Education: spending way up, scores flat

$2 trillion trying to improve education, zero results. That is just federal spending. Total spending (state, local, federal) for a high-school graduate has tripled with, again, zero improvement. (All numbers adjusted for inflation.)

Ed funding, scores

There is (or was) ONE federal program that did show results – the Washington, DC Opportunity Scholarships Program. Compared to the local public schools, it produced better results at one-quarter the cost. Naturally the politicians canceled the program.

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Down in Concord

“Three groups spend other people’s money: children, thieves, politicians. All three need supervision.” — Dick Armey

There is an old fable about a scorpion asking a frog to carry him across a river. The frog is afraid of being stung during the trip, but the scorpion argues that if it stung the frog, the frog would sink and the scorpion would drown. The frog agrees and begins carrying the scorpion, but midway across the river the scorpion does indeed sting the frog, dooming them both. When asked why, the scorpion explains that this is simply its nature.

It seems that it is the nature of Democrat politicians to raise taxes and fees. Taxpayers, especially those of us with lower incomes, are the ones who get stung. The Democrats previously passed five bills to increase taxes or fees. As part of their budget they increased six other taxes or fees.

Democrats increased by 25% a tax on fuel oil. They made permanent a “temporary” tax increase they originally passed in 2009 that doubled boat registration fees. They raised a license fee for youth skill camps by 300%; increased the cigarette tax by 30 cents per pack; and increased the gas tax by 67%. On all of these bills Democrats voted more than 90% in favor of an increased tax or fee, Republicans voted more than 90% against the tax or fee increase.

The Democrats’ budget delays for a year – and nobody should be surprised if next year they delay it again – a business tax reduction dealing with loss carry-forwards. That change would have been especially useful for high-tech R&D firms. Don’t we want more such companies to come to NH? Their budget similarly delays two other business tax reductions.

They increased the fee for a marriage license and the fee for a saltwater fishing license. They stung property tax payers by downshifting costs for the county nursing homes. Which brings to mind one other change that will sting county property tax payers. The House Democrats and the Governor have indicated that they will adopt expanded Medicaid. This will cost the state tens of millions of dollars, and will also cost the counties millions of dollars. The counties lose money on every Medicaid patient – more patients means more losses, which the county property tax payers have to make up.

On a normal day, the House deals with about 30 bills. Last Wednesday it had only the three budget bills to deal with, but it still took almost all day. What took most of the time was debating 16 separate amendments to HB 2, which has all of the changes to law necessary to make the spending numbers legal. For example, current law says that not less than 73% of the Highway fund will go to the department of Transportation. The Democrats wanted to spend only 67% of the fund on actual highways, so they wrote in HB 2 a section which says that it is okay for them to break that part of the law.

The first proposed amendment was to delete the downshifting of county nursing home expenses. The Democrats are shifting $11 million in expenses from the state to the counties. The cost to property tax payers of Sullivan county will be approximately $400,000. Republicans opposed downshifting; Democrats voted for raising your property taxes.

The Governor and House Democrats want to spend more money than the state will collect in revenue. They propose to make up the difference by raiding so-called “dedicated” funds. These are funds set up for a specific purpose. E.g. a part of the motorcycle license fee is intended to be used for motorcycle safety training and nothing else. Democrats want to use these funds as piggy-banks to pay for all sorts of other things. Their budget authorizes the Governor to raid any and all funds as she deems appropriate.

Republicans proposed to mark just one dozen of these dedicated funds as off-limits. Money in those funds could be used only for the specific purpose for which people paid the fee, not raided for unrelated purposes. These dozen funds were intended for such purposes as: dam maintenance, the 911 system, unemployment compensation, the Land and Community Heritage Investment trust Program (LCHIP), and search and rescue. Fifteen Democrats crossed over to vote with the unanimous Republicans but they fell just one vote shy.

Other amendments would have deleted the three increases in business taxes, deleted the increased license fee for saltwater fishing, reduced the 30 cent increase in the cigarette tax to 20 cents. Republicans were concerned that such a large increase in the cigarette tax would hurt small businesses near the borders where people from neighboring states come to save money. Republicans almost unanimously voted for lower taxes and fees; Democrats almost unanimously voted for higher taxes and fees.

