The Prosperity Blog

Georgia City Shows Florida How to Cut Costs, from the James Madison Institute

John Hallman — Sat, 16 Jun 2007 08:34:00 GMT

Georgia City Shows Florida How To Cut Costs

By GEOFFREY F. SEGAL

Published: Jun 12, 2007

With the Florida Legislature now seemingly intent on mandating lower property taxes, some local officials are warning of libraries shutting down, your 911 call going unanswered, or your local jail turning inmates loose.

Yet if those same officials would only turn their gaze a bit farther north, they could observe a Georgia city that demonstrates how Florida's local governments not only could survive but could thrive, with big savings for taxpayers.

Indeed, the experiment in Sandy Springs, Ga., has proved that local governments don't need hundreds of public employees to function. Sandy Springs, a fast-growing town of more than 80,000 residents, has only four public employees who are not involved with public safety. Except for police and fire, virtually every government function has been contracted out.

In its two years under private management, Sandy Springs hasn't needed a tax hike or a fee increase, the government has become more responsive, the service quality has improved, and so has customer satisfaction. The residents love it.

In fact, this model has worked so well that two other Atlanta-area communities adopted it last year, and several others are considering a similar approach.

How could Florida's communities follow suit? First, they could take a page from management guru Peter Drucker and require that every "traditional" service or function prove that it's a proper role of government.

Second, they could apply to local government Drucker's famous test for business: "If we weren't doing this yesterday, would we do it today?" Some services may well be discontinued rather than contracted out.

Indeed, certain services that some other cities provide won't necessarily be provided by Sandy Springs - either because they've outgrown their purpose, they're no longer effective, or they're outside the proper scope of government.

Florida's local officials can determine on a case-by-case basis whether it makes more sense for their community to "make" or "buy" public services. If they decide to buy, there are numerous functions that are readily available on the marketplace and could be easily contracted out to the private sector.

Criticism of the way Florida's state government handled contracts for the outsourcing of selected government services shouldn't deter local officials from experimenting. At the state level, the problem arguably wasn't in the game plan but in the execution.

While the Sandy Springs model isn't necessarily a good fit for every city, it does teach us an important lesson: that "business as usual" isn't the only operational model for local governments. Local governments need not adopt the entire model; rather; they can choose some services or entire departments to outsource to achieve savings.

For too many years local governments have been on auto-pilot when it comes to budgeting. They generally tend to spend more than they did the year before, with little real consideration of how sustainable that spending trend would be over the long term.

By breaking the mold and encouraging the kind of innovation and creativity that Sandy Springs exemplifies, Florida's local governments could become more efficient and effective. In Florida, rethinking how local governments operate can be the key to providing real property-tax relief.

Geoffrey F. Segal is an adjunct scholar of The James Madison Institute, a non-partisan policy center based in Tallahassee, and the director of government reform at Reason Foundation.

School Choice has saved $444 million; from the Friedman Foundation

John Hallman — Fri, 08 Jun 2007 10:58:00 GMT

School choice has saved $444 million
Article from the Friedman Foundation
May 09, 2007

New study analyzes fiscal impact of the nation's school choice
programs

INDIANAPOLISA landmark new study finds that school choice programs
throughout the country generated nearly $444 million in net savings
to state and local budgets from 1990 to 2006. Contrary to opponents'
predictions, the analysis also finds that instructional spending per
student has consistently gone up in all affected public school
districts and states.

"School choice saves. It saves children, and now we have empirical
evidence that it saves money," said Robert Enlow, executive director
and COO of the Milton and Rose D. Friedman Foundation. "In the face
of $444 million in savings, another excuse to deny children a
quality education has vanished before our eyes."

Released by the Friedman Foundation, "Education by the Numbers: The
Fiscal Effect of School Choice Programs, 1990-2006" provides the
first comprehensive analysis of how the nation's school choice
programs have affected state and public school districts. Of the 12
voucher and tax-credit scholarship programs that began operations
before 2006, every program is at least fiscally neutral, and most
produce substantial savings. Seven more programs have been created
since 2006.

"Programs giving parents freedom to choose in their child's
education are growing rapidly in number and size," said Dr. Susan
Aud, author of the study and a Friedman Foundation senior
fellow. "And a program's fiscal impact has become an important
political issue. This brings empirical evidence to that debate."

For years, opponents have claimed that school choice reduces
spending in public schools. Yet the study's analysis of the states
and school districts where school choice is available finds that
this is not the case. Instructional spending in areas affected by
school choice has uniformly increased.

