under a more realistic set of assumptions, the three pension funds face a likely combined shortfall of $425 billion. Add to that an estimated $110 billion in lost portfolio value, and California’s pension fund debt is almost “eight times greater than officially reported.”
CalPERS issued a response to the SIEPR study, which calls the report’s methodology into question and claims it uses “outdated data.” But even if SIEPR’s doomsday projections are only half-right, California taxpayers can expect to be walloped in the future in order to make-up for the huge pension shortfall.
For those of us on the outside looking in, California’s fiscal blunders serve as a powerful reminder of the consequences of governments gone wild.
As more parents learn about the benefits of charter schools, many are trying to get their child into one even if it means taking their chances with a random lottery. These parents are willing to do whatever it takes to get their child the best education possible.
Charter schools are free public schools. Since charter schools are open-enrollment and may not have a seat for every student that applies, the schools hold a lottery to determine admission for the following school year.
Last week, we witnessed firsthand a lottery at a college preparatory charter school in South Austin, the Harmony School of Excellence. The school had 79 applicants for 48 spots in its two kindergarten classes for 2010-11. In grades one through eight, more than 400 students had applied for a total of nine vacancies. The names of the applicants were written on cards and drawn from a basket in the presence of many of the parents of school children who have applied for openings at Harmony. Children whose names were not selected in the lottery will go on the waiting list for that campus.
Two Austin TV stations covered the lotteries, interviewing the principal and parents.
KXAN 36 (NBC)
KVUE 24 (ABC)
Charter school lotteries are happening all over the state this spring as tens of thousands of students are on a waiting list in Texas to attend a charter school. After surveying charter schools around the state, the Foundation released an updated charter school waiting list number and found that the Texas charter school waiting list had more than doubled from nearly 17,000 for the 2007-08 school year to more than 40,000 students for the 2008-09 school year.
Each child on the waiting list has their own story and deserves to attend the school that best meets their needs. Hopefully, Texas lawmakers will eliminate the cap on charter schools and allow for more open-enrollment charter schools to open in Texas to meet the high student and parental demand.
Remember the summer of 2008 when gasoline prices breached $4 per gallon? A public uproar to “Drill Here, Drill Now” demanded congressional repeal of the 30-plus-year ban on most offshore oil development. Multiple polls showed 85 percent of Americans enthusiastically supported repeal of the legislated ban. The United States was the only country in the world denying access to its offshore oil resources. President George W. Bush repealed a longstanding executive order blocking off-shore production. And finally the unthinkable happened – Congress allowed the ban to expire. The administration immediately opened the doors for lease application to drill here, now.
Eighteen months later, in early 2010, the offshore ban might as well still be in place. Regardless of the Obama administration’s frequent protestations about energy independence, oil resources everywhere – offshore, in Alaska, and onshore – are made increasingly inaccessible. Home grown energy seems to include only ethanol, wind and solar.
Not long after he assumed his office, Interior Secretary Ken Salazar stopped the offshore leasing process by calling for six additional months of public comment. The only offshore activity leased was a wind power installation. In early March, Secretary Salazar told Congress that offshore leases for oil would not begin for two years! The Secretary also denied a request by the Virginia General Assembly for limited offshore drilling. And then the U.S. Department of Interior (DOI) failed to meet court-ordered deadlines for processing new oil leases off the Alaskan coast.
Stall ’em if you must but simply stop ’em if you can: try the lower 48. DOI cancelled oil and gas leases on 77 parcels of federal land in Utah and eight more in Wyoming.
Go for broke: Stop ’em permanently. DOI recently leaked a memo detailing plans to “lock up” 14 million acres of energy-rich Western lands. The document identifies 14 different parcels that the president could close for energy development by designation as “national monuments” under the 1906 Antiquities Act. President Bill Clinton used this authority 22 times to create 19 new national monuments covering almost six million acres. Among those presidential designations, the Grand Escalante Staircase in Utah eliminated access to the largest deposit of low-sulfur coal in the lower 48 and nullified oil and gas leases on 65,000 acres.
Increasing mandates and subsidies for renewable energy will not measurably increase our domestic energy supply. Energy independence per se is an unrealistic and economically ill-advised policy goal. Reducing U.S. dependence on energy sources, however, from unstable or hostile foreign governments (e.g. Venezuela) is a worthy and realistic goal. The federal government need only get out of the way of private enterprise. Allowing the market to develop still abundant U.S. energy resources is the only means of decreasing energy dependence.
SolarBridge recently received a $1.5 million grant from the Texas Emerging Technology Fund to develop technology for residential and small commercial solar installations. Meanwhile, the Texas Public Utility Commission is considering a plan that would provide subsidies to solar generators of electricity. And these are on top of the hundreds or millions of dollars of solar subsidies available from the federal government. In fact, solar is already the most subsidized energy source at around $24 per megawatt-hour.
Now comes a ruling from the office of US Customs and Border Protection that imported solar panels from China containing a basic electronic device for safety and energy efficiency will be treated as electric generators, and thus subject to a duty of 2.5 percent.
So, on the one hand, we are subsidizing solar equipment to make it cheaper. On the other, we are taxing it to make it more expensive. What gives?
A big part of this is probably good ‘ol American protectionism. We like solar panels… provided they are made here by American workers.
But whatever the causes, the one thing these conflicting government actions have in common is that they cost money. The subsidies for solar make electricity more expensive and increases taxes, as do the tariffs on solar panels. And the money is used to shore up a company, “create” jobs, or boost some local economy. Everybody gets something, except consumers and taxpayers.
One of the recent twists in the D.C. health reform saga is a revelation that certain federal employees – including top administration officials and senior congressional staff—are exempt from the new health care system.
According to Politico, rank-and-file federal employees will be kicked out of their existing health care plan – the Federal Employee Health Benefits Plan – and forced to participate in the new government-run health care exchanges. But “professional committee staff, joint committee staff, some shared staff, as well as potentially those staff employed by leadership offices” appear to be exempt from the bill’s mandate since they aren’t listed alongside other federal employees on page 158 of the bill.
What’s worse, the loophole appears to have been created intentionally.
Last year, Sen. Charles Grassley tried to address the issue by changing the bill’s language in committee to mandate that top administration officials participate in the exchanges. But when the Senate bill came to the floor, the language had been removed and subsequent efforts to amend the bill on the floor were rebuffed.
From the start, the government’s health care reform plan has been characterized as expensive and intrusive, but this latest wrinkle proves it to be overly paternalistic as well. The very notion that we would have officials writing bills that they themselves are not subject to goes against a government for the people, by the people.
Health care isn’t the only sector of our nation’s economy that is well on its way to a government takeover. In addition to the health care overhaul, the ill-titled Student Aid and Fiscal Responsibility Act (SAFRA) has been attached the health care reconciliation bill that has passed in the House and is pending in the Senate. That bill is expected to pass the Senate any day.
Fortunately, SAFRA isn’t as bad as it once was, but that isn’t saying much. Now the bill is essentially a broad reorganization of the student loan program. It eliminates private lenders from federal aid programs, in addition to providing $36 billion in additional funding for Pell Grants.
So, similar to how the passage of health care reform without the “public option” was still a near government takeover of health care, SAFRA in its current form is one gigantic step towards a government takeover of the student loan sector of the United States economy.
Cato Institute scholar Neal McCluskey sums up the latest version of SAFRA by saying that “while a great deal of the spending has been stripped out, reconciliation would still tighten the federal government’s already iron grip on college financing. It would also plow billions more into Pell grants despite decades of evidence that schools just eat such increases by raising prices.”
Don’t be fooled into thinking the only higher education reform options are either a nationalization of the student loan market or even more subsidies to private student loan lenders (crony-capitalism). If the government left the higher education market, there would be no need for either.
During Sunday night’s contentious health care debate, Congressman Paul Ryan gave one of the finer speeches of the evening, reminding us of the Founders’ intentions for a limited government and the dangers of subverting that ideal. An excerpt:
America is not just a nationality – it’s not just a mass of land from Hawaii to Maine, from Wisconsin to Florida. America is an idea. It’s the most pro-human idea ever designed by mankind.
Our founders got it right, when they wrote in the Declaration of Independence that our rights come from nature and nature's God – not from government.
Should we now subscribe to an ideology where government creates rights, is solely responsible for delivering these artificial rights, and then systematically rations these rights?
Do we believe that the goal of government is to promote equal opportunity for all Americans to make the most of their lives – or do we now believe that government’s role is to equalize the results of people’s lives?
The philosophy advanced on the floor by the Majority today is so paternalistic, and so arrogant. It’s condescending. And it tramples upon the principles that have made America so exceptional.
My friends, we are fast approaching a tipping point where more Americans depend on the federal government than on themselves for their livelihoods – a point where we, the American people, trade in our commitment and our concern for our individual liberties in exchange for government benefits and dependencies.
“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” - Tenth Amendment to the United States Constitution
Late Sunday night, the United States House of Representatives passed a massive health care reform bill that Americans strongly opposed and rallied against. Passed by a slim majority and with bipartisan opposition, the bill represented everything the public despises about Washington—backroom deals, parliamentary chicanery, arrogant power grabs, and fiscal recklessness.
The president and congressional leaders have said they know better than the American public—dismissing public opposition in the name of socializing our health care system, betting that the public will support their efforts once the bill has passed. But they are wrong and will quickly see that they have stirred an anger that will only grow, as people recognize their freedoms are slipping away.
America and Texas need not wait for another wake-up call. Our federal government has sought to nationalize major parts of our country’s automotive industry, financial system, health care sector, and even the “jobs” machinery. These are things you typically hear out of despotic regimes, not countries who found a path to prosperity by empowering citizens over their government instead of the other way around.
Those in the Congress and the Obama Administration wish to take away the ability for states to be the laboratories of democracy, preferring instead for a command-and-control bureaucracy where Texas is indistinct from California or New York.
Our federal government is broken and working against us. It is our job at the Texas Public Policy Foundation to defend Texas’ liberty. Sunday night’s health care vote is not the beginning of the end. Rather, it is the end of the beginning. The health care debate has engaged Americans on a much more fundamental question: what is the proper balance of power between the federal government, the states...and the people?
During the next several months, the Texas Public Policy Foundation will begin to educate policymakers and the general public about the constitutional intrusion of federal government beyond what the Founding Fathers intended, the negative consequences of this expansion for the states and the people, and viable solutions for the states to avoid the costly and abusive interference by the federal government.
As one example, the health care reform will push 16 million Americans into Medicaid, a dysfunctional federal insurance program for the poor and disabled that barely has the ability to serve the 60 million people already using it. And who will eventually pay for this mandatory expansion of care? The states.
As our executive director Arlene Wohlgemuth said in a press statement earlier today, “The runaway costs in Medicaid are at the core of Texas’ current budget problems, and this new federal law will increase Texas’ Medicaid caseload by 50 percent, putting one-fourth of Texas’ population into this government program. The federal government has no right to co-opt state budgets in the manner that it is with Medicaid.”
Unfortunately, health care is only one of hundreds of examples of how the federal government burdens the states with demands that are difficult—if not impossible—to meet, and enmeshes itself in decisions that should be yours and mine to make as free people.
But as much as we’d like to wave a magic wand and return things to as our Founding Fathers intended, that’s not how things work in the real world. We understand that the first step of fixing a problem is to understand exactly how big of a mess you’re in. (“Really gosh darned big” doesn’t cut it.)
That is why the Texas Public Policy Foundation will apply our expertise and develop the independent research that will help Texans realize the extent of the federal government’s overreach and provide practical solutions to help restore a proper balance and allows Texans to govern Texas—and to govern themselves. We hope you will help us toward this end.
Thank you for standing with me to defend our Constitution and freedom. Texas’ economy is the envy of those across the nation. Our talented team will work tirelessly to ensure that Texas continues to be the beacon of freedom and prosperity for the rest of the country and the world.
My final prognostication is that the U. S. Supreme Court will rule the mandate unconstitutional on a 5 to 4 vote, arguing that the Commerce Clause and 16th Amendment can't be used to support such a unique radical departure. Whoever loses at first in the federal District court will appeal the decision to the Appellate court, the loser then appealing it to the Supreme Court, which will grant cert to hear the case (takes only four votes to grant cert).
So even if the fat lady seemed to start singing on Sunday with a Democrat victory, she still has not commenced her final aria.
One other matter enters into this: For a case to be heard by the District court, that case must be "ripe" and have "standing" – that is, there must be "harm" or "imminent harm" to an individual. Democrats might argue here that since the mandate doesn't kick in until 2014, the case will not be ripe or have standing until then. But since the harm is locked in at the time of passage of Obamacare, I believe the courts will recognize this, ruling both ripeness and standing upon passage.
Now if the individual mandate is found unconstitutional, Obamacare will likely collapse from its own weight: the risk pool of funds will not be there to finance an additional 32 million health insurance policies. And there might not be even enough funds to finance coverage of pre-existing conditions, unless insurance companies raise rates into the stratosphere.
So if Obamacare fails, Matthew Arnold's observation about the poet Shelley is applicable: Obama is "a beautiful and ineffectual angel beating in the void his luminous wings in vain."
- Dr. Ronald Trowbridge, TPPF Visiting Research Fellow, served as chief of staff to the late U.S. Supreme Court Chief Justice Warren Burger and to the Commission on the Bicentennial of the U.S. Constitution.
As the weekend approaches and President Obama and the congressional leadership prepare to force through their federal takeover of our health care system – over the strong objections of the American people – some perspective is in order.
This morning’s Congressional Budget Office score on the “reconciliation amendment” is nothing more than a smoke screen to distract the public. The core issue remains the ugly details of the U.S. Senate health care bill the House will try to “deem to have passed” this Sunday without its members ever voting on the actual legislation.
Passage of the Senate bill would increase Texans’ health insurance premiums by 61 percent over the next five years. Passage of the Senate bill would increase Texas’ Medicaid population by 50 percent and Texas’ budget deficit by several billion dollars. Passage of the Senate bill could expose Texas medical providers to more than 20 new types of medical malpractice lawsuits and pre-empt the tort reforms approved by Texas voters. All of this means that Texans’ health care costs would go up, while our access to quality health care would go down.
The CBO admitted that the $940 billion cost estimate it released this morning was merely an educated guess, as “the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections.”
However, the CBO estimate continues to double-count $463 billion in Medicare cuts that are unlikely to occur in the first place, as well as $53 billion in Social Security payroll taxes that are already committed to paying for future benefits. Once these and other smoke-and-mirrors tricks are removed from the analysis, the Senate’s health care legislation would increase the deficit nearly $600 billion in the first decade and by more than $1.6 trillion in its second decade.
Beyond that, the latest reconciliation draft postpones a more onerous tax on so-called “Cadillac” health plans until the end of the decade. Given that this tax is one of the unions’ most hated provisions and that the changes will hit a broad swath of the middle class, it is almost certainly to be repealed before it can take effect, which further guts the deficit reduction promises after 2018.
Sunday’s House vote would only assure that the Senate bill would go to the White House for President Obama’s signature. Any “reconciliation” provisions sent back to the Senate can be struck on parliamentary grounds, and the Senate leadership has little incentive to pass a reconciliation bill once its health care legislation has already been signed into law. That increases the likelihood that Nebraska’s Cornhusker Kickback, Florida’s Gator Aid, the Louisiana Purchase, and all of the other sweetheart deals in the Senate bill will become federal law.
Perhaps the same philosophy of “more government spending will help the economy” that we saw with the stimulus bill has affected the thinking in Washington with regard to the health care bill. Is spending trillions of tax dollars, enacting costly mandates, and federalizing health care decisions really the way to improve health care in America?
And while border security is not one of the Foundation’s research areas, I would be remiss if I didn’t point out that it is a core function of government, if not the central reason for government’s existence. That our federal leaders are devoting so much time, energy, political capital, and – how shall I put it – procedural creativity on an issue outside their constitutional authority while ignoring the mayhem that is bleeding across our southern border into Texas is an outrage.
At the close of the Constitutional Convention in 1787, Ben Franklin was asked what kind of government our Founding Fathers had produced. His response: “A republic…if you can keep it.” Win or lose this weekend, the Texas Public Policy Foundation will remain committed to our Founders’ principles – including individual liberty, limited government, and the rule of law. We ask you to help us keep it.
Be it the epicenter of a cultural movement or a political controversy, New York often seems to grab public attention. Last week was no exception to the norm. Concerns about consumers’ unhealthy high sodium diet prompted state Assemblyman Felix Ortiz to propose a bill banning the use of salt in restaurant food preparation – without regard for salt’s role in food flavor or, as the article’s author put it, the “bill’s ramifications for the restaurant industry.”
Not surprisingly, the culinary world and the public do not seem to appreciate Assemblyman Ortiz’ worries about their health. Thousands of agitated people twittered and posted Facebook comments on Facebook urging a halt to New York’s legislative experiments with their food.
Government policy undoubtedly plays an important role in protecting society, but no one is in need of protection here. While Assemblyman Ortiz argues that this bill will give consumers “the option to exercise healthier diets and healthier lifestyles” by having a personal control over their salt intake, he has obviously forgotten that customers are able to make their own choice by easily switching restaurants if they are not satisfied with the quality of served food. Ultimately, the bill will not just regulate preparation of food in restaurants, but also the choices available to restaurant customers.
Banning a millennia old culinary ingredient such as salt will spoil the cuisine of both internationally inspired restaurants and home-style eateries, leaving New Yorkers with a bad taste in their mouths in more ways than one.
- Desislava Yordanova
Intern, Center for Economic Freedom
The Associated Press is reporting that, despite directives from President Obama, the federal government has become less transparent, not more.
The new AP audit cites a “review of annual Freedom of Information Act (FOIA) reports filed by 17 major agencies,” which found the government used legal exemptions to withhold information from the public at a much greater rate in FY 2009 versus FY 2008.
Agencies cited the FOIA’s nine exemptions “at least 466,872 times in budget year 2009, compared with 312,683 times the previous year.”
• A severe backlog in FOIA requests, with some requests dating back 18 years;
• Only 13 of 90 agencies in the audit had documented concrete changes to the improve their FOIA practices;
• Just four federal agencies, including the Justice Department, showed both an increase in information released and a decrease in information withheld.
Clearly, as these two reports show, more work that needs to be done – especially at the federal level – before the public’s right to know is secure.
Peter Berkowitz, a senior fellow at Stanford University’s Hoover Institute, recently had a piece in the Wall Street Journal entitled “Climategate Was an Academic Disaster Waiting to Happen.” In his piece, he explains why ordeals such as the recent Climategate scandal should not be surprising to anyone due to today’s unfortunate state of affairs at our nation’s public universities.
The piece sheds light on an issue often overlooked or understated, and that is the impact university affairs have on everyday political and business issues. Research published by university intellectuals, though mostly incredibly specialized, sometimes has far reaching effects. Climategate is a perfect example.
Berkowitz lays out the problem quite succinctly when he states that “…our universities, which above all should be cultivating intellectual virtue, are in their day-to-day operations fostering the opposite. Fashionable ideas, the convenience of professors, and the bureaucratic structures of academic life combine to encourage students and faculty alike to defend arguments for which they lack vital information. They pretend to knowledge they don't possess and invoke the authority of rank and status instead of reasoned debate.”
Unfortunately, this dishonest trend shows no sign of slowing down. Until a strong coalition of brave university intellectuals are willing to risk their careers for the sake of true intellectual honesty, expect more scandals like Climategate.
Testifying before the House Appropriations Committee earlier this week, Legislative Budget Board (LBB) director John O’Brien told committee members that the state’s next budget will likely be awash in red ink.
On the low side, O’Brien told lawmakers to expect at least an $11 billion shortfall for the 2012-13 budget. But that figure could go as high as $15 billion if the economy and tax revenues performed below expectations. The shortfall’s main culprits: falling revenues, an ongoing structural deficit, and recurring expenses resulting from the stimulus act.
Making matters worse, Health and Human Services Commissioner Tom Suehs recently informed lawmakers that rising health care costs would add an additional $1.7 billion in cost to the current budget. The increased costs, in large part, stem from higher-than-expected enrollment growth in the state’s Medicaid program.
