Statesman Editorialist Stole My Hymnal

I typically don't like to respond to things I read in an editorial or an article. This is mainly because I'd rather use this blog for unique content that comes from my own thoughts instead of focusing on what someone else has said, but today will be different.

Today (Sunday), the Statesman chose to make public education the focus of its editorial. Definitely a worthy choice. With thousands of school children and college students throughout Idaho just finishing or preparing to start their first week of the fall semester the topic is also very timely.

Reading the editorial was a bizarre, almost speaking in the third person type experience. The editorial itself had three basic assertions.

1. Cuts to public education (K-12) have resulted in higher property taxes for local property taxpayers.
2. Idaho continues to disinvest in post secondary education and shift the costs onto students and parents
3. Cuts to K-12 and post secondary education are nearsighted and there hasn't been any effort to innovate/reform the system

Let me take each point one at a time.

First, the Statesman is absolutely correct that the cuts to public education have shifted costs to property taxpayers. Unfortunately, that isn't news. On March 25 I argued vigorously on the floor of the House that cuts to public education would have this precise impact. I did so in an attempt to discredit the education budget as it clearly violated Joint Rule 18, which states in part:

Statement of Purpose and Fiscal Notes.-- No bill shall be introduced in either house unless it shall have attached thereto a concise statement of purpose and fiscal note. The contact person for the statement of purpose and fiscal note shall be identified on the document. No bill making an appropriation, increasing or decreasing existing appropriations, or requiring a future appropriation, or increasing or decreasing revenues of the state or any unit of local government, or requiring a significant expenditure of funds by the state or a unit of local government, shall be introduced unless it shall have attached thereto a fiscal note. This note shall contain an estimate of the amount of such appropriation, expenditure, or change under the bill. The fiscal note shall identify a full fiscal year's impact of the legislation. Statements of purpose and fiscal notes may be combined in the same statement. All statements of purpose and fiscal notes shall be reviewed for compliance with this rule by the committee to which the bill is assigned. A member may challenge the sufficiency of a statement of purpose or fiscal note at any time prior to passage, except upon introduction.

Essentially this says that each bill has to have a fiscal note that reflects fiscal impact to both the State and any unit of local government. If it doesn't, the bill is invalid. Obviously, with dozens of districts throughout Idaho raising property taxes as a result of the budget cut, the rule was violated. Unfortunately, the majority was more interested in balancing the budget on the back's of school children than following the rules we have given ourselves.

The second point on the disinvestment in post-secondary education is also very well made and the same point I've been making since my first day in the Legislature. I don't want to spend too much time here, but obviously there have been a few of us that get that point. The combination of cutting public education and raising the limits on tuition hikes is devastating for middle income Idahoan families. I have, without exception, opposed all attempts to reduce funding to higher education and raise student tuition/fees. We are leaving our students with a legacy of debt.

Third and finally, I couldn't agree more that innovation is necessary throughout the education pipeline. As it turns out, I co-authored what has been described as the most innovative change to public education since the late 1990's. The Master Advancement Pilot Project (MAPP) is exactly the sort of innovative policy solutions that the Statesman seems to be talking about, but fails to recognize. Now, I know in the past they have given it some credit, but to ignore MAPP in this editorial just doesn't make sense. I am excited for the future of MAPP and look forward to the positive changes it makes to Idaho's public education system.

I suppose the whole point of this post is to try to find a way to tactfully say, "I told you so." More than that, I just wish the Statesman would quit trying so hard to avoid giving credit when it is due. The decision to omit information is what makes the electorate in Idaho less informed and less well prepared to vote. There legislators fighting for the things they are talking about, lets name names and quit dancing around the issue.

The Hidden Costs of 2010 Budget

In economics, there is something known as a hidden cost. As defined by BusinessDictionary.com hidden costs are:

Expense not normally included in the purchase price of an equipment or machine, such as for maintenance, supplies, training, and upgrades.

In the process of setting the state budget, members of JFAC will routinely attempt to identity what the fixed and variable costs of any budget setting action might be. They look at the world with little complexity and simply as a matter of "balancing the state's checkbook." Unfortunately, this de minimis view of the budgeting is neither useful nor realistic.

While Governor Otter and majority legislative "leadership" praised themselves for a "stellar" session, they failed economics 101. Yes, the state budget is "balanced" but the true costs are not calculated. As has already been reported, not more one week after the end of the legislative session, the Department of Health & Welfare is closing nine regional office and laying-off 126 employees. Now instead of helping struggling Idahoans get access to services to give them a hand-up, they'll be putting their own hand out.

