Irresponsible government spending certainly isn’t anything new, but the record-setting pace at which it’s occurring should concern taxpayers. Over the last 15 years, government payrolls have increased by 40% (after inflation) to a record $60.74 billion in March 2006 – despite a recession in the early 2000’s.

To pay for these additional public servants, state and local leaders are mysteriously relying on tax revenue that has remained flat since mid-2007; projections indicate collections will remain this way for the foreseeable future. To sustain itself, lawmakers will soon have to raise taxes or find creative ways to generate state revenue to pay for bloated state and local governments. The federal government operates with the more nonchalant attitude of “just put it on my tab.”

Operational efficiency shouldn’t be relegated to the private sector alone, especially in difficult economic circumstances.

- James Quintero]]>PublicationMon, 12 May 2008 00:00:00 MDT Recession-proofing Texas
Declaring energy independence
The climate alarmists of yesteryear
A question of conviction
Creating jobs by cutting taxes]]>PublicationFri, 09 May 2008 00:00:00 MDT The San Antonio Express-News highlighted a report on on America’s “recession-proof cities.” Out of America’s top 50 metropolitan areas, San Antonio ranks #2. Austin is #3, Houston #7, and Dallas-Fort Worth #10.

The cities were highlighted based on recent employment and housing data. Texas’ cities fared so well because we continue to have low unemployment and strong job growth in key economic sectors, while home prices are growing steadily from modest levels.

Texas’ commitment to competitiveness has brought 1.6 million new jobs here in the last decade. Texas cities have not depended on the construction or service sectors to propel their growth; low taxes, low government spending, and a favorable regulatory climate have cultivated a strong and diverse economic base.

That ties in with the housing piece. In general, our cities have not restricted the construction of housing with anti-sprawl measures or excessive zoning/building standards. Suburban development has kept prices reasonable, which in turn, minimized the appeal of speculation and necessity for exotic mortgages that are ravaging the coasts.

With plentiful jobs and sensible housing, companies want to do business here and people want to move here. This isn’t to minimize the pain of those Texans who may have recently lost a job or are saddled with a bad mortgage. But those events are much less likely to happen here, and if they do, you’re much better off here than in California, or Florida, or Phoenix, or Las Vegas, or the Rust Belt, or ...

- David Guenthner]]>PublicationFri, 09 May 2008 00:00:00 MDT * KTEM AM 1400 in Temple/Killeen;
* KWBC AM 1550 in Bryan/College Station;
* KCRS AM 550 in Midland/Odessa;
* KBRA FM 95.9 in Freer; and
* Woolley's website.

The interview can also be heard on a tape delay at 10:15 p.m. on KVCE AM 1160 in Dallas/Fort Worth.]]>PublicationThu, 08 May 2008 00:00:00 MDT“Are You Smarter Than a 5th Grader?” and was disturbed by the idea that comparing the education level of adults to 5th graders was “entertainment.” The episode featured a pre-law college student trying to answer questions that are supposedly taught in elementary school classrooms. She answered several questions correctly and then struggled with a basic grammar question to identify the part of speech of a word (given in the context of a sentence). Unfortunately, she did not know that the word was an adverb and dropped out of the running for the $1 million jackpot.

This college student’s mistake exemplifies the larger problem that many high school graduates and college students struggle with grammar. Our research finds that large numbers of Texas high school graduates need remedial education in writing just to be able to do college-level work.

Some courageous Texas reformers are trying to buck this trend by increasing the rigor of Texas’ K-12 English/Language Arts curriculum. The proposed curriculum emphasizes the teaching of grammar by giving it its own section within the curriculum. We hope the State Board of Education in Texas understands the need for change and chooses to adopt these more rigorous standards.

- Brooke Terry]]>PublicationThu, 08 May 2008 00:00:00 MDTFort Worth Star-Telegram column on federal ethanol policy. The program can be heard live on:

* KTEM AM 1400 in Temple/Killeen;
* KWBC AM 1550 in Bryan/College Station;
* KCRS AM 550 in Midland/Odessa;
* KBRA FM 95.9 in Freer; and
* Woolley's website.