With the state’s budget outlook presenting a challenge, some are already beating the drums for higher taxes in order to close the shortfall. But just because Texas faces a multi-billion shortfall doesn’t mean higher taxes are a must. The 2003 legislative session is a perfect example of this.
Faced with a $10 billion budget shortfall—similar to the one we face today—Texas lawmakers held the line on spending and passed a balanced budget, without raising taxes.
Duplicating that 2003 effort won’t be easy, but considering the alternative—higher taxes, slower economic growth, and less money in your pocket—it is definitely the better approach.
As the time to write the 2012-13 state budget approaches, viewing the task as an opportunity, once again puts Texas in the position of leading the nation in strong fiscal policy.
One common theme in education that exists in much of the world is the belief by government bureaucrats that they know better than parents. Many academics and development experts tend to believe that because parents are poor they cannot make good decisions regarding their child’s education.
James Tooley, author of “The Beautiful Tree,” finds some very specific examples in Third World countries of parents acting as consumers of education. Parents visited schools, talked with teachers and administrators, compared notes with other parents, and checked up on what students were learning by questioning them or asking them how often their teacher checks their homework. These informal tactics allowed parents to actively compare children in the government public schools to those in the private schools in their neighborhood.
During his travels, Tooley would frequently ask parents why they chose one type of schooling over the other. Here are some of the responses:
• One parent said, “government school children are always smartly dressed in good uniforms but when you ask them some questions, you realize that they know nothing.”
• Another parent explained their reason for choosing a private school for their child by saying, “the children do not learn [in public schools]; all they do is play.”
Private schools are accountable to parents. If parents decide to withdraw their children and their fees, then the private school could go out of business. Owners of private schools understand this market principle and seek to keep their parents happy. Yet government experts don’t appear to trust the judgment of poor parents to decide the best school for their child and don’t understand how a private school can be accountable to parents.
Tooley believes in the education marketplace and finishes his book by saying “the market in education is powerful. It builds on something that no central planner can possibly embrace, the strength of millions of decisions by individual families, the millions of bits of information grasped by the Searchers who relentlessly create and innovate, modify and develop what the people want.”
James Tooley, in his book “The Beautiful Tree,” explores public and private schools in Third World countries and finds that the private schools deliver a superior education with less funding. Why are private schools better?
One government principal in Ghana says that parents choose private schools because public schools cannot fire bad teachers. She says private schools proprietors “are very tough. If teachers don’t show up and teach, the parents react. Private schools need to make a profit, with the profit they pay their teachers, and so they need as many students as they can get. So they are tough with their teachers and supervise them carefully. I can’t do that with my teachers. I can’t sack them…. It is very rare for a teacher to be sacked [in a government school].”
Another reason that private schools are better is incentives. Private school owners have to stay on their toes and constantly monitor the performance of their teachers. Leaders of private schools are constantly walking around their school, making sure teachers are teaching, and following up on parent complaints to ensure that students are learning. One private school proprietor in India decided to install a closed-circuit television system to monitor classrooms because he knew that if teachers were accountable to him, he could be accountable to parents.
Government schools don’t have this incentive. Tooley explains, “the chief problem in the government schools is that the principals and inspectors have no incentives to do any of these things. Principals will draw the same salary and same benefits if they sit in their offices reading the newspaper all day — or even if they don’t show up at all — as they would if they meticulously walked the corridors checking on their teachers.”
As I wrote on Tuesday, James Tooley, author of “The Beautiful Tree,” visited public, recognized private schools, and unrecognized private schools in the slums of India, China, and Africa to compare the quality between these different school environments.
Tooley and other researchers visited the schools unannounced and took copious notes on the size of classes, whether the teacher was actually teaching, and the condition of the building and facilities.
All in all, private schools came out on top on almost every measure. Private school classes were smaller, teachers at private schools were more committed to teaching (as determined by more time on task), private schools were more likely to provide the curriculum parents wanted (such as teaching English), and the condition of the building and facilities were of equal quality. The only input where public government schools ranked higher was on the provision of playgrounds.
Tooley found that class size was a key factor in parents choosing private schools. Parents view classes in government public schools as “simply too big.” The data supports this belief with public school class sizes being either twice or three times as large as private schools.
Tooley was also able to gather information on the level of teacher training, teacher salaries, and student learning. He found that government schools were more likely to have better trained and educated teachers and better paid teachers (in some cases seven times more than teachers at private schools). Yet more training and higher pay doesn’t necessarily lead to higher teacher performance in the classroom, better student results, or a better school.
He explains, “When critics dismiss private schools for not having extensively trained teachers, the key reason they do is because they assume the teachers will be less effective. We’ve already seen that these untrained teachers are far more likely to show up and teach then their more heavily trained counterparts in government schools. Does their lack of training make any difference to student achievement – a key indicator of their effectiveness? It turns out it does not. Private schools again turn out to be superior to government schools.”
Students in private schools also scored higher on standardized tests in key subjects than students in government schools even when controlling for background differences.
Private schools serving poor children in the slums actually receive no government funding and no international aid and yet are of a higher quality because market forces are at work and they are accountable to parents.
While the state’s prison population continues to fall, some counties are still disproportionately filling state lockups.
Consider that Lubbock County (population: 264,418) has 2,478 of its residents in prisons and state jails, while Hidalgo County (population: 726,604) accounts for 2,986 inmates. Thus, taxpayers in Hidalgo County are subsidizing other counties like Lubbock that incarcerate nearly three times as many of their residents per capita.
Gross disparities exist in revocations to prison from probation. For example, in Hunt County, according to state data, last year 95 percent of their adult probation department’s revocations were for rules violations rather than a new offense. That far exceeds the statewide average of 49 percent. From 2004-05 to 2008-09, probation revocations from Hunt County grew 24.9 percent, going from 244 to 309 even as its number of probationers declined. The county only has about 600 felony probationers, but it revokes them for rules violations at a much higher rate than most other counties.
Hunt County is not alone. Many other counties, particularly rural counties in East Texas, have revocation rates for rules violations far above the state average. In contrast, Hidalgo County is the lowest in the state – only 31.8 percent of their probation revocations were for rules violations. Most other counties in the Valley are also below the state average.
Imbalanced scales of justice weigh heavily on Texas taxpayers and lock in disparities, as the same person who would be sentenced or revoked to prison in one county receives probation or remains on probation in another county.
Decisions on revoking probationers must always put public safety first. However, lawmakers should require all probation departments and judges to use a progressive sanctions and incentives model. Instead of doing nothing when a probationer violates the rules and then revoking them for many years after enough violations pile up, graduated responses such as a curfew – and even a few nights in county jail if necessary – are used to promote compliance. Conversely, incentives such as less frequent reporting are used to recognize exemplary performance. Victims also benefit when probationers succeed, as probationers pay more than $45 million per year in restitution while inmates pay about half a million in restitution, fees, and court costs combined.
All counties must be held accountable for implementing best practices that result in more offenders successfully completing probation and reserve prison space for those who pose a danger to public safety.
Many philanthropists, foreign governments, and international aid organizations sincerely want to help the poor and are looking for the best way to educate the poorest children around the world.
This is a lofty goal. What is the best way to provide all children, even those in the most poor and remote areas on earth, access to a quality education? Many academics and development experts believe the answer lies in free public schooling for all. But does a free public education benefit every child or are private schools also part of the answer? Which type of school provides a better education? Do private schools even exist in the slums?
James Tooley set out to answer these questions by traveling around the world in search of private schools that serve the poor. He visited the slums in Nigeria, Ghana, Kenya, India and China to conduct research on public and private schools and shares his findings in his book, “The Beautiful Tree.”
As he visited with government officials in these countries to get a list of public and private schools, he commonly found that those in government did not believe that private schools existed in the poor areas and if they did they had to be of a very low quality. Tooley shares interesting stories as he explores the slums and searches for schools that the government doesn’t believe exist. He encounters many obstacles, but is able to find schools with the help of local townspeople, students, and parents.
Tooley found that there are basically three types of schools in the Third World:
1) Government public schools;
2) Recognized private schools; and
3) Unrecognized or unregistered private schools.
Government schools are public schools and are free and open to any student. They are typically funded by the country’s government, foreign aid, philanthropists, and international aid organizations.
Private schools are funded by fees paid by parents. Private schools make sure their fees are affordable to poor families and typically charge a monthly fee of about 5 to 10 percent of what the breadwinner earns a month. In addition, private schools serve a percentage of orphans and students who can’t afford their fees by allowing up to 20 percent of students to attend for free or at a reduced rate.
Private schools are either recognized or unrecognized by the government and may be for-profit or non-profit. Unrecognized schools are not regulated by the government and may not even be listed on their registry of schools. Tooley does not think much of government recognition, saying that it “conveys no information about school quality, it only indicates the school’s ability to afford bribes.”
Over the last year, the American people have said repeatedly and emphatically that they object to the federal government taking control of their health care. President Obama’s “new” health care proposal is nothing more than a rebranding of the same big-government ideas that the Congress has already passed and the public has already repudiated.
Instead of moving away from government control of health care, President Obama’s plan includes even more regulation. Creating yet another agency, a new Health Insurance Rate Authority, would provide “oversight” of rates. In recent years, the Texas Legislature has moved away from allowing government agencies to set consumer prices. Artificial price controls have never proven effective for very long, and there is no reason to believe that would change now.
Texas has shown that capping non-economic damages is essential to reducing frivolous medical malpractice lawsuits and increasing access to health care. The absence of damage caps in President Obama’s plan demonstrates a lack of seriousness on the issue of tort reform.
President Obama’s plan includes no free market ideas and no elements that promote competition among health insurers and health care providers. The token items that the President claims to have included from his critics were already in the Senate’s bill.
In fact, nothing in the substance of President Obama’s plan gives individuals more control over their health insurance. The only part of his plan that mentions more choices for consumers is the headline on the White House website. That does not count for legislative change.
Google is at it again. According to a recent Los Angeles Times article, the technology giant is planning on building a high-speed broadband service. Google claims that the network will be 100 times faster than what is available today, and reach as many as 500,000 people. Many municipalities have already created “Bring Google Fiber” groups on Facebook, seeking to attract Google to their respective cities.
Interestingly, Google is choosing to put its experimental network in territory tightly controlled by other service providers, citing the strong competition as the key to ensuring success. Google has stated that offering this experimental network could prod cable and phone companies to offer cheaper, speedier access on a broader scale.
The increase in competition is good for ensuring innovation as well. The National Cable and Telecommunications Association said that the cable industry planned to spend billions of dollars on top of the $161 billion it had already invested over 13 years in a national broadband infrastructure, and industry watchers are hoping that Google’s entry into the marketplace will spur competition and innovation. Google’s new fiber network could cost anywhere from $60 million to $1.6 billion.
A new Cato Institute study examines the arguments for national standards. Some individuals and organizations support national standards claiming that countries that outperform the United States on international assessments all have national standards. Let's examine the facts of countries that do better and worse than the U.S. on two different international tests.
• On the international 8th grade TIMMS test, eight countries that outperformed the U.S. have national standards, but so did 33 of the 39 countries that scored lower than the U.S. – including 11 of the 12 lowest performers.
• On the international PISA exam, 11 nations that outperformed the U.S. have national standards, three have regional standards, and five have no centralized standards. Of the nine countries that did worse on the PISA, four have national standards, one has regional standards, and four have no standards.
Clearly, national standards do not equal excellence.
Nations that perform well on international tests with national standards tend to be homogeneous. For a country as diverse as the U.S. making everyone happy with the content on religion or history will be extremely difficult. Just think about the recent battles in Texas over evolution and social studies.
Another thing to note is that some countries with national standards are actually decreasing the scope of their standards.
• Japan reduced the content of their national standards by 30 percent in 2002.
• Singapore reduced its national curriculum by a third in 1999 and added critical thinking in 2001.
• Korea is sending its teachers here to learn how to teach creativity and critical thinking.
What about the quality of the proposed national standards in the U.S.? A study released today by the Pioneer Institute and the Pacific Research Institute shows that Massachusetts and California have higher standards than the prosposed national standards. Another analysis done by higher education and public school educators comparing Texas' English and math college readiness standards to the proposed national standards finds that Texas' standards are more comprehensive than the national standards.
All of this confirms Texas' decision to not join the national standards bandwagon because it just doesn't make sense.
As state government agencies are pressed to cut their budgets, we are glad to hear that some public schools are also examining and rethinking items in their budgets.
The Houston Independent School District and YES Prep charter school are both considering putting an end to the practice of paying teachers more for an advanced degree, according to the Houston Chronicle. HISD estimates it will cost taxpayers $7.8 million this year to pay teachers an additional stipend for a master’s or doctorate degree.
A common misperception about teacher quality is that more training and education equals a better teacher. This is not necessarily the case. Just because a teacher has a Ph.D. in physics does not mean they know how to teach. A one-size-fits-all compensation method such as stipends for advanced degrees risks paying some teachers more who aren’t worth it and not adequately rewarding others who are. School leaders should make the decision on how much to pay each teacher individually based on their performance and effectiveness.
Research clearly finds that possession of an advanced degree has absolutely no correlation to higher teacher effectiveness or student achievement. Our recent paper on teacher quality explains this misconception.
The Center on Reinventing Public Education recently put out a report on teachers with master’s degrees that had some surprising facts.
• 90% of teacher’s master degrees are in education programs (not the subject area they teach).
• Master’s degrees in education had the highest growth rate of all master’s degrees between 1997 and 2007.
• 27% of teachers in Texas have a master’s degree and, as a result, receive an extra $1,423 per year on average. This amounts to more than $124.5 million a year spent on outdated method of compensation that does not translate into better teacher quality or higher student achievement.
As school districts are looking for ways to cut their budget and improve teacher quality, we recommend they cut out stipends for advanced degrees – there is nothing in state or federal education regulations prohibiting them making this cut.
The Texas Tribune re-launched its public employee payroll database last week, citing a need for more dynamic search capabilities. The original application, which the Texas Tribune found to be the most popular feature on its site, only allowed a visitor to search by name or agency. Today, users have a full range of search tools, allowing for a more in-depth analysis.
Through the Texas Freedom of Information Act, the Texas Tribune collected some 340,000 public employee records, accounting for $15 billion in payroll at the state’s largest agencies, universities, cities, school districts, and mass transit operators. Just by toggling through the “Job Title” search function, I found that the 169 “School Crossing Guards” across the state make, on average, $9,683 per year, while the highest paid crossing guards in the state receive $15,080. School Crossing Guard Supervisors make approximately $24,000 on average, while the highest paid Supervisor takes home $47,844. According to the data, “School Crossing Guards” and their supervisors are only on the payroll under that title in seven Texas jurisdictions.
Why do only seven jurisdictions in Texas have salaried crossing guards? $15,080 works out to almost $20 per hour for a guard working two 2-hour shifts per day during a nine-month school year – is that, in fact, a crossing guards schedule?
Obviously, the database can’t answer those questions, but having the data available and making the government transparent allows for us to discover questions we would have never thought to ask. We can then take those questions to PTA meetings, or our school superintendents, or our school board members to find answers.
Kudos to the Texas Tribune for making a great product even better.
One of the panels at this year’s Policy Orientation focused on Western civilization courses and the quality of education received at our state’s public universities.
In this “Quick Take” filmed after the panel, Dr. Richard Brake with the Intercollegiate Studies Institute discussed how Texas does at teaching its students western civilization, as well as if we need to improve and how.
Dr. Brake explained, “ISI has been involved with a multi-year effort to assess how much students know when they go into college about American history and government and how much they know when they come out.” The results of the study showed that students aren’t learning much while in college.
Take ISI’s Civic Literacy Quiz for yourself and see whether you also need a refresher.
At our 8th Annual Policy Orientation for the Texas Legislature, we hosted a movie screening of the education documentary ”The Cartel”. This incredible film has won numerous awards at multiple film festivals. The film’s director Bob Bowdon takes a minute to explain his film in this short video from our “Quick Takes” series.
“The Cartel” has been named an official selection of the Washington, DC Independent Film Festival and will screen at noon on Saturday, March 13. In addition, The Cartel will be shown in movie theaters in 12 cities across the country this spring – one of them being Houston – and the theatrical release will likely be in late April or early May. Stay tuned for more details on dates.
Like many of President Obama’s policy goals, his goals for higher education sound fantastic. However, his plan to “expand access” to higher education is fundamentally flawed. It provides a massive increase in student aid – $156 billion in fiscal year 2011, up from $98 billion in 2008. The budget also will make it easier for borrowers to repay their loans, lowering income-based repayments and cutting the length of their repayments. Again, that sounds great. So what’s the problem?
Neal McCluskey from the Cato Institute summed it up best when he said: “There is perhaps no bigger vehicle politicians use to buy middle class votes than higher education and student aid – giving money away to people who want to go to college. And, there is simply no justification for this because the reason people go to college is so they can earn more money over their lifetime. So, when the president talks about ‘forgiving student debt,’ essentially what he’s saying is taxpayers should have to pay the burden for someone else to make a whole lot more money over their lifetime. It’s simply unfair.”
McCluskey continued, “And then there’s another problem connected to all this student aid, and that’s that it drives up tuition costs. The president talks about tuition inflation, well student aid is what drives tuition inflation because students can buy more, they demand more, which means universities can charge more because they can get the money.”
So not only is the President’s proposal unfair, it actually makes the problem of tuition inflation much worse. The way to solve tuition inflation is not by doing more of the same. Increasing access to grants and loans has become a crutch for bad higher education policy, and until lawmakers ease up on regulations and let the market flourish in higher education, things will only get worse.
The University of Texas at Austin recently announced it would be shutting down its well-known and much loved Cactus Café due to budget woes. The university will also be ending its decades-long program of informal classes that allow area residents to learn various subjects and skills for a nominal fee. Together, ending these programs will save UT-Austin $122,000, barely a drop out of its multi-billion dollar bucket.
The issue here isn’t cutting Cactus Café or the informal classes; it’s that UT-Austin chose to cut those programs rather than areas of the budget that would save substantially more money. For this reason, the cut seems suspect. UT-Austin has so many other areas in their budget to cut, and the fact that they chose something students and lawmakers would be upset about raises some red flags for me. Here’s why.
The state leadership’s letter asking state agencies to cut 5% from their budgets specifically states that: “Your plan should represent prudent, efficient reductions that minimize the impact on direct services. For purposes of this review, we expect you to analyze the necessity of all administrative expenses and purchases. Reducing direct services should be your last option, but should be identified, if necessary, in order to meet the 5 percent target.”
If that’s the case, then why is the Cactus Café the first cut that’s been announced?
To be clear, I’m not defending the Cactus Café. It’s just that when spending cuts are proposed, bureaucracies tend to offer up the ones that inflict the most pain on the public first (e.g., closing the Washington Monument on weekends) as a means to protect their turf. That’s certainly what this smells like.
The public should implore UT-Austin to cut the real fat in its budget. This paper lists several ways universities in Texas, particularly UT-Austin, could reform their operations to save substantial sums of money.
The entire process has been on wrong track from the very beginning. Once leaders in Congress saw that the American people generally disapproved of their proposals, rather than taking a step back, they tried to ram through reform using power moves and backroom deals. The entire issue has become so snarled that Congress couldn’t get out of the mess they created for themselves.
Fortunately, President Obama gave Congress an out this week when he proclaimed the new focus of his administration would be job growth. But during the same speech he reiterated his commitment to health care reform.
"As temperatures cool, I want everyone to take another look at the plan we've proposed," Mr. Obama said in his address. "But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Here's what I ask of Congress, though: Do not walk away from reform. Not now. Not when we are so close."
Well, Mr. President, there is a better approach. If Congress is serious about getting a health care bill passed this year, it should abandon its one-government-fits-all designs and instead take its first serious look at the patient-centered health care solutions the Texas Public Policy Foundation has championed all along.
According to the Cato Institute, federal subsidy programs topped the 2,000 mark for the first time last week. Almost half of those have been created in the last 20 years: the number of federal subsidy programs soared 21 percent during the 1990s and 40 percent during the 2000s.
