Minnesota Democrats Give Up on Tax Increases
Minnesota's new governor, Tim Pawlenty (R), has repeated the theme of George H.W. Bush's convention speech: Read my lips. No new taxes. Bush recanted on that promise, which is a large reason he became ex-president four years sooner than expected.

So far, though, Pawlenty has done the former president one better: he has stood firm on his position, and has encouraged his partisans in the House (where Republicans are the majority) and Senate (where they are the minority) to stand with him.

After Pawlenty threatened to shut down the state government rather than concede a tax increase, Senate Democrats gave up. Their tax package, which passed the Senate earlier in the week, included a tax hike on the top 5 percent of taxpayers as jumps on the cigarette tax and an increase in the state business property tax.

Newt Gingrich tried this technique in reverse--a legislator shutting down government in the fact of tax-and-spend executive, and we all know that ended badly for Gingrich and the Congressional Republicans. Now, Pawlenty strikes me as a smart guy (or else he has a smart PR staff), and not unusually arrogant (politicians do require a larger-than-average ego, after all, to succeed). So what makes him think that he won't face the fate of Gingrich in this game of chicken? There are obvious differences--Speaker of the House versus Governor; Gingrich's opponent stood first, Pawlenty's caved. The DFL (as we call Democrats here) figures that there will be an electoral uprising against the GOP in the next election. Maybe (one hopes) Pawlenty has a better read on the electorate than the DFL.


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Is Minnesota Retreating from the Welfare State? Part 2
Writing in the Minneapolis Star-Tribune, Dane Smith remarks that "Minnesota appears to be on the verge of a metamorphosis." Perhaps. True, social conservatives have cheered the passage of a conceal carry measure, as well as a modest restriction on abortion (a "Right to Know" measure), and Pawlenty has stuck with his "no new taxes" pledge, at least to date.

Smith quotes Gov. Pawlenty at a meeting of Republican politicos: ""We are at a crossroads for Minnesota's future." He's right of course, though it is not yet known which path the state will take: continue with the status quo of redistribution of wealth and high taxes, or increase reliance on civil society. True, the conceal carry law and the new restriction on abortion are significant, but they were bound to be enacted at some time. After all, pro-life legislation has been passed in previous sessions, only to be vetoed by the governor. Conceal carry was also enacted largely because there was no longer a governor who would stand in the way.

The last election brought the Republican Pawlenty into the governor's seat, enlarged the GOP's majority in the House and narrowed the Democrat's majority in the senate. As a result, libertarians and conservatives think there's a transformation underway. ""We are seeing a transformation from a blue [Democratic] state to a red [Republican] state," said a representative of the Taxpayers League of Minnesota. Advocates of the status quo deny that. Marcia Avner, of the Minnesota Council of Nonprofits, says that any change in the state's political culture is "only a perception." [Here's a topic for another day: in the workaday world of government, "nonprofit" often means "receives government money," which of course means "advocates higher taxes."]

Larry Jacobs, a professor of political science at the University of Minnesota, wisely notes, however, that we can't yet know how significantly the state has changed until we know what happens with the budget. Here's the key question to ask at the end of the year: did the state rely more on tax increases, or budget cuts to meet its deficit?
(Thanks to Geitner Simmons, via InstaPundit, for these links).


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Is Minnesota Retreating from the Welfare State? Part 1
Is Minnesota backing off from a soak-the-rich tax system, a cradle-to-grave social services system, and a culture that equate civic mindedness with high taxes? I certainly hope so--when I moved here from Illinois, my state income tax withholding went up 60 percent. Or maybe it was "only" 30 percent. It's too depressing; I've forgotten about it.

The political atmosphere, of course, is with the looming deficit in the state budget, estimated at $4.2 billion---this for a state of roughly 5 million people. (In case you are keeping track, that's $800 per person.) As it stands now, the Tax Foundation calculates that Minnesota is already the third most heavily-taxed state, behind only Maine and New York. (The average rank for states that border Minnesota: 23).