The interview can also be heard on a tape delay at 10:15 p.m. on KVCE AM 1160 in Dallas/Fort Worth.]]>PublicationThu, 08 May 2008 00:00:00 MDTrejected an amendment yesterday to add wind coverage to the National Flood Insurance Program. Good for them, especially for Senate Banking Committee Chairman Chris Dodd (D-CT), who urged members to vote against it. However, challenges for bringing rationality to both federal flood insurance and state-based windstorm insurance remain, with Sen. Dodd telling members, “Wind is an issue we have to grapple with, but the last thing we want to do is destroy a flood program which we very well could by overwhelming it.”

The problem with both flood and windstorm insurance is that both are largely controlled by government. We don’t see the problems with flood insurance because the costs are buried deep within the federal budget. Windstorm costs, however, are on the backs of state taxpayers and much harder to hide. In Texas, taxpayers and homeowners’ insurance policyholders could be on the hook for more than $5 billion if a major hurricane hit the upper Texas coast. The situation is much worse in Florida.

That is why states like Florida and Mississippi are trying to get Congress to add windstorm coverage to the flood insurance program. Spreading the cost of windstorm insurance to all U.S. taxpayers would allow them to continue subsidizing coastal insurance premiums.

Of course, it is just not insurance we are subsidizing, but coastal development. With greatly reduced premiums, homeowners and businesses do not have to take into consideration the actual costs of protecting themselves against the risk of hurricanes. As a result, coastal development is exploding, along with the exposure of taxpayers and policyholders elsewhere.

It will take a while to fix this mess, but the first step is to increase the prices of government flood and windstorm insurance so that they better reflect the actual risk being insured. As this occurs, the exposure of government programs will begin to decline to a level that we adequately address the issue. Until then, all we can do is hope the big one doesn’t come our way.

- Bill Peacock]]>PublicationThu, 01 May 2008 00:00:00 MDTtaco truck. In Los Angeles, it’s the bacon dog.

(Hat tip: Reason.tv)

In both cases, the government health nitpickers need to just chill.

One more thing: Even though I just got back from lunch, seeing that bacon dog still makes me hungry.

- David Guenthner]]>PublicationWed, 30 Apr 2008 00:00:00 MDT According to the Tax Foundation’s report, April 23 marked the average day that Americans started earning their paycheck — three days earlier than the last two years. Of course, the burden of federal, state, and local taxes varies by state, so the actual Tax Freedom Day can also vary by state.

In Texas, April 12 marked the day that Texans stopped working to earn the money to pay taxes, putting Texas just outside the 10 states with the earliest Tax Freedom Days. Connecticut has the dubious honor of being #1 in the Tax Foundation rankings with the latest Tax Freedom Day of all the states—May 8. Alaskans celebrate Tax Freedom Day on March 29, which is the earliest of all the states.

- Mary Katherine Stout]]>PublicationTue, 29 Apr 2008 00:00:00 MDTSan Antonio Express-News led this morning with this gem: “The decisions we make today will determine whether summer temperatures rise in Texas by as much as 12 degrees by the end of the century or as little as 5 to 6 degrees, according to Texas Tech University atmospheric scientist Katharine Hayhoe.”

After a roughly one-degree temperature rise over the last century, estimates of a five-to-12-degree warming over the next 100 years are far-fetched, particularly given the leveling off of temperatures since 1998, the falling of temperatures in 2007, and the inadequacy of the climate models upon which outlandish warming predictions are based.

Will cooler heads prevail, or will the alarmist rhetoric continue to rise?

- Drew Thornley]]>PublicationTue, 29 Apr 2008 00:00:00 MDTAustin American Statesman ran an article drawing attention to the record high price of health insurance in Texas. The article points out that the price of health insurance premiums rose 40% from 2001-2005, the third highest rate in the country. And as if that weren’t troubling enough, the article goes on to explain that over that same five-year span, the state’s median income increased by a mere 4%, meaning that the cost of health insurance is climbing 10 times faster than the state’s average income.

The Statesman attributes the skyrocketing health insurance premiums to expensive medical technology, unhealthy lifestyles, and an aging population. It also adds that there isn’t enough outreach for government programs. In actuality, the fault lies with government policies that restrict innovation in health care, mandates that inflate the price of health insurance, and broad government programs that encourage people drop private coverage.