As Chris Edwards, Cato’s director of tax policy, rather depressingly puts it, “There is a federal subsidy program for every year that has passed since Emperor Augustus held sway in Rome. We’ve gone from bread and circuses to food stamps, the National Endowment for the Arts, and 1,999 other hand-out programs from the imperial city on the Potomac.”
Of course, Washington isn’t alone in the subsidy game. Texas does pretty well too. In addition to the standard economic development programs, Texas is tops in the nation when it comes to renewable energy subsidies. By 2020, Texas consumers could be paying as much $1.3 billion a year to support wind energy—that is in addition to the $300 million or so the Feds are contributing to Texas wind producers. The solar folks are also lining up—the cost of proposed solar subsidies last session ran as high as $220 million. And they’ll all be back in 2011.
It would be nice in this one instance if we could topple Texas from its number one ranking.
Social media has revolutionized countless aspects of our lives and made communicating while at work, rest, or play a cinch. Yet, even as transformational as social media has been over the last several years, our state’s public information laws reflect very little of the world we live in.
Government employees of all ages are tweeting, blogging, friending, and chatting their day through the workweek—but much of this information is inaccessible to the public, violating the spirit of Texas’ Open Records Act.
To help tackle this issue, Dr. Wanda Cash, a guest columnist in the Texas Tribune and a journalism professor at the University of Texas, offers some interesting reform measures for lawmakers to consider this interim.
• Update existing law to include “new definitions that encompass wireless-transmission devices and social media;”
• Consider all e-mail traffic emanating from government servers to be public record—regardless of who owns the electronic device;
• Standardize the length of time all state agencies must keep public data; and
• Apply the same standards that government agencies face under the Open Records Act to privatized government functions.
While the details of Dr. Cash’s open government reforms may need to be fleshed out a bit further to determine their full impact, they certainly give lawmakers something to think about this interim as they go about formulating policy ideas for next session.
With as quickly as Facebook, Twitter, and YouTube are changing our world, it is important that our state’s public information laws don’t lag too far behind.
The report calls on the U.S. Department of Education to create an Office of Consumer Protection in Higher Education that would pressure colleges to produce significantly better data on how well they serve students, develop a system for making that data available for students to use in choosing a college, and direct students unhappy with their college’s educational practices to federal, state, or accrediting officials who can help them resolve their complaints.
A new bureaucracy isn’t needed to accomplish these goals – and may actually make things worse – so I disagree with their proposed means to achieve improved higher education accountability. But despite this disagreement, it seems both sides of the philosophical spectrum agree that the lack of accountability in higher education is a problem in need of addressing. It is also incredibly promising that the Center for American Progress referred to students as university “customers.”
The author of the paper states that “In most sectors of our economy, customer focus is paramount, as it should be in education, too. Customer focus could yield a more student-centric system through the development and dissemination of user-friendly 'truth-in-education' information that helps students make 'best-fit' choices regarding which education provider to select based on customer preferences such as: academic quality, price, convenience, learning style, beginning education level and the anticipated return on their investment in education."
The first step is always admitting there is a problem. Now our elected officials, regardless of party affiliation, should come together to reach a solution. Improving university accountability will empower students, improve educational quality, and allow taxpayers to better track the results their tax dollars yield.
Texas property crime victims often pay twice – once for the crime and once for the time as taxpayers. Only half of all court-ordered victim restitution in Texas is collected, although the national average is even lower.
Utilizing alternatives to incarceration when the offender does not pose a danger to the public can increase restitution. Consider that in 2008, Texas probationers paid an average of $109 in victim restitution, totaling $46.75 million. This is more than 34 times the restitution paid by each prison inmate. Probationers also performed 9.7 million community service hours, which would be worth $70.3 million based on the federal minimum wage of $7.25 per hour.
Additionally, felony probationers must pay $600 per year in fees plus court costs. Texas has some of the highest fees in the nation, which fund 40 percent of probation department budgets. This burdens indigent probationers – many of whom also owe child support – and creates a fiscal incentive to revoke a greater share of non-paying probationers to prison.
In 2008, Texas prison inmates paid a mere $501,000 in total victim restitution, fines, fees, and court costs, an average of only $3.21 per inmate. Parolees did better, paying $1.2 million solely in victim restitution, an average of $15.18 per parolee.
Most Texas parolees are employed – indeed the employment rate of Texas parolees exceeds Detroit’s overall employment rate. However, parolees are typically in the limited tier of lowest-wage jobs open to ex-inmates, who average less than an 8th grade achievement level. They often struggle to cover basic housing and nutritional needs. Also, the average inmate who leaves prison owing child support is more than $16,000 in arrears. These children are secondary victims of crime and overreliance on incarceration.
Incarceration is necessary for offenders who pose an ongoing danger to public safety, but two-thirds of offenders entering Texas prisons are non-violent and many county jails are overflowing with non-violent inmates. Incarceration protects the public in many cases, but also severs employment, family, and any religious ties, reducing the likelihood that the victim will receive restitution. The criminal justice system must be brought into fiscal balance with victims treated as consumers.
Allied Van Lines recently released its 42nd Annual Magnet States Report, which tracks where people are relocating within the United States. Texas remained the top destination for people moving between states. Texas’ net relocation gain was almost 2,000 in 2009, higher than the 1,900 gained in 2008. According to Allied, the movers are singles and families from various backgrounds. Not surprisingly, Allied also did a lot of corporate relocations for some very large companies based in Texas.
A large reason for Texas’ appeal is its favorable tax climate. Texas has no income tax, and holds a competitive advantage over most states due to its minimal tax burden on dividends, capital gains, and corporate income. As Bill Hammond, president of the Texas Association of Business stated, “Texas remains the best place in America to live, work, and raise a family.”
For those wondering why states like Pennsylvania, which was the third highest in net relocation losses, continue to lose so many people, the answer lies in their policies. Last year, Pennsylvania spent more on economic development programs than any other state in the nation. Their “economic development” spending was upwards of $754 million. As a direct result of this flurry of government spending, 2,591 people left on Allied Van Lines alone. This result is not surprising.
As pointed out in “Competitive States: Economic Growth Prospects for the 21st Century,” poor economic policies lead to poor economic outcomes. In order to spend money, the government must first take it from the private sector, either through taxes or borrowing. Often, the contribution of the government expenditures to the economy is less than the value of the money to the economy prior to its removal from the private sector. When comparing economic growth in the 10 states with the lowest total state and local taxes per $1,000 of personal income against the 10 states with the highest total state and local taxes per $1,000 of personal income, overall economic growth has been significantly higher in the low-tax states.
When faced with high taxes and job loss, it is no wonder people are moving out of states with large “economic development” packages and into states where they can spend their own money how they choose. If the tax climate in Texas remains the same, we should be on top for a long time to come.
Can a low-performing school actually be turned around? A new article in Education Next suggests that instead of trying to fix failing schools, policymakers should close them and allow them to start over.
The author gives several compelling examples of how the best of intentions have not led to better schools. In California, the state targeted the lowest-performing schools for intervention. Three years later, only 11% of those schools made exemplary progress (109 of 968 schools). Ohio recently restructured 52 failing schools and few have met academic goals.
Several studies found similar results. The Center on Education Policy found that less than 15% of schools being restructured in California, Maryland, and Ohio made federal academic goals set by No Child Left Behind (adequate yearly progress). A 2005 report by the Education Commission of the States says that school takeovers “have yet to produce dramatic consistent increases in student performance.”
Thus, there are no best practices on how to improve a persistently failing schools. In fact, the successful charter school network KIPP attempted to turnaround schools and abandoned the effort after only two years.
If the evidence does not point to success, why do school leaders and policymakers continue to push for restructuring a school versus just shutting it down and starting anew? Politics.
It is very hard politically for a school superintendent or a politician to tell their constituents that a school in their community is so bad it is beyond fixing. They take a risk of angering their constituents who may have emotional ties to the school. So, in most cases, it is easier to come up with a list of action items to improve the school versus allowing the school to face the consequences of its mediocre performance and get shut down.
Often ignored in this debate is the best interest of students. Is it in the best interest of the student and their future if they are stuck attending a low-performing schools for several years? Wouldn’t they be better served if they could attend a high-quality school down the street?
Let’s look at the facts and invest our time and resources in what works instead of continuing to do the same thing over and over and expecting different results.
In the midst of the worst economic climate since the Great Depression, Washington D.C. officials are hitting area shoppers with a brand new tax on shopping bags.
The new 5-cent tax, approved unanimously by the D.C. City Council last June, applies to every disposable paper and plastic bag a customer carries out of businesses that sell food or alcohol. An estimate from the Progressive Bag Affiliates of the American Chemistry Council puts the cost to Washingtonians at $5 million this year.
Instituting a costly new retail tax, particularly in today’s economy, has the potential to reduce business activity and harm struggling consumers, but supporters insist the cost is worth reducing pollution. History has shown that that is not necessarily the case though.
In 2007, the city of San Francisco banned plastic bags altogether in an attempt to reduce the amount of plastic bag pollution in the city. However, when the city conducted a litter audit, it was “revealed that plastic bag litter remained the same: 0.6% of litter composition.”
While we Texans may be tempted to sit back and watch with bemusement, it wasn’t long ago that we were under similar threat.
During last year’s legislative session, House Bill 1361 would have imposed a tax of “7 cents on each disposable plastic bag provided by a retailer to a customer to carry out purchased items,” but the bill never made it out of committee. You can bet that supporters of HB 1361 are watching the D.C. bag tax experiment closely, hoping that it doesn’t fail like in San Francisco and gives them cover to try again next session.
Whose beach is it anyway? We’re about to find out.
Hurricane Rita’s destruction of West Galveston Island moved the vegetation line inland and, with it, the beach.
In 2007, some beachfront property owners, including Carol Severance, were told by the General Land Office that their land was seaward of the new vegetation line and now part of the “public” beach.
At issue is whether the vegetation line’s movement gives the state of Texas a “rolling” easement over the private land that requires property owners to give the public access to their property and perhaps even move their beach houses off of the land.
The legal question is whether there is any such thing as a “rolling” easement, i.e., since the state did not have an easement over the land prior to Hurricane Rita, how can it have one afterward?
In other words, when two pieces of adjacent land now suddenly “overlap,” who gets to use the overlapped portions—property owners or beachgoers? In this case, the answer lies in the courts’ interpretation of the Texas Open Beaches Act (OBA).
Carol Severance has fought her way to the Fifth Circuit Court of Appeals in defense of blocking public access to her land. The Fifth Circuit has asked the Supreme Court of Texas for guidance in helping them understand the application of the OBA. Hinging on the Texas Supreme Court’s response is a large amount of private property and potentially numerous displaced homeowners.
The plain language of the OBA makes clear that it does not create a land interest that was not already in place through an easement created under traditional common law rules. Here, the state has not shown that it had an easement over Carol Severance’s land prior to Hurricane Rita. Since there was no property interest in the land prior to the “overlap,” the OBA should not be used to create one now.
Whose beach is it? We can only hope the Texas Supreme Court and the Fifth Circuit Court of Appeals find the right answer.
This Thursday at 6:15 pm, the Texas Public Policy Foundation and Austin CEO Foundation are hosting a screening of the education documentary “The Cartel,” followed by a Q&A session with Director Bob Bowdon. This incredible film examines the national education crisis and New Jersey schools through personal stories of student, parents, and teachers, and suggests ways to improve education. Check out the trailer and see for yourself.
The Cartel has won numerous awards at various film festivals including:
• Official Selection at the New Jersey State Film Festival & Philadelphia Independent Film Festival;
• Best Feature Documentary & Audience Choice Award at the Jersey Shore Film Festival;
• Best Full-Length Documentary & Official Selection at the Downbeach Film Festival;
• Silver Screen Award at the Nevada Film Festival; and
• Audience Award at the Hoboken International Film Festival.
Please contact me for more details on the screening or if you are interested in attending.
While many Americans are struggling just to make ends meet in today’s sluggish economy, a damning new report shows that government workers are prospering.
According to USA Today, the ratio of federal employees making $100,000 or more increased from 14 percent to 19 percent in the first 18 months of the current recession.
One agency with a particularly high concentration of six-figure bureaucrats was the Department of Transportation. “When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.”
The dramatic salary increases means that the average federal worker now earns an annual salary of $71,206 versus an average annual salary of $40,331 in the private sector.
State and local government employees also saw their pay raised over the last year-and-a-half, though, to be fair, the percent increase (3.9 percent) was on par with that of a private sector employee. Still, the average state and local government employee now earns $54,000 a year, or about $14,000 more than their private sector counterparts.
The growth in public sector wages and compensation is troubling, particularly given the current recession. By taking more and more from those who produce (in the form of higher taxes and increased borrowing) and awarding it (in the form of higher wages and increased benefits) to those in non-productive positions, we are removing the incentive to be productive and slowing our own economic recovery.
During the current economic downturn, some 35 state correctional facilities have been shuttered, though no adult facilities have yet been shut down in Texas where two-thirds of incoming inmates were convicted of a non-violent offense. However, as the state’s crime rate and prison population declines, this issue may arise.
Plans to close lockups often stir opposition in rural areas where the facility is one of the largest employers, though the cities of Dallas and Sugar Land have each sought to redevelop the valuable land on which prisons in their communities sit. Local communities and some of their lawmakers fought the closure of Texas Youth Commission facilities, two more of which will be shuttered in the current biennium.
Prisons have been misused as a bipartisan economic development tool. For example, former Democrat New York Governor Mario Cuomo went on a prison building spree and delivered a prison each to many Republican senators in upstate New York in exchange for support on other measures. Moreover, Cuomo used public housing authority bonds with a higher interest rate than general revenue bonds, a bill that New York taxpayers are still picking up today. This year, the state finally repealed the Rockefeller-era drug laws that fueled this building binge with long prison terms in low-level drug possession cases.
All job losses are regrettable. However, if other agencies are cut instead, jobs will also be lost. Raising taxes may well cost even more jobs as money is drained from the private sector. Furthermore, it’s not the government’s role to create jobs.
However, what’s worse is the harrowing impact of the prison work environment on employees. The prison guard suicide rate is far higher than the general population, and at least anecdotal evidence suggests rates of family violence, depression, alcoholism, and heart attacks are much higher as well. In 2005, 761 Texas prison guards were arrested. Sadly, a prison guard’s life expectancy is only 59, compared to the overall lifespan of 77. Texas guards’ salaries start at $26,000, and many won’t live to collect their retirement, which goes to their survivor.
Given that there are 2,000 prison guard vacancies and still more lower-paying county jail guard vacancies, prison closures in Texas would not necessarily result in job losses, depending on the number of units shuttered. In the larger picture, retraining prison guards in other areas such as probation is preferable to prisons as a jobs program.
Barely a month after the Texas Department of Insurance rejected the Texas Windstorm Insurance Association’s (TWIA) request to increase rates by 10 percent, TWIA’s board announced that it will consider raising rates 5 percent across the board for policy holders. While even the 10 percent rate increase was inadequate, maybe this increase will be enough to move us toward solving current coastal insurance problems and getting private insurers back into the market.
The creation of TWIA has pushed private insurers out of the market, while increasing the amount of exposure for the state. TWIA’s total exposure has increased from $13.2 billion in 2001 to $64.2 billion this year. The cumulative impacts of Hurricane Dolly and Hurricane Ike wiped out TWIA’s finances and the recent legislative fixes are not likely to help – there is concern now that TWIA will not be able to sell the first tier of catastrophe bonds. Texans are still trying to put Galveston back together. Another storm would be catastrophic at this point in time.
Misguided concerns for consumers have led to the current homeowners’ and windstorm insurance regulations that have mishandled pricing, increased risk, and kept private companies from investing capital in Texas. A large, diverse group of policy holders is what spreads the risks and minimizes costs, keeping prices competitive and low. Yet these regulations keep pushing us in the other direction. As Bill Peacock points out in his recent op-ed, “Windstorm Insurance Ruling Shows Legislative Reforms Have Failed,” there is a right way and a wrong way to go about helping consumers.
If TWIA returns to its original intent to serve as the market of last resort – instead of today’s first and best option – private companies will want to return to the Texas coastal market. With the private companies’ return, coastal residents will see competitive, lower prices, and enough money in the market to cover homeowners in the case of another major storm.
Last Friday, a group of 222 economists publicly rejected the Administration’s view that we need to “spend our way out of this recession,” instead insisting that officials focus on solutions that emphasize the free market.
In their statement, the troupe of economists – hailing from a number of prestigious universities, including Harvard, George Mason, and Rice – warn that:
The country’s economic future depends on Congress’ ability to rein in the growth of federal spending. Failing to restrict spending growth will further balloon the national debt, impede economic growth, and threaten the long-term economic health of our Nation. Controlling spending growth to reverse our dangerous debt accumulation can be done without endangering the near-term economic recovery, and will prove beneficial over the longer horizon.
The 2009 near-term “stimulus” has proven to be an inefficient spur to job creation and does not merit repeating. Any further policy efforts should be focused on opening borders to free trade, cutting burdensome regulations, and providing necessary tax relief to employers and employees.
The growing chorus of academics and scholars calling for an end to the Keynesian policies of the Obama Administration is getting hard to ignore. Let’s hope officials in Washington are listening.
• School for the Talented & Gifted at Yvonne A. Ewell Townview Center
Dallas, TX - Magnet
• School of Science & Engineering Magnet
Dallas, TX - Magnet
• IDEA Quest Academy & College Preparatory
Donna, TX (Rio Grande Valley) - Charter
• KIPP Houston High School
Houston, TX - Charter
• Michael E. DeBakey High School for Health Professions
Houston, TX - Magnet
• YES Prep Southeast
Houston, TX - Charter
• Highland Park High School
Dallas, TX - Traditional
• Carnegie Vanguard High School
Houston, TX - Magnet
• South Texas High School for Health Professions
Mercedes, TX (Rio Grande Valley) - Magnet
• Fort Worth Academy of Fine Arts
Fort Worth, TX – Charter
• Hidalgo Early College High School
Hidalgo, TX
It is not surprising that charter schools and magnet schools comprise the majority of Texas schools on this list. Charter schools and magnet schools are schools that students “choose” to attend. They offer a variety of educational models ranging from specialized curriculum focusing on a specific area such as math and science or fine arts to having a strong college-going culture.
Hopefully, we will see more high-quality charter schools and magnet schools open in Texas, giving more students the opportunity to attend a high-quality school.
States Continue Raising Taxes
States, struggling to contain huge budget deficits, raised taxes and fees by $23.9 billion and enacted $7.7 billion in other revenue-raising measures for FY 2010, according to a new report from the National Association of State Budget Officers (NASBO).
Among the slate of new net tax and fee increases:
• Personal Income Taxes: $10.7 billion
• Sales Taxes: $6.1 billion
• Fees: $5.3 billion
• Other Taxes: $967.8 million
• Cigarette, Tobacco and Alcohol Taxes: $908.1 million
• Alcohol Taxes: $54.1 million
• Motor Fuel Taxes: $42.3 million
NASBO executive director Scott Pattison said the new tax and fee increases represent the “highest tax increases ever,” and that, incredibly, Americans should expect further tax hikes in the near future.
This news is disturbing on a number of fronts. Americans already “pay more in taxes than they will spend on food, clothing and housing combined,” face the second highest corporate tax rate in the world, and are under threat of massive federal tax increases tied to proposed climate change and health care legislation. Add to that even more taxes being collected at the state level, and one begins to wonder if anyone is looking out for the American taxpayer anymore.
The American Revolution Center has just released a study that found 83 percent of American adults fail a quiz on America’s founding and the American Revolution. The results of the study are not only alarming but incredibly sad.
On the 27-question test within the survey, a national sample of American adults scored an average of only 44 percent correct. Additionally:
• Nearly 83 percent received a failing grade.
• Only four of the 27 questions were answered correctly by 70 percent or more of respondents.
• Many more Americans knew that Michael Jackson authored “Beat It” and “Billie Jean” than knew that James Madison was the Father of the Constitution, or that Alexander Hamilton was the first Treasury Secretary.