It should be no surprise to anybody that the Democrats have new taxes, higher taxes and fees, and that they have much higher spending. It is mildly surprising that they have absolutely no new spending on roads and bridges. They sold the new gas tax on the basis that it was needed to repair our crumbling infrastructure. But their budget actually spends LESS on the department of Transportation than last year’s budget spent. It’s almost as if the Democrats didn’t really believe their own talking points.

Massive new gas tax not needed

The claim by Reps. Carson et al. (letter, March 19) that their votes for an 83% increase in the gas tax were necessary to fix our deteriorating infrastructure is just plain wrong.

Oh, their intentions are good – my town of Sunapee could dearly use more money for roads – but the road to hell is paved with good intentions. The bill they voted for does not do what they say it will.

The fact is that HB 617 won’t repair a single bridge nor pave a single mile of road. It does not spend a dime on roads and bridges. It is a taxing bill, not a spending bill. Their rhetoric simply does not match reality.

Their massive tax increase does not mean there will be an increase in spending on roads and bridges. The budget writers can always find a way to divert money elsewhere. The proposed budget actually diverts $28 million away from the department of Transportation (DOT). When their budget spends LESS money on roads and bridges, why should struggling taxpayers put MORE money into the highway fund?

There is an alternative, a way to send more money to towns and cities, and to spend more money on roads and bridges, without a huge tax increase. The first step is the budget writers should stop diverting money away from DOT. Before taxpayers are forced to spend a dime more on new taxes, make sure the old taxes are spent the right way.

The Highway Fund collects more than $270 million per year via the current gas tax and vehicle registration fees. That would be more than enough money to maintain and improve our highway infrastructure if it were all spent on actual highways. The problem is that a full $80 million per year is siphoned off and spent on things that have nothing to do with building or maintaining roads and bridges.

The proposed budget allocates just 67% of the Highway Fund to the DOT. (Current law says that “no less than 73%” should go to DOT, but budget writers simply change the law when they want money to go somewhere else. That is exactly what they could do with the new gas tax despite promises to the contrary.)

Without raising the gas tax a penny, instead by reallocating and prioritizing spending, the legislature could raise more money for roads and bridges. The legislature should increase the DOT’s allocation of existing highway money to 80%, 90%, or a full 100%.

Currently, $30 million goes in block grants to towns and cities. The legislature could increase that amount to $35 million. That would actually be more money to municipalities than the new gas tax would produce.

Those two changes – dedicating Highway Fund expenditures to actual highways, not diverting to other agencies, and increasing the block grants to localities – those two changes would provide more money for roads and bridges than the new gas tax would. There is simply no need for higher taxes.

But what about all those other agencies currently funded with gas tax money? They are a little more than 1% of the whole budget. Let them find money in the rest of the budget. If roads and highways are high priority, that means that something else must be lower priority. Let them cut lower priority spending.

The new tax lets our legislators avoid making the hard choices as to which items are higher/lower priority. If they won’t cut other spending then the net effect of new taxes is to provide more money for low priority items.

(Printed in InterTown Record, April 2, 2013.)

Obamacare – the (un)Affordable Care Act

$910 million – that is the cost (so far) for California to create its state-run health exchange. Now we have to pay for a whole new layer of government bureaucrats in addition to paying for doctors, hospitals, and medication. Just how will that reduce the total costs of health care?

A private company, Esurance, sells health insurance, homeowner’s and auto insurance nationwide. They built their website with $40 million of private financing. Facebook $14 million, eBay $7 million. The California government somehow manages to spend $910 million.

Outdated laws waste billions

Do we really need a Rural Electrification Administration? Created in 1935 when only 11% of farms had electricity, surely it reached its goal when almost every farm had electricity more than 60 years ago. Renamed the Rural Utilities Service almost 20 years ago, today it consumes $578 million of taxpayer money.

That is just one example of laws and regulations that might have made sense when first created long ago. Now in very different times does it make sense to have farm subsidies that mostly go to millionaires and billionaires?

When you go to the store, do you worry that the price of raisins is too low? Should the government make the price higher? Fear not, the Raisin Administrative Committee is on the job. This is another 1930s agency which orders farmers to turn over 47% of their crop to the government. Why? Don’t ask me.

Three quarters of voters believe that obsolete laws and regulations waste billions of dollars. More than 9 out of 10 think that it would be a god idea to review all regulations at least once every ten years to make sure they work.