"Opponents of educational freedom will find it tougher to bend the
truth. Our research adheres to the highest standards of scientific
rigor," said Enlow. "We've seen seven school choice programs start
in just the last year because evidence of the benefits are growing
just as rapidly."

The Friedman Foundation has provided analysis to many states on the
fiscal effect of proposed school choice measures. Consistently, the
studies for states like Arizona, New Hampshire, Utah, Virginia,
Minnesota and Kentucky point to substantial savings.

The study can be downloaded at
http://www.friedmanfoundation.org/friedman/research/ShowResearchItem.
do?id=10079.

+++++

FLORIDA (excerpt)

Like Arizona, Florida was an early entrant to the school choice
movement. The school choice programs that it has offered
to date target particular types of students. The McKay Scholarship
Program is a voucher program for students
with disabilities, the A+ Opportunity Scholarship Program is a
voucher program for students in chronically failing
schools, and the state also has a corporate tax-credit scholarship
program for low-income students. In the 2005-06 school
year more than 31,500 students in Florida received vouchers and
scholarships from these three programs. Although this
represents only 1.2 percent of Florida's 2.5 million students, the
state has been a school choice leader.

Florida's public education funding system is known as the Florida
Education Finance Program (FEFP).10 The FEFP
uses a foundation funding amount per student, the Base Student
Allocation (BSA), and multiplies this by the weighted
number of full-time equivalent students in each district.11 The
weights are mainly based on student grade levels, with
add-on weights for severe special needs, English language learners
and vocational students. In addition to the BSA there
are several categorical programs, the funding of which is determined
according to separate formulas. The total FEFP
amount for each district is then divided between the state and the
district according to the district's ability to pay, as
determined by property values and legislatively determined tax
rates. So the total FEFP amount represents both state
and local funding. The state's FEFP spending rose from 76 percent of
total state spending in 1999-2000 to 85 percent in
2003-04.

1. A+ Opportunity Scholarship Program

The A+ Opportunity Scholarship Program was established in 1999 and
offered students in chronically failing schools the
opportunity to attend a private school of their choice with school
vouchers. To be considered chronically failing, a school
had to have received a state rating of "F" for two consecutive
years, based on its scores on the Florida Comprehensive
Assessment Test. In 2006, the Florida Supreme Court struck down the
A+ program. Since then, students who were previously
receiving A+ vouchers have been made eligible to receive
scholarships through Florida's tax-credit scholarship
program (see below).

During the seven years that this program was in existence, students
received vouchers that averaged between $3,000 and
$4,100 each. In each year, the average voucher amount exceeded state
formula spending per student, and the growth in
the average voucher amount was greater than the growth in the state
FEFP spending per student. However, districts
had the total voucher amounts for their students deducted from their
state aid. Therefore, the program resulted in a
total savings to the state of about $2 million (see Table 3). This
represents the difference between what the state paid for
vouchers and what it would have paid for the same students in FEFP
aid to public schools.

Although the A+ program reduced state aid to local public school
districts, the average instructional spending per student
in Florida was greater than this amount for each year of the
program's existence. This created a net fiscal savings
for school districts. Over seven years, their total net savings was
about $1 million (see Table 3).

2. McKay Scholarship Program

The McKay program is slightly more complicated to analyze than most
other voucher programs. Its participants are
disabled students, and these students require additional educational
resources. Thus, in addition to state FEFP spending, the state's
portion of funding for Exceptional Student Education (ESE) and ESE
transportation programs must be
considered. There is substantial variation in the amount of funding
associated with each disabled student, so we cannot
calculate the effect on state fi nances without more data than we
possess. However, the amount of the voucher is limited
to actual spending that the student would have generated in public
school, so the worst possible case is that the program
is revenue neutral for the state. If students do not use the full
amount of the voucher because their private school tuition
is less than this amount, then the program would generate a savings
for the state.

However, we can calculate the fi scal impact on local public school
districts. Florida's average instructional expenditures
for exceptional students are known to have exceeded the average
McKay voucher amount for each year.12 As the program
has grown, the annual cost savings to school districts have grown to
more than $40 million per year, totaling $139
million over seven years (see Table 4). It is likely that, as more
parents choose to exercise choice through this program,
the savings will grow.