• Only 11 percent of Americans could identify John Jay as the first Chief Justice of the United States Supreme Court. Compare that to the 60 percent who knew the number of children of Jon and Kate Gosselin, a reality-TV show couple.
• More than 50 percent of Americans wrongly attributed the quote “From each according to his ability, to each according to his needs” to either George Washington, Thomas Paine, or President Barack Obama, when it is in fact a quote from Karl Marx, author of The Communist Manifesto.
• One-third did not know that the right to a jury trial is covered in the Bill of Rights, while 40 percent mistakenly thought that the right to vote is.
The study also found, in addition to the alarming lack of basic American Civics knowledge, that Americans think it is important that citizens do know the history and principles of America’s founding and the American Revolution and that this information is taught in school.
While teacher performance is much discussed, little is said about law enforcement effectiveness. As policymakers face budget pressures, they should examine law enforcement spending to prioritize activities that prevent and solve the crimes that most harm victims.
In the Texas Department of Public Safety’s budget, Goal C. is to “Prevent and Reduce Crime.” However, the sole performance measure within this goal for each division is the number of arrests. It doesn’t matter if the arrest is of a drug kingpin or murderer, or a person with a joint. Similarly, in the proposed 2009-10 budget for the Dallas Police Department, performance measures for the narcotics division are total arrests, investigations conducted, and operations/investigations per full-time equivalent employee.
The San Antonio Police Department’s proposed budget commendably includes targeted clearance rates for property crime (11.5%) and violent crime (32.8%), although these numbers suggest too many resources may be devoted to arrests for the most minor crimes as opposed to solving more crimes that severely harm victims.
Fort Worth is the best among major Texas cities. Four of its five police department budget performance measures, are result- and victim-oriented. They are the serious violent and property crime rate, percent of violent crimes solved, percent of property crimes solved, and rate of traffic fatality accidents. (You’ll notice that arrests are not included.) Outside of Texas, Washington D.C. has measured victim satisfaction.
Many policing activities are actually proven to prevent crime, leading to fewer arrests.
State agencies like DPS can propose new performance measures in the spring and many Texas cities are adopting their budgets, presenting an opportunity to improve law enforcement effectiveness through better performance measures.
Last week, Texas Comptroller Susan Combs unveiled her office’s latest effort to promote open government: the Leadership Circle.
The program – considered to be the first part of a two-step, carrot-and-stick approach – spotlights local governments in Texas that are “opening their books to the public; providing clear, consistent pictures of spending; and sharing information in a user-friendly format that lets taxpayers easily drill down for more information.”
Program participation is free and local governments even score themselves, though the results are verified by the Comptroller’s office. Based on the participant’s answers and the extent to which they have embraced transparency, one of three awards are given:
- Gold: Awarded to government entities that are “setting the bar in their transparency efforts;”
- Silver: Presented to those making progress; and
- Bronze: Given to those just starting the process.
The Leadership Circle’s first winners include: City of Tyler (Gold), Smith County (Gold), Tyler ISD (Gold), Arp ISD (Bronze), Chapel Hill ISD (Bronze), and Lindale ISD (Bronze).
Recognizing cities, counties, and school districts – like those listed above – is a great, low-cost way to reward local officials for their efforts. But even more importantly, the program helps keep the transparency issue in the public eye. And if the transparency movement is going to continue to be a force for good government, the public must constantly see it and demand it.
Today, the Center for Education Reform released its state rankings and Texas’ charter school law received a “D.” This isn’t really surprising considering the multiple rules and regulations that have been added on in recent years, the lack of facilities funding, and barriers to growth such as the state imposed cap of 215.
Yet, in spite of a mediocre state law, more and more Texas students and parents are choosing to attend a charter school. In Texas, charter school enrollment continues to increase. The Texas Education Agency reports that the number of students attending an open enrollment charter school increased from approximately 90,000 students to 102,000 students (2007-08 to 2008-09). Fourteen school districts operate charter schools that serve another 25,000 students. This brings the total of Texas charter school enrollment to almost 128,000 students.
The same trend holds true nationally. Across the country, more than 1.4 million students attended a public charter school last year. This year, student enrollment in public charter schools is more than 1.5 million students, according to the Center for Education Reform. The United States has more than 5,000 charter schools and 39 states currently allow charter schools, according to the National Alliance for Public Charter Schools.
Unfortunately, the charter school movement still has many artificial barriers to growth such as caps on enrollment, caps on the number of schools that may operate, or paperwork requirements that traditional public schools don’t have to fill out in order to expand. These barriers plus a lack of facilities has led to long waiting lists in many areas.
Nationwide, an estimated 365,000 students are on a charter school waiting list. In New York City, about 40,000 students applied for 8,500 seats. Texas had nearly 17,000 students on wait lists last year. (TPPF will release an updated total tomorrow.) Even states with very few charter schools such as Maryland has a waiting list with 3,000 students.
Students deserve the ability attend the school of their choice. It is time to get rid of arbitrary caps and other unnecessary barriers to expansion.
Some jurisdictions use performance measures for various departments to help determine the extent to which taxpayer funds are accomplishing their intended purpose.
A 2006 Texas Public Policy Foundation report called for measures based on results, not on “pure activity and volume measures such as numbers of applications processed, the number of individuals served by a program, complaint volume, and so on.”
With that in mind, how should prosecutors’ performance be measured? In San Bernardino County, California, one of their two performance measures for the district attorney’s office is the percent of felony cases resulting in a prison sentence. Is their goal of 33 percent necessarily justice? Violent felons going to prison certainly may be, but, apart from the cost, does imprisoning first-time drug possession offenders alongside violent criminals enhance public safety? Similarly, Johnson County, Kansas uses total prison and jail time obtained as one of their measures.
The most traditional district attorney performance measures are the number of cases processed, convictions, and conviction rate. For example, among the four measures used by Fort Bend County, Texas are felony and misdemeanor dispositions. Similarly, the measures in Dallas County focus on the number of filings and dispositions. These volume measurements are of little value, since more cases may simply reflect an increase in crime.
Dan Conley, the district attorney in Boston, notes a prosecutor’s job is not simply to obtain convictions, but “to seek the truth and achieve justice.” A good place to start is achieving justice for victims, which can be measured by restitution obtained and victim satisfaction. A report by the National District Attorneys Association advocates such measures, though it also endorses measures such as convictions and incarceration. If performance measures and office culture emphasize convictions, why would a prosecutor refer a case to victim-offender mediation even though research shows it increases restitution and reduces costs?
As counties tighten their belts, measures for prosecutors’ performance should emphasize maximizing the use of every dollar to enhance public safety and outcomes for victims.
Not every student is the same. Each student has different learning styles, interests, strengths, and weaknesses. Yet, many traditional public schools ignore this fact and don’t understand why students dropout or leave that model for one that better fits their needs.
As students and parents become more dissatisfied with their neighborhood public school, homeschooling is seeing explosive growth. Education Next has a fantastic article about homeschooling that is well worth the read.
Ten years ago, the number of students homeschooled across the country stood at roughly 850,000 students. Today, that total is estimated to be between 1.5 million and 2 million students. This equals about 3% of all k-12 students. Texas has 160,000 homeschooled students (see page 6).
Actor Will Smith said that he and his wife home school their children because they like the flexibility.
“They can stay with us when we travel,” he said, “and also because the school system in this country – public and private – is designed for the industrial age. We’re in a technological age. We don’t want our kids to memorize. We want them to learn.”
Some parents of students with special needs or diagnosed learning disabilities are pulling their kids out of public school as they believe they can do a better job teaching them at home.
Surprisingly, religion is not the main reason parents choose to home school their kids. In fact, 70% of parents who home school their kids give nonreligious reasons for doing so.
What about academic outcomes for home school students? The College Board reports a dramatic rise in the number of home school students taking AP tests. A 2004 survey of universities found more than 75% of universities have admission policies for homeschoolers. Admissions officers tended to have positive feelings about home school applicants and universities were typically happy with the academic performance and graduation rates of home school students.
The National Home Education Research Institute also finds positive academic outcomes for homeschoolers. Its report finds that homeschooled students perform much better academically than public school students for less money and without certified teachers.
Parents and students interested in learning more about homeschooling should contact local home school groups in their community or their state home school association.
Even as Harris County faces budget pressures with assessed property tax values falling $7.1 billion in 2009, Sheriff Adrian Garcia is renewing the call for building a 2,193 bed jail that could result in a tax hike.
In 2007, voters rejected a $195 million bond measure for a 2,500 bed new jail that would have grown the criminal justice share of the budget by 9 percent, including $9.6 million annually to staff the new jail. The proposed jail could be voted on in November 2010.
Many options to control the jail population that are consistent with public safety have not been implemented. The Harris County jail is under federal investigation and its population has swelled to 10,500, with the County also paying to lock up more than 1,000 inmates in Louisiana.
In 2007, House Bill 2391 authorized police officers to issue tickets and notices to appear in court for certain minor misdemeanors instead of making an arrest and bringing the suspect to jail. Harris County has declined to implement this policy. The Travis County Sheriff’s office is issuing tickets and 90 percent of suspects show up for their hearing.
Also, most but not all of the County’s judges use a graduated sanctions model with sanctions such as a curfew and increased reporting to reduce revocations from probation to jail and prison. Without this proven approach, probationers may either be revoked for a minor initial violation, or many accumulated violations may lead to a revocation because a swift and certain message was not sent.
Additionally, Harris County is jailing 1,200 first-time offenders for possession of less than a gram of drugs, a state jail felony. Lawmakers excluded these offenders from state jails, with the intent that they be placed on probation, which is the approach most other counties take in all of these cases.
Other possible solutions include more rapid processing of cases (5,093 inmates are awaiting trial), victim-offender mediation for minor property offenses, work release, a day reporting center with a work program, and electronic monitoring.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications.
On November 30, KVCE 1160 AM in Dallas/Fort Worth -- the radio home of the Lone Star Lessons -- changed formats. We appreciate KVCE airing these segments for the last two years, and we hope to have a new radio home for these segments very soon.
According to Recovery.gov, the website is
supposed to “foster greater accountability and transparency in the use of funds
made available” through the $787 billion stimulus act. But a disturbing new report
from ABC
News shows quite the opposite.
A number of inaccuracies exist within the site that falsely
claim to have spent stimulus money creating or saving jobs in nonexistent
congressional districts. That’s right – the government is spending your tax dollars
to create jobs in places that don’t exist.
The site’s imaginary districts exist in a number of states. Here
are the ones in Texas that the Foundation found after a quick look:
Congressional
District
Jobs
Saved or Created
Money Spent
52nd
0
$8,937,289
58th
45
$3,659,694
86th
6
$943,326
00
11
$752,292
68th
1
$ 310,963
91st
30
$57,367
85th
5
$56,661
TOTAL
98
$14,717,592
Though these inaccuracies were reportedly linked to human
error, dispensing fictional data—particularly on a site dedicated to
transparency—is simply inexcusable. If the purpose of Recovery.gov is really to
“foster greater accountability,” then someone needs to be held accountable.
Who knew that the sentencing of federal defendants had anything to do with spending on national defense? There is no connection, but Congress is well known for Christmas tree-style legislation, and the National Defense Authorization Act signed in October by President Barack Obama calls on the United States Sentencing Commission to study mandatory minimum sentences, which eliminate judicial discretion by requiring a minimum term of incarceration. The Commission advises federal judges on sentences, though any changes to mandatory minimums would have to be approved by Congress.
Partly due to mandatory minimums, the federal prison population has risen from 24,000 in 1980 to 209,000 today, as the Bureau of Prisons staff has increased from 10,000 to 36,000 employees. While some mandatory minimums concern crimes involving weapons, some of the 170 mandatory minimum laws concern drugs and other nonviolent offenses. In 2008, 21,023 offenders were convicted of crimes subject to mandatory minimums
The conservative late Supreme Court Chief Justice William Rehnquist said mandatory minimums are “perhaps a good example of the law of unintended consequences.” Chief Judge Julie Carnes of the Northern District of Georgia testified before Congress in July that mandatory minimums sweep too broadly. She cited a mandatory minimum statute that would impose a 20-year sentence not only on the kingpin who had organized and operated an extensive drug trafficking ring, but also on the manual laborer hired to offload a shipment of that kingpin’s drugs.
Texas is not among the states with mandatory minimums, as probation is an option for every offense. As federal corrections costs continue to soar, this is an ideal time to re-examine mandatory minimums.
I recently attended a conference with a lot of fellow free marketers. One of the speakers was a former appointee in the administration of George W. Bush. During the subsequent Q&A, it became apparent that many in the crowd were not happy with the growth of government during Bush’s eight years in office.
I must confess to being one who wasn’t particularly happy with President Bush’s big government conservatism. Heck, I still sometimes grumble about his father’s presidency. But as I listened to the crowd the other day, it reminded me far too much of Barack Obama and his constant blaming of Bush for all the world’s evils.
Those of us who believe in liberty, personal responsibility, and free enterprise have a choice to make. We can either dwell in the past or look to the future. If we spend all out time grumbling about the Bush years, we’ll never have the energy and insight to advance the free market cause. Even daydreaming about the next Ronald Reagan won’t help. Yes, we must learn from past successes and failures, but we can’t let the past get in the way of the future. We can’t let it get in the way of liberty.
The stakes are too high. As our board member Jeff Sandefer said at the same event, “the opposite of ‘liberty’ is not ‘financial insecurity’ but “slavery.’” We must be “committed to finding a calling, to finding a specific wrong we will right, to seeking a cause that will roll back the power of government and set an example for others to follow.” There is no room in this future for grumbling about the past.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
According to government reports at Recovery.gov, the federal stimulus program has added more than 19,500 jobs to the Texas economy. But last week, Dallas Morning News reporter Dave Michaels found some fuzzy math was used when compiling those numbers and collecting the data.
As summer came to a close, so did the work for more than one-fourth of those employed through the stimulus program. About 5,100 of the 19,500 jobs that had been created ended just as abruptly. Now, one may count a job as a job, whether temporary or full-time, but look at the quality of some of those jobs.
A housing authority in a small Navarro County town claimed a grant of $26,174 employed 456 people – that’s $58.16 per employee or $7.27 an hour for just one eight hour day’s work. That’s not what I would call sustainable living.
The article is rife with other examples of misrepresentation, which begs the bigger question: who is wrong here? Those dishonestly inflating their job creation numbers, the federal government for not cautiously vetting the candidates applying for these grants, or both?
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
There are a lot of ways to measure how the economy is doing. But employment, or jobs, is probably the measure that means the most to us. On a macro level, we understand that it means something good when we read that two million new jobs were created and unemployment fell to 4.2%. On the micro level, it doesn’t require a Ph.D. to understand what it means when we look around and see our friends, neighbors, and even ourselves losing jobs.
So when we look at Texas today, it is easy to figure out why Texas is doing better than the rest of the national economy. It is because of jobs.
We created more jobs than the rest of the country combined in 2008, and kept creating a net increase in jobs much further into the recession than any other state.
To be sure, we’ve lost jobs this year and unemployment has increased, but we’ve still outpaced the national economy in keeping jobs and in creating new jobs to replace some of those that are lost.
Why is this? Why has Texas, alone among the 50 states, been a beacon of job creation?
We know it is not because of high taxes and government spending. The Associated Press reported last week that the administration’s report on jobs created by its economic recovery plan—how shall I put this—overstates the number of jobs actually created. And a new Harvard report finds that “fiscal stimuli based upon tax cuts are much more likely to be growth enhancing than those on the spending side.”
Maybe it is because we know that it is Texans, not the government, who create jobs. And because our level of taxes and regulations allow Texas entrepreneurs to go about their jobs of meeting consumer demand and in the process, create more jobs.
The Foundation’s Center for Economic Freedom held a policy primer last week to more closely examine the causes behind Texas’ economic success. It featured Tom Pauken, chairman of the Texas Workforce Commission; Ken Legler, state representative from Pasadena; Kurt Summers, owner of Austin Generator Service; and Andy Ellard, general manager of Manda Machine Co. in Dallas.
We spent some time looking at the big picture, but honed in on the role of the entrepreneur of in keeping the Texas economy going. 51% of Texas jobs and 48% of payroll expenditures are provided by employers with less than 500 employers. And most new jobs come from these smaller businesses. The panel pointed out that the entrepreneurs/owners of these businesses have a hard enough time providing jobs while meeting the demands of the market. When the government steps in to make life even harder, the jobs can disappear pretty quickly.
Here are some comments made after the event by Rep. Legler.
Among other things, the bill would extend unemployment insurance benefits in all states an additional 14 weeks. For states with unemployment rates at or above 8.5 percent, an additional six weeks of benefits would be granted.
With the passage of this bill, this marks the fourth time since June 2008 that Congress has voted to extend benefits, meaning that certain jobless Americans could be eligible for up to 99 weeks worth of benefits. This breaks the previous record of 65 weeks set back during the 1970’s.
While we can all sympathize with people who have legitimately lost their jobs through no fault of their own, Congress’ passage of HR 3548 threatens to do more harm than good. There’s a real danger that extending unemployment benefits – seemingly indefinitely – will further incentivize unproductive behavior and prolong economic stagnation.
Remember, economists have proven that when you subsidize an activity, you tend to get more of it – as is the opposite with taxation.
Nobody can fault Congress or the administration for wanting to help the unemployed; however, there is a right way and a wrong way. And more government involvement, more government spending, and more government subsidies are just not the right way.
This spring, the Texas Public Policy Foundation testified in support of a higher education transparency bill by Representative Lois Kolkhorst, HB 2504.
HB 2504 passed both houses unanimously, and public universities in Texas are in the beginning stages of implementing the reforms that HB 2504 mandates, including posting the syllabus of each course, the faculty member’s curriculum vitae, and other information on the internet by next fall. The bill requires that this information be no more than three clicks away from the institution’s homepage.
David Koon at the John William Pope Center for Higher Education Policy notes that although “Texas is the first and only state to have such legislation… the law reflects a growing national concern with the lack of transparency in state universities.” He calls HB 2504 “a step in the direction of greater transparency.”
His article notes that most schools are having no problem complying with the law, but Valerie Paton, a vice provost of Texas Tech University, said the deadline poses a “significant challenge” to the university, citing cost concerns. Regardless, it seems most universities are complying.
The main controversy surrounding the bill, however, is the provision requiring universities to come up with a plan to post student course evaluations online. These evaluations have always been private, and as of right now they will remain that way. Still, it is clear the legislature may want to address the issue of making student evaluations public in the future.
Koon notes that “Texas is moving ahead of…the rest of the country by providing greater public access to the workings of higher education. Though the ivory tower remains shielded, Texas’ new syllabi law provides at least a small window on its inner happenings.
Other states should look to HB 2504 as an example of how to begin improving accountability standards at their public universities.
First, as documented in this report, the E-Verify system used to verify workers’ legal status has numerous flaws. Some 17.8 million records are inaccurate, resulting in incorrect feedback when employers submit a worker’s name and address. The bill will include language designed to improve this system. Currently, E-Verify is optional for most businesses, but is required for federal contractors and recipients of stimulus funds, as well as all businesses in Arizona, Mississippi, and South Carolina.
The other provision slated to be in the bill that is relevant to our recommendations would create an “employment-based visa system” that would “align visa numbers with actual labor market demands and economic needs.” The goal of allowing the market to work is laudable. Currently, the visa system frustrates many companies because of arbitrary caps on the total number of visas and visas from certain countries.
The cap on H-1B visas for highly skilled workers, such as engineers and computer scientists, is 65,000, which is still being reached despite the economic downturn. As late as 2001, the cap on H-1B visas was 195,000. In 2008, one U.S. technology company hired 1,000 programmers in India because they couldn’t obtain U.S. visas for any of them. The Heritage Foundation and Governor Rick Perry have endorsed raising the cap, but Congress could go even further and abolish the cap to truly let the market work.
Our report also recommended abolishing country caps on these visas. These caps leave even more highly-skilled workers, who have jobs lined up with U.S. employers, waiting for years to immigrate, if they are able to come at all.
