Tag: Colorado

Tax Revenues from Legal Marijuana Overstated

There are plenty of reasons to legalize marijuana. But one that has received perhaps too much attention is tax revenue. In this Cato Daily Podcast (Subscribe! via iTunes), senior fellow Jeff Miron argues that tax revenue estimates are simply too rosy.

Miron’s 2010 report, The Budgetary Impact of Ending Drug Prohibition, estimates that the overall fiscal impact (including tax revenue) of legalizing marijuana nationwide could be tens of billions of dollars, the revenue boost that legalization supporters trumpet is overstated.

Public Schools Cost More Than Americans Think

Imagine your business trying to decide whether to increase or decrease spending on marketing without knowing how much your company currently spends on marketing. Worse, imagine making that decision under the false impression that your company spends nearly half as much as it actually does. Sadly, that’s the state of the education funding debate nationwide, and the media often exacerbate the problem.

For example, in a news segment on Colorado’s NBC affiliate earlier this month, the reporter acts as though the amount of money spent per child in the public schools is a matter of political opinion to be legitimately debated rather than an empirical fact:

Like any good political debate, there are two sides to every single answer. When it comes to school funding, people have been wondering how much schools get to spend per student. That answer depends on who you ask.

The first person the reporter asked was Kathleen Gebhardt, the lead attorney in Colorado’s education adequacy lawsuit, who claimed that the public schools “receive an average of $6,474 per pupil in tax dollars.” How does that compare with other states? According to Gebhardt, “We’re in the top 10 for wealth and in the bottom 10 for funding our students.”

The reporter then gets a second opinion from Ben DeGrow, senior education policy analyst at the Independence Institute, who claimed that education funding is actually “closer to $10,000 per student.”

The media segment doesn’t give DeGrow an opportunity to explain how he reached that figure, instead turning to a laughing Gebhardt who chortles, “Oh, $10,000-a-year would be unimaginable for almost anybody in Colorado! It would be a nice problem to have, but it’s not one we currently have.”

So who was telling the truth? According to the reporter, no one can really know. He concludes the segment: “Like any good political debate, much of the issue will be addressed at the polls.”

After the segment aired, DeGrow explained how he and his counterpart arrived at their figures. Gebhardt’s figure didn’t account for all sources of tax revenue. In DeGrow’s words, “It is equivalent to counting only the primary breadwinner’s earnings as household income, even though about half as much more money comes in through a side job, home business and investment earnings.”

Moreover, the reporter was asking the wrong question. He wanted to know the amount of state tax dollars that public school districts receive per pupil. The more relevant question is what is actually spent per pupil, including local and federal sources of funding. Not surprisingly, that figure is even higher. According to a report from the Colorado Department of Education, Colorado’s average per-pupil expenditures total $12,181, nearly double the misleading figure given by Gebhardt.

But why mislead the public about how much public schools actually cost? The penultimate paragraph provides a clue:

On Election Day, voters in 31 school districts around the state will decide whether to raise property taxes to pump an additional $1 billion into the school system in the form of bond issues for buildings or mill levy overrides for operating budgets.

And what did voters decide?

Tuesday’s election saw voters in 29 Colorado schools districts approve 34 bond issues and operating revenue increases – plus one sales tax hike – worth just over $1 billion.

Would voters have decided as they did had they known how much money was actually spent per pupil? That’s impossible to know. But it’s also impossible to legitimately debate what the right level of public school funding should be when bureaucrats misinform the public about what public school funding currently is. A 2008 survey by Harvard University’s Program on Education Policy and Governance found that voters greatly underestimate how much public schools cost and that their funding preferences vary depending on whether they are accurately informed or not:

The average per-pupil spending estimate from respondents to the 2008 Education Next/PEPG survey was $4,231, and the median response was just $2,000; but for these respondents, local average spending per pupil at the time exceeded $10,000. When told how much the local schools were spending, support for increased spending dropped by 10 percentage points, from 61 percent to a bare majority of 51 percent.

Likewise, in PEPG’s 2011 survey, only 46% of informed respondents wanted to increase funding compared with 59% of uninformed (read: misinformed) respondents.

A part of the media’s job is looking at every claim with a gimlet eye. Sadly, this is far from the only case of the media replacing their self-proclaimed “If your mother tells you she loves you, check it out” skepticism with “Rekab Street” credulity.


Colorado Court Halts School Voucher Program

Last Friday, a Colorado District Court halted the new and unique Douglas County school voucher program with a permanent injunction. School choice legislation is a little like the Field of Dreams: pass it, and they will sue–and we all know who “they” are. So there’s a tendency to dismiss legal setbacks for the choice movement as purely the result of self-serving monopolists exploiting bad laws or partisan, activist judges. There are certainly cases that fall into that category, but this Colorado ruling isn’t one of them.

Oh, the self-serving monopolists and opponents of educational freedom are no doubt cheering it, but the ruling does not read like the work of a rube or an ideologue, and not all of the state constitutional provisions on which it was based can be dismissed as outdated examples of religious bigotry. The state’s “compelled support” clause, in particular, seems to uphold a fundamentally American idea: that it is wrong to coerce people to pay for the propagation of ideas that they disbelieve. Thomas Jefferson, in his Virginia Declaration of Religious Freedom, called this: “tyranny.”