3. Corporate Tax-Credit Scholarships

Finally, Florida's corporate tax-credit scholarship program has
provided scholarships of up to $3,500 to eligible students
since 2002. Students must have family incomes of no more than 185
percent of federal poverty guidelines to participate.
While $3,500, the scholarship limit set by the legislation creating
the program, is more than the state portion of FEFP
spending per student, the dollar amount of the scholarships has been
constant over the four years of the program's existence
while the state's FEFP spending per student has increased. By 2005-
06 the two amounts were virtually even, and
by 2006-07 the program is probably resulting in a savings to the
state (see Table 5).

As with Florida's other school choice programs, the state formula
revenue lost by districts through the corporate taxcredit
scholarship program is less than the amount that local districts
would have had to spend for the basic instructional
needs of the participating students had they remained in public
schools. The total savings to local public districts over
the four years of the program is more than $53 million (see Table 5).
The combined fi scal impact of the three Florida school choice
programs indicates an increase in state education costs of
$10 million. However, this increase is dwarfed by a total savings to
local public school districts of $194 million. This net
savings of nearly $184 million occurred even as parents' options and
overall satisfaction increased.13

Taxpayers need to be vigilant, organized; by John R. Smith

John Hallman — Fri, 08 Jun 2007 09:43:32 GMT

Taxpayers need to be vigilant, organized

By John R. Smith

June 7, 2007

We've all read reams about the hand-wringing going on with the issue of "affordable housing" in our county. But what about the larger issue of affordable taxes?

Local elected officials want us to think of the tax problem in terms of how many services must be eliminated. That's backwards. We taxpayers are the ones who are providing tax money by the barrel, and we are being milked. But I don't hear many elected officials expressing concern about us. Rather, the politicians are crying wolf. All we hear from local officials in the press is that the sky is falling, that police and firemen jobs will be slashed, and we will be left unprotected. Hooey. Huge dollars can be cut before vital services are touched.

We have unfair and unaffordable property taxes. The Legislature is on its way to providing relief, but the city and county governments are squealing that doomsday approaches.

Local politicians have placed the taxpayer cart before the horse. Rather than talk about what local government "needs" in taxes, let's have taxpayers decide what they can afford to pay. Then, it's up to government to prioritize and do the best they can with what taxpayers can afford to send. The Florida Legislature is going to come up with a property tax bill that is fair, and they will do it by imposing financial discipline. It will then be the job of our local governments to set realistic priorities, not raise false alarms. The Legislature is not advocating action that will cut vital services.

Now, here's a prediction you can bank on: starting on the day that the Legislature enacts its decision on property tax cuts, local officials will blame every problem going forward on this enactment. They will manufacture a "crisis" designed to cause the Legislature to come back to "undo the evil they did". Politics being what it is, in a battle between local governments vs. the Legislature, local governments will be strong. There are many more of them, and they are better known.

The very minute the Legislature passes tax reform, local governments will spring their campaigns to have it repealed, blaming every local ill on the reform, pumping dozens of "victim stories" to the media. Local officials will jack up every fee and service charge they can, and dream up new ones. They will create new Special Taxing Districts. Their goal will be to reach the point where their government revenues equal or exceed the property tax reduction. Local government bureaucrats will be relentless and arrogant in this cause, because this is their full-time occupation. Elected and hired officials will pay taxpayer money to hire hordes of lobbyists, and will fight fiercely to rebuild their fiefdoms, by rebuilding taxpayer revenue. Our own money will be used against us.

Mark my word. We will see this campaign unfold in a professional way, and quickly. The only way we can stop it is if enough of us taxpayers are wise to the plot and the tricks being played against us. The Legislature will hand the taxpayers a victory, but we won't hold the upper hand long unless we are vigilant and organized going forward. If taxpayers do not defend their victory, they will have won a battle but will lose the war.

John R. Smith is Chairman of BizPac and owner of a financial services company.

Why is Profit a Dirty Word? by John Stossel

John Hallman — Fri, 08 Jun 2007 08:53:00 GMT

Why Is Profit a Dirty Word?
By John Stossel
Wednesday, June 6, 2007

At a recent press conference Sen. John Kerry was upset as he snarled, "Oil companies in America are reporting record profits. Record profits."

When did profit become a dirty word?"

I wish the oil executives would face the media. They could say something like:

"What are you complaining about? What do you think we do with our profits? Buy fancy cars and homes? Well, we do, actually, but nearly all the money goes to looking for more oil and following environmental rules that you want us to follow. You should want us to make more profit. Anyway, we make less profit per gallon than your beloved government takes in taxes."

But Big Oil never shouts back at the reporters. I guess I can't blame them, given the hostility of the economically ignorant media.

This month the media claimed that gasoline prices had reached a "new record."