The actual language of Congressman Gutierrez’s bill must be analyzed and other provisions likely to be in the bill are unrelated to our research, but it is encouraging that he is addressing these two issues that impact employers seeking to grow and create jobs.
Last month, the College Board released a study which found, not surprisingly, that the average cost of tuition and fees at four-year public colleges rose 6.5 percent from last year. During this same time period, inflation decreased by 2.1 percent. So, why such a profound tuition increase? After all, our country is in a recession.
Many blame state governments for not appropriating universities enough money. Maybe this has had some small impact on tuition increases in states other than Texas, maybe, but those who use this as an excuse overestimate its impact and seem to have ulterior motives in mind. Hint: universities themselves use this excuse at every available opportunity.
Additionally, this excuse definitely doesn’t explain the tuition increases here in Texas. Our state government increased appropriations to higher education by 15 percent this legislative session. Tuition has still increased at our state’s public universities.
The College Board study is quick to point out that although tuition has increased, student loans more than make up for the increased tuition costs. Or as the Cato Institute’sNeal McCluskey puts it, “colleges were able to charge students more without greatly affecting access by pawning much of the new charges off on donors and taxpayers.”
The College Board study is just more evidence that student aid drives tuition increases because it means third parties are paying for the costs, much like the reason health insurance costs are so high. No one cares how much a product costs when they aren’t footing the bill.
Rather than instituting more of the same, policymakers should make real higher education reforms that address the core of the problem – too much government interference and zero university accountability.
In the wake of the worst economic downturn since the Great Depression, a new kind of “refugee” has emerged: the American taxpayer.
No longer able to afford the liberal tax-and-spend policies of the past, Americans increasingly find themselves fleeing their high-tax home states in search of greener pastures. One state hit unusually hard by this phenomenon—New York.
Between 2000 and 2008, over 1.5 million people, or 8 percent of the population at the start of the decade, left New York for other states in the U.S., according to a new report from the Empire Center for New York State Policy. At its absolute worst, the state lost nearly 250,000 people in 2005.
This mass out-migration is more than just a drain on New York’s population though, it’s also having a frightening effect on the state’s tax base.
According to the report, “in 2006-07 alone, the migration flow out of New York drained $4.3 billion in taxpayer income from the state.” In other words, states aren’t just losing people—they’re also losing money too.
New York’s example should serve as a stark reminder that taxes matter. Today’s population is more mobile than ever, and if high-tax states don’t rethink their approach soon, they could very well end up broke and population-less.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
A couple weeks ago, Houston Mayor and U.S. senatorial candidate Bill White spoke at a University of Houston Faculty Senate meeting alongside former UH Chancellor Bill Hobby. The main topic of discussion at this meeting revolved around university research and Proposition 4.
But the most troubling comments made at the meeting were not about Proposition 4, but rather the so-called failure of the free market in higher education.
During his presentation, White told attendees that “we should not create a market system in higher education.” He seemed to be suggesting that the problems at public universities can’t be solved by more competition and less government regulation, as the Texas Public Policy Foundation and others propose.
The truth is, most problems in the higher education market are because of too much government interference, and unleashing the free market would be the best way to improve those problems.
Below are just a few examples of how government involvement in the higher education market harms students:
Higher education isn’t any different than the market for automobiles, toothpaste, or diapers. Students are the consumer, and universities are the producer. The free market can create the same options for university students as every individual has when purchasing an automobile, if only the government would just get out of the way.
In the education policy community, many folks are following the charter school movement and wondering if state lawmakers are going to get rid of their caps on charter schools or allow the existence of charter schools in their state. Much of the momentum comes from the Obama Administration’s strong stance in favor of lifting caps on charter schools and their decision to reward states with strong charter laws with Race to the Top stimulus funds.
Last February, I researched state policies on charter schools and found that 25 states and the District of Columbia had some type of cap or limit on charter schools. Since then, Louisiana has removed its cap, Illinois and Tennessee have raised their caps, and Delaware has gotten rid of its moratorium on new charter schools. The demand for charter schools is strong. Nationwide, 365,000 students are on a waiting list to attend a charter school.
Texas has a cap on charter schools and has a charter school waiting list of nearly 17,000 students. Efforts to raise the cap died from a point of order on the House floor during the last hours of session. This is extremely unfortunate since Texas hit the 215 cap earlier this year and no new charters can open until the cap is raised or an existing school returns its charter.
What do students think about charter schools? The Illinois Policy Institute recently released an interesting documentary on charter schools in its state titled Charter Schools: Changing Lives. This is a must see for those that are on the fence or are trying to learn more about charters.
Last week, I was among a group of business professionals that got to hear remarks by retired Navy Admiral Bobby Inman, Interim Dean for the LBJ School of Public Affairs at the University of Texas at Austin. He gave a very general and interesting overview of the current state of the globe, region by region. The most surprising comment I took away from the lecture was that the slim South American country of Chile is the place to do business on the continent. But why?
• Transparent and stable public finance management
• Protection of property rights
• Openness to global free trade and investment
Sensible immigration laws may also be a factor in economic prowess. Take the information technology industry for example. If an IT company was to submit a business plan and invest $500,000 over five years, the Chilean government will provide a slew of incentives, starting with a permanent visa. Contrast that with the United States’ complex, bureaucratic, and backlogged immigration system, recently analyzed by TPPF’s own Marc Levin, and Chile resembles a petri dish for innovative entrepreneurs.
But why do U.S. entrepreneurs have to go overseas in search of employees? Because business owners, especially those in the technology fields, can’t find enough homegrown workers with the necessary skill sets to perform their essential tasks.
I think we are going to see big things from Chile in the coming decade. Entrepreneurship, economic growth, and standard of living are all on the rise, with free market policies and sensible immigration laws serving as the catalysts that have made Chile the most developed country in Latin America.
The recent awarding of the Nobel Prize in Economic Sciences shows that at least one of the Nobel prizes is based on common sense.
The prize was awarded to Elinor Ostrom at Indiana University and Oliver E. Williamson at the University of California, Berkeley for their work on the “tragedy of the commons.” As John Tierney points out that since 1968, environmental activists have misused Garrett Hardin’s flawed 1968 article in Science magazine to push for regulation of just about everything from fisheries to population growth. The theory being that problems like air pollution or depletion of the ocean fisheries represent market failures that require government intervention. But these two economists show that this is not the case.
As the Nobel prize announcement said, “Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctions are the responsibility of the state and should be conducted by public employees.”
It seems as if people are pretty good at solving their own problems if left alone by the government!
Of course, not everyone agrees. Robert Shiller, a Yale University economist who believes that “animal spirits” trump Reaganism and Thatcherism, said, “This award is part of the merging of the social sciences. Economics has been too isolated and too stuck on the view that markets are efficient and self-regulating. It has derailed our thinking.”
While his attempt to spin the prize award back toward the need for government regulation fails, at least he is right in his comment about the isolation of economics. Elinor Ostrom is a political scientist, not an economist, and another encouraging thing about this award is that “in honoring her, the judges seemed to suggest that economics should be thought of as an interdisciplinary field rather than a pure science governed by mathematics.” In other words, Human Action, rather than mathematical modeling, should be the focus of economic study. We are all individuals motivated by varying incentives, a fact which modern economics almost completely overlooks, and which ruins the application of most econometric models when it comes to public policy.
At a time when it seems that almost everyone is moving toward collectivism, this award should give hope to those of us who still believe in individual freedom.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
If you had to guess, what would you say Americans are most concerned about today? Exploding deficits? Rising unemployment? Affordable health care? According to the results of a new Rasmussen poll, it’s none of the above.
In a recent telephone survey of 1,000 likely voters, government ethics and corruption was singled out as the issue with 83 percent of respondents regarding it as “very important,” followed by the economy (82 percent) and health care (73 percent).
The new findings are intriguing on a few different levels. First, this marks the first time since January 2008 – right around the start of the recession – that government ethics and corruption has trumped the economy as the number one issue affecting likely voters. Second, the poll’s results reveal a growing sense of mistrust in government and the way it handles public money.
One need only read the daily news to understand why the public feels this way (see here, here, and here); stories of fraud, waste, and abuse in government litter the headlines. Interestingly though, these feelings of frustration are giving way to action.
Concern over the misuse of public money has led to a surge in the number of federal and state-based transparency websites. One of the newest ones to enter the fray is the Cato Institute’s DownsizingGovernment.org, whose mission is to help the public “understand where federal funds are being spent and how to reform each (federal) government department.”
These tools alone, however, are not enough to change the public’s perception. It will take time and principled leadership.
“Smart Growth” is a fad that has caught on in many cities, counties, and states by promising better urban growth and planning. So far, it has delivered only the artificially inflated prices of the housing bubble, the collapse of which sparked the current recession. Unfortunately, despite the proven calamity, there is a continuing push to bring these destructive policies to Texas.
Smart Growth is the label that has been given to a wide array of restrictive government policies that define what land can be used and what it can be used for, levy fines and fees on homeowners and developers, and generally distort the real estate market. California, Florida, and the city of Portland are the leading examples of governments that have adopted Smart Growth policies. It is no coincidence that these are among the nation’s most decimated housing markets. By restricting the use of available developable land, these regulators decreased supply, even as demand was being fueled by more liberal lending policies. Consequently, prices started to climb rapidly, sparking speculation that drove prices even higher, feeding a vicious cycle that distorted home prices far more than in areas without such restrictions.
In a report recently prepared for Houstonians for Responsible Growth, Demographia broke down the factors contributing to real estate costs, and found that construction costs, demand, population growth, available land, lending practices (Texas had among the greatest number of sub-prime mortgages in the nation), and other factors were not able to explain why California’s and Florida’s bubble was so much bigger than Texas’. Instead it was restrictive land use policies disconnecting the housing market from the true indicators of cost that fueled such an incredibly large bubble.
Home ownership has become a symbol of the American Dream, but it remains out of reach for too many people. Many potential first-time home buyers are being driven out of the market by restrictive government policies. Texans must recognize the consequences of these policies and work to ensure that our cities are able to grow and develop appropriately to meet the demand of our growing population and business community.
And should it be a surprise that much of that population and business growth comes from people and businesses leaving California and Florida?
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
This is a glimpse of the future under the energy efficiency regime being pushed in Texas and across the U.S. The picture shows a new home in the SOL neighborhood, three miles east of downtown Austin. It is being built on the premise that energy efficiency is the cheapest option for “new” energy.
A new study along these lines claims that energy efficiency would eliminate the need for seven new power plants and save Texas consumers $5 billion. But the reports always underestimate the costs of the energy efficiency measures and overestimate their savings. For instance, the study states that energy efficiency houses cost about 15% more to construct, though numbers in the study show the costs to be more like 20%. But whatever the figure, the mantra is that these higher costs will eventually be recouped through annual energy savings.
However, the numbers don’t actually work out so well. The report estimates that the savings of a net-zero home will run about $500 per year. However, if a normal house costs about $150,000 to construct, then the additional costs of making a home energy efficient will be about $22,500. That’s a payout of about 61 years, considering interest costs and inflation.
So one of the problems of the current energy efficiency push is that most people won’t live long enough to see the benefits of their investment in it! That is why those promoting energy efficiency want to mandate it, i.e., make us pay for it. They say while individuals may not be able to benefit from energy efficiency, society does, which represents a market failure. So we’ll all be better off if we pay for something that we’ll never benefit from personally.
One problem with this is that it ignores opportunity costs, i.e., the benefits that could have been achieved had energy efficiency money been invested elsewhere – say college, or a business, or savings for the future. This would make the likely payout much longer than 61 years. In fact, it would probably make the return go negative, which just highlights the fact that most energy efficiency arguments ignore basic math. Something is only efficient if it costs less. The energy efficiency solutions being mandated today are not. It also ignores basic human nature. If something is cheaper and better we’ll buy it or use it. If it is not, we won’t.
When energy efficiency is cheaper than building new power plants, then the market will be the place those measures are adopted. But until then, we’ll keep using coal, nuclear and natural gas to keep our lights on and our homes cool.
The Heritage Foundation and its related website Overcriminalized.com have published a profile of a Texas man sent to federal prison for 17 months, including 71 days in solitary confinement, for importing plants from Peru. Now 71 years old, George Norris of Spring, a Houston suburb, was convicted in 2004 of violating the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), as implemented by the Endangered Species Act of 1973 (ESA) and the Lacey Act. His prison sentence was upheld by the U.S. Court of Appeals for the Eleventh Circuit in 2006. He is now a free man again after also serving two years of probation. His case proves the point that criminal law has gone too far.
Norris was a retiree whose hobby was collecting orchids. The hobby eventually became a part-time business operated out of the greenhouse behind his home. In October 2003, his life was turned upside down when six armed federal agents raided his home and left with 37 boxes full of documents. Norris was eventually charged, along with his supplier Peruvian orchid grower Manuel Arias-Silver, with what amounts to a paperwork violation.
The raid stemmed from Norris purchases of a newly discovered rare species of orchid called phragmipedium Kovachii from Arias-Silver, who artificially replicated the specimens. The CITES actually permits the export and import of artificially replicated plant species, but requires that they be accompanied by permits issued by the exporting country. Norris advertised the availability of the species in his newsletter. A taxonomist who received who was disgruntled because he was not the first to name the species asked the U.S. Fish and Wildlife Service to investigate Norris.
A buyer (who was an informant for Fish and Wildlife Service agents) ordered four phragmipedium Kovachii from Norris and asked that the permits be sent with the specimens. That surprised Norris because normally the permits were taken by U.S. Department of Agriculture inspectors at the port of entry for their reference. On this basis, Norris’ house was raided. Upon examining Norris’ confiscated files, investigators found some of the plants he had offered for sale were not listed on any permits. Among those missing permits were three of the phragmipedium Kovachii orchids.
Both the ESA and Lacey Act provide for criminal penalties, including prison terms. Norris was indicted for one count of conspiracy to violate the ESA, five counts of violating CITES requirements and the ESA, and one count of making a false statement to a government official for mislabeling orchids. His sentence of 17 months in prison followed by two years of probation concluded in June 2009.
Norris’ ordeal, which was also highlighted by the Ludwig Von Mises Institute in 2004, illustrates that the more than 4,000 federal criminal laws have ensnared entrepreneurs who at most should be subject to civil penalties for conduct, that unlike traditional crimes, does not endanger the public.
It is not often that governments voluntarily reduce fees or taxes. So when one does, it is worth taking a closer look.
Last month, the Plano City Council eliminated impact fees on developers building new homes and businesses. The fees were charged based on the size of the water meter for the project, and typically ran from $1,000 to $2,000 for a typical home, but could go as high as $95,000 for the largest meters. The money was then used to build additional infrastructure for the city. But as new construction has slowed in Plano, the city is looking for ways to make it less expensive for people to live in.
Taken by themselves, impact fees could be seen as a user fee, which is one of the better ways for governments to raise money. Use a service, pay a fee. That is what makes toll roads so appealing from a market perspective. But user fees are only good if used instead of general taxation, replacing the tax revenue rather than supplementing it.
I don’t know which route Plano took, but the good news now is at least its city council members acknowledge the fact that fees and taxes make living their more expensive – not for the developers, but for the people who live there and ultimately have to bear these costs.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Several weeks ago, I wrote about the Student Aid and Fiscal Responsibility Act. There still hasn’t been much discussion about the bill, so I thought I’d give some more details about the damage it could cause if passed by Congress.
According to a recent Wall Street Journal article, the plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80%. Once this occurs, private lenders will be barred from making government-guaranteed loans, and the remaining 20% of the market that would remain private will most likely shrink as lenders try to comply with new government regulations.
Beginning in July of next year, taxpayers will pay $100 billion a year to lend to students.
Several college administrators have sent a letter requesting they be given a longer transition period to this “public option.” They don’t think the government will be able to make the transition in just eight months time.
Supporters of the bill claim it will save $87 billion by cutting out private middlemen. However, the director of the Congressional Budget Office thinks these savings estimates are inaccurate.
According to the Wall Street Journal article, “the statutory methodology ‘does not include the cost to the government stemming from the risk that the cash flows may be less than the amount projected (that is, that defaults could be higher than projected).’” Also, “the government's accounting system is specifically skewed to make direct loans from the government appear to cost much less than guaranteed loans made by private lenders… the real ‘savings’ are only $47 billion, even though, in a deception that would be criminal fraud if it weren't mandated by Congress, the official estimate remains at $80 billion.”
The bill is expected to pass the U.S. House. The only chance that it will be stopped lies with the U.S. Senate.
If it passes, parents will be forced to use a Washington bureaucracy to borrow money for their college-bound children, and taxpayers will pay a fortune to send those children to college.
Last week, the Senate Finance Committee voted down an amendment to the health care bill that had been proposed by Sen. John Cornyn (TX) and Jim Bunning (KY). The amendment should not have been controversial – it simply required that the Senate Finance Committee post on its website the final text of the health care reform bill and a final Congressional Budget Office score for 72 hours prior to a committee vote on final passage. Amazingly, the amendment failed 12-11, with only one Democrat crossing over to vote yes.
Instead, the committee decided it would post the “conceptual” language online along with cost estimates. Apparently the senators on the committee who voted against the amendment didn’t think posting the actual language would be worthwhile on the grounds that the average American wouldn’t be able to understand it anyway.
According to Sen. Bunning, "This is not a normal bill for us or for the American people. The devil is in the details. The way legislative language is written could have a large impact."
Sen. Olympia Snowe (ME), a swing vote in the health care debate, agreed with Bunning. "We should not be afraid of having a better and complete understanding of what we are all doing," she said. "The fact is, words matter, and so do the numbers."
The failure of this amendment is particularly disturbing considering the public had been demanding greater transparency throughout the summer, holding signs at rallies across the country urging legislators to “read the bill.”
The informed participation of citizens is vital to the success of any popular government, because without access to factual information there is no way of effectively participating in the political process. The importance of transparency in this particular bill can’t be overstated. Not only does it come with a steep price tag, it also threatens to usurp the rights of individuals to make their own health care decisions.
Without transparency, taxpayers are unable to hold their government accountable. Hopefully that’s not what is motivating our congressional leaders.
Last Saturday, Austin news outlets reported the tragic story of an unidentified jogger who had been struck and killed Friday evening outside a downtown parking garage. After her identity became known and tributes filled the Internet, many of those outlets came back for follow-up stories, seeking to fill in the picture of who this young woman was and why so many people reacted so emotionally to her death.
Hopefully I can help explain what made that young woman so remarkable. Her name was Brianna Nichole Becker. She was my intern and my friend.
By the spring of 2008, the Foundation’s internship program had grown to the point where I was given a communications intern. I had met Brianna through Young Conservatives of Texas – a group she had joined at the University of Texas and of which I was a former state chairman – and recruited her to come over and work with me. Her work product was so strong and her work ethic so reliable that I would have kept her that summer had she not had that great offer lined up with the Clare Boothe Luce Policy Institute in Washington, DC. She made such an impression on them that they did a spotlight feature on her.
Thankfully, I didn’t have to prod Brianna to return for a second semester that fall. We even had internal discussions about creating a part-time communications position for her long-term, but as much as she enjoyed the communications work, her passion was for the law and we supported her decision to pursue that.
Brianna provided critical support during the early stages of developing our social media program. Her writing skill and philosophical grounding were such that I trusted her with writing many of the scripts for our “Lone Star Lessons,” a daily radio commentary that airs on KVCE-AM in Dallas/Fort Worth. She was someone our other interns looked to for leadership, and brought a positive energy that rubbed off on the entire office.
Even after leaving TPPF, Brianna continued to support our activities as a regular attendee of our Policy Primers and other functions. She spoke alongside our Elizabeth Young at last month’s kickoff of the Coalition for American Traditions and Ethics – the Associated Press’ Austin bureau chief commented to me this morning how impressive she found Brianna’s presentation.
She was a cheerful presence in all situations, a friend to all who knew her, and a passionate and articulate supporter of liberty. Those of us who knew her and worked with her are devastated that she has been taken from us way too soon.
