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Welcome Back TABOR!
Posted By:  - 07/16/10

Call me crazy, but I feel like singing. Why? I want to celebrate the end of Colorado's Referendum C and the full Return of the Taxpayers Bill of Rights (TABOR).

TABOR is the strongest set of taxpayer protections and spending limits in the country. TABOR requires the Colorado state government to return excess taxes to the people in the form of rebates, limits government growth to a formula of population growth plus inflation, and allows tax increases only through a popular vote. Since 1992, TABOR lowered Colorado's income and sales taxes, and by 2001 returned $3.2 billion in refunds to taxpayers.

But since 1992 tax and spenders in Colorado have bemoaned TABOR. These special interests, especially public employee union and others who live off of government largess, claim that TABOR has led to so-called "crippling cuts" in government services. The tax and spenders ignore the fact that TABOR does not stop the growth of government; it only keeps it to a more manageable size. In fact, Colorado's education spending has grown by at least 1/3 and math and reading test scores have consistently been above the national average.

In 2005, the tax and spenders waged a massive campaign to suspend TABOR and succeeded in enacting Referendum C, which suspended the limits on government expenditures for five years. Between 2006 and this year, Coloradans missed out on approximately $5 billion in tax relief while the government grew. Moreover, Referendum C did not live up to its promises to save the government from draconian cuts. What's ironic is that without Referendum C, the cuts probably would have been more gradual. On July 1st, the suspension ended.

On Tuesday, I was in Colorado to speak at a press conference, along with Jon Caldara of the Independence Institute, Marty Nielson with the Colorado Union of Taxpayers, Joshua Culling of Americans for Tax Reform, State Senator Shawn Mitchell, Amy Oliver with Mothers Against Debt, and Laura Carno with Americans for Prosperity Colorado, recognizing the return of TABOR. You can read about it here.

As I said at the press conference, "NTU's members welcome the end of Referendum C and the beginning of a new chapter in the TABOR success story. We will work with groups like the Independence Institute, Mothers Against Debt, Colorado Union of Taxpayers, Americans for Tax Reform, and Americans for Prosperity Colorado, and individuals like State Senator Shawn Mitchell, to ensure the strongest taxpayer protections remain in place well into the future."

Welcome back, TABOR!

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Illinois Hands Out Money It Doesn't Have
Posted By: Kristina Rasmussen - 07/15/10

If you were amazed that the State of Illinois is handing out pay bumps to tends of thousands of state workers in the midst of a multi-billion dollar budget deficit, get ready for this.

Between June 2011 and January 2012, unionized state workers are scheduled to receive a total of 7.25 percent in cost of living adjustments. You read that right: 7.25 percent over a period of seven months. Pay steps outside of cost of living adjustments would only grow this amount.

paybump

So a state worker making $60,000 on May 31, 2011 will be earning $64,443 on January 2, 2012. Not bad, if you can get it. Or take it, from taxpayers. 

The state is essentially a failing business. It can't pay its bills on time, and it's default risk is heading in the wrong direction. Failing businesses looking to recover don't hand out pay raises like candy -- they work to balance costs with revenues.

Read about ways to right size public employee pay in our latest Spotlight on Spending.

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Will We Even Be Celebrating?
Posted By: Pete Sepp - 07/08/10

As we all get back into the post-July 4th work groove, we'd do well to read and tuck away for future reference this commentary by NTU Board Member Ken Blackwell and Ken Klukowski. The Kens' disscussion centers on the Obama administration's attempts to dismantle the concept of American exceptionalism.

Blackwell and Klukowski recently authored a book, The Blueprint: Obama's Plan to Subvert the Constitution and Build an Imperial Presidency, in which they recount our President's dismissal of the notion that America is blessed with more freedom and prosperity than anywhere else.  But as Blackwell and Klukowski observe, "If we're all exceptional, then none of us are exceptional. President Obama could not be more wrong." And it shows, given the way "he's leading a government takeover of our marvelous free-market economy."

If Blackwell and Klukowski are right, what will July 4, 2011 look like? Maybe next year July 4th will be seen as merely another day off for federal workers, rather than the holiday that celebrates the birth date of our country's independence and the freedoms we enjoy.

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Massachusetts Leaves Tough Decisions to Local Governments
Posted By:  - 07/07/10

If awards for work shirking existed, Massachusetts would win in a walk. Last week, Governor Deval Patrick signed a budget that severely cuts funding to local governments but prohibits them from reforming one of the most costly aspects of their budget, namely health care plans for public employees.

