Tag: Massachusetts

Estimate: Massachusetts Diverts 99% of Tobacco Money to Other Causes

From this weekend’s Lawrence (Mass.) Eagle-Tribune
Millions of dollars originally intended for smoking cessation programs in Massachusetts have been diverted to offset budget deficits, leaving the state struggling to fund quit-smoking hotlines, treatment programs and anti-tobacco advertising, the New England Center for Investigative Reporting has found. … 
 
“Roughly 99 percent of all the tobacco dollars that come into the state are used for something else,” said Stephen Shestakofsky, recently retired executive director of Tobacco Free Massachusetts, an anti-tobacco advocacy group. He was referring to the nearly $254 million in tobacco-related legal awards given to Massachusetts in 2012. More than $561 million in tobacco taxes was also collected, bringing the state’s total tobacco tally to just over $815 million, the CDC reports.
On the one hand, it’s not as if I’d urge the state of Massachusetts to sink vast sums into the paternalist project of hectoring its citizens to quit, especially not at a time when its taxpayers are already having to foot a steep tab for its RomneyCare health insurance experiment. On the other hand, we can now see that it was the purest pretense for attorneys general in states like Massachusetts to have portrayed the Great Tobacco Robbery settlement of some years back as motivated by a supposed need for new “public health” outlays, as opposed to sheer plunder and the interests of the various lawyers involved.  
 
That’s worth remembering next time you hear a proposal to extract large sums from the food industry (either through taxation or, as some in the legal profession would like, by suing them for it under some creative theory) with the promise that funds will then be earmarked for anti-obesity efforts. In practice, after voters’ attention wanders, funds ordinarily get earmarked for the advancement of the political interests of those in power.  
 
More on the late-1990s Medicaid-tobacco settlement from Cato chairman Robert Levy here, here, here, and in his book Shakedown, and from me here, here, and in my book The Rule of Lawyers

Why Is Massachusetts Trying to Ban Truthful Information About Hedge Funds?

The Massachusetts Uniform Securities Act prohibits general solicitation and advertising by anyone offering unregistered securities, ostensibly for the purpose of furthering state and federal disclosure schemes. Yet this ban on public communications has been applied so broadly that it has undermined those purported disclosure goals.  For instance, the ban has prevented individuals who have no interest in investing in any security – such as journalists, academics, students, and others who are not wealthy or financially sophisticated – from receiving truthful, non-misleading information about hedge funds.

In Bulldog Investors v. Massachusetts, an investment company maintained an interactive website that provided information about its products. Because Bulldog was not registered in Massachusetts, however, the State filed an administrative action against the firm, demanding it take down its online content.

In response, Bulldog joined a group of other firms and individuals – including some who have no interest in investing but wish to read the website information – in a lawsuit claiming that the Massachusetts ban violates their First Amendment rights. The Supreme Judicial Court of Massachusetts upheld the ban, so the plaintiffs have asked the U.S. Supreme Court to take the case.

Cato, along with the Competitive Enterprise Institute and a group of journalists and academics, has now filed an amicus brief supporting that request and arguing that the Massachusetts law is an unconstitutional ban on free speech. We show that the state’s claim that the ban furthers a larger federal regulatory scheme ignores the judgment of many federal officials (from both parties) who have concluded that such bans undermine these goals.

The state’s alleged disclosure interest is just a pretext for coercing companies to register in Massachusetts, and is therefore an unconstitutional attempt at circumventing federal preemption. But even if the ban furthers a legitimate state interest, it is so broad that it is has substantially chilled both truthful, non-misleading commercial speech and noncommercial speech alike.

A law so repugnant to the First Amendment cannot stand.

Obamacare’s Sweetheart Deal for Massachusetts

A bunch of rural hospitals are upset about a provision of Obamacare that benefits Massachusetts above all other states. Forgive the bureaucratese, but you really have to read the Medicare Price Control Payment Advisory Commission’s description to appreciate the situation:

Among the proposed wage index reclassifications or exceptions granted to hospitals for FY2012, the rural floor exception triggered in the state of Massachusetts will have a large impact on hospital payments. Beginning in FY 2012, the conversion of Nantucket Cottage Hospital from a critical access hospital to an IPPS hospital will trigger the rural floor wage index exception for the 60 urban hospitals in the state of Massachusetts, increasing wage indexes for these hospitals from an average of 1.16 in FY2011 to 1.35 in FY2012. Nantucket Cottage Hospital is a rural island hospital, which has 15 inpatient beds and serves approximately 150 Medicare inpatients per year. This hospital will become the only rural IPPS hospital in the state of Massachusetts. As a result of this change in one small hospital’s status, and the subsequent change in the wage index, payment rates for urban hospitals in Massachusetts will increase by 8 percent, or by more than $200 million in FY 2012. These extra payments will be made budget neutral at the national level, and therefore all hospitals—including rural hospitals—will absorb the financial loss.

Got that? One small, rural, island hospital in Massachusetts changes its Medicare status, and—presto!—the other 60 Massachusetts hospitals suddenly qualify for an extra $200 million in Medicare subsidies. Land of the free! A letter from several state hospital associations complains the amount is actually $367 million per year. The best part: Medicare scrounges up that $200-$367 million by reducing subsidies to other states. Thus the nasty letter from the lobbyists for non-Massachusetts hospitals.

Cato adjunct scholar David Hyman writes about this dynamic in his excellent satire, Medicare Meets Mephistopheles:

Geographically based envy has also precipitated a “formula fight” among the states, complete with litigation, coalitions of aggrieved states and senior citizens, coverage in newspapers and editorials, and statements from concerned legislators… [C]ertain state medical societies have been particularly insistent that their states are being shortchanged by the Medicare program. These interest groups have had great success in persuading their elected representatives to change Medicare’s reimbursement formulas, so the Medicare money train unloads their “fair share.”