Last Thursday, we hosted an event at the AT&T conference center with award-winning journalist John Stossel. While we routinely make arrangements for traditional media to cover our functions, this was our first time to have a blog row for social media activists. Brianna was the first to accept my invitation.
After the event, she had a nice visit with our president and other staff, and I was able to introduce her to Mr. Stossel as the best intern I ever had. One of the few points of solace I can take right now is that I got to tell her that before she left us.
Many have paid tribute to Brianna online – from Gov. Rick Perry and Comptroller Susan Combs, to her YCT and College Republican contemporaries, even people who had only met her at the Stossel event. I particularly recommend Robbie Cooper’s post on UrbanGrounds.
But our mutual friend, Michele Samuelson, highlighted Brianna's very last message on Twitter, sent shortly before setting out on that fateful jog: "I never wanted something as much as I want tomorrow to be the real deal, the one and only time I need to take that test." (Brianna and Elizabeth were scheduled to take the LSAT together on Saturday morning.)
To which Michele responded, “In an odd way, her wish was granted. We know where she is – dancing in heaven, with her Savior. That really is the real deal.”
God bless you, Brianna. We’ll always value your friendship and we’ll see you when we get there.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
On Tuesday in the Capitol Auditorium, Texas state leaders gathered for a federal climate change legislation summit on the economic impacts for Texas from the federal climate bill known as Waxman/Markey. This massive legislation, the American Clean Energy and Security Act, narrowly passed the U.S. House of Representatives in late June. With the bill’s fate now in the hands of the U.S. Senate, these sweeping federal mandates to control energy move perilously close to becoming U.S. law. Wisely, Gov. Rick Perry and state agency heads convened to sound a clear alarm: with more at stake than any other, the Texas economy would likely be devastated by the sweeping, forced transformation of energy federally mandated by this bill.
This extraordinarily large of group of state leaders did not mince words. Governor Perry began the summit with the assessment that the Waxman/Markey federal climate bill would be “an economic disaster for Texas” – a sentiment shared by the 12 commissioners of major state agencies participating.
Hosted by Public Utility Commission (PUC) Chairman Barry Smitherman, all members of the PUC, Texas Commission on Environmental Quality, and the Railroad Commission presided. Agriculture Commissioner Todd Staples, Deputy Comptroller Martin Hubert, and Texas Workforce Commission Chairman Tom Pauken spoke. Twenty-four speakers representing academia, think tanks (including myself), manufacturing, refining, agriculture, oil and gas, electric utilities, renewable energy, environmental and consumer interests populated the five panels in this day long summit. A large majority of the speakers either adamantly opposed the bill or underlined the unavoidably negative impacts on energy prices, food, consumer goods, and employment.
Chairman Pauken noted the urgent need of federal policies “designed to encourage capital investment and create jobs in the private sector… Government cannot create jobs; only the private sector can. Waxman/Markey will kill more jobs than it creates.”
The state leaders who participated in this cap-and-trade summit should be saluted for their courage and candor. Texas leadership provided an informed and unified stand against Waxman/Markey as a Texas job killer with no measurable environmental benefits. Bravo!
During Mississippi Governor Haley Barbour’s remarks at the Texas Public Policy Foundation’s 20th anniversary gala, he highlighted how Mississippi has relied on many of the same policies as Texas – principally, low taxes, limited spending, and tort reform – to enhance its competitiveness. Interestingly, under the Barbour administration, Mississippi has also progressed on criminal justice reform.
Barbour signed the Mississippi Juvenile Justice Reform Act, which parallels many of the policies Texas has implemented in the last few years. The Act emphasizes less expensive community-based alternatives to incarceration and vocational programs that redirect youths from crime into the workforce. Just as legislation passed in 2007 in Texas disallowed misdemeanors from being incarcerated at the Texas Youth Commission, the Mississippi law prohibited the incarceration of status offenders. This refers to conduct, such as possession of alcohol, that is a crime only because it is committed by a minor.
Over the last two years, changes in administrative polices have reduced the number of Mississippi prisoners in solitary confinement from more than 1,000 to 130. This lowers costs because less space is required when there are two prisoners to a cell and there is a reduced need for prison guard time. When an inmate is in solitary confinement, a prison guard must transport each inmate individually from their cell to meals and the restroom.
More importantly, a study of Washington state inmates found that those released to the public from solitary confinement, controlling for all other factors, had a significantly higher recidivism rate. In Texas, as in many other states, inmates in solitary confinement are not eligible for educational or vocational programs, but simply sit in their cell for 23 hours a day.
Texas has approximately 10,000 inmates in solitary confinement and more than 1,000 are released directly from solitary confinement. A key component of the new policy on solitary confinement in Mississippi is precise criteria for what behavior justifies entry into solitary confinement and exit form it. In Texas, many inmates are placed in solitary confinement simply for alleged gang membership, even though they have not misbehaved in prison.
If Texas adopted the Mississippi approach and achieved even a more modest reduction in solitary confinement, it could save millions of dollars by closing a prison unit or a wing of a unit.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
A new report by Dr. Brian Ray of the National Home Education Research Institute finds that homeschooled students perform much better academically than public school students for less money and without certified teachers. This should broaden the appeal of homeschooling to more families.
The homeschooling movement is growing. Ten years ago, roughly 850,000 students were homeschooled. Today that number has grown to as much as 1.5 million to 2 million students.
How is it possible to learn without a certified teacher? Dr. Ray’s research of more than 11,000 families in all 50 states (and even Guam and Puerto Rico) finds that there is no correlation between a certified parent and higher test scores. In fact, he finds slightly higher test scores for students if neither parent had ever had a teaching certificate than if one or both parents were certified.
How much better are homeschoolers academically? Homeschooled students performed 34 to 39 percentile points higher than public school students in all core subject areas.
What does it cost to homeschool? Homeschool families typically spend between $400 and $599 per child whereas the average per student cost in public schools nationwide is $9,963.
What does a typical family that homeschools look like? Usually, the parents are married with an average of 3.5 children, and have a median family income between $75k and $80k. This figure is similar to the nationwide median of $79k for married couples with kids. About 20% of mothers work outside the home in mostly part-time positions. Most families are Protestant (82.4%) or Roman Catholic (12.4%). In addition, the parents are well educated. Ray found 62% of the mothers and 66% of the fathers have a bachelor’s degree or more advanced degree.
Obviously, homeschooling is working for these kids. By reducing property taxes, local officials will inevitably make it easier for more students to have this opportunity.
A new poll confirms a marketing problem between the charter school movement and the average Joe. Most Americans are quite confused and some are just wrong regarding characteristics of charter schools.
Charter schools are PUBLIC SCHOOLS. They cannot teach religion, charge tuition, or be selective in their admissions policy. For more information on what a charter school looks like, please refer to our Charter School Q&A and share it with others. Charter schools have quite a mountain to climb to make sure parents truly understand the structure, laws, and benefits of charter schools.
Lately, politicians have been promising more health insurance coverage for everyone. That sounds terrific, and I wish it were possible, but let’s stop and think about this promise for a second.
In an ABC News special, John Stossel does just that. He points out that “health insurance means someone else pays your bills, and when that happens...patients don’t care what things cost. And if someone else is paying for it, who cares how much it costs?”
And that’s the problem. Stossel explains this economic concept using hypothetical “grocery insurance” as an example.
What would happen if a third-party paid for your groceries? John Mackey of Whole Foods explains, “[Consumers would] buy a lot more. Instead of buying a bottle of wine for $7.99 they’d buy a bottle of wine for 300 dollars.”
Does this economic theoretical transfer into real life? It does, and one can look to medical services not covered by insurance as proof.
Insurance doesn’t pay for Lasik, and guess what – Lasik keeps getting cheaper! The price of Lasik has gone down thirty percent because without insurance, people shop around to get the best deal. One doctor says of the procedure, “I can’t get away with not telling the patients how much exactly it’s going to cost. No one would put up with it.”
Insurance was designed to cover major health emergencies, but now it covers many things. Things like in-vitro fertilization in some states and breast reconstruction in others. Some states even require insurance companies to cover marriage therapists and smoking cessation programs. That’s right: single, non-smoker males are required to pay for these things in some states.
Expanding health insurance won’t solve our nation’s health care system shortcomings as some policymakers suggest. It will only exacerbate the problems we have now.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Indiana recently became the 10th state to pass an education tax credit program, with a total of 14 education tax credit programs operating across the country.
Education tax credits allow individuals and corporations to receive a tax break when they spend money on educational expenses, like tuition, books, or lab materials. Depending on the state, individuals may receive a tax credit for money they spend on their own children or for donating to organizations that give scholarships to low- or middle-income students. Companies can often make similar donations.
The program details:
• Individuals and corporations can donate to scholarship granting organizations (SGO’s).
• The program will allow up to $2.5 million annually in tax credits.
• Tax credits can be claimed in an amount up to 50% of the tax liability.
Several individuals and organizations, like the Friedman Foundation for Educational Choice, supported a tax credit program in Indiana. The Orthodox Union, Agudath Israel, and the Indiana Catholic Conference, among others, also lauded the opportunity the program gives their members to send their children to private schools. Governor Mitch Daniels spearheaded the movement, including it in the budget proposal when he called the special session.
This program is small (especially compared to the $118 million cap for the Florida corporate tax credit program) and will hopefully be expanded quickly. Additionally, a dollar-for-dollar tax credit would encourage more donations for well-deserving students.
Nevertheless, Indiana has taken a solid step toward promoting greater competition in its K-12 school system. The same cannot be said for Texas. Texas lawmakers should study education tax credits during the interim and implement a broad-based program during the next legislative session.
A recent article in the New Yorker investigates the practice of paying teachers to do nothing all day and sit in a “rubber room.” New York City has 7 rubber rooms occupied by about 600 teachers accused of misconduct or incompetence. The average length of stay in a NYC rubber room is three years, costing taxpayers hundreds of thousands of dollars in salaries and pension benefits per teacher to keep them away from students.
What is this all about? Union requirements and job security for teachers.
After just three years of teaching, public schoolteachers are granted tenure and essentially guaranteed a job for the rest of their career. Burdensome documentation requirements, red tape, local politics, and multiple levels of appeal make it next to impossible for principals and superintendents to dismiss a teacher for poor performance, incompetence, or misconduct. A group in Colorado charted out all the steps to fire a bad teacher. This is mind numbing considering that research conclusively finds that having an excellent teacher for three years can be path to erasing the achievement gap for poor and minority students.
In Texas, many school districts dismiss less than 1% of teachers per year, compared to a 16% dismissal rate in the private sector. Over a five-year time period, Arlington ISD only dismissed two teachers out of the more than 4,000 teachers employed in the district. A large school district in Houston, Cy-Fair ISD, dismissed one teacher out of more than 5,200 employed at the district over five years – a dismissal rate of 0.01% per year. Public school districts across the state show a similar pattern. Clearly it is not easy or politically palatable to fire bad teachers.
But, the tide may be turning. U.S. Education Secretary Arne Duncan is pushing back on rigid teacher tenure rules. He recently told the largest teacher union, the National Education Association, that when the tenure system keeps an ineffective teacher in the classroom, “the system is protecting jobs rather than children.”
Good luck, Mr. Duncan. You will have quite a fight on your hands.
It looks like Xtreme Power, the Kyle-based manufacturer of state-of-the-art batteries for storing renewable energy, is close to expanding its manufacturing capacity by locating a new plant in Michigan. It is moving its manufacturing facilities north to take advantage of Michigan’s offer of mega-subsidies, even though Texas has an ownership stake in the company through the Governor’s Emerging Technology Fund. This is an excellent case study on several fronts.
First, real economic development. Texas gave the company $2 million of seed money to get started here a few years back. I don’t agree with that, but it is small change compared to the $1 billion or so that is being used to lure them to Michigan. Lesson: Keep your taxes and regulations low and companies will move and stay here with little or no taxpayer dollars needed. Keep taxes and regulations high and you’ll need to drain taxpayers’ wallets to lure companies to your state to replace the jobs lost from the companies that have moved to other states—like Texas!
Second, renewable energy. This just shows how uncompetitive wind energy really is compared to coal, nuclear, and natural gas. This company is going to get a billion dollars in government subsidies to build batteries to store electricity from wind turbines. Maybe, just maybe, that billion dollars—along with the per-kWh and REC subsidies—will allow wind-generated electricity to be competitive with electricity generated from traditional sources. That all depends on if the batteries work and can actually store enough electricity to make the wind system reliable.
Third, government ownership of private companies. I suppose we can’t complain about Texas having a 4% stake in the billion dollars worth of subsidies from Michigan and the feds. But do we really want Texas to own Xtreme Power, any more than we want the feds to own GM? Seems like we are doing well enough with getting and keeping businesses here without becoming shareholders. And how about we cut taxes for everyone by $2 million rather than giving that cash to one business—that then picks up and moves to Michigan!
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Dr. Richard Vedder, a TPPF Senior Fellow, recently appeared on Reason.TV to answer the question, “Why does college cost so much?” His answer: too much government interference in the higher education marketplace.
“It takes a larger percentage of a family’s income to go to college today than it did 30, 40, 50 years ago,” Vedder explained. This has occurred despite government policies aimed at making college more affordable.
Government policies, despite their good intentions, have resulted in the opposite of their desired effect because they have increased demand for higher education. In a free marketplace, supply would go up to counteract this, but in higher education, it is almost impossible for new suppliers to enter the marketplace because of excessive regulations and an overly burdensome accreditation process. Not to mention that government subsidizes public universities but not new for-profit colleges; it’s hard to survive when your competition receives government funds.
Sound familiar? This is similar to the approach the government is taking to “fix” health care. Once again, those in power have failed to learn from economic history. If they had looked, they would find that these anti-market policies have failed across the board, especially in higher education.
In fact, tuition costs have increased twice the rate of inflation for the past 30 to 40 years. That’s faster than the rate of inflation for medical costs! Now, President Obama wants to make Pell Grants an entitlement of sorts, as he thinks this will make college more affordable.
We have seen the consequences of expanding government’s role in higher education. It has only made things worse. In an effort to fix the problem, what is government doing? Expanding the government’s role in the higher education market even more! That’s government for you.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
How many U.S. Congressmen and American voters have read all of the 1,480-page global warming bill that passed the U.S. House of Representatives June 26 by seven votes? An extremely small group, I suppose. Usually labeled the “cap and trade” bill, the official name is the American Clean Energy and Security Act (ACES). The provisions on carbon caps cover only 400 pages of the text.
This massive bill was rushed through the House floor in less than six hours. Many members had not seen a 300-page amendment supposedly “available” at 3:00 a.m. on the day of passage. And many congressmen chuckled when asked if they read the bill or have a clear idea of the basic contents. Those laughing included the bill’s architect and author, Congressman Henry Waxman.
American voters should declare this attitude totally unacceptable lest this year’s pattern – overnight passage of trillion-dollar, thousand-page bills – becomes the norm.
Now in the U.S. Senate, ACES not only mandates aggressive carbon caps which will drive up the cost of fuel, electricity and basic goods, but also thousands of other dictates creating an unprecedented expansion of the federal government’s control of energy production and use. A senior lawyer for the Sierra Club referred to ACES as the most complex legislation in U.S. history. And elected representatives find actually reading such a monumental bill a joke?
Public discussion of health care reform has overshadowed needed attention to the global warming bill. The juggernaut that is ACES, however, begs for the light of day. If reading through the 1,480 pages of ACES is beyond the pale for most, consider a meaningful alternative. Look through the 10-page table of contents of ACES, available on the Government Printing Office website. It is perfect summer reading material: a template for EPA assisted living with rules to direct every moment of individual life. Forget the espionage thrillers. A cursory scan of the more than 500 section titles of ACES is an eye-opener and a jaw-dropper all in one.
Wednesday was Cost of Government Day—the day when the average American is finally finished working to pay all the costs of taxes and government regulation.
According to Americans for Tax Reform, this year is the latest that the COGD has ever occurred, falling 26 days later than last year, and 23 days later than the previous all-time high of July 20, 1982. Two big reasons for the late date are the stimulus packages (both Bush’s and Obama’s) and bailouts for the Big Three automakers.
It is interesting to note that Tax Freedom Day this year was April 13, eight days earlier than last year. Why was it earlier? Well, one reason was that the recession has cut government income more than it has our income. But another reason was that the stimulus packages contained tax cuts! So what the government gave us earlier this year through the tax cuts they more than took away through the larger spending in the stimulus package.
Finally, while we worked 103 days on average this year to pay our taxes, Americans actually worked more—104 days—to pay the costs that government regulation imposes on the economy. This may be the first time that this has happened.
It may not be the last if pending legislation to regulate health care and carbon emissions passes Congress this year. But there is still hope that these bills will get bogged down amidst the ongoing citizen protests.
As I alluded to last Friday, KIPP is radically different than the traditional one-size-fits all school. KIPP schools have a common set of values know as the Five Pillars: High Expectations, Choice & Commitment, More Time, Power to Lead, and Focus on Results. Here are some examples of differences between traditional public schools and KIPP. (Disclaimer: These are my initial observations and not an exhaustive list.)
• High Expectations for EVERY student
o Strong college-going culture
o College pennants decorate the walls and classrooms
o College Field Trips
o Solid, Rigorous curriculum including Algebra in 7th grade
o Consistent Discipline standards
o Positive Rewards such as Out-of-Town Field Trips
• More Time for Instruction
o Longer School Day (9 hours)
o Summer School
o Saturday School (every other week)
• Enthusiastic and Hard Working Teachers
o Work longer hours than traditional teachers
o Willing to do whatever it takes to help students succeed
o Able to be creative and experiment in the classroom
o Make home visits to every student’s home
o Available at night to answer students’ phone calls regarding homework
• Principals are Truly School Leaders
o Have the power to hire and fire teachers
o Set salaries of teachers
o Have control over their schools’ budgets
As KIPP charter schools continue to succeed and expand – they hope to have 100 schools by 2011 and serve approximately 40,000 students – I hope traditional public schools will take some plays out of the KIPP playbook and implement some of these strategies in their classrooms. One important lesson KIPP has taught all of us is that thinking “outside the box,” trying new things, and innovating can lead to amazing results.
Thankfully, the public has been focused on the terrible health care proposals coming out of Washington for the past several weeks. Unfortunately, that preoccupation is allowing some other bad bills to slip through the process largely unnoticed.
One example: the Student Aid and Fiscal Responsibility Act. This blog post from the Cato Institute summarizes the bill and its problems quite nicely.
Referring to the legislation, President Obama said, "Not since the passage of the original GI Bill… have we taken such a historic step on behalf of community colleges in America. And let me be clear: we pay for this plan by ending the wasteful subsidies we currently provide to banks and private lenders for student loans, which will save tens of billions of dollars over the next 10 years. Instead of lining the pockets of special interests, it's time this money went toward the interest of higher education in America."
The bill would:
• end federally backed student loans that come through private companies, and instead make Uncle Sam the universal lender;
• greatly increase Pell Grants and peg their growth to the rate of inflation plus 1 point;
• balloon the federal Perkins loan program;
• authorize $5 billion over two years for elementary and secondary school facility projects, with a focus on “green” efforts;
• authorize $10 billion over ten years for Early Learning Challenge Grants; and
• provide $12 billion to community colleges.
Now, to be fair, the legislation isn’t all bad since it could save some money (although not nearly as much as the President claims). However, only $10 billion of the estimated $87 billion in savings will go towards deficit reduction. With the rest, politicians will do with it what they do best – spend! There are also no incentives for schools and colleges to actually improve their product. Essentially, they get access to millions with no standards.
Politicians regularly claim more money is the solution for higher education problems; that is simply not the case. This bill is just another example of government hand outs with no precautions to ensure taxpayer dollars are used appropriately and produce the desired results.
Yesterday, Dr. Arthur Laffer appeared on several media outlets to promote the report he produced for the Texas Public Policy Foundation, “The Prognosis for National Health Insurance.” While most of the coverage has been positive and fact-based, one of his interviews has been mischaracterized by some to imply he does not understand that Medicare and Medicaid are government programs.
