School choice has entered a new world. Because Americans are increasingly vocal on providing parents the ability to choose their children’s schools, states are adopting broad-based school choice initiatives. Those successes can be attributed to various individuals, groups, and campaigns nationwide. However, it is school choice’s “Christopher Columbus” who deserves recognition for starting this movement more than 50 years ago.
In 1955, Milton Friedman introduced school choice as a way to improve the quality of American education. His idea was simple: Give parents access to their children’s public education funding, rather than require they attend the government (public) schools nearest their homes.
“Governments could require a minimum level of education which they could finance by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on ‘approved’ educational services,” Friedman wrote in 1955. “Parents would then be free to spend this sum and any additional sum on purchasing educational services from an ‘approved’ institution of their own choice. The educational services could be rendered by private enterprises operated for profit, or by non-profit institutions of various kinds. The role of the government would be limited to assuring that the schools met certain minimum standards such as the inclusion of a minimum common content in their programs, much as it now inspects restaurants to assure that they maintain minimum sanitary standards.”
Because of vested interests in the education arena, Friedman’s suggestions were ignored. And, as a result, the cost of public education doubled while its academic performance stayed the same. As Friedman noted, that shouldn’t come as a surprise because that’s exactly what monopolies do: They offer a product of similar, if not worse, value at a higher price than normally would be allowed if they had to compete in the free market.
But those days are over. Many states are broke, preventing them from dropping more money out of airplanes over public schools. And many parents are fed up, wondering why their kids are underperforming or unmotivated in K-12 schools and unprepared for their college courses and future careers.
Because of that sentiment and cash crunch, last year a historic number of choice programs were enacted across the country. Substantiating that momentum, the Wall Street Journal called 2011 “The Year of School Choice.”
Today, 18 states and the District of Columbia provide some type of private school choice for their residents. And more states continue to come online. Already in 2012, Virginia has joined the school choice “family;” New Hampshire’s legislature has passed a school choice measure; Florida and Arizona expanded their programs; and Louisiana dramatically increased the scope of its school voucher program. Oregon is behind the curve, with no significant private school choice programs―yet. But widening charter school and online school options hopefully will soon lead to more school choice for all Oregon children.
Of course, no state has followed Friedman’s vision entirely―i.e., school choice for all families. Indiana and Louisiana are close, in that both make more than half their states’ student populations eligible.
But Friedman’s vision was not for school choice to be just another government program. He wanted to see school choice fundamentally change the way public education operates from its current structure that supports schools to a better model that empowers parents. Both rich families and poor ones can receive government funding when their kids use public schools. And both rich and poor should be able to receive government funding for their kids to use vouchers.
It took America more than 50 years to reach today’s environment in which parent empowerment in education is celebrated, not ridiculed. Moving forward, the late Milton Friedman’s voucher idea is more important than ever, for it is the tool advocates can use to navigate the new world for school choice they helped discover.
Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, which is participating in July 31st Friedman Legacy for Freedom Day, an international event celebrating the late Milton Friedman on what would have been his 100th birthday.
Oregon’s public education system is beset with problems. Too many students drop out, and too many of those who stay aren’t achieving to the levels we expect. The national publication Education Week ranked Oregon’s public education system 43rd in the nation in 2011, and our K-12 achievement level only earned a D grade last year.
Some people argue that more money will solve our schools’ problems. But with total expenditures now over $11,000 per public school student, according to the nation’s largest teachers union, it’s hard to believe that $330,000 for each 30-student classroom is not enough money to get education right.
What happens in our public school system is driven more by politics than anything else, and for many years the most powerful political force driving education decisions in our state is what we call the Status Quo Lobby. While many children continue to fall through the cracks, this Lobby fights for more of the same: more powerless parents, more powerless principals, more hamstrung teachers, more taxpayer spending, and more control over the decisions parents should make for their own children.
Who is the Status Quo Lobby? Primarily, it’s the Oregon Education Association, the teachers union that represents most public school teachers in this state. The OEA is primarily concerned with the paychecks of its members, not with the achievement and success of Oregon schoolchildren. Unfortunately, what’s best for OEA members’ pocketbooks isn’t necessarily best for our kids’ education. Make no mistake, huge financial interests rest on the bulk of the laws for which they lobby. And, the Status Quo Lobby is often the biggest contributor to political campaigns in Oregon.
In a word, the Status Quo Lobby fights for more centralization, which Nobel Prize winning economist Milton Friedman said is responsible for much of the decline in the public school system over the decades.