Massachusetts state and local public employees receive generous health benefits. Currently, local government workers pay only $5 copayments when they visit a doctor. There is no question that such benefits put pressure on local government budgets. But only the state, not the local government, can modify employee health care plans through their Group Insurance Commission. In fact, local governments must get approval for all cost-saving steps by the municipal unions, who have incentives to maintain the benefits for their members rather than find savings for taxpayers. Allowing local government to modify their health benefits could ultimately save $100 million a year and help preserve the health care system, according to the Massachusetts Municipal Association. Geoffrey Beckwith, the Executive Director of the MMA said, "The current [public employee health care benefits] system is unaffordable - it costs taxpayers too much, crowds out important services, and forces the elimination of teachers, firefighters, police officers, and other workers."

Massachusetts' unwillingness to give local governments the ability to address the cost of health care gives the municipalities the mother of all unfunded mandates, namely providing the same health care plan to their employees, but with less money. The state has left the tough decisions to local government but has simultaneously tied their hands. Reforms of public employee health benefits are an important step in reducing government spending. Local governments in Massachusetts should have the same power as the state does to modify health benefits.

 

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Delaware Fails to Reform its Budget....Yet Again
Posted By:  - 07/01/10

Yesterday, Gov. Jack Markell of Delaware signed the budget for fiscal year 2011. While states across the country are tightening their wallets and making cuts, Delaware lawmakers, excited by an increase in tax revenue from the past year that is expected to continue, rushed to push money in every direction because, after all, it is an election year. Instead of being concerned with the long-term economic security of the state, the Joint Finance Committee struck down the budget cuts proposed by the Governor and fell back into old habits. It's more of the same in the First State where increases in public sector health benefits and pension plans, including free health insurance for the spouses of government employees, are digging the financial hole deeper and deeper.  In the end the budget they passed for 2011 is 6.5% larger than the 2010 budget.

But throwing money around will not solve the economic problems in Delaware. Currently, the ALEC-LAFFER State Economic Competitiveness Index ranks Delaware 47th in the nation for their top marginal corporate income tax rate at 9.98% and 42nd for their top marginal personal income tax rate at 8.20%. These exorbitant rates are to blame for their low personal income per capita cumulative growth; from 1998-2008 personal incomes only grew 39.9%, the tenth lowest in the nation. Additionally, the punitive Gross Receipts Tax levied on producers makes Delaware an unattractive option for businesses looking to relocate.

Delaware missed a great opportunity to make significant reforms that would have saved the state $200 million over the next five years. The state continues to pay large sums of money to keep state troopers instead of resource officers in schools and to put nurses in private schools. Additionally, making non-profits compete for their grants and requiring districts to share the costs of the bus routes they plan would have saved taxpayers even more. All in all, the short-sightedness of Delaware’s budget increase will be on display next year when they are in the same position with the same problems.

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A few thoughts about "stimulus"
Posted By: Ross Kaminsky - 06/21/10

The other day on CNBC, I saw Larry Kudlow discussing the Democrats’ desire for a second “jobs bill” – what they’re calling “stimulus” now that “stimulus” is known to be ineffective union-boosting pork.

I sent Mr. Kudlow a few thoughts on the subject (and he was kind enough to respond that I was “dead right.")

Here are those thoughts:

One thing I think is worth mentioning is how all of the jobs which are suggested to be saved by a proposed second “stimulus"/jobs measure, like teachers, cops, firemen, etc., are government employees…not just that, but state government employees.

Thus, this so-called stimulus is really just plugging holes in state budgets. Beyond its questionable legality, this has a bunch of other problems:

  1. Since some states have worse budget problems than others, the effect of the legislation will be to transfer money from taxpayers in some states to taxpayers in other states, like from Indiana to California, from Maine to New York, etc.

  2. The moral hazard problem is huge, removing pressure from states and municipalities to tighten their belts, feeling like they’re being seen as something like “too big to fail".

  3. Creating/saving government jobs adds to the long-term burden of the cost of government on the private sector in addition to increasing the power of public sector unions, one of the most destructive forces in the nation.
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Dear FCC: How About a Fourth Way?
Posted By: Andrew Moylan - 06/15/10

This coming Thursday marks the next step in the raging debate regarding the ambitious effort of the Federal Communications Commission (FCC) to regulate the Internet. On June 17th, the FCC will conduct an open meeting in which they will discuss their plans for so-called "reclassification" of broadband Internet in order to impose net neutrality regulations, an issue that has been the cause of much dispute in the past several months.

The root of this disagreement lies in the Comcast Corp vs. FCC U.S. Court of Appeals ruling this past April. It's a long story (surprise!), but Comcast had been exposed as slowing down traffic on some torrent sites in order to prevent their network from being overloaded and the FCC attempted to crack down on them legally. The Supreme Court ruled, however, that the FCC lacked the authority to dictate how the Comcast Corporation could manage its network. But even without that legal action, Comcast had announced that it would stop the practice after hearing an outpouring of opposition from their paying customers. The FCC was soundly rebuked for its regulatory overreach, and Comcast agreed to stop slowing traffic so as to avoid angering any more of their customers. End of story, right? Not exactly.