Writing for the Wall Street Journal, John Fund think that "Compassionate conservatism may be about to get the upper hand over old-fashioned progressive politics in one of the nation's original welfare states." At least it's a start in the right direction. While even Republican ex-governors call on Gov. Tim Pawlenty to raise taxes--again--Fund says that " Mr. Pawlenty is, to paraphrase Margaret Thatcher, not for turning."



The governor's budget calls for a 5 percent increase in state spending. That's generous, at a time when inflation is practically non-existant. The "soak the rich" Democratic party wants more, of course. But as Michael Greve notes (see preceding entry for the link), this is exactly the time for states--Minnesota, especially--to make necessary reforms.





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State Budget Deficits-Whose Fault is It Anyway?
State governments across the country are dealing with huge budget deficits, both current ($30 billion for this fiscal year) and projected ($80 billion for the next fiscal year). Many governors demand more federal money, claiming that the problem stems from unfunded mandates from Washington.

Michael S. Greve, a scholar with the American Enterprise Institute, agrees that there is need for federal action, but he doesn't call for more money. Rather, he calls for a reform in the way that federal dollars flow to the states. A brief review cannot do justice to this essay, which covers not only budget policy but federalism, education, and health care policy. But here are a few points that stuck out:

Since World War II, the role of federal spending in the national economy has been stagnant, at about 17 percent of Gross Domestic Product. State spending, however, as doubled, from 5 percent to 10 percent.

How did this happen? Through what governors are asking more money for even now -- joint federal/state programs such as Medicaid. "Federal funding of state-administered programs," Greve writes, "permanently inflates the demand for government."

State politicians like to please constituents and interest groups by expanding government programs--that's the old "buy your voters" technique. In the case of federal/state programs, the feds match state spending. So if a state spends $1 on Medicaid, it gets $1 (or even more) from the federal treasury. The state politicos get to satisfy demands for increased spending, but they can shift some of the responsibility onto the federal tax system: increase overall state programs by 100 percent, for example, but increase the demands on the state budget by only 50 percent. A smart move for state politicians? Certainly. Who can resist a 2-for-1 sale?

In the states, though, the political process that reconciles the demands of taxpayers, who want lower taxes, with those on the dole--program beneficiaries, administrators, consultants, and assorted technocrats--who want higher spending--is distorted by the federal funds. By design, federal matches result in states spending more on, say, Medicaid, than they would have otherwise. With money coming from Uncle Sam, expanding a state program doesn't seem as costly after all. By spending another $100 on Medicaid, the flow of money to those on the dole increases by $200.

When hard times come, however, watch out. If the state cuts its $100 share, it loses the $100 in federal money, and a $200 cut to a program sounds a lot worse than a $100 one. It also affects more people--people who have a very strong interest in seeing the deficit by increasing taxes, preferably on somebody else. Joe Taxpayer, on the other hand, might save a few bucks from cutting taxes (rather than spending in one particular program), so he is not going to be as motivated about making his views known. So guess which policy option--increased taxes or decreased spending--wins out over time?

Greve has some specific recommendations about education and Medicaid, which are worth the time of anyone interested in those issues.
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Freedom of Association Will Play Through at Colonial
On May 19th, Annika Sorenstam will be the first woman since the legandary Babe Zaharias to play in a tournament with men. Sorenstam, a phenom on the LPGA, will participate in the Bank of Colonial Colonial tournament, an event on the men's PGA Tour. A woman in a man's tournament? As you can expect, this has caused a lot of controversy.

Sportswriter Melanie Hauser has some good thoughts in a an op-ed on the subject.

Some players grumble that Sorenstam has not played in any of the qualifying tournaments for this tournament. Instead she will be there courtesy of a sponsor's exemption. These exemptions are granted at most, if not all, tournaments, so the criticism is overblown: what is unusual in this case is that the sponsored player is a woman. Actually, there are seven other players (all men) who will receive an exemption as well.

The cause of women in golf, then, is being advanced by commercial interests, not through a lawsuit, or a small group of protestors storming the gates. Bank of America may indeed be a progressive organization, but one can't help but admire their business acumen: giving a sponsor's exemption to Sorenstam is a sure-fire way to attract attention to an event that is, after all, not a major tournament. More public interest in the Colonial means more marketing opportunities for B of A.