"Filling up is more expensive now than it's ever been." That's Julie Chen of CBS.

"A record high." -- Brian Williams, NBC

"Another record high." -- Charlie Gibson, ABC

" ... [R]ecord high of, get this: [ka-ching] $3.18 a gallon." -- Jon Scott, Fox

No, Jon, get this: It's not a record high. It only looks that way if you don't adjust for inflation. And that's just silly. It's like saying the movie "Rush Hour II" out-earned "Gone with the Wind." The media should quote prices in real dollars, but when they get excited, they don't. As the U.S. Energy Information Agency (EIA) acknowledges, once you adjust for inflation, it turns out that gasoline cost more 25 years ago, in 1981. When the 1981 price is converted to 2007 prices (not 2006 prices, as originally used at the EIA website), last week's average price of $3.22 was seven cents below the record, $3.29, which, by the way, was a monthly average.

Even if gasoline prices set no record, Congress surely set a record for inanity. What else are we to say about an anti-"gouging" bill passed last month by the House that would make it a crime to charge "unconscionably excessive" prices, "tak[e] unfair advantage of unusual market conditions," and "increase prices unreasonably" during an emergency?

Please. Lawyers will get rich debating vague words like those. Laws are supposed to be clear so we'll know in advance what's legal and what's not. But there's nothing clear about those "crimes."

That's not legislation. It's legislative posturing. Considering the perverse incentives of electoral politics, I'm amazed this bill got only 284 votes.

And Congress should know better. After Hurricane Katrina, Congress had the Federal Trade Commission investigate price gouging, and so the FTC studied price spikes going back years. But it found "no instances of illegal manipulation."

If the politicians do enforce anti-"gouging" rules, it will be akin to capping prices, and we tried that before. It was a disaster. Drivers had to wait in long lines, and some couldn't get any gasoline. Only when price controls were lifted did supplies rush in, and only then did prices go back down.

Markets don't work? That's a myth.

Why did prices spike in recent weeks? It's just supply and demand. Demand is up 3 percent, while supply is up just 1 percent.

And gasoline is still a bargain. Think about what it takes to bring it to us: Drills must bend and dig sideways through as many as seven miles of earth. What they find has to be delivered through long pipelines or transported in monstrously expensive ships, then converted into three different formulas of gasoline, moved in trucks that cost more than $100,000 each, and shipped to gas stations that have to have lots of expensive equipment to make sure we don't blow ourselves up filling the tank. Even after all that, gasoline is still cheaper per ounce than the bottled water gas stations sell.

There's no dirtier word in English than "gouging." But we've had enough unpleasant experience with price controls to know that all they do is create shortages.

Who, but the politician, benefits from that?

John Stossel is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.

Gasoline Economics 101

John Hallman — Thu, 07 Jun 2007 15:20:22 GMT

GASOLINE ECONOMICS 101

By: Tom Gaitens

What opportunists on the left don’t know about economics could fill textbooks…in fact, it does. They should try learning and applying Market Based Economics and reading some texts.

Government, via taxes, accounts for as much and often more than Refining Costs and Profits in a gallon of gasoline sold at the pump. Yet, possibly most interesting, is that while in the early 1980’s most of the nations 350 refineries were owned by Oil Companies like Exxon, Shell, Hess and Mobil, today’s 153 refineries are own mostly by independent Refiners, not the large Oil Companies.

The Supply and Demand of Gasoline is largely an independent variable, uncontrolled by Oil Companies and subject to international political situations, so says the US SENATE REPORT found here…http://www.senate.gov/~gov_affairs/042902gasreport/sectioni.pdf

So what goes into the Supply of gasoline, let us discuss that because you understand the demand (just look at India and China, or the interstate).

Of course, you understand that the largest supplies of Crude Oil are in the Middle East and Russia, so international politics play a heavy role. While we do get 60% of our Crude from our hemisphere, we are still dependant upon the Middle East and OPEC. While Canada and Mexico are our most prolific suppliers, Venzuala also is a bigger supplier adding to our woes.

Yet despite this, the flow of Crude has remained very consistent. Though is adds to the price fluctuation of Crude on the market, it is but the first step. Crude must be refined into Gasoline and this has been a variable of great concern since the mid 1980’s. It was during this time the Major Oil Companies divested their interest in Refineries and reduced the number of operational refineries from 350 to 153 domestically.