One such example of this appearing online:
Economist Laffer on CNN: "[J]ust wait till you see Medicare, Medicaid ... done by the government"
What Dr. Laffer actually said on CNN:
“I mean, if you look at the unfunded liabilities of Medicare and Medicaid and the projections going out as to what these costs will be, I think she’s grossly underestimating the type of costs you’re gonna see from these programs. I mean, if…if you like the post office and the Department of Motor Vehicles, and you think they’re run well, just wait till you see Medicare, Medicaid, and health care done by the government. I mean, the single provider I think is a real problem Judy, and I know we have a disagreement here, but…”
When taken in context with his repeated references to government programs like Medicare and Medicaid throughout the interview, as well as throughout the report, this mischaracterization is extremely unfortunate.
The Texas Public Policy Foundation commissioned Dr. Laffer’s report to start a fact-based dialogue about effective health care reform. We believe that current health care reform proposals currently being considered in the House and Senate not only fail to solve the crisis, they worsen it. Dr. Laffer’s research clearly points out several indisputable facts that the current proposals based on President Obama’s policies would:
• add $285 billion to the federal deficit by 2019;
• increase national health care expenditures by an additional 8.9 percent;
• raise medical price inflation 5.2 percent above what it would have been otherwise;
• slow U.S. economic growth in 2019 by 4.9 percent less than doing nothing;
• impose an additional $4,354 financial burden on every man, woman, and child in the U.S.; and
• still leave 30 million Americans uninsured.
Jay Matthews’ new book, Work Hard. Be Nice., tells the inspiring story of two young teachers’ struggle to create a new type of public school that challenges traditional notions and strives to prepare all students – regardless of their background, income level, and ethnicity – for success in college and life.
In 1994, after teaching for two years in the Houston Independent School District, Mike Feinberg and Dave Levin (former Teach for America alums) started a school for 5th graders in inner-city Houston.
Feinberg and Levin named the school KIPP (Knowledge is Power Program). They got the idea for the name from a chant they learned from their mentor Harriett Ball.
Read, Baby, Read
You gotta read, baby, read.
You gotta read, baby, read.
The more you read, the more you know, ‘Cause knowledge is power,
Power is money, and
I want it.
How are these schools so different? They hire smart, enthusiastic teachers. They have extremely high expectations for their students. They spend more time on instruction through a longer school day and longer school year. The teachers work hard and expect their students to work hard and do their homework. They expect students to call their teachers at night at home if they have questions about their homework. They give their principals the ability to lead the school. They get to know the parents through home visits.
This grand experiment called KIPP has turned into a network of 82 schools spanning 19 states and the District of Columbia serving more than 20,000 students. According to KIPP’s 2008 report, more than 95% of their students are African American or Hispanic, more than 80% are poor (as determined by their eligibility for the school lunch program), and yet 85% matriculate to college (compared to 40% of low-income students matriculating to college nationwide).
While KIPP is an open-enrollment charter school, traditional public schools can adopt many of these “best practices” without having to convert to a charter school. With so much riding on the quality of our education system, I hope traditional public schools will be open to trying new things. This has been a recipe for success for KIPP.
Having a master’s degree does not necessarily make a teacher a better teacher. In fact, research clearly finds that possession of an advanced degree has absolutely no correlation to higher teacher effectiveness or student achievement. Our white paper on teacher compensation discusses this misconception.
Here are a couple of remarkable facts. Ninety percent of teacher’s master degrees are in education programs (not the subject area they teach). Most school districts give teachers a financial incentive to attain a master’s degree and thus, it should not surprise us that master’s degrees in education had the highest growth rate of all master’s degrees between 1997 and 2007.
In Texas, 27% of teachers have a master’s degree and, as a result, receive an extra $1,423 per year on average. This equals more than $124.5 million spent on an outdated method of compensation that has no bearing on increasing learning in the classroom!
During this recession, school leaders are likely looking for easy ways to cut their school budgets without hurting students. Here is an easy thing to cut for all new teachers hired and phased out over time for current teachers.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
On Thursday, internationally renowned economist Dr. Arthur Laffer appeared on Bloomberg News to discuss his report for the Texas Public Policy Foundation, “The Prognosis for National Health Insurance.” You can watch the interview below.
Today, the Texas Public Policy Foundation released a report by internationally renowned economist Dr. Arthur Laffer, "The Prognosis for National Health Insurance." He debuted the report this morning with a live interview on CNBC's "Squawk on the Street," which you can watch below.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Over the weekend, House Judiciary Chairman John Conyers mocked the suggestion that congressmen should read the pending federal health care legislation.
“What good is reading the bill if it’s 1,000 pages and you don’t have two days and two lawyers to find out what it means after you read the bill?” he said.
Oops...a congressman accidentally slipped and told the American people something we already suspected: the people we elect don’t even read, much less understand, the bills they write and pass into law.
Put another way, Congress has written and expects the American people to obey the law; yet an elected representative in favor of the law doesn’t even understand it and refuses to even entertain the thought of reading it. There are almost no words.
Clearly, Mr. Conyers is uninformed about the values upon which our government system is founded. We elect our congressmen to make governing decisions on our behalf, and we expect those decisions to be based on sound judgment and the best and most thorough information available.
And while the congressman’s remark is certainly startling, he also unintentionally brings up some important points. Why does a bill even need to be 1,000 pages long, and why does a member of Congress need help from two lawyers just to understand the bill’s language?
Let’s simplify health care, not pass laws so complex that even our society’s so-called elite can’t understand.
A majority of economists believe the United States does not need a second stimulus package, according to a new poll from the Wall Street Journal.
In the survey, 43 of the 51 economists rejected calls for another round of government stimulus, with one person commenting that it would be “dangerous to pile on more federal debt atop a mountain of debt.”
Other reasons cited against a stimulus 2.0 had to do with concerns over pork-barrel spending and the fact that very few of the funds from the first $787 billion stimulus had been spent so far.
The poll’s results also revealed misgivings many of these academics have with the federal government’s first Keynesian attempt to fix the economy.
Nearly half of those surveyed thought that the first $787 billion stimulus package had only a small effect or hurt the economy – not exactly the responses our nation’s leaders should be looking for after passing the largest fiscal stimulus in U.S. history.
Whether or not the WSJ poll has any impact on Congress’ erratic reasoning is hard to say. But if anything, it reinforces the message that large groups of economists wholeheartedly disagree with this administration’s fiscal approach.
The Texas Department of Criminal Justice (TDCJ) has announced it will end its contracts for 1,899 temporary beds at privately-operated county jails. At a rate of $41.48 per day, this will save taxpayers $28.8 million per year.
This still leaves TDCJ with 156,641 beds, and Texas with the nation’s second highest incarceration rate. Nonetheless, this is a significant victory for taxpayers and a product of criminal justice reforms that have redirected nonviolent offenders from prison. Indeed, this eventuality was unthinkable in early 2007, when the state was projected to need an additional 17,000 prison beds.
It is important to note that this transformation of Texas criminal justice was achieved without shortening sentences for any offenses. Judges were given more options such as shorter-term treatment facilities but offenders could still be sent to prison. Additionally, the Texas crime rate declined in 2008.
Since the contract facilities were county jails, they were designed for short stays, not the prison population they were being used to house. Accordingly, the temporary contract beds do not offer the same programming as the regular privately operated beds within the system.
It is always possible TDCJ will need to restart the contract, particularly if the economic downturn continues. Crime has increased in every recession since the late 1950’s. However, the Legislative Budget Board projected in January 2009 that, due primarily to reforms enacted in 2007, the demand for prison beds would not exceed TDCJ’s regular capacity until 2013.
The uncertainty in the demand for prisons illustrates the benefit of using private lockups versus building new prisons. Not only does a prison require the state to invest tens to hundreds of millions of dollars in capital, government-run prisons are politically difficult to close.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
William F. Buckley Jr.’s first book, God and Man at Yale, examined the anti-Christian and anti-capitalist mindset which, even in 1951, was pervasive among the Yale University faculty. The book caused quite a bit of controversy—not because it wasn’t true, but because the radical liberals/socialists/communists in American academia and other institutions (the press, government, etc.) were not prepared to be exposed in a country that was so traditionally-minded.
Today, we’ve come to a place where the radicals no longer mind being exposed. In fact, they live out in the open!
Now, there is nothing wrong with folks living as they please and expressing their opinions. The problem, of course, is that society is so accepting of some of these radical opinions today that we are paying to support them with our tax dollars just about everywhere we turn in academia, government, etc.
One such person espousing a radical economic/political philosophy today is John E. Roemer, Professor of Political Science/Economics, Yale University. The essence of his argument is that pure Marxism, i.e., communism, is not enough to bring equality to the masses. Under Marxism, Roemer says, equality is achieved through the “distribution of output in proportion to the value of labor performed.” Traditionally, the way to achieve this is to eliminate private property and to make all property public so that the government can then distribute profits according to the “value of labor performed.”
However, Roemer says that if we did this today, it would still result in an undesirable distribution of income, because of the unequal distribution of skills caused by our present capitalist system. But after a while, he says, the distribution of skills would start to become more equitable under socialism, as long as under socialism there was included “some kind of equal-opportunity educational system.”
However, even then, Roemer writes, “equality of opportunity may not be enough. Imagine that the distribution of innate talents is such that an equal-opportunity educational system would still engender a great deal of income inequality. Many would still advocate redistributive taxation, justifiable under the Rawlsian construal that the distribution of talents is morally arbitrary.”
So here we come to the bottom line. Marxism just isn’t good enough, because innate differences among individuals (of course, this begs the question of how the distribution of talents came to be in the first place—a discussion for another time) results in unequal distribution of wealth. So even in the most socialist of countries, the government will still have to actively redistribute property/income on a real time basis to bring about true equality.
Combating this type of belief system, and its imposition on us through the power of the sword by government, is just one of the reasons we do what we do here at the Foundation.
The Waxman-Markey bill has been the cause of a great deal of justified alarm about its potential threat to the American economy and future prosperity. If passed, the bill will create a cap-and-trade system regulating the amount of carbon dioxide that can be legally emitted by US producers each year. This system will not only impose huge costs on the American economy, but will also have a virtually insignificant effect on carbon dioxide emissions. On Sunday, the San Antonio Express-News criticized the cap-and-trade bill as flawed. But even if it is defeated in the Senate, there will still be many battles to come in the judicial and administrative spheres.
In 2007, the Supreme Court held in Massachusetts v. EPA that the EPA has statutory authority to regulate greenhouse gas emissions (GHGs) from new motor vehicles. Beyond that, it held that EPA must regulate those emissions unless it determines that GHGs are not a contributing factor to climate change or provides a reasonable explanation as to why it will not make this determination. Of course, EPA had done just that: it said in a 2001 National Resources Council Report that the scientific uncertainty was too profound to make a reasoned judgment about the contribution of GHGs to global warming. Unfortunately, because that was not the reasonable explanation the Court wanted to hear, it was deemed insufficient.
This case symbolized a massive usurpation of administrative discretion by the Court: rather than defer to the agency’s reasonable judgment, as it traditionally does, the Court substituted its own inexpert judgment for the EPA’s and overstepped its boundaries. The Court was inappropriately involved in this case because Massachusetts and its co-litigants did not have proper standing to be heard in court. The doctrine of standing is meant to prevent the courts from becoming an arena for political decisions; it ensures that the parties involved in the case are at risk of a particular injury and that the remedy they seek will directly address that injury. Otherwise, anybody can sue in court for anything, which is precisely what happened here.
In response to the Court’s ruling, EPA has made the determination that CO2 is a pollutant that poses a risk to human health and welfare. This Endangerment Finding subjects CO2 to regulation under the mammoth Clean Air Act. Now that this finding is in place, the Court will almost certainly find itself involved in the myriad of legal questions that will arise if EPA attempts to apply the ill-fitted Clean Air Act to CO2 regulation. By involving itself in what is fundamentally a political dispute, reserved for the legislative branch, the Court injected itself into the middle of the GHG debate – and will likely be there for decades to come.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
How do you know teachers will be successful before you’ve seen them teach? Malcolm Gladwell, author of the best sellers Tipping Point, Blink, and Outliers, delves into this question in his article, “Most Likely to Succeed.” He points to the “quarterback problem” –neither the NFL nor a school district knows for sure how their recruits will perform until they see them in action.
Isn’t that the truth? And as schools struggle, it becomes increasingly important for school districts to hire quality teachers. In fact, research identifies the teacher as the most important school-related factor in raising student achievement. Gladwell emphasizes that students in a “bad” school with an “excellent” teacher are better off than students in an “excellent” school with a “bad” teacher. He highlights qualities of excellent teachers like making the lessons understandable and energizing the class. Conversely, the school system harps on certification and advanced degrees, indicators that research has proven unreliable.
What does a good teacher look like? They are smart. According to research from the National Council on Teacher Quality, teachers with strong literacy skills as identified by high SAT, ACT, or GRE verbal scores are more likely to produce large gains in student achievement. In addition, the selectivity of a teacher’s college is also significant as “students make greater learning gains if their teachers attended a selective college.”
To find these great teachers, Gladwell recommends that the teaching field “throw the door wide open” to all college-educated candidates. From this large pool, schools could select candidates and send them to a training camp. They could offer positions only to the most successful. Tenure wouldn’t be rewarded, and teachers would be paid competitively.
While these suggestions may sound revolutionary, they are just plain common sense. Shouldn’t schools want to select the best candidates and observe the teachers’ work before putting them in the classroom? Injecting the teaching profession with some competition might not only encourage “good” teachers to stay in the profession, but it would also likely improve student performance, a result that everyone can agree is “excellent.”
Some of the cost savings that universities in other states have implemented:
• The University of Washington got rid of landlines, saving more than $1,000 a month.
• The University of North Carolina at Chapel Hill canceled their traditional bus tour of the state for new faculty members because “in a recession, people don’t want to see 100 faculty members traveling around and staying in hotels.”
• Oberlin College in Ohio reduced window washing and saved $22,300.
• Whittier College in California cut one day of its new-student orientation, saving $50,000.
• Cafeterias, too, are saving money, cutting food waste and reducing hot-water and detergent costs by eliminating trays. Whittier College saved almost $30,000 a semester after going fully “trayless.”
• Cornell College in Mount Vernon, Iowa, estimates that it saved $40,000 by not replacing old voicemail equipment.
• Rhodes College in Memphis hired students for 25 professional staff positions, saving $725,000 a year…and giving those students valuable work experience.
• Other schools have pruned their expenses by reducing paper usage by posting materials online, cutting back on power washing, switching trash pickup from daily to weekly, increasing teacher course loads, switching from bottled to tap water, relying more on videoconferences than travel, and rebuilding computers instead of buying new ones, etc.
Revenue-strapped universities in Texas should consider these opportunities, if they have not done so already. With tuition increasing dramatically in the past several years, and universities making announcements that further tuition increases are coming, they owe it to the students and taxpayers to streamline their operating expenses first.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
“Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children’s children what it was once like in the United States where men were free.”
I’ve often heard that quote from the late President Ronald Reagan, but never have they seemed as clear as they do now.
Almost on a daily basis, we’re bombarded with startling new reports about the erosion of our individual liberties. From the freedom of assembly to protections against unreasonable search and seizure to our right to keep and bear arms, every area of individual liberty seems to be under attack from the Nanny State.
The attacks on our freedom don’t stop there.
Congress is now considering a number of different proposals that pose a very real danger to all of our economic, political, and social freedoms. These proposals include:
• The cap-and-trade bill would limit emissions from certain industries and create a scheme where many companies would have to purchase carbon permits. These costs would ultimately be passed on to the consumer. The measure has been called “the biggest tax in American history.”
• Sweeping health care legislation which would provide for an effective government takeover of our health care system, at a 10-year cost of well over $1 trillion.
• The Clean Water Restoration Act would expand the scope of the Clean Water Act to allow federal regulators to dictate the use of any land with even the slightest amount of water on it. The Heritage Foundation has said it represents “the most dangerous federal intrusion on private property rights in existence.”
Needless to say, the escalation of intrusive behavior by the government, particularly at the federal level, into the lives of private citizens is happening at an alarming rate.
With Independence Day coming up this weekend, I hope that we all take a moment to consider how severely our freedoms are being eroded by an overreaching national government.
Despite tough economic conditions for students and parents, University of Houston System regents recently voted to raise tuition at all four of its campuses beginning next fall.
Not surprisingly, UH officials claim they have done everything possible to cut costs. However, students don’t seem to agree with that assessment. They presented regents with alternatives, including freezing faculty salaries.
When asked how much staff the system was willing to let go, the administrator of finance said it would be less than one percent.
Regents did express sympathy for students but maintained they couldn’t manage the loss of revenue during a time when the university was striving to become a tier-1 research institution. This excuse begs the question: should research be the top priority at UH when it requires raising tuition during the worst recession our country has seen in decades?
One student had it exactly right when he told the regents who would be voting on the increase, “In the real world, this business model would not happen. When revenue is low, businesses don’t raise prices.”
In making this observation, the student brings up an important point, intentionally or not. The higher education market lacks sufficient competition. If universities operated under a free-market model, they would have scrubbed down every aspect of their operations before asking their customers to pay higher prices.
Free markets have a funny way of forcing businesses to re-prioritize during economic hard times. The same cannot be said for government agencies because they have the luxury of asking for more money. The Foundation’s higher education reforms would help infuse competition into the higher education market, keeping costs under control and quality high.
A Zogby poll commissioned by the National Council on Crime and Delinquency reveals strong public support for alternatives to incarceration for nonviolent offenders. The poll, which was released earlier this month, finds 77 percent of those surveyed believe the most appropriate sentence for non-violent, non-serious offenders is supervised probation, restitution, community service, and/or rehabilitative services with prison or jail as an option if the offender fails. Non-violent, non-serious crimes are defined in the survey as those offenses that do not involve violence and sex and where the loss is $400 or less.
Some 68 percent of respondents felt that incarceration is only sometimes, rarely, or never necessary for drug possession cases where the offender is not involved in selling drugs. Only 30 percent believed that incarceration is usually or always necessary in such cases. In regard to disturbing the peace or loitering, 52 percent of respondents said incarceration is never necessary, with an additional 34 percent believing it is only rarely or sometimes necessary. Similarly, only 21 percent of those surveyed believed incarceration is usually or always necessary for public drunkenness.
In another question, more than 55 percent of respondents thought that alternatives to prison reduce costs to state and local governments. They are quite correct, as in Texas the cost of prison (including health care) is $56.10, compared with $1.24 per day for the share of probation costs borne by taxpayers. Those surveyed were surprisingly aware of various alternatives to incarceration, with 94 percent familiar with house arrest, 92 percent familiar with electronic monitoring, and 79 percent familiar with restorative justice.
Some 54 percent of respondents believed that serving time in prison or jail does not reduce the likelihood that a person will commit a crime in the future. Among those surveyed, 45 percent believed that alternatives to incarceration are effective at reducing recidivism compared to 38 percent who thought the same about prison or jail time.
In sum, these results are important because they demonstrate that the public recognizes the benefits of alternatives to incarceration for non-violent offenders, particularly at a time when local and state budgets are tight and correctional spending has surged in recent years.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
The Equity Project, a new charter school in New York City, will open this fall, according to a recent New York Times article. The charter school conducted a nationwide search to hire America’s finest teachers and hired eight teachers, including two Ivy League graduates. They will assume responsibilities traditionally covered by other staff members and will work a longer school day and year. The price for their expected success: $125,000 a year.
It is possible that many bright and qualified individuals would leave the private sector to teach with that type of salary. With the average teacher in Texas making about $47,000, this would be quite a raise.
Texas has the largest teacher incentive pay system in the country, and numerous school districts here reward teachers who perform well. Unfortunately, most school districts continue to pay teachers with a salary schedule that rewards seniority over merit, consuming enormous amounts of resources and restricting the their ability to offer more competitive wages to attract the best and brightest.
Michelle Rhee, chancellor of Washington, D.C., schools, has been wrestling with the teachers’ union for months to implement a contract that would allow her to pay up to $131,000 for senior teachers while giving her more leeway in reassigning and firing teachers. No agreement has yet been reached. Stay tuned.