Some of the men grumble, though in an age of political correctness and "diversity", nearly all the dissenters have kept their mouths shut. Of course, if they feel strongly enough about the issue, they always drop out of the event. It's an easy bet that none will. The stakes of winning--and the criticism they would face for withdrawing--all but guarantee it.

Rather than lobbying a government agency to regulate the PGA Tour, or sue the Tour for the "right" to enter, Sorenstam, who wants to test her mettle against the best golfers in the world, relied on the self-interest of Bank of America and of the Tour (which depends, of course, on sponors such as B of A). No regulatory dictat. No judicial decision. Just the free free market, and freedom of association at work.

Too bad we don't rely on that path much anymore.

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News is Entertainment. Better citizenry through talk radio.
Much has been made of the fact that a reporter at the New York Times committed frequent acts of plagarism and fraud. For the editors, the question is "what did they know, and when did they know it?" Unavoidable as well is the suggestion that the paper's enthusiastic embrace of affirmative action led senior staff to ignore the warnings of a junior manager. The Times, whose editorial page of late has shown a distinct break from reality, suffers another blow.

Meanwhile, a comic (Jay Leno) and a journalist (Katie Couric) trade places, and host each others show. Is this a scandal for journalism? Probably not. I've never thought of The Today Show as a serious journalistic enterprise, what with all its "lifestyle" stories and interviews of celebrities--and the fact that its hosts are celebrities in their own rights. By contrast, monologues from The Tonight Show are a major source of political news for many people. Entertainment as news. News as entertainment. This exercise in swap-o-rama merely confirms the obvious.

Liberals and centrists like to worry about "right-wing talk radio." Does it dominate the airwaves? Not quite. There is, after all, an extensive "left-wing talk radio" network, though most people don't think about it that way. What is this left-wing talk radio? Why, National Public Radio. Unlike CBS, ABC, CBS, etc., this one is supported by your tax dollars.

One other note on talk radio. The most intelligent and certainly most educated talk radio host in the country is Milt Rosenberg. This month marks his 30th year with "Extension 720" on WGN-AM, Chicago. Rosenberg, a professor of psychology at the University of Chicago, has the quiet demeanor of an old school professor, and he skillfully conducts serious interviews of serious guests, discussing serious subjects. Though I frequently listened in while I was living in Chicagoland, I was always amazed that I could listen to a discussion of, say, the Peloponnesian War or language and human cognition on a radio show. Think of Extension 720 as NPR, only better, and without the taxpayer funding. If even this superstation can't reach you over the air, you can listen through the WGN web site.
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Checker Finn on Education
One of the country's finest experts on education, Checker Finn, spoke at a luncheon today. For someone who writes and speaks on a subject usually discussed in tones either earnest and uptight (reduce class size! it's for the children!) or dull and inpenetrable (usually beyond parody), Finn gives a fantastic speech, full of insight and humor. Come to think of it, those two qualities are usally lacking in the literature on education.

One point worth relaying was one his observations on the commission that produced the famous report "America at Risk," which detailed the sad state of government-owned schooling. To paraphrase, he said "The members of the commission were naive, thinking that the will for change was there, the only thing missing was the knowledge of where to go." Of course, it's more the other way around these days. We know what works: highly educated teachers. High expectations of students. What we lack is not knowledge but political will: the "education blob" resists raising academic standards of would-be teachers to make sure they actually know what to teach, and not just the latest fads in pedagogy. The blob also resists the usual practice of business, which is to reward high achievers (merit pay) and punish slackers (at-will employment).

When asked about the usefulness of small classes ("class size reduction," in the jargon), Finn replied that the evidence was mixed. However, paraphrasing again, "If you're a lousy teacher with a large class, you'll still be a lousy teacher with a small class."

Finally, he laid out the two different ways of education reform: market reform (using financial incentives to reward success and punish failure--think vouchers and tax credits) and standards (increase annual testing of students and perhaps teachers, but keep the funding system as it is). Finn suggested that these two approaches can be combined: use vouchers to provide more choices, especially to the poor, and implement a strong testing system, so people can know what schools are doing best.