Unfortunately, the 126 employees is only the tip of the iceberg. Most of the job losses will be seen in the private sector by private social service providers that will no longer be able to offer services, especially in our small rural communities. The multiplier effect is a funny thing, when you cut off income to one group, it finds its way to all segments of our economy. Whats more, as clients of private providers and H&W are unable to get access to services, many of which are preventative in nature, they will undoubtedly be accessing more expensive services in the form institutional care either in corrections or a state hospital. It is a lose-lose propisition with the Idaho taxpayer stuck holding the bill.

The Department of Health & Welfare is only the beginning. In future weeks other agencies will face the budgetary reality that our nearsighted Governor and majority leadership placed upon them and make similar cuts to services and jobs. In education, this will be felt very close to home. In fact, many local districts in rural Idaho will be faced with the choice of closing down entire schools or trying to raise property taxes. So rather than address the funding problem at the state level, the decision was made to make the local district make the tough decision. What kind of leadership is that?

After all is said and done, productivity will decline, marriage and family situations will strain, students will be less well prepared, and Idaho will be worse off. These are the hidden costs to the 2010 budget.

No Alternatives?

The tag line of the majority members of the Joint Finance and Appropriation Committee as they set budgets this year has become, "There isn't any alternative." What I believe to be the most telling of this commentary is the implicit defeatism. It is saying that we in the legislature have no control. If that is true, everyone should be worried.

Consider this quotation from Senator Jim Hammond (R-5):

I’m not comfortable with this budget either. I don’t like it. But I truly don’t see an alternative. As I return home each weekend and I talk to those businesses who have already laid off 30, 40 percent of their staff and are trying to stay alive, they beg me, ‘Don’t tax me any more, don’t raise my taxes, don’t raise the taxes of those employees that I still am able to employ.'

Luckily, the issue isn't an absence of alternatives, but instead the insistence to prefer a slash and burn strategy over a protect and preserve. The slash and burn strategy adopted by the majority is indicative of the defeatism their mantra suggests. However, defeatism doesn't have to win the day, although it likely will. There are several options to improving state budgets that don't include raising taxes, including:

1. Delaying the implementation of the elections consolidation - $8 million
2. Collecting on unpaid taxes - $30-40 million
3. Reforming the parole system - $10 million (approximately)

There are also of course those pesky exemptions and delaying the increase in the grocery tax credit, but there are alternatives. It is an inconvenient truth for the majority that the alternatives exist, and they don't have to be in the form of a tax increase.

Now I do believe that every efficiency in government should be found and any waste needs to be cut. However, there is a point of diminishing returns. We have reached that point. Many students, especially struggling students, will be irreparably harmed by the current budget proposals. The elderly and disabled will be cut off from services that they need to survive. In some cases it is literally a matter of life or death. The corrections budget will put the public safety in jeopardy. That is not hyperbole or propaganda. That is the stark reality.

We have a decision to make and it's a very important one. Do we believe that government should be shrunk, no matter what the costs or do we believe that long-term and social costs should also be considered. My philosophy is the latter. We are not defeated. Idahoans can make it through this difficult time without leaving those in need behind.

Can I get a Witness?!

You know when you are watching a television show like Law & Order and they call up the expert witness? To state the obvious they are doing that because that individual supposedly has some sort of useful insight into the situation. The expert's testimony is credible and thus has influence on decisions. In the Idaho Legislature when it comes to issues surrounding budgets and economics an expert witness is just another voice no different than the rest.

At least that is the impression that I get from the decision made earlier today by the JFAC when it set its target budget well below the budget recommended by the State of Idaho's Chief Economist, Mike Ferguson. Rather than follow the recommendations of the expert, members of JFAC decided that they liked the beat of their own drum a bit more thank you very much. Never mind if the beat is a bit slow and depressing.

So why does it matter? The revenue number that they accept and target the budget to has everything do with the amount of money the state spends for services including schools, parks, safety net programs, and countless others. So the lower the number, the more cuts.

To be fair, Mr. Ferguson has been a bit off with his projections the last couple of years. Perhaps this is the response, distrust. However, even with my own education and training and Mr. Ferguson's missed projections, he is still the expert. By ignoring his recommendation, JFAC is making the concerted effort to disregard his efforts.

Frankly, if Mr. Ferguson was new to the team and had messed up early and often, I'd understand, but Mr. Ferguson has been at this game for a long time (longer than nearly all the legislators). The combination of his training and experience are irreplaceable even by a strong gut reaction, like the one exhibited by JFAC. Projecting budgets and the economy isn't easy, especially at a time like now when the economy has been demonstrating some unusual characteristics.