Obviously, conventional public schools have been a source of such coercion for a very long time–everyone has to pay for the public schools, despite profound objections they may have to the way those schools teach history, literature, government, biology, or sex education. That’s why we’ve had “school wars” as long as we’ve had government schools. And obviously vouchers offer the advantage of giving parents a much wider range of educational options for their children than do the one-size-fits few public schools. But despite this advantage, vouchers require all taxpayers to fund every kind of schooling, including types of instruction that might violate some taxpayers’ most deeply held convictions. That’s a recipe for continued social conflict over what is taught.

If there were no alternative to vouchers for providing school choice, perhaps it would make sense to have a debate over which freedoms should take precedence: the freedom of choice of families or the freedom of conscience of taxpayers–and then to sacrifice whichever one was deemed less worthy. But there is an alternative, and it does not require anyone to be compelled to support any particular type of instruction. I discuss this alternative, education tax credits, in a recent Huffington Post op-ed.

Aetna Exits Colorado’s Individual Market

According to the Denver Business Journal:

A spokeswoman for Aetna confirmed Monday that the insurer will no longer sell new individual-market health insurance policies in Colorado and will terminate current policies held by state residents no later than July 31, 2012.

Aetna had already announced that it will no longer sell child-only coverage or small-group coverage in the state.   Colorado is one of 34 states where insurers fled the market for child-only coverage as a result of ObamaCare.  Colorado took steps to try to stabilize its child-only market, and is considering requiring insurers to sell child-only coverage as a condition of selling coverage directly to adults.

Aetna isn’t commenting on whether ObamaCare played a role in its decision.   Aetna customers will have to switch plans by July 31, 2012.

Remarkable Interest in School Choice in Colorado?

In Douglas County, CO, a jurisdiction with 240,000 residents south of Denver, there is strong public interest in the possible implementation of a sweeping school choice program.  Here’s a blurb from the Denver Post:

Douglas County School District officials say an unexpected level of interest in a retreat exploring school choice today and Saturday is forcing them to add an overflow room and a video feed to allow the public to watch the discussion. The school board is investigating a voucher program that would allow students to use public money to help with tuition at approved religious schools and other private ones. The two-day retreat will discuss the findings of a school-choice task force that has been mulling several issues, including vouchers.

…The board will officially discuss the school-choice recommendations at a meeting Tuesday night, during which the public will be allowed to comment. No Colorado school district has a voucher program.

Here’s a link to the full proposal. I’m told that parents will have a voucher for about $4,500 per child that can be used to finance tuition at any qualifying school. This is more than enough money to cover costs at most non-government schools, and the population is sufficiently large to make this program a dramatic test case.

Keep your fingers crossed that Douglas County officials resist special-interest groups that are seeking to thwart this reform. The teacher unions have been vicious in their efforts to stop this kind of development. If Douglas County succeeds in putting kids first, this could break the logjam and lead to better education policy across the nation.

Think Tanks Should Be Able to Opine on Public Policy Without Running Afoul of Campaign Finance Regulations

In 2005, political opponents filed a complaint against the Independence Institute for not complying with the Colorado constitution and other campaign finance regulations when it spoke against a state ballot initiative. These regulations require, among other things, disclosure of the identity of anyone who has donated more than $20 to a cause and imposes registration and contribution limits on groups who have major interests in ballot issues.

The Independence Institute challenged the constitutionality of Colorado’s state ballot issue requirements and the issue is petitioning the Supreme Court for certiorari in Independence Institute v. Buescher. Cato has filed an amicus brief, in cooperation with Wyoming Liberty Group, the Center for Competitive Politics, the Sam Adams Alliance, the Montana Policy Institute, and the Goldwater Institute in support of the Independence Institute. We argue that Colorado’s ballot campaign regulations run roughshod over constitutional protections for political speech and association, which lie at the very heart of the First Amendment—particularly for think tanks and other organizations that regularly comment on public policy matters. Loss of these First Amendment protections will chill think tanks’ future attempts to educate the public about issues that are the subject of ballot campaigns. The Court should thus review this case and ensure that citizens maintain their associational rights—including the right to remain anonymous when donating to non-profits—and associations their freedom of expression.

You can download the entire brief here. A special thanks to Cato Legal Associate Travis Cushman for his assistance on this brief.

Three Worthwhile Health Care Videos

The first comes from the group Patients United Now.  Keep this video in mind the next time you hear someone say that a new “public option” is not about a government takeover of the health care sector.

The next video comes from the Independence Institute in Colorado.  It is a nice complement to my colleague Michael Tanner’s recent study, “Massachusetts Miracle or Massachusetts Miserable: What the Failure of the ‘Massachusetts Model’ Tells Us about Health Care Reform.”

Finally, a really disturbing video showing Christina Romer, chair of President Obama’s Council of Economic Advisors, refusing to admit to a congressman that the president’s reform plan would oust Americans from their current health plans.

It’s a shame what politics does to really smart people.