Great idea. But don't we already get that information from graduation rates and college entrance exam scores?

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School Boards: Part of the Problem
Teacher union opposition to vouchers and tax credits is well-known. Opposition from union bosses is understandable--if students leave government-owned (public) schools, they usually do so for schools (private, or home schools) that are non-unionized. Union bosses lose members, which means they lose money and power. Who wants to do that?

But as this news report from the Associated Press points out, there's another opponent of vouchers: members of the school boards. From the news story:

"There is no middle ground on vouchers," said Freddie Whitford, executive director of the Louisiana School Boards Association and a voucher opponent."

The same logic that applies to the bosses of teacher unions applies to Whitford, of course: a decline in the budgets of public schools would undermine his own organization. But I suspect there's more at work than that. Too often, school board members, if not already in the pocket of teacher unions when they are elected (unions are working vigorously to get pro-union individuals elected to school boards), they become captured by the culture and logic of the very people--the teachers union--they are supposed to manage. It's something like the Stockholm Syndrome, in which hostages come to endorse the cause of their captors. But the analogy is imperfect: while school board members may be indoctrinated by the unions, the true hostages are the low-income families who cannot easily escape from the government-owned schools that allegedly teach their children.

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Higher Expectations and Prices for Higher Education
Education, after health care spending, is usually the largest budget item for most states. While there are plenty of ideas floating around for reforming K-12 education, ranging from (on the status quo-side) fiddling with funding formulas and increased testing of students to (on the more dramatic side) tuition tax credits or vouchers that families can use at any school, higher education has, by and large, escaped public scrutiny. Sure, the folks at the American Council of Trustees and Alumni and the National Association of Scholars have turned up the heat on political correctness and the weakening (dare we say abandoning?) of academic standards, the basic structure of higher education, with its heavy reliance on state-run universities, has largely gone unchallenged. At least in my own state, the behemoth university is lionized as an engine of economic growth and cultural creativity.


It's about time that the sacred cow receive a little scrutiny, because recent events are reason enough to wonder "what are we thinking?" On April 11, 2003, the Wall Street Journal published "Education: College, With All the Perks--Schools Try Free Phones, Cable." College isn't necessarily the spartan life of communal showers, 20-year old thin mattresses on ugly wooden built-in furniture, and black, rotary dial telephones (one per room) that I knew not that long ago. Colleges and universities are offering cellular phones, cable tv and high speed internet access in each dorm room, laptop computers, and other niceties. Some, like internet access, can be useful tools for academic research--as well as for downloading gigabits of illegally-obtained music. Others features are of a much more dubious nature.


In its April 18 edition, then, the Journal reports that "Schools Trim State Ties." State aid to colleges has almost tripled during the last 20 years, but university budgets have increased even more. The result is that state funds are accounting for a smaller percentage of state funding, ranging from 25 percent at the University of Wisconsin to just 10 percent at the University of Michigan. Universities are increasingly turning to full-priced students from out of state and private funds for research centers.


University officials are calling for more independence over fees and salaries. Some are even using market mechanisms, charging higher tuition for high-demand fields such as engineering, and less for lower-demand fields such as liberal arts. Good for them--if they can continue down this path and accept more serious reform.


More serious reform is what a proposal in the Colorado House of Representatives envisions. It would drop annual appropriations to the state's colleges and universities, and give students a tuition voucher. In other words, shift the funding mechanism from institutions to students. That's a good idea, for several reasons. It would make universities more aware of competition--something sorely needed in the last bastion of American socialism. By tying all (or nearly all) state budget allocations to the backs of students, universities would have to watch over their budget with an eye to the market (of students) rather than rely on the patronage of a a well-positioned alumnus in the legislature.

Would this, however, mean that we would see even cushier student unions and 5-star accomodations in university dorms as colleges rush to meet the demands of today's students? Initially, perhaps---until students realize that they will rack up less debt at universities with more pedestrian surroundings.
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