This reduction has had a major impact on supply mainly as a response to the associated costs to refiners when Windfall Profits Taxes were pushed into law by Jimmy Carter and a Democrat Congress. When it became less profitable to manage a refinery due to taxes and this was coupled with Environmental interference, the Major Oil Companies found there way out of the refinery business. Though most of these companies still own some of the most profitable facilities, a large number are operated by other than the so-called Big Oil.

Ultimately this constriction in refining capacity has placed pressures upon the industry that have been exploited by natural disasters and geo-politics in recent years. Regular maintenance, Specialty blends due to regional and state requirements and home heating oil also play significantly into the overall supply at various points during the year. These variables have placed the greatest pressure in recent years exacerbating the general tightening of supply in the US.

While we have allowed politics to add another ingredient into the supply side of this equation environmental concerns have remained steady. The most recent addition to variables has been the government requirement to move away from the chemical additive and more heavily to ethanol. The ethanol replacement has taken up valuable storage that the additive had not.

Finally, with all the factors involved in production and refining of gasoline, it remains rather interesting that while the overall cost has gone up what appears to be like a rocket, the reality of the price as adjusted for inflation is rather flat.

What remains to be done is to convince the left that speaking about energy independence while at the same time preventing the utilization of known and likely reserves in ANWR and OCS is disingenuous. We must build independence by utilizing those reserves we have in our midst.

We must understand that allowing ourselves to be fooled by those who would rather play politics with the costs associated with Gasoline and blaming these costs on excessive profits are playing the very worst game imaginable. It does not require a PHD to see that Government at both the Federal and State levels earn via taxes, often twice as much as Oil Companies off the same gallon of gas, without any of the risk.

Floridians pay about 51 cents in taxes while New Yorkers pay over 60 cents. Taxes are levied on every gallon of gas, irrespective of whether the companies involved were successful enough to make a profit or not. In the 1980’s when refining took the profit out of a gallon of gas, these taxes continued, even while the companies lost money.

So I ask you, who is doing the gouging?

Government Taxes and political opposition to developing domestic production capacity via ANWR and the regional waters off our coasts are our biggest gougers. They tell us we cannot become independent but tax us and blame Oil Companies to boot.

The time has come for American’s to wake up to energy politics. Learn the process by which we drive the open road, travel to Grandma Annie’s, and visit the ball park.

America's Gathering Energy Crisis

John Hallman — Tue, 05 Jun 2007 11:58:00 GMT

AMERICA'S GATHERING ENERGY CRISIS

Thursday, May 31, 2007

David Reinhard

WASHINGTON, D.C. I t's hard to say who's more admirable in this tale of common sense and bipartisanship -- Rep. John Peterson or Rep. Neil Abercrombie. The conservative Pennsylvania Republican who made a compelling argument on a critical national issue or the liberal Hawaii Democrat who didn't get caught up in cliches and saw the wisdom of his argument.

A few years back, Peterson was making the case for ending the congressional ban on natural gas exploration in the Outer Continental Shelf. Congress has passed the ban each year since 1981, and he was working in committee to lift it. But he didn't think he had the votes and said he was withdrawing his amendment. Wait, said Abercrombie. He had found Peterson's case convincing and was ready to deliver Democratic votes.

A congressional debate that actually led lawmakers to change their minds on a big issue -- amazing. It also led to an ongoing partnership. Last year, that partnership resulted in a House vote to lift the exploration ban. (It died in the Senate.) Now the two partners will go back at it with a new and improved bill.

Peterson's still making the case. The only thing that's changed is his sense of urgency. "Our gas production is actually declining," he says, "and the consumption is rising faster than ever."

For the last six years, U.S. natural gas prices have been the highest in the world. They're set to skyrocket again this year -- 23 percent in the Northwest, 29 percent in Southern California, 32 percent in Texas. Something to do with the law of supply and demand.

"We've never had competitors like China and India, and they have cash," Peterson says. "They're securing energy for the future of their economies. We're not.

"The United States is the only country in the world which prohibits production of gas and oil deep beneath our oceans," he says, referring to the area within 200 miles of our shores. "If 85 percent of our Outer Continental Shelf remains off limits for natural gas exploration, . . . we will undoubtedly become a second-rate nation."

And this will occur as second-rate nations tap the oil and natural gas beneath our waters. Cuba is going after the energy we've locked up. And recent technological gains will allow companies from other nations to slant-drill into our fields.

Price increases will rock Americans who heat their homes with natural gas, but the economic wreckage won't end there. Natural gas generates nearly a quarter of all U.S. electricity, and it's a major industrial component. Peterson fears a future in which our fertilizer comes from Russia and our glass, bricks and tiles come from Trinidad, where natural gas costs $1.25 per decatherm. It's now $7.94 in the United States. He says the price differential has already resulted in the loss of 750,000 U.S. manufacturing jobs.