Why don’t school districts across the country select teachers more carefully, expect them to perform, and pay them accordingly? Maintaining the status quo is much easier than rethinking teacher compensation and trying something new. Hopefully, this “experiment” in New York City will lead to higher student achievement – and encourage more schools to pay well for proven results.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
The Texas Legislature made wise decisions on juvenile justice in the 2009 session. First, the Texas Youth Commission’s (TYC) funding was cut from $314.9 million in 2008 to $210 million per year for 2010-2011. Community-based alternatives to TYC received $60 million. The result is $44.9 million in net savings to taxpayers.
Part of these savings some from closing unnecessary TYC facilities. The 2010-2011 budget calls for the West Texas and Victory Field TYC units to be closed in 2011. Both are remotely located away from the urban areas from which most youth come.
Not only does this shifting of resources save money, research has indicated that all but the highest-risk youth are less likely to recidivate if they are kept in the community. More than 55 percent of offenders leaving TYC are rearrested within one year. In contrast, Ohio implemented a policy called RECLAIM that redirected youth from state lockups to community-based programs – these youths had a 22 percent recidivism rate.
The further downsizing of TYC continues a trend. The Texas Youth Commission held some 5,646 youth in 2000 and 4,800 youth in 2006. That declined to 3,448 in 2007 and 2,054 in April 2009. These declines are largely attributable to SB 103, passed in 2007, that prohibited misdemeanants from being placed at TYC and reduced the maximum age of TYC residents to 19 from 21. Some counties also reduced their utilization of TYC due to concerns about the abuses.
Another positive development in the 2009 session is the passage of HB 3689, the sunset bill for TYC and the Texas Juvenile Probation Commission (TJPC). One of the most important provisions requires each juvenile probation department to use a risk assessment instrument. This will enable the departments to better determine what treatment approach is most appropriate. Some adult probation departments use the results of the instrument to allocate staff, accounting for the fact that a probation officer with a higher-risk caseload may need more time per offender.
In sum, a smaller TYC and community programs that are better targeted to the individual offender will improve Texas’ juvenile justice system and enhance public safety.
In his recent National Review Online article on the federal government’s deficit spending, Rich Lowry wrote, “The same way overzealous Republicans once argued that tax cuts paid for themselves, Obama Democrats argue that deficit spending pays for itself.”
Lowry’s statement is problematic on several levels.
For one, it essentially equates tax cutting and deficit spending, abandoning the moral high ground in an attempt to come across as reasoned. Even more importantly, it misrepresents the facts. In truth, tax cuts have paid for themselves time and time again: the Harding/Coolidge, Kennedy, Reagan, and Bush tax cuts all accomplished this.
As noted in the Foundation’s Thinking Economically lesson on the Laffer Curve, “In the four years prior to the 1965 (Kennedy) tax rate cuts, federal government income tax revenue, adjusted for inflation, had increased at an average annual rate of 2.1%, while total government income tax revenue (federal plus state and local) had increased 2.6% per year. In the four years following the tax cut, these two measures of revenue growth rose to 8.6% and 9.0%, respectively. Government income tax revenue not only increased in the years following the tax cut, it increased at a much faster rate.”
People claim the early Reagan income tax cuts didn’t pay for themselves. But they compare tax revenues between 1981 and 1982 when the tax cuts didn’t take full effect until July 1983. Look at the revenue before and after the cuts had been fully implemented, and they worked. The problem with the Reagan tax cuts is that they weren’t implemented fast enough. Just as predicted, people deferred income until after the tax cuts were fully implemented, delaying the growth in tax revenues. Tax cuts generally won’t increase revenue overnight, but they will increase revenue once the economy has a chance to respond.
The one tax where cuts (or increases) affect revenues almost immediately is the capital gains tax. “Following the 1981 capital gains cut from 28% to 20%, nominal capital gains tax revenues leapt from $12.5 billion in 1980 to $18.7 billion by 1983—a 50% increase.” After the rate went back up in the late 1980s, capital gains revenue collapsed. And, once again, “in 1996, the year before the tax rate cut (back to 20%) and the last year with the 28% rate, taxes paid on assets sold totaled $66.4 billion. A year later, tax receipts jumped to $79.3 billion, and they jumped again to $89.1 billion in 1998. … Seldom in economics does real life so closely conform to theory as this capital gains example does to the Laffer Curve. Lower tax rates change people’s economic behavior and stimulate economic growth, which can create more, not less, tax revenue.”
Tax cuts won’t always increase the incentives for people to earn or recognize more income. But we are a long way from a tax rate low enough for that to be the case.
A recent study reveals some troubling information about the state of education in America.
Despite our government’s education reform efforts, the study shows American students have not improved in math, science, and reading in four decades. Alternatively, our international competitors have consistently improved test scores in each of these areas.
Another alarming statistic finds that the longer American children are in school, the further behind international students they fall. Of course, this fact speaks volumes about the quality of K-12 education in the U.S.; however, it also has major negative ramifications for institutions of higher education.
It seems that just when students are beginning their higher education is when they are the furthest behind internationally.
Because U.S. students aren’t where they need to be, other nations are taking advantage of our educational shortcomings. In fact, “In 1995, America was tied for first in college graduation rates; by 2006, this ranking had dropped to 14th.”
While one does not need a college degree to be a productive member of society, the statistics make clear that education reform efforts, both in K-12 and higher education, are generally headed in the wrong direction.
Reforms over the last 40 years such as increasing education spending are not yielding the anticipated results. In fact, the McKinsey study finds that “school spending in the U.S. is among the least cost-effective in the world.” True reformers should start looking at where the money goes and not just focus on spending more.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Amid all of the craziness at the Capitol this session, the Texas Legislature recently passed a bill that will help students have more education options than their assigned public school. This legislation is now on its way to the governor.
HB 1423 by Rep. Ryan Guillen and Sen. Florence Shapiro allows junior colleges and community colleges in Texas to open a charter school. The colleges would still have to go through a rigorous application process at the Texas Education Agency and with the State Board of Education to be approved.
Many Texas community colleges already collaborate with charter schools across the state. For example, Houston ISD and Houston Community College collaborate with two early college high schools and at an academy for international studies, while Texas State Technical College in Waco collaborates with the Rapoport Academy. See the full list on page 7 of our research on charter schools.
Senior universities already have the ability to open charter schools in Texas. Currently, the University of Texas at Austin, the University of Houston, Stephen F. Austin State University, and Texas Southern University either operate or collaborate with a charter school.
Charter schools run by senior universities are exempt from the state cap on charters of 215. This bill also exempts junior colleges and community colleges from the cap.
Charter schools are helping more than 110,000 Texas students. With this new opportunity for community colleges, imagine how many more Texas children can be helped.
Former President Ronald Reagan once quipped that, “government is like a baby: an alimentary canal with a big appetite at one end and no sense of responsibility at the other.”
Funny how true those words still are.
Bungling what could have been a defining moment of fiscal conservatism this session, the Texas Senate instead allowed the Texas Department of Transportation sunset bill House Bill 300 to sail through with revised local option transportation tax and fee language attached.
The bill, as is currently written, allows local governments to impose any combination of three new taxes and fees while requiring virtually no measurable performance objectives.
Though discouraging, the Senate’s decision is not the final say.
HB 300’s next stop – if it advances at all – is a House/Senate conference committee, where five members from each chamber will duke it out over the differences between the two versions. If common sense prevails, taxpayers may pull out a win just yet and force government to live within its means. If not, refer back to quote above.
Much of the higher education discussion this session involved HB 51, which would give more state dollars to fund university research. As far as I can tell, there hasn’t been any notable opposition except from Sen. Dan Patrick, who remarked during floor debate that research might actually harm student learning and for the legislature to keep this in mind during future debate of the issue.
Still, no legislator has asked the question: What benefit does university research (largely taxpayer funded) provide society? The answer: very little if any. Sure, there is good research, but the majority of it isn’t being produced at our state’s public universities.
Only 13% of all research occurs at universities – 87% is privately funded. It seems the government doesn’t need to fund research at all. The free market has proven that it supports private investment in worthwhile research, whereas the taxpayer funded research at our state’s universities yields poor results and shifts professor focus away from teaching.
Recent research by TPPF Senior Research Fellow Rick O’Donnell expands on the issue of university research, and the facts he lays out make a good argument against any more taxpayer investment in it.
Texas universities have invested an estimated $9 billion on scientific research in the last 10 years. The rate of return on these taxpayer research investments was just $8.3 million a year, or 0.09 percent. By any standard, that’s a poor rate of return.
Beyond being a bad investment, the emphasis on research at our universities harms student learning. In fact, the average college professor only spends 21% of his time performing teaching relating activities. The rest is spent on administrative duties and research. Imagine how much the quality of education could improve if professors spent more time focusing on educating students.
Let’s change the incentives at our public universities. Don’t increase funding for research; enact policies that will shift professors’ focus back to their original mission – educating university customers.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Early this week, a huge story broke out of the UK about how English Ministers of Parliament (MPs) have been claiming personal expenses with public dollars. Here are a few of my not-so-favorites:
* £30,000.00 (or $46,995.00) over three years for MP Sir Peter Viggers’ gardening expenses which include a duck house for his pond. Due to this find by the Telegraph UK, he will be retiring his seat in the next election.
* £100.00 ($156.55) for MP Sarah McCarthy-Fry’s hair straighteners.
* £2,200.00 ($3,446.30) for MP Douglas Hogg’s moat cleaning bill at his country home. He has agreed to repay this expense to the taxpayers.
In fact, there are several MPs who have turned in receipts and are shown to accept to repay an expense. However, no interest is said to have been collected, and who is to say that if the abuse wasn’t discovered that money would have come back at all?
Due to the fact that a private entity, the Telegraph UK, has decided to take it upon itself to investigate the expense accounts of Members of Parliament, light is finally being shown into the dark crevasses of English government so that a new culture of open, public government is to include meticulously following the money.
The British controversy only adds more fodder to the transparency cannon as governed people begin to wake up and demand to see how the officials they elect are spending the money they allocate them to spend.
Victims of the politics that eliminated the Washington, D.C., school voucher program are kids like Mercedes Campbell, a student at Georgetown Visitation Prep. After escaping the notoriously poor D.C. school district, she describes her new life in glowing terms. “I approach things differently,” she said. “It’s like a whole new world, basically.” Her mother, Ingrid, now facing the prospect of returning her child to a failing school, in an interview desperately asks President Barack Obama, “why, sir, why?”
In addition to the anecdotal stories of past success and the perilous future these children face, there now is statistical evidence from a U.S. Department of Education study that confirms the ardent enthusiasm Mercedes and her mother have for the scholarship:
• Reading achievement increased by 3.7 months of learning and math achievement was no worse for those who used scholarships.
• Parents of students offered scholarships were more likely to report that their child’s school was safer and had an orderly school climate.
Similar success has been documented in scholarship programs across the country like the Horizon school choice program.
The answer to Mrs. Campbell’s question seems to be that although the government has failed miserably for decades with public schools, it will sacrifice what definitively works for her child for the unproven contingent hope that it may find a way to fix the public schools. To this sort of hope in the unseen that doesn’t put these kids first, we must answer as USA Today did in its editorial this morning: Mercedes deserves better.
County jails cost Texas taxpayers hundreds of millions to operate and represent a quarter of most county budgets, constituting the single largest item. In considering the Jail Standards Commission sunset bill on Wednesday, it is important that the Texas House avoid further burdening taxpayers by taking into account the unnecessary costs that could be added by possible amendments.
Specifically, one anticipated amendment that failed to make it as a stand-alone bill (HB 2170) could remove discretion from the Jail Standards Commission regarding staffing ratios and make state law the 1:48 staffing ratio currently used by the commission. This would prevent the commission from granting variances where a larger ratio is compatible with safety. Modernized designs could potentially reduce the number of deputies needed to maintain a safe jail, an approach that would be precluded by this amendment. Because the amendment would require that the county budget be sufficient for a 1:48 ratio, it would invite costly litigation.
This amendment would also require that ratios be calculated for each floor of the jail, as opposed to throughout the jail. This could force many counties to increase the number of jailers. Harris County already pays $30 million in overtime to meet current staffing requirements.
Other failed proposals could be attached as amendments at great cost to taxpayers. For example, HB 1714 would have prevented county officials from contracting with private facilities, even though they are often the most efficient option and the local jail may be full. HB 3247 would preclude counties from contracting with private facilities that lack a collective bargaining agreement. At best, this would raise labor costs; at worst, if an agreement couldn’t be reached, the county would be forced either to find a more expensive way to deal with the inmates or to release dangerous inmates.
These potential amendments are solutions in search of a problem. Texas county jails, including privately operated county jails, are by definition costly to taxpayers, but they can become even more so with unnecessary legislative micromanagement.
"Lone Star Lesson" is a daily radio commentary on today's most important issues featuring Justin Keener, the Foundation's Vice President of Policy and Communications. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
I recently had the opportunity to sit down and chat with Rep. Lois Kolkhorst about her bill, HB 2504, which would improve higher education transparency.
She was spot-on in her assessment of the current transparency deficiencies at our state’s public universities. And she would know – Rep. Kolkhorst formerly chaired the education subcommittee on appropriations, which oversees all the funding to our universities.
“These are publicly funded universities, and there are complaints that we don’t give them enough money,” she said, “But I can tell you that through general appropriations and tuition from students, we are paying a lot of money to fund education.”
The truth is that there is not nearly enough transparency in higher education. Without transparency, how can we know where all our money is going? Well, we can’t.
There is not enough transparency in place to ensure universities are being held accountable for their spending. Kolkhorst’s HB 2504 could help change this, as it would require universities to post course budgets, syllabi, and curriculum vitae online.
Federal carbon cap legislation would be a $20 billion disaster for Texas, according to a new report released by ERCOT. The billions of dollars in added electricity production costs would inevitably be borne by Texas consumers, some of whom already have trouble paying the bills. ERCOT estimates that the typical consumer’s monthly bill would increase by $27 a month, or $324 annually. And this is only a partial estimate of the carbon cap’s total costs.
ERCOT then went on to make recommendations on how to mitigate some of these federally imposed costs by increasing wind energy capacity. It doesn’t necessarily follow, however, that spending billions of more dollars on costly wind projects will leave consumers better off than they are today. The Foundation found in its report on the state of wind energy that combined subsidies, tax breaks, market disruptions, and increase production costs associated with wind energy in Texas could equate to more than $4 billion per year. This more than offsets the estimated carbon cap savings of $3 billion generated by wind power.
Federal carbon legislation would impose one of the most profound, new financial burdens to electricity consumers in Texas. Residential consumers will be faced with higher monthly bills, while business owners will be faced with higher production or overhead costs. There is little doubt that Texas economy would ultimately be worse off under a carbon cap scheme. It is less clear, however, that spending additional billions in taxpayer money on costly wind subsidies will leave consumers better off.
A Legislative Update from the Texas Public Policy Foundation
Dear Friend:
Government-funded health insurance to families making as much as $66,000 per year. Medicaid eligibility expansion that will cost state taxpayers almost $300 million during the next two years. Unemployment eligibility changes that will permanently raise employer taxes by at least $75 million per year. Gasoline tax changes that could increase the taxes motorists pay by as much as 125% during the next decade. Burdensome air regulations that could stop power plant expansions and smother the state's economic growth. An expensive state grant program for full-day pre-kindergarten despite research showing no lasting benefits.
Sound like California? How about New York or Massachusetts? Sadly, that could very well be the 81st Texas Legislature's list of achievements in about three weeks.
With less than 20 days left in the legislative session, we now have a fairly representative snapshot of legislation that has an opportunity for passage. Unfortunately, taxpayers will be lucky to escape untouched, and if current momentum continues, they will be negatively affected well beyond the current national recession.
The federal government led the way by passing a spending plan so large that it crowds out the private sector and will actually cost Texas more than 130,000 jobs, according to our research. The state legislature began shortly thereafter, and gave taxpayers a glimmer of hope when the House and Senate adopted versions of the budget that appeared to reasonably hold the line on spending, coming in at just under the rate of growth for population plus inflation. Despite the use of federal stimulus money, budget writers generally limited stimulus spending to one-time expenses. But then came the tidal wave of tax-and-spend bills.
Everyone has heard the speeches and remarks from our legislators about Texas’ superior economic condition, and disparaging remarks about states that are raising taxes during a recession. But if these measures are adopted, expect Texas to join the list of states being singled out for misplaced fiscal priorities.
Thank you for your continued interest in our work. While the overall outlook for the session is grim, there have been a few modest successes, as you'll see in the items below. As always, you can review our research, testimony, commentaries, podcasts, news coverage, and blog at www.texaspolicy.com.
Yours in Liberty,
Justin Keener
Vice President of Policy and Communications
Pre-Kindergarten Expansion
Legislation to create another state grant program for pre-kindergarten passed the Texas House last week and will be considered by the Senate Education Committee on Thursday May 14th. HB 130 creates a full-day pre-K program at the cost of $25 million which will likely grow in the future. Pre-K advocates claim this program will lower crime and prison costs, as well as decrease the number of high school dropouts, saving much more taxpayer dollars than it costs. As we wrote to the legislature, research and common sense do not support these claims. Full-day pre-K programs are not more effective than half-day programs. An expensive pre-K program will do nothing to improve Texas' struggling middle schools and high schools, magically solve the dropout crisis, or save taxpayer dollars.
CHIP & Medicaid Expansion
HB 2962, which expands the Children’s Health Insurance Program (CHIP) from 200 percent to 300 percent of the Federal Poverty Level, is on the House Major State calendar tomorrow. Not only will this have a negative effect on the budget, but extending CHIP to families making up to $66,000 per year morphs the program into an expensive entitlement for the middle class. Expanding this program while 170,000 children projected to be eligible for CHIP are still not participating is a wasteful decision. Additionally, HB 2962 creates a buy-in program for families whose net income is between 300 percent and 400 percent of FPL.
Last week, the House Human Services Committee passed HB 1541, expanding eligibility for the children’s Medicaid program from six months to 12. The Legislature should resist efforts to expand this program as it was intended to provide health care to our poorest citizens, and a six-month eligibility period ensures that the services provided are to the truly needy. Increasing the continuous eligibility period will increase the number of Medicaid recipients by more than 250,000 and cost taxpayers almost $300 million in state funds over the next biennium. The 12-month eligibility proposal will be a significant burden at a time when the state needs to restrain spending ahead of a projected budget shortfall in 2011.
Eminent Domain
The U.S. Supreme Court’s infamous Kelo decision essentially changed private property ownership from a fundamental civil right to a privilege granted by the state. Almost four years later, Texans are still subject to Kelo-style takings. The Foundation’s Center for Economic Freedom just released two new bill analyses, Senate Bill 18: Texas’ Kelo Problem Still Not Solved and Eminent Domain: SJR 42, to explain why these two major eminent domain bills don’t address the main problem they were originally intended to solve, and how each can be amended to fix our state’s Kelo problem.
On the other hand, HJR 14 by Rep. Frank Corte, which just passed the Texas House, will fix Texas’ Kelo problem by allowing takings for public use “only if the taking, damage, or destruction is necessary for the elimination of urban blight on a particular parcel of property or for the possession, occupation, and enjoyment of the property by a common carrier, by an entity providing utility service, by the public at large, by the State, or by a political subdivision of the State.”
Victim-Offender Mediation
The House has passed HB 2139 to create an adult victim-offender mediation program. This is a means for the victim and offender to resolve a matter with a binding agreement for restitution. It means less government is required to do justice. Studies show victim-offender mediation reduces recidivism and improves victim satisfaction. The bill now awaits a hearing before the Senate Criminal Justice Committee.
Tollroad Transparency & Transportation Taxes
An amendment was adopted to the TxDOT sunset bill, HB 300, that made significant transparency progress for regional tollway authorities, but there is already talk around the capitol that the toll authorities are attempting to strip this provision. If this amendment stands, toll authorities will be subject to annual audits by the State Auditor. The toll authorities will also be required to post their check register on their website, with updates at least once a month. The information is to be maintained on the site f
