Posts Tagged spending

Pledge or Principle?


By Lowman S. Henry

Much ado has been made in recent weeks about the impact of the no tax pledge spearheaded by Americans for Tax Reform. Those who view the pending expiration of Bush era tax rates, and the fiscal sequester resulting from Congress’ inability to deal with the situation last year as a revenue problem, rather than as a spending problem have made the pledge and its purveyor, Grover Norquist, out to be the major stumbling block to a solution.

The narrative surrounding this near hysteria on the Left centers on portraying Norquist as some sort of a K Street puppeteer controlling U.S. Senators and congressmen from behind the scenes. These elected officials, having signed the pledge, now find their strings being pulled by a man bent on enforcing a far right political agenda. For the good of the country, so the theory goes, they need to break the pledge and enact higher taxes upon the populace.

This begs the question: to whom was the pledge made? Most, if not all, of the pledge signers did so in a public way to demonstrate to voters their belief that Washington spends too much with debt and entitlements out of control. Their pledge not to raise taxes was made not to Grover Norquist; it was made to their constituents. Norquist’s apostasy is expecting candidates, once elected, to actually keep their campaign promises.

Having pledged to voters that they would not raise taxes, hundreds of candidates were subsequently elected to office. They were put there for the precise reason that voters want them to curb spending. It is true that President Barack Obama won re-election while promising tax hikes. But, voters also re-elected a Republican majority, most of whom made holding the line on taxes a key component of their campaigns. They were sent to Washington to cut spending, not to raise taxes. The pledge simply reminds voters of that fact.

Once again the main political problem is that conservatives have allowed the spending interests to define the debate. We don’t face a “fiscal cliff,” we face a spending cliff. It is crystal clear that without significant entitlement reform, especially in the Medicare and Medicaid programs, neither government spending nor the ballooning federal deficit can be brought under control. But just as Republicans refuse to raise taxes, Democrats refuse to reform entitlements. It is a product of mainstream media bias that the intransigence of the Left on entitlement reform results in no political penalty.

Like a junkie shooting up in police custody, the Democrats are so addicted to spending that in the midst of this crisis they have proposed $50 billion in higher spending. The latest so-called stimulus put on the table by Treasury Secretary Timothy Geithner graphically illustrated the unwillingness of the Obama Administration to veer from its tax-borrow-spend approach to governing. The proposal was so ridiculous Republican negotiators literally broke out in laughter.

The more absolute becomes the Democrat’s refusal to cut spending or to reform entitlements the louder the attacks are on the no tax pledge.   But the pledge is simply a manifestation of long-held Republican principle, at least among those Republicans who still have principles. Historically the GOP has been an anti-tax party. Its candidates have been punished by the electorate when they have veered from that course. Examples of this being the breaking of his “read my lips” promise by former President George H.W. Bush and the ousting of a spendthrift Republican majority from Congress in 2006. Conversely, Republicans have won while cutting or promising to cut taxes. Ronald Reagan and George W. Bush both did so, and the GOP swept back into control of Congress in 2010 based largely on Tea Party-style fiscal conservatism.

Thus the pledge is not simply a way for Grover Norquist to control Congress. Rather, it is a manifestation of the Republican Party’s long and deeply held conservative economic principles.   It is a promise to voters that those principles will be transformed into public policy.   Those who have signed the pledge – and even those who have not – will ultimately answer not to Norquist for their abandonment of principle, but rather to the voters who elected them.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is lhenry@lincolnisntitute.org.)

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This Week on Lincoln Radio Journal: Cutting Prison Costs


Radio Program Schedule for the week of May 26, 2012 – June 1, 2012

This week on American Radio Journal:

  • Lowman Henry talks with Bill Frezza of the Competitive Enterprise Institute about the political and economic upheaval in Greece
  • Andy Roth of the Club for Growth has the Real Story behind conservative Republican congressional victories in Kentucky and Arkansas
  • Adam Tragone has an Off the Cuff discussion with Human Events Political Editor John Gizzi who has returned from covering the French Presidential election
  • Dr. Paul Kengor from the Center for Vision & Values at Grove City College has an American Radio Journal commentary on Memorial Day and our vanishing World War II veterans

This week on Lincoln Radio Journal:

  • Eric Boehm of www.paindependent.com has news headlines
  • David Taylor of the PA Manufacturers Association hosts a Capitol Watch roundtable discussion on reducing prison costs with Matthew Brouillette of the Commonwealth Foundation and with Kevin Shivers from the Pennsylvania Chapter of the National Federation of Independent Business
  • Lowman Henry has a Town Hall Commentaryon how state government has become a cesspool of corruption

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

http://www.lincolnradiojournal.com

http://www.americanradiojournal.com

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PA Property Tax System Broken


By Scott Paterno

For time out of mind, Pennsylvania has funded public education from a locally imposed and collected property tax, supplemented annually by state funds. The idea behind it was simple – tie taxes to property in the school district so that school boards are accountable to the communities in which they operate. There is only one problem – the system is a complete disaster that fuels a vicious cycle with no end in sight.

