Tag: washington

Which State Will Expand School Choice Next?

With over 150,000 participating students in 12 states, scholarship tax credit (STC) programs constitute the largest and most popular form of private school choice. STC programs have expanded rapidly in recent years with six states adopting them since 2011, including Alabama this year. So which state will be next? After yesterday’s disappointing defeat in South Carolina, the answer may lie on the opposite side of the continent.

Earlier this week, Rep. Liz Pike introduced an STC bill to the Washington state legislature. The bill would provide tax credits to corporations donating to state-approved scholarship organizations that fund children from low-income families and children with disabilities attending the schools of their choice.

Like the STC program that New Hampshire enacted last year, the WA legislation follows the best practices from STC programs around the nation and avoids the flaws of the recent bills in Virginia and Alabama. Washington’s proposed STC program would be capped at $100 million in the first year and includes an “escalator” so that the program will grow over time to meet demand and it eschews unnecessary new regulations. The $5,000 cap on scholarships is high enough to benefit low-income families but low enough that the state still has the potential to save money, as shown in this chart from the Freedom Foundation comparing the maximum scholarship size to Washington state’s total public school spending per pupil: 

How Tax Credits Result in Savings. Image courtesy of the Freedom Foundation.

The bill could go farther still by expanding the use of the scholarships to include educational expenses beyond just private school tuition. For example, under New Hampshire’s STC program, scholarships can cover expenses such as tutoring, textbooks, homeschool curricula, and online learning. Adding a similar provision would move the bill from school choice to educational choice, which would foster greater customization and innovation in the delivery of education.

But even without such provisions, school choice programs have been proven effective at improving student outcomes and adopting one would be a great leap forward for Washington’s education system.

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.

A Quick Round-Up on Education Policy and the 2012 Elections

Californians approved Prop 30, a $6 trillion dollar tax hike intended to save public schools from “devastating” cuts. In fact, the state is already spending around $30 billion more today on public schooling than it did in the early 1970s, after controlling for both enrollment growth and inflation—and SAT scores, the only academic outcome measure going back that far, are down. Prediction: this $6 billion will have little impact on children’s education even if it does make it to the school level. Instead, it will further slow California’s economy and drive a few more businesses out of the state.

Georgia approved a new charter school authorizer, which should lead to more rapid growth of charter schools in that state. Based on recent research published by the Cato Institute, this will increase generally mediocre options within the public school sector by, in part, cannibalizing generally better options in the private sector. Georgia can avoid a net reduction in educational diversity, freedom, and quality by expanding its existing education tax credit program.

Washington becomes the 43rd state to adopt charter schools. Initiative 1240 caps the state-wide charter school count at 40 over the next five years, however, so it will have little short term impact. If the charter cap is expanded before Washington state levels the financial playing field for private schooling through a tax credit program like Georgia’s, the existing independent education sector in the state will be largely consumed by the competition from new “free” charter schools.

High profile Indiana state schools superintendent Tony Bennett has been defeated by his rival Glenda Ritz. Ritz not only opposes the statewide voucher program championed by Bennett, she is among the plaintiffs in a lawsuit to overturn it. Indiana’s voucher legislation accords the state department of education the power to adopt rules and regulations pertaining to its implementation, including determination of students’ eligibility to receive vouchers. If Ritz does not use these powers in an attempt to hobble and curtail the program, I will be shocked.

The political balance in New Hampshire’s legislature has shifted toward Democrats strongly supportive of the educational status quo. This raises the possibility that there will be efforts to cripple or repeal a K-12 scholarship donation education tax credit in that state. Though the program is quite small, it was among the best-designed in the country and it would be an unfortunate turn of events for low-income children in that state if the program is killed.

None of these developments or possible developments are likely to derail the growing interest in expanding educational freedom in America as a whole, but they do suggest that reformers have more work to do in educating themselves and the public about what works and what doesn’t in education policy.

A Happier New Year for the Beltway

An article in the Washington Post provides another example of how the Washington metro area has become virtually recession-proof:

The Washington region posted the highest year-over-year home price gains in the nation this fall, as real estate values slumped in nearly every other metropolitan area, a key housing report said Tuesday.

A healthy job market, particularly for high-salaried workers, buoyed demand and prices for housing in the D.C. area, local economists said. Home values climbed 3.7 percent in Washington in October from a year earlier, making it one of only four regions nationally to avoid a dip in prices, the Standard & Poor’s Case-Shiller home-price index said.

My colleagues David Boaz and Walter Olsen have highlighted numerous examples of how the Washington metro economy has prospered relative to the rest of the recession-battered country.

A map of Virginia’s unemployment rate by county produced by the Bureau of Labor Statistics is illustrative:

Unemployment rates for counties closest to the “Imperial City” are dramatically lower than the rates for those counties that are further removed. Arlington County unemployment is 3.8 percent, Alexandria City is 4.4 percent, and Fairfax County is 4.6 percent.