I’ve written before about how Romneycare solidified layers of corruption whereby Massachusetts officials (with the complicity of the Bush administration) bilked taxpayers in the other 49 states. It turns out that Obamacare also has a sweetheart deal for Massachusetts. Who knew Romneycare and Obamacare had so much in common?

RomneyCare Just Got $150 Million More Expensive

One of the ways Massachusetts officials have tried to temper RomneyCare’s cost overruns was by denying participation to legal immigrants. Last week, the Commonwealth’s highest court ruled that restriction violates the Massachusetts Constitution:

Massachusetts cannot bar legal immigrants from a state health care program, according to a ruling issued Thursday by the state’s highest court…

The ruling said that a 2009 state budget that dropped about 29,000 legal immigrants who had lived in the United States for less than five years from Commonwealth Care, a subsidized health insurance program central to this state’s 2006 health care overhaul, violated the State Constitution.

“This appropriation discriminated on the basis of alienage and national origin,” wrote Justice Robert J. Cordy of the Supreme Judicial Court, ruling that the action “violates their rights to equal protection under the Massachusetts Constitution.”…

State officials say they will abide by the decision, although they are not yet sure how to pay for the change.

“This decision has significant fiscal impacts for the commonwealth, adding somewhere in the range of $150 million in annual costs to what is already a very challenging budget,” said Jay Gonzalez, secretary of administration and finance.

No doubt their “pay for” will involve another unpopular minority.

Former Romney/Obama advisor Jonathan Gruber has written that RomneyCare  was already costing the state $50 billion more than projected by 2009.  Of course, supporters have been hiding RomneyCare’s costs (and exaggerating its benefits) all along.

“Dear Foreigners, You Do the Math” —USA

A brand new Harvard University study finds that American students perform very poorly in math compared to their peers in other nations.

What’s that? You’ve heard this all before? Not quite.

This study compares the percentages of students scoring at advanced levels across countries, and it controls for the confounding effects of differing populations of disadvantaged groups. When the researchers looked exclusively at white students and at students with at least one parent with a college degree, the results remained largely the same. Among white students, for instance, 8 percent of Americans scored “advanced” in math, landing us in 25th place among nations for which scores were available–behind nearly every other advanced industrialized nation on Earth. And the highest ranked U.S. state, Massachusetts, trails the overall averages of 14 nations.

This may come as a shock to those who imagined that America’s educational shortcomings were restricted to inner cities or disadvantaged populations, but it is entirely consistent with results reported more than a decade ago as part of the Third International Mathematics and Science Study, showing that U.S. students taking advanced mathematics and physics classes lagged their peers in other industrialized nations at the end of high school, often by wide margins.

So how, then, have we remained an economic superpower for so long if our school system is so bad? The answer is that we have historically enjoyed one of the freest economies on Earth, a relatively unfettered labor market, and comparatively low taxes–all of which have drawn to our shores many of the world’s best and brightest. Regrettably, our comparative advantage in those areas has eroded over the past several years.

Perhaps, instead of continuing to make our economy more like our failing centrally planned school monopoly, we should allow our education system to benefit from the freedoms and incentives of the marketplace that was always the engine of our prosperity….

Giving Power to Experts Is No Way to Reform Health Care

In the latest Cato Policy Report, Cato adjunct scholar Arnold Kling’s essay on the (mis)rule of experts explains why ObamaCare will fail:

Despite the many pages contained in the health care legislation that Congress enacted, the health care system that will result is for the most part to be determined. The design and implementation of health care reform was delegated to unelected bureaucrats, as was done in Massachusetts.

In Massachusetts, the promises of proponents have proven false, and the predictions of skeptics have been borne out. Costs have not been contained; they have shot up. Emergency room visits have not been curtailed; they have increased. The mandate to purchase health insurance has not removed the problem of adverse selection and moral hazard; instead, thousands of residents have chosen to obtain insurance when sick and drop it when healthy. The officials responsible for administering the Massachusetts health care system are no longer talking about sophisticated ways of making health care more efficient.

Instead, they are turning to the crude tactic of imposing price controls.

Once again, we have legislators putting unrealistic demands on experts. This results in the selection of experts with the greatest hubris, shutting out experts who appreciate the difficulty of the problem. When the selected experts find that their plans go awry, they take out their frustrations by resorting to more authoritarian methods of control.

With ObamaCare, that dynamic took hold before the law even took effect.

Race to the Top ‘Winners’ Declared

So the much ballyhooed Race to the Top program – $4.35 billion out of nearly $110 billion in federal education stimulus and bailouts – is over, with today’s announcement of ten round-two winners. Who knows for sure how the winners were ultimately determined – point allocation was highly subjective – but it’s hard to be impressed by the list: the District of Columbia, Florida, Georgia, Hawaii, Maryland, Massachusetts, New York, North Carolina, Ohio and Rhode Island.

New York? Recent revelations about dumbed-down Regents exams hardly make it seem like a paragon of honest reform. Hawaii? How did last years’ school-free Fridays help them stack up so high? Maryland? Fostering charter schools was supposed to be important, but it has one of the most constricting charter laws in the nation. And Massachusetts? Well, it’s easy to see how it won – it just dropped its own, often-considered nation-leading curriculum standards to adopt national standards demanded by Race to the Top.

In the end, though, how states were chosen really doesn’t matter that much. Why? Because the race was based mainly on who could make the biggest, fastest promises of reform, not who was actually, meaningfully reforming things. So, at the very least, we should all hold our applause for both the winners and the race for several years, because promises are easy – real change is tough.

Pages