Regardless of the spastic nature of the economy, numbers still work and trend lines can still be predicted. Idahoans deserve that the expert that they are paying for be listened to. Ignoring him and treating him like just another uninformed voice puts our economic recovery at risk and needlessly cuts services that we all value.

Three ways to help the budget

I think that the criticism that being unwilling to vote to cut programs without another solution is right on. After all, as a state legislator, I along with the rest of the legislature have the constitutional requirement to balance the budget. Last year I was more than just a little hesitant about cutting programs, especially in education (at all levels) and Medicaid. This year, those cuts are looking like they may be even more draconian than ever before. In order show that I am serious about finding solutions, I have come up with the following three ideas to help trim the state budget, so that cuts to vital programs can be minimized.

1. Modify the property tax legislation from the 2006 Extraordinary Session to only apply to owner occupied residences,
2. Institute a new program for paroling and otherwise taking non-violent offenders out of our expensive prisons and into other forms of corrections (e.g. house arrest, work release, etc.), and
3. Restructuring of state government by combining some state agencies, where doing so makes sense both fiscally and from an operations standpoint.

While there are many other solutions, and these three ideas aren't the panacea for our budget woes, they certainly would make a significant dent in the budget shortfall. In the upcoming days and weeks, I'll provide more details and data about my ideas and explain why I think that they are superior to simply cutting state programs that serve Idahoans. Stay tuned.

Budget Denied

So why do I keep voting no on all those appropriation bills? Well, some of the budgets are better than others, but they nearly all have the same fatal flaw. The flaw is an across the board five percent cut on state employee salaries. Now, intelligent people may disagree as to whether or not state employees should be asked to hold the bag in the economic down turn. However, it is undeniable that reducing state employee pay will have a direct and negative impact on Idaho's economy.

State employees, generally speaking, are middle income earners. Due to this, as a group, their savings rate is relatively low. This low savings rate, justified or not, means that they spend what they make. It also means they would find it very difficult to absorb any cut. It is likely that the cuts will result in increased debt and potentially loss of homes. More certainly, this cut will have a direct and negative impact on the multiplier effect within our economy. This impact will only prolong our recession.

In addition to the negative economic impact, there is a question of control. That is, who should decide how state agencies are managed? Is it the proper role of the legislature to manage state agencies? I don't think so. Some may say, "But negotiations are in the works right now. The across the board component may go away." Well, frankly, may doesn't mean shall. Given the history of the legislature, I am not comforted that the negotiations will conclude in anything that will resolve these harms.

As a lawmaker, I am asked to "vote on the bill before me." The bills before me don't allow managers to manage. The bills before also will have a substantial negative impact on our economy. I will continue to vote no.

Stimulate this...

So, first sorry for the long delay in posts. Actually, I have written several posts, but decided against publishing them because I was waiting on information each time. Okay, so on to the post...

I have consistently and ardently advocated for the Idaho Legislature to position itself as well as possible to take advantage of any economic stimulus package that could potentially be approved by Congress. My position has never been one based upon the politics of the stimulus, but rather the reality of what it could mean for Idaho. Said another way, the Idaho Legislature isn't going to keep the bill from passing, but we sure do benefit if it does and need to be prepared when it comes our way.

Now to be fair the co-chairs of JFAC, Representative Maxine Bell and Senator Dean Cameron, have also been consistent. They have stated, repeatedly, that they will act as if the stimulus package is the proverbial pot of gold at the end of the rainbow. Due to their claim of an absence of any leprechauns sightings, no gold was to be found. What I don't understand, however, is if they are watching the same news that I do how they could come to this conclusion.

It seems to me that Senate Majority Leader Harry Reid (D-NV) made it pretty clear last week that the Senate wasn't going home until the stimulus package was signed by President Obama. While I understand that none of us have known exactly what was going to be in the package, it has been pretty clear, at least to me, that the package would do a lot to hold-off our budget crisis.

This gets me back to my original point. As a state lawmaker, what I care about is helping Idahoans and putting the Idaho Legislature in the best position to deliver the services that they expect while fulfilling our constitutionally required obligation of balancing the budget. I am totally perplexed by the philosophy that rejects out of hand the assistance from the federal government because its coming from the federal government. Furthermore, do we not understand that those dollars are Idahoans money too? Why wouldn't we want to be as strategic as possible and use the money in such a way to alleviate the headaches and problems that can come from budget cuts, especially more unemployment?

To continue to ignore the leprechaun and call him a puppet with strings attached is both unwise and unnecessary. The stimulus package may be a fluid thing, but so is our economy. We must be more agile and less rigid. We must be ready take what we can get and maximize its use.