Peterson's amped-up urgency stems from the fact that it will take eight to 10 years to bring supplies on line after we've tired of pink slips and higher energy bills.

But aren't alternative fuels the answer? Part of it, sure. But many alternatives rely on natural gas. Ethanol and biodiesel? Natural gas is a key component in their production. Ditto for hydrogen.

Peterson and Abercrombie's National Environment and Energy Development Act would make permanent the ban on oil and gas leasing within 25 miles of shore, but allow gas leasing on the next 25 to 50 miles if a state approves. It also permits gas leasing from 50 to 100 miles unless a state votes to maintain the moratorium. Beyond 100 miles, gas leasing can start immediately. The leases will generate about $400 billion. A quarter of that will go to the U.S. Treasury, and 37.5 percent to producing states. Another 8 percent ($32 billion) will fund the Strategic Energy Efficiency and Renewables Reserve for research. And 2.5 percent ($10 billion) will go toward weatherization and low-income energy assistance programs.

After Peterson sketches a bleak natural-gas-poor future and bemoans the lack of urgency on the part of Congress and the Bush administration, there's only one question: Is there any good news? "There's really no good news on natural gas," he says.

At the risk of being Pollyannaish, I think he's wrong. There is some good news in Peterson and Abercrombie's sensible bill. And the true bipartisan understanding at its core.

David Reinhard, associate editor, can be reached at 503-221-8152 or davidreinhard@news.oregonian.

TABOR; The only way to bring real property tax relief

John Hallman — Tue, 05 Jun 2007 09:33:00 GMT

TABOR, which stands for Taxpayer Bill of Rights is a constitutional or charter amendment that limits the annual growth in government. Under TABOR, expenditures cannot grow faster than the rate of annual population growth plus inflation. Surplus revenue received above this amount is returned to the taxpayers. Also, TABOR requires that any tax increase must be approved by a vote of the people; this approval process brings public scrutiny and gives taxpayers a place at the table. TABOR forces lawmakers to live under spending restraints in the same manner that families and businesses do by forcing lawmakers to set priorities and cut wasteful spending.

One of the fundamental reasons to enact revenue and spending limits is to protect taxpayers from constantly rising demands on their pocketbooks. Government spending displaces private-sector activity. Every dollar that government spends means one less dollar in the productive sector of the economy. High or increasing taxes retard new business formation and expansion, thereby slowing job creation and wage growth.

Under TABOR, Government can still grow, and without drastic cuts in essential services, but government would grow at a slow and predictable rate. TABOR forces elected officials to make honest, conscious decisions about where to direct resources and without a spending mechanism like TABOR, elected officials have incentives to continually expand government when tax revenues are plentiful, and then are forced to increase taxes during an economic downturn. With TABOR in place, the budget process is more predictable. California has learned this lesson painfully by increasing the size of state government by 90% during the prosperous 90’s only to find themselves 34 billion dollars in the hole when the boom times ended. On the other side is Colorado, which enacted TABOR in 1992. In next 10 years Colorado increased private sector jobs 9 times that of government jobs, personal income growth almost doubled and more than 3 billion dollars in surplus taxes were refunded to the people who had earned them. More than 20 states from Alaska to Florida are debating or creating TABOR measures as we speak.

The true spirit of TABOR is to protect taxpayers from the freewheeling spending practices of elected officials and the growing burden that government places on their pocketbooks.

Social Insecurity

John Hallman — Mon, 04 Jun 2007 19:26:00 GMT

The Social Security Trustees report continues to report that Social Security is headed for insolvency sooner that previously expected. They have projected that Social Security will not be able to pay full benefits by the year 2040, and will begin to run deficits by 2017, a year sooner than last years projection.

Social Security began in 1937 as a strictly supplemental retirement income. The payroll tax was 2% of a workers income up to a maximum of $3,000.00. This worked really well in 1937 when there were 45 workers for every one retiree and a lot of retirees didn’t live much past 65.

But over the years Congress began to add benefits to the Social Security Program, they added spousal benefits, survivor benefits for children, supplemental security income, and disability benefits.

As Social Security benefits grew over the years as increased benefits were added, a problem arose; people started living longer and people started having fewer children. The ratio of workers to retirees went from 45 to 1 in 1937 to today’s 3 to 1 ratio and is projected to be only 2 to 1 by 2017.