- Kalese Hammonds]]>PublicationTue, 29 Apr 2008 00:00:00 MDT Individual mandates = higher taxes
More income tax out of fewer pockets
Shaming you out of your Starbucks
Unleashing the taxpayer watchdogs on Washington
Health insurance and interstate commerce]]>PublicationMon, 28 Apr 2008 00:00:00 MDTpart one and part two.]]>PublicationWed, 23 Apr 2008 00:00:00 MDTeliminating the criminal conviction box from employment applications for county jobs; the question will be asked later in the process based on the sensitivity of the work involved. Meanwhile, the U.S. military says the number of felons joining has doubled to more than 500.

Our research indicates that these are positive developments. Ex-offenders who are employed are at least three times less likely to re-offend, and are much more likely to pay whatever restitution and child support they owe.

Yes, this movement can be taken too far. A recent proposal by D.C. Councilman and former Mayor Marion Berry overreaches by banning private employers from considering criminal convictions. Employers should be free to consider an applicant’s past conduct, but government entities -- both in their own employment decisions and occupational licensing -- should ensure that all barriers are limited to where the nature of the work would make it more likely that the same type of offense would be repeated or have greater impact. Examples include a child sex predator working in a day care center or an embezzler managing funds.

With the growing number of retirees and the crackdown on illegal immigration, there is a growing need to lower government barriers to employment so that more ex-offenders can punch the clock after serving their time.

- Marc Levin]]>PublicationTue, 22 Apr 2008 00:00:00 MDT Texas manufacturers lead in pollution controls
What we're getting for our education buck
A look at national health care systems
How government regulation hinders health care
States burned by tobacco dependence]]>PublicationMon, 21 Apr 2008 00:00:00 MDTunemployment increases for the third straight month and growing concerns that the economy is headed for a recession, government advocacy groups can be heard sounding the alarm. Almost on cue, doomsayers can already be heard calling for expanded government programs and initiatives as a means to create jobs.

But government’s role in the economy is not to create jobs; that’s a primary function of the private sector. If the federal government feels the overwhelming desire to tackle the unemployment issue, they can do so by reducing taxes on corporations – as they have now become the highest in the world.

A recent study conducted by the Tax Foundation reveals that the U.S. currently has the world’s highest federal corporate income tax rate. Not only is this tax forcing America’s corporations to cope with smaller profit margins and inhibiting their competitive edge, but the dubious nature of the tax means that employers are implementing hiring freezes and layoffs.

Rather than contriving a short-sighted tax rebate scheme to curry favor with voters, Congress should focus on restoring America’s long-term economic competitiveness through permanent tax cuts.

- James Quintero]]>PublicationMon, 21 Apr 2008 00:00:00 MDTTexas Electric Meter and related commentary) has generated quite a bit of criticism. One (friendly) critic sent me an article by Scott Hempling, executive director of the National Regulatory Research Institute, with the following quote, “Competition and regulation share a common purpose to align private behavior with the public interest.”

Of course, competition and regulation are not aligned toward the same end—regulation is by its very nature intended to change the outcome of what would have otherwise happened through competition, i.e., the voluntary actions of buyers and sellers, in the market.

For instance, in a particular electricity market, 100 MW of power is sold by 5 generators through 10 retailers to 100,000 people at an average price of 12 cents per kWh. This is the market result. However, perhaps someone thinks 12 cents is too high. Or that some of the retailers or generators made too much profit. Or that the generators and retailers communicated/cooperated too much (some would call it collusion). Or that too much pollution was generated in the process.

Whatever the objection, the only reason to impose regulations on this—or any other—market would be that someone for some reason is dissatisfied with the results that the market produced. So the article—which is intended to support the imposition of regulations on markets—gets it wrong from the beginning.

It is important to understand the implications of this: the sole raison d’être of regulations is to allow a relatively few regulators to forcibly change the behavior of the relatively numerous producers and consumers in the marketplace. Or, in other words, to limit the ability of people to use their own private property and labor as they think best.

Now we can certainly have a debate about under what circumstances the “public interest” is served by imposing regulations on a marketplace. But the coercive nature inherent in regulations ought to give everyone pause as they ponder what benefits might ensue from imposing restrictions on the actions and property of others.