As David points out, the Washington region’s relative prosperity is a reflection of high pay for federal workers and “the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas.” Like an insatiable parasite, the Beltway class continues to gorge itself at the expense of the country’s productive class.

Taxpaying citizens should bear this in mind the next time they are tempted to look to Washington for “solutions” to the country’s problems.

The Constitutional Vision of The New York Times

The editorialists at the The New York Times are out of sorts this morning over a Tea Party backed constitutional amendment that would give state legislatures the power to veto any federal law or regulation if two-thirds of the legislatures approved. Despite the backing of incoming House majority leader Eric Cantor and legislative leaders in 12 states, the proposal has little chance of succeeding, the Times avers, “but it helps explain further the anger-fueled, myth-based politics of the populist new right.” Indeed, it expresses “with bold simplicity the view of the Tea Party and others that the federal government’s influence is far too broad.”

Well? Isn’t that what the election last month was all about? But right there, for the Times, is the problem: “In past economic crises, populist fervor has been for expanding the power of the national government to address America’s pressing needs. Pleas for making good the nation’s commitment to equality and welfare have been as loud as those for liberty.” With the Tea Party, however, the tables have turned. What most troubles the Times, it seems, are Tea Party signs that say “We Want Less!”

And nowhere is that better captured than when the Times speaks of “the mistaken vision of federalism on which [this amendment] rests. Its foundation is that the United States defined in the Constitution are a set of decentralized sovereignties where personal responsibility, private property and a laissez-faire economy should reign. In this vision, the federal government is an intrusive parent.”

If that vision is “mistaken,” so too, apparently, were the Founders, because it was their vision as well. To be sure, the Constitution they crafted held “competing elements, some constraining the national government, others energizing it,” as the Times writes. And true also, the government they shaped was meant “to promote economic development that would lift the fortunes of the American people” – but mainly by securing the framework for liberty, the rule of law, not by pursuing prosperity through government programs. In particular, the Framers believed in personal, not government, responsibility; private, not collective, property; and a free, not a planned, economy. And they left most power with the states, where it would be exercised responsibly, or not – something to keep in mind as we watch our “failed states” asking Washington (read, the other states) to bail them out.

Overwrought On START

It is unclear whether New Strategic Arms Reduction Treaty (START) will make it to the Senate floor this year or if there are 67 votes for it if it does. According to the White House and arms control boosters, that uncertainty endangers us all by leaving Russia’s nuclear arsenal unmonitored and undermining our non-proliferation agenda. According to pundits, New START’s failure to pass in the lame-duck would be a grievous political wound for Obama adminstration, which is struggling to buy enough Republican votes for ratification.

In an op-ed out today on the National Interest’s website, Owen Cote and I say this talk is mostly hot air. New START just isn’t that big a deal. We write:

[New START] would provide minor increases in intelligence and Russian goodwill. But passing it means handing taxpayers a substantial new tab on top of what we already pay for our bloated nuclear weapons complex. And rather than reducing the arsenal’s size and cost, the treaty props it up…. The real impact of New START is distraction. By faking a drawdown, the treaty keeps Americans from noticing that deterring our enemies requires nothing like the force structure we plan to retain.

Still Not Serious About Cutting Spending

The howls of outrage that have greeted the report of the bipartisan National Commission on Fiscal Responsibility and Reform shows two things:  1) most Democrats have no interest in reducing the size and cost of government; and 2) few Republicans are actually serious about it.

From the initial reaction, one would think that the Commission has slashed government to the bone, throwing the elderly, poor and sick into the street.  In reality, the Commission report is far from a radical document.  It proposes a reduction in government spending from 24.3 percent of GDP today to 21.8 percent over the next 15 years.  That’s a start.  But as recently as 2000 total federal spending was just 18.4 percent of GDP – and people were hardly dying in the streets during the Clinton years.  

In fact, the Commission doesn’t actually “cut” federal spending.  Under the Commission’s proposal, it would rise from roughly $3.5 trillion today to more than $5 trillion by 2020.  So, under the terrible “cuts” that the Commission is recommending, federal spending would still increase faster than inflation.  This is the old Washington game of calling a slower increase than previously projected a “cut.”

But Democrats appear unwilling to support even this modest slowing in the growth of government.  Instead they call for simply raising taxes to support a virtually unlimited amount of federal spending.  Republicans, meanwhile, talk about reducing government, but fall back on bromides about reducing waste, fraud, and abuse when faced with the need to make specific cuts.

If we were serious about reducing the size, cost and intrusiveness of government, we should roll back spending to Clinton-era levels.  (My colleague Chris Edwards has shown how that can be done.)  That would eliminate the need for the tax increases that the commission proposes. 

Alas, we still await political leadership with that amount of courage.

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