Congress in order to meet increasing demands on Social Security has raised payroll taxes 20 times since 1937 from 2% in 1937 to 12.4 % today. They have raised the retirement age from 65 to 67. They began taxing Social Security benefits in 1983.

By 2008 the baby boom generation will begin to retire and by 2035 we will have 78 million retirees receiving benefits and these 78 million retirees are expected to live longer and will put additional stress on Social Security.

The Social Security Administration has reported that the projected 2 to 1 ratio of workers to retirees will not be enough to fund full benefits, because of this the Social Security Administration has reported that without any other reforms; Social Security benefits will have to be reduced by 25% or payroll taxes would have to be raised from the current 12.4% to approximately 18%, or a combination of both.

The Social Security trust fund contains the surplus revenue from Social Security payroll taxes. Social Security has been running surplus revenue from payroll taxes and is projected to run surpluses until 2017 when the system will begin to run deficits. The Social Security trust fund now contains 1.7 trillion dollars. OR DOES IT! Actually Congress has raided the Trust Fund and taken 1.7 trillion dollars over the years to use for other budget items.

In 2017, when Social Security begins to run deficits they will have to pay back that money in order to keep Social Security solvent until 2040 when at that point even if Congress finds a way to pay back the trust fund money, Social Security will not be able to pay full benefits and raising the retirement age, increasing payroll taxes, cutting benefits means you pay more and get less.

The Federal Government has tried to fix Social Security over the years by raising payroll taxes, cutting benefits, and raising the retirement age and still Social Security is still headed for bankruptcy. Both Social Security and Medicare together is projected to have a 70 trillion unfunded liability over the long term.

One day soon our generation will have passed and if we do nothing today, future generations will be stuck with a failing government retirement system. Those future generations will ask of us, why didn’t you do something about it while you could? The questions we must ask ourselves, are we going to allow Congress to continue to stick their heads in the sand and ignore the problem, refuse to have an open discussion about our options or are they going face reality and say we care about what our country will look like in 30 years, we care what will happen to our children, grandchildren and great grandchildren long after we are gone? Are we going to continue down a road of more government dependency or we are going to allow Americans to have more control of their lives, a chance of ownership and the pride of self-reliance and independence that our founding fathers envisioned over 225 years ago?

Lawsuit Abuse; We all Pay!

John Hallman — Mon, 04 Jun 2007 18:17:31 GMT

Every legal system needs a mechanism to address torts, or non-criminal civil wrongs. Ideally, the tort system should
perform two functions: compensate victims and deter potentially dangerous behavior. The structure of damage awards
is intended to reflect these goals, with compensatory damages to ensure victims are made whole, and punitive damages
that can be assessed to discipline bad actors.

Unfortunately some people have turned our civil justice system into a lottery. Frivolous lawsuits impose costs on consumers, businesses, and the economy in general. Over the last couple of decades America’s tort system has become one of the most
costly and inefficient methods of dispute resolution in the world. All told, the legal system’s direct costs are more than 180
billion dollars annually, roughly 2 percent of GDP, more than two and half times the average industrialized country, this does
not include other consumer costs, such as higher prices for the goods and services they consume, as well as the reduced
availability of goods and services that are taken off the market for fear of lawsuits. All in all, each and every one of us in
America is paying for a civil justice system that is out of control. In dollar terms, the tab comes to about 1,200 dollars per
person, per year.

This is not to say that all lawsuits are unwarranted. A tort system is necessary for resolving accidental harms. Somewhere
in the United States a lawsuit is filed every 10 seconds of every working hour. It comes as no surprise, that victims with
legitimate injury cases are forced to wait an average of 65 months to go to trial. Because of frivolous lawsuits, those with
legitimate cases are forced to wait for years.

The most important institution for any country is a set of rules that allows people to resolve private disputes and enforce
contracts. Legal rules deter people from breaking contracts and injuring others, and they protect property owned by
individuals. The legal system also provides rules that guide behavior and create a sense of personal responsibility,
and avoid activities that may harm others. I believe a great majority of lawyers in this country are good people, providing
a great service to our citizens. Unfortunately there is a select group of personal injury attorneys who are ruining the system
for all of us. We need to give back our legal system to decent, honest Americans with real grievances. We can debate
on what reforms will work best, but I hope we all can agree our legal system is in need of serious reform. To do nothing
will surely lead us on the path of economic destruction.