- Bill Peacock]]>PublicationMon, 21 Apr 2008 00:00:00 MDT Last week, the U.S. House approved new regulations on HSAs in legislation touted as protecting taxpayers. If passed, the law would require HSA withdrawals to be substantiated—that is, to require a determination as to whether the withdrawal is for a qualified medical expense, effectively restricting the uses for an HSA and slowing the transactions with red tape. HSA substantiation’s fans in Congress claim that the same process occurs with both Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs). But HRAs and FSAs are fundamentally different. The funds in an HRA are employer-only funds and employers have an understandable interest in making sure that HRA funds are used for medical expenses. FSAs are individually funded, but the funds are restricted for paying medical expenses with that dreaded use-it-or-lose-it feature that kicks in and reclaims any unused funds at the end of the year.

HSAs, however, are individually owned and managed; and the funds belong to the individual and may be used for any purpose, but are only tax-free when withdrawn for qualified medical expenses. HSA owners must keep records of their withdrawals and purchases and know they must supply them to the IRS if needed to substantiate HSA uses for qualified medical expenses. The account holder is responsible for the account and its uses, just as they are with IRAs and other savings vehicles with similar tax benefits.

If that weren’t enough, the proposal is rent-seeking at its worst. A Connecticut company with a significant share of the HRA and FSA substantiation market has decided to ask Congress to open a new market for their business by requiring HSA substantiation. Congressional leaders otherwise unable to kill HSAs outright have embraced the substantiation requirement, no doubt hoping to quietly kill HSAs with red tape.

If it passes, the winners are the company looking for new business and congressional leaders hoping to suck the lifeblood from HSAs. It would be a loss for the HSA account holders enjoying new flexibility in health care purchasing, and for greater consumer-control in health care.

- Mary Katherine Stout]]>PublicationThu, 17 Apr 2008 00:00:00 MDTTODAY Show highlighted two competitive forces evolving in the health care industry: one, a familiar throw back to America’s golden years; the second, an innovative use of today’s technology.

Dr. Jordan Schlain, a general physician in San Francisco, has responded to patients that are “sick and tired of the run around at the doctor’s office. I think that what America’s ready for is value. They’re looking for their doctor back.”

With that in mind, Dr. Schlain has returned to consulting with patients at their homes. Rather than rushing them through his office in 10 minutes, he often spends more than 30 minutes with each patient and is available 24 hours a day, seven days a week.

Similarly, Dr. Howard Stark has met his patients’ demands for convenience and flexibility by taking his practice online. “With just the click of a mouse, patients can communicate with Dr. Stark about what ails them, seeking his advice on just about everything.” Dr. Stark requires an annual office visit, but the online consultations are free of charge to all of his patients.

Despite government regulations that have attempted to snuff out innovative developments in health care delivery, the competitive nature of providers and the market continue to shape the industry to better meet the needs of consumers. Here’s hoping that the government doesn’t come along and implement new regulations that will derail the convenience driven health care that has evolved from consumer demands and provider competition.

- Kalese Hammonds]]>PublicationThu, 17 Apr 2008 00:00:00 MDT Earlier this week, a federal judge upheld a New York City food labeling regulation. Effective Monday, any food-service establishment with 15 or more locations in the United States is required to include calorie counts on its menus.

The availability of dietary information about the food you consume is not a bad thing. Many large chains already promote that information on their websites, in brochures available at their restaurants, and in-store kiosks. But mandating the information and format as this regulation does is a separate issue.

First, it will increase the operating costs of chains doing business in New York City. Those businesses that already publish that information will have to redesign and republish their menus and/or retrofit their signs between now and June 3rd, when the city will begin to fine non-compliant restaurants.

Then consider the 15-location threshold. If your brand has 14 locations, you don’t have to worry about caloric content. But as soon as you open location #15, you have to get all your food tested for calories and publish that on your menus. Those extra costs may factor into the decision whether a New York City restaurant brand expands into new markets, or a restaurant brand from another part of the country enters New York City.

Why should it matter to you what happens in New York City? Because according to the National Restaurant Association, similar regulations have passed in King County, WA, and New York City’s lead will give momentum to measures pending in several large cities and at least five states.

What you eat should be a matter of individual conscience, not of government omniscience.

- David Guenthner]]>Publication