In 2006, the year he died, Friedman noted, “When I went to elementary school, a long, long time ago in the 1920s, there were about 150,000 school districts in the United States. Today there are fewer than 15,000, and the population is more than twice as large.” Friedman blamed what he called “your friends in the teachers union” for this centralization and corresponding decline in educational results for America’s children.
The Status Quo Lobby has long claimed to lobby in the name of helping kids. But it itself typically has the most to win or lose―in terms of money and power―when it shows up to a hearing for proposed laws. While children’s futures are at stake, the choices legislators make today often have a delayed impact for kids. The Status Quo Lobby, however, often sees a quick impact to its bottom line.
Because far too many people seem to think these lobbyists are just in it “for the kids,” Cascade Policy Institute has launched a new website called “Enough with the Status Quo Lobby” at www.StatusQuoLobby.com. At this website, Oregonians can discover just who the Status Quo Lobby is, which policies it advocates, and what kinds of results are seen from these policies.
At this site Oregonians also can see just how the Status Quo Lobby stands in the way of real education reform, often labeled “school choice.” Milton Friedman first described school choice in 1955 as letting parents choose which schools their children attend―public, private, religious, or home school―with the money following the student. Most Oregon parents want such choices, and they shouldn’t let the Status Quo Lobby stand in their way.
To help educate voters on how to keep their legislators accountable for their voting on educational policies, the StatusQuoLobby.com website includes a report card grading every legislator during the 2011 legislative session on their votes either supporting the Status Quo Lobby, or supporting school choice for Oregon’s children.
Oregonians also will be able to see how much money the Status Quo Lobby has contributed to each legislator’s campaigns, along with videos of them speaking on policies affecting the education of Oregon’s children.
We urge all Oregonians interested in learning about who is standing in the way of real educational reform in our state to go to www.StatusQuoLobby.com and see for yourselves.
 Report Awards State Grades for Education Performance, Policy…, Education Week, January 11, 2011
2 National Education Association report Table F-2 (pg 39)
3 Teachers Unions and Public Schools: Who Needs ‘Em?, latimes.com, Bob Sipchen, July 3, 2006
4 The Role of Government in Education, Milton Friedman, Economics and the Public Interest, 1955
5 Nearly Nine of Ten Oregonians Would Opt Out of Regular Public Schools, Cascade Policy Institute, Steve Buckstein, January 5, 2009
By Erin Mae Shiffler
Nobel Prize-winning economist Milton Friedman would have turned 100 years old on July 31. This will be an opportunity to remember his accomplishments and to celebrate his legacy. Dr. Friedman was thoroughly invested in the cause of educating children by fixing our current school system. He once said, “The only solution is the same solution as we found everywhere else―which is competition. The essence of an effective television industry, an effective telephone industry, an effective computer industry, or an effective mail delivery industry―you name it―is competition. That’s what we need to get in schools.”
Friedman promoted competition among teachers themselves, as well as among schools. By allowing competition, successful and innovative teachers would earn more for their efforts. Schools would obtain more students, and therefore additional revenue, to educate those students, if they were good schools. Poorly performing schools would lose students until they found ways to improve.
Unfortunately, we have not seen this kind of system in Oregon because teachers unions and lobbyists protect teachers at the expense of what is good for students. As parents who want a better education for our kids, we need to promote Dr. Friedman’s ideas in order to push against the current stagnant system. To learn how teachers unions stand in the way of real education reform, and to see if your local representatives are holding back or trying to improve your choices and your child’s education, visit www.statusquolobby.com.
Erin Mae Shiffler is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.
By Todd Myers
Asked by reporters how he felt after a victory over the Cleveland Cavaliers, former Chicago Bulls center Stacey King told reporters, “I’ll always remember this as the night that Michael Jordan and I combined for 70 points.” This is the comment that came to mind when President Obama told an audience recently, “If you built a business – you didn’t build that. Somebody else made that happen.” The President went on to say, “If you were successful, somebody along the line gave you some help.”
Certainly, Stacey King legitimately could tell reporters that without him, the two players would not have scored 70, even though King scored only one point and Michael Jordan contributed the other 69. Indeed, the President legitimately can say that government services like road construction, national defense, and the like contribute to a climate that allows economic growth and innovation. It would be hard to imagine, however, Stacey King telling Michael Jordan, “You didn’t do that. Somebody else made that happen.”