The Federal Communication Commission decided to retaliate against this Appeals Court ruling by redefining their terms. The FCC is likely to begin proceedings on Thursday in their plan to "reclassify" broadband Internet from its current status as an "information service" to a "telecommunications service" regulated under Title II of the Communications Act. For those of you who aren't regulation nerds (and really, who is?), that basically means that the Internet would change from being regulated under the lighter regime that has allowed its exponential growth in recent years to a regime intended to regulate monopoly telephone providers back before World War II. Because, you know, the Internet is totally what Congress had in mind when drafting Title II in 1934. That seemingly minor regulatory change could generate any number of extremely onerous new restrictions, like having the government dictate prices.

Though the FCC hopes to present this reclassification in light of warm, fuzzy terms like "consumer protection," the real question here is this: who should have the ability to manage the multi-billion dollar networks that comprise the heart of the Internet, bureaucrats in the FCC or the businesses that built, own, and maintain them?

On Thursday, this issue will be discussed in light of three specific points:

  • The legitimacy and legality of the Commission's previous decision to call broadband Internet an "information service."
  • The consequences of reclassifying broadband Internet as a "telecommunications service."
  •  Whether or not to adopt the Orwellian "third way," in which FCC Chairman Julius Genachowski would basically cross his heart and totally promise that this regulation would be minimal and not expand in size and scope like every other government effort ever.

The solution to this issue lies not in a cagey reclassification of terms, but rather a free market approach. Call it a "fourth way," if you're feeling Genachowski-esque. Recently a group of broadband and high-tech companies -- the Broadband Internet Technical Advisory Group -- voluntarily collaborated in order to facilitate discussion on how to create their own solution to network management and technical Internet issues. Much-deserved kudos to the member companies for cooperating to try to face the real issues of network management head on, as many of them have been at each other's throats for years in the marketplace and on net neutrality, for cooperating to try to face the real issues of network management head on. This is the solution we should be advocating because the last thing the Internet needs is an army of bureaucrats deciding how it should be managed.

After all, do you think we should trust the regulation of the Internet to the geniuses behind the unintentional comedy that is the FCC KidsZone? I mean, the site has information about cutting edge technology like PAGERS and ANSWERING MACHINES!

So how can you get involved? The best thing to do right now is to call your Member of Congress! It seems like a cliché, but it works and it's necessary. Since the FCC seems determined to do whatever the heck it wants, rules be damned, Congress needs to assert its authority to tell Genachowski to simmer down. Call your representatives and tell them you oppose net neutrality and reclassification in order to regulate the Internet!

 

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Are local governments in Maine illegally campaigning for more taxes and spending?
Posted By:  - 06/02/10

It appears as though the line prohibiting government entities from engaging in political campaigns has been crossed in Maine. Now, the Maine Heritage Policy Center (MHPC) is doing something about it. Today, MHPC's David Crocker announced that his group filed a lawsuit alleging that the Maine Municipal Association (MMA) engaged in illegal campaign activities by contributing millions, including campaigns against initiatives that would have limited spending and lower taxes for Mainers. You can read about it here.  This is what Crocker had to say:

"The Maine Municipal Association has directly and publicly engaged in electioneering by taking sides and contributing public dollars to influence the outcome of initiative campaigns," Crocker said.  "There is a clear line that may not be crossed.  MMA has crossed that line repeatedly."

According to the release: "Under a 1989 statute, the Maine Legislature confirmed MMAs status as an "instrumentality" of local government.  The same statute also requires all MMA assets be held by the State Treasurer upon MMA's dissolution for municipalities in Maine.  Further, MMA claims exemption from federal income tax as a government entity, and receives an exemption as a government entity from Maine sales tax."

"Based on more than 60 years of national case law (including a 1991 opinion by the Maine Superior Court) and a 2004 opinion by then-Attorney General Steven Rowe, a government entity is prohibited from interfering, taking sides, participating and contributing to political campaigns.  MMA has unequivocally ignored this legal advice."

"Between 2000 and 2009, MMA provided substantial financial, staff and other resources to four PACs supporting or opposing five citizen initiatives.  Their interference included: coordination with other interest groups in organizing and/or managing PACs; staff support for PACs and political campaigns, including MMA personnel holding leadership roles with PACs; and cash and in-kind contributions totaling nearly $2 million."

"The complaint also shows that MMA's electioneering exceeds its articles of incorporation.  According to those articles, MMA's purpose is 'to serve as an association for the promotion of good municipal government; to be a non-political and non-partisan organization dedicated to the purpose of promoting good municipal government by the exchange of ideas and information through the united effort and cooperation of its members,'."