Energy Independence and the Environment

John Hallman — Mon, 04 Jun 2007 14:35:00 GMT

Most Americans understand the need to reduce our dependence on foreign oil and provide the extra supply of oil and natural gas to lower our energy costs. The Mineral Management Services (MMS) an agency of the Department of Interior estimates that the OCS (Outer Continental Shelf) contains enough natural gas to heat 100 million homes for 60 years or enough oil to replace current Persian Gulf imports for 59 years. Unfortunately the Federal Government has held back 80% of the country's OCS from oil and gas exploration and production. But despite these findings, there are those from radical environmental groups that oppose critical access to domestic oil and natural gas, claiming they are protecting the environment.

Actually the facts tell us that offshore rigs and platforms can be beneficial to marine wildlife. Once in place, the platform's substructure acts as an "artificial reef," providing hard surfaces for encrusting organisms such as spiny oysters, barnacles, sponges, and corals. These creatures are the basis of the food chain in what becomes a new marine ecosystem for numerous types of fish, sharks, sea turtles, spiny lobsters, and sea urchins, so basically speaking,the rigs create critical two factors for marine life: Shelter and food. The food chain begins with the formation of barnacles on these structures below the waterline. This sets the stage for small fish seeking shelter and food that the steel legs provide. Many local Gulf coast scuba divers enjoy underwater visits to Gulf platforms to sight-see tropical fish and organisms normally associated with natural reef systems located in the Caribbean and far away places. Local divers call these trips "Rig Diving" because the word rig is commonly used in place of platform.

The areas of the Gulf Coast that have access to the platforms have seen increased business due to the popularity of “rig” diving, that means the platforms are not only beneficial to the environment but also good for local economies, attracting new tourist to Gulf Coast towns. Also new technologies make platforms safer from oil leaks, automatic well-head cut-off valves keep oil under the seabed if the rig or platform breaks away. Investigations showed that there was no significant environmental damage from the offshore platforms despite two Category 5 hurricanes last year in the Gulf. Actually, the only oil spills after the hurricanes came from beached oil tankers damaged from the storms and not from the platform pipes themselves. Also, all proposed drilling areas would have platforms very far from the field of vision from coastal beaches as not to have any impact people enjoying their “day at the beach”.

Allowing greater access to the outer continental shelf for new oil and natural gas exploration is a win-win for Americans; less dependence on foreign oil prices, and creating beneficial artificial reefs for marine wildlife.

Opportunity Scholarships

John Hallman — Mon, 04 Jun 2007 10:05:00 GMT

For the United States to remain economically viable and able to compete in a global economy, quality education must be a high priority. Unfortunately, statistics show that nationwide as well as in Florida, our public schools are failing. The number of student drop-outs and those graduating without the basic skills to compete in the real world are terrifying, especially noting the huge increases in funding public schools. I would hope that as a society, a world class education would be the top priority for our children. Statistics show that students graduating and able to qualify for college, go onto higher paying jobs and statistically live healthier lives than their undereducated counterparts.

The Florida Supreme Court's decision to strike down Opportunity Scholarships were based on specious arguments. Students using the scholarship voucher to go to private schools did not result in less money for public schools, quite the opposite, during the era of Opportunity Scholarships in Florida, per student spending on public schools rose. Also, between 1999 and 2005, the number of “A” and “B” graded schools, which trailed the number of “D” and “F” schools in 1999, rose from 515 to 1,843.

It is time to end the stranglehold of special interests and do what is best for our children and for the future of our country, and that is to inject competition into the school system, which will make all schools better, private and public, and our children will benefit.

Getting Serious about Florida's Energy Needs

John Hallman — Fri, 08 Jun 2007 08:59:00 GMT

Florida has been undergoing major population growth over the years and forecasts predict this growth will continue, in fact Florida's population is expected to increase 30 percent over the next 25 years. With this population boom will come higher and higher demand for electricity. Natural Gas is the primary energy source for producing electricity and has the benefit of being a clean burning, environmentally friendly energy source. Because natural gas is clean burning, its use has risen dramatically and our natural gas supplies are being strained. Unfortunately, government policies restrict access to areas where geologists have found ample supplies of new natural gas. For example, the Mineral Management Service estimates over 230 trillion cubic feet of natural gas in the Gulf of Mexico alone. If we don't access new supplies of natural gas, tight supplies will cause electricity to become more and more expensive. Besides electricity, natural gas is used by Florida businesses that make many of the products we buy everyday, like steel, glass, processed food and aspirins. With property taxes and property insurance in Florida skyrocketing out of sight, we need relief somewhere.