For the last several election cycles, property tax reform has been an issue. Tom Corbett has paid significant lip service to the issue yet has failed to propose a comprehensive plan. Ed Rendell used it to pass gaming in a state that still limits Sunday alcohol sales. Tom Ridge worked to pass a reform to little effect. House and senate candidates have been tickling the ears of older constituents – people with fully paid off houses, grown kids, yet a rising tax bill – seemingly forever. It is, in many ways, the one issue that appears to have universal support yet never seems to be significantly addressed.

But before we get in to the politics of why we can’t seem to get a real fix, let’s look at the stunning dysfunction of the system – a system that grows more antiquated and damaging each year.

Starting at the most basic element, Pennsylvania uses a system of property taxes to fund public education based on the value of properties within the school districts themselves. Districts with lots of valuable personal and business real estate – think districts like Hershey, State College, Lower Merion and Mount Lebanon – have well funded schools. Districts with lower property values and lots of untaxed public property – Harrisburg is perhaps the best example – are in a constant struggle to make ends meet. As the economy tightens, and as property values fall, more and more districts are finding themselves in the same position – saddled with a declining tax base and rising costs.

This starts the cycle. As property values fall, so does the desirability of the school district. Once a school district’s quality is perceived as falling, the image of the town in which it resides falls with it. This in turn scares off potential residents, as home owners with kids would rather move into a town with a solid school district. As a result, the demand for property in the better school district goes up, increasing the value of the property within that district. As property values rise, so does the funding base for the school district.

Meanwhile, the town literally next door with the less attractive school district sees the opposite effect. Fewer potential home owners wanting to move into a district lowers demand for property in the town, and consequently lowers property values. As property values fall, so does the tax base and the funding for the school district. As the school district struggles, it further drags down the appeal of the community it serves, making a recovery harder and harder with each passing year.

This is exacerbated in urban and quasi-urban settings where more and more lower income residents move into higher density rental properties. The effect is to increase population density without any improvement in tax revenues, putting an even greater strain on the limited and declining resources in these districts.

This is a cycle doomed to failure. Towns can’t improve their property values without improving their school system, yet they can’t improve their school system without a deepening tax base that can only come with an improved and attractive school system. Like the chicken and the egg, there is no way to know which came first; all we do know is the result has been sliding toward disaster for more than a generation and yet we still have no comprehensive solution to the problem.

And that brings us back to the “why” – politics. You see, while both sides want property tax reform, there has yet to be a real majority supporting the type of comprehensive reform that might actually make a difference. One side wants to “tweak” the system in order to trumpet cutting taxes. Another side wants to increase funding across the board but needs to disguise the tax increase. Still others want to exempt certain properties of elderly constituents while failing to provide an offset. In short, there are lots of political maneuvering yet no real fix to the obvious problem. In laymen’s terms, the politicians have been “painting over the rust” hoping the public is distracted from the rot underneath.

But there is a tipping point coming, and one that will bring real passion into the discussion across the state. No, I am not referring to any political event – it’s the growing use of “pay to play” athletics and extracurricular activities in school districts across the state.

Over the past few years, as it has become harder to raise property taxes in a bad economy and as property values have fallen off as much as 40% in some districts, school boards have been faced with Hobson’s choice: either charge for extra curricular activities or end them. It’s a choice that more and more districts are facing, and as a result the vicious cycle continues and gets worse.

Athletics, as trivial as they may seem on paper when discussing education, are more than just games; they are avenues to learn life lessons that transcend the playing field. The lessons learned, such as teamwork, leadership, dedication, how to succeed and fail, serve the participants as they move forward. These are, after all, some of the most important lessons we learn in our youth.

The value of athletics – or band, debate club, or any number of other extra curricular activities threatened with “pay to play” funding models – go far beyond their cost. To many parents they are a part of the school experience, and as more and more of them are forced to write a check or tell their child they can’t participate, the louder the outcry for real reform.

And we need real reform. The process will be messy and ugly at times, but the fact is we need real leadership from our elected officials to reverse – truly reverse – the root of the failure our government keeps trying to ignore: the property tax system itself.

If we want to stop the vicious cycle that dooms poor school districts to struggle, if we want to provide a truly equal educational experience in every school in Pennsylvania, if we really want to improve outcomes, we must stop treating the symptom and start treating the cause – we MUST completely rethink and recreate our public school funding system, and elect officials with the courage to do just that. Anything short of that is a path to failure evident to all – except those officials in Harrisburg.

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