This lawsuit could have significant precedential weight in the many states where tax and spending issues are on the ballot, and public sector unions hold significant sway budget policies. We here at NTU are going to be watching this case closely. As a group that has been involved in a number of initiative campaigns and seen a lot of dirty tricks employed, we are always hope for the success of efforts to keep things fair. Governments and their allies need to learn that they cannot use taxpayer dollars to finance efforts to continue their reckless spending and tax policies.

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The Forgotten Debt
Posted By:  - 05/20/10

Sandwiched between our financial meltdown, Obama's presidential election, and the crisis in Greece, another, equally important story has flown under the radar.  With the rise of the 24-hour news cycle, modern news coverage should ensure that events of national importance receive the coverage that they deserve. 

When we look at the coverage of government debt, not only the media, but also the government fails to reveal the whole story.  We are bombarded with a litany of stories about the federal budget deficit and the national debt, but the attention given to the debt issue is not the problem. The point is not the media's failure to mention the topic of federal debt, but rather it's the substance of the coverage that is lacking – specifically the way the amount of debt is calculated.  It's a far larger problem than a mere matter of incorrect addition.  You can find the problem with every garbage pick-up man, mayor, city official, and governor across our nation.  How is this possible?  It stems from the debt carried by state and local governments, and it just might be the straw that breaks the camel's back.

State and local debt is not calculated as part of the national debt.  This egregious error demonstrates that the media and the government do not offer the American public an accurate depiction of the severity of the country's debt obligations.  The federal system of government is, by definition, a combination of national and state governments. So then, by extension, government/national (take your pick of words) debt should be viewed as a compilation of federal and state debt

This technicality might not be as big of an issue if the difference between the two numbers was inconsequential.  However, that is not the case.  So, exactly how big is the difference? Approximately $2.3 trillion.  That's right, state and local governments across the country have amassed $2.3 trillion in debt.  Add that figure to the nearly $13 trillion the national government owes, and we are talking about a staggering $15.3 trillion in combined government debt. 

Recently, Paul Krugman wrote an op-ed in The New York Times arguing that the United States' financial situation is not comparable to Greece's.  On this point, he is correct.  The United States is not Greece; instead, we are toast – blackened, burnt toast – and with the current trends of increased government spending, the oven is just beginning to heat up.  At least Greece is small enough to bail out; here in the United States, we don't have that option.  If we go up in flames, there will be no one left to put out the fire.  

Burnt toast aside, our government's debt level is unsustainable and extremely alarming. Regretfully, with an additional $2.3 trillion added in, a far more formidable debt faces our nation. That's why we need concerned citizens to tell Washington (and Sacramento, Tallahassee, Phoenix, and Baton Rouge) to stop writing checks that we can't cash.  

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New Series at Government Bytes: And WE'RE Astroturf? Part I
Posted By: Andrew Moylan - 05/10/10

You've no doubt heard liberal Members of Congress and other interest groups calling the Tea Party movement "astroturf," a play on the term grassroots.  Like our good friend Nancy, for example...

Or the liberal pro-net neutrality group Free Press, which has an entire section on its site devoted to "outing" so-called Astroturf operations.  This page includes a handy-dandy widget with a graphic of large corporations pulling the strings of Congress.

They claim that the whole movement is the invention of a bunch of Beltway insiders backed by piles of corporate cash.  For them, it simply does not compute that ordinary Americans could be fed up with trillions of dollars in debt, tax hikes, and runaway spending.  It MUST be the orchestrations of rich puppet-masters in DC, right?  Instead of spending hours debunking those claims, I'll point to a post I made on our old blog after the massive 9/12 March on Washington that NTU helped to organize.  Several hundred thousand people from all across the country do a better job of dismissing these silly claims than I could here.  Instead, the "And WE'RE astroturf?!" series will focus on liberal activists employing exactly the kind of shady strategies that they accuse us of using.

So, that group I mentioned, Free Press?  The ones that have a page on their site to expose "Astroturfing?"  Last week, they were outed as being the true authors behind a letter supposedly written by Congressman Jay Inslee (D-WA).  The letter is being passed around to various Congressional offices to solicit support for FCC Chairman Julius Genachowski's radical effort to thumb his nose at the limits of his regulatory authority.  But the properties of the electronic file show that the real author of the letter was not Mr. Inslee or a member of his staff, but none other than Free Press Policy Director Ben Scott!

I've worked in government affairs for the National Taxpayers Union for nearly five years now.  Never in my life have I ghost-written a letter for a Member of Congress, nor have I offered to or been asked to do so.  It's just not a part of the discussions we have with Congressional offices.

So, Free Press, what say you?  Are you pulling Jay Inslee's strings?  What other seemingly spontaneous pro-net neutrality efforts have you coordinated?  How many other letters or bills have you written behind closed doors without getting caught?

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