The economy isn’t the only area where politicians attempt to grab more credit than is deserved. Air quality is another good example.
For many on the environmental left, the story of air quality begins in 1972, the year the Clean Air Act (CAA) took effect. There are a couple reasons for this. First, prior to 1972, air quality data is intermittent. As part of the monitoring included in the CAA, the government began collecting data on a consistent basis. So, history appears to begin in 1972 because records before that are incomplete.
Second, it marks the beginning of a government program promoted by politicians and activists. They have a strong interest in demonstrating that the policy for which they advocated is working. How many times have you heard a politician say, “I advocated for this, but it didn’t work the way I wanted. I was wrong”? I’ll give you a minute to think.
In fact, the Clean Air Act has contributed to air quality. Air quality today is dramatically better than it was forty years ago, despite a significant increase in population, wealth, and miles traveled. That story, however, ignores the role the private sector played in making this happen, long before the CAA took effect.
The following graph shows the trend in indoor air quality from 1940 through 1990. As you will notice, the vast majority of the reduction in traditional air pollutants had occurred by the time the CAA was enacted in 1970 and implemented in 1972. Trends in outdoor pollution are similar. A major reason for this is that improvements in energy efficiency meant fewer pollutants per unit of energy. Unburned coal dust emitted from a smokestack was not only air pollution, it was lost energy. Burning coal or gas more completely and efficiently meant less air pollution and increased wealth.
Ignoring the value of private sector innovation ignores a key part of the story. Claiming the Clean Air Act was entirely, or even mostly, responsible for improved air quality is not accurate.
Pretending the Clean Air Act had no role to play is equally false. The most dramatic example is lead. Between 1970 and 2005, nationwide lead emissions decreased by 99 percent, largely due to the switch to unleaded gasoline. Everyone has their role to play; and belittling others to build your own role up is not only incorrect, it is childish.
Success has many fathers, especially when there are politicians around whose profession is taking credit for others’ success. This impulse, however, makes for bad policy and bad basketball. A team that demeans Michael Jordan’s contribution because “somebody else made that happen” is as likely to have as much success as a government that tells innovators like Steve Jobs or Jeff Bezos they owe their success to government regulation.
Todd Myers is the environmental director at Washington Policy Center. He has more than a decade of experience in environmental policy and is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.
By Shane Young
Did you know you need a license to braid hair in Oregon?
Last year, Amber Starks of Portland tried to start a hair braiding business geared towards young girls in foster care. The State of Oregon informed Starks that she could not start her business without a cosmetology license. A cosmetology license typically requires over $1,000 and a minimum of 1,700 hours of training focusing heavily on the proper use of hairstyle chemicals and heating equipment―things hair braiders don’t use.
Starks then tried to braid hair as an unpaid volunteer with the state foster care system. She was told once again that it would be illegal for her, and nearly anyone else, to dress hair outside their own homes without a license.
Regulations like these prevent people like Starks from providing simple yet desired services at competitive market prices. Meanwhile, those with cosmetology licenses are protected from competition in markets such as hair braiding―fields that hardly require 1,700 hours of training.
Where public health and hygiene are issues, the state could require professional braiders to undergo a basic health course in lieu of a cosmetology license. By analogy, the Oregon Food Handler’s Card certifies that people who prepare and serve food for the public know basic food safety.
In 2005, Washington State declared that braiders no longer need cosmetology licenses. It’s time for Oregon to do the same.
Shane Young is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.
By Sven R. Larson, Ph.D.
By now, I am sure you have heard of Taxmageddon – the $494 billion tax increase set to hit America’s already overburdened taxpayers in January 2013. If you haven’t, check out this informative website provided by the Heritage Foundation. Taxmageddon is a combination of expiring Bush-era tax cuts, expiring payroll tax cuts, and new incoming ObamaCare taxes. Together they will create the largest single-year tax increase in American history and very likely the largest tax increase ever created in the entire world.
Taxmageddon will, of course, wreak havoc on our already fragile economy. The only comparable tax increase is the one Sweden went through in 1995-98, when the government took away three percent of GDP per year, three years in a row. This sent the Swedish economy into a lasting depression, brought standard of living to a standstill for a good decade, and caused the permanent loss of hundreds of thousands of jobs.
If Taxmageddon were to happen here in America, we most certainly would experience something similar, only on a much grander scale. To put some perspective on what this massive tax increase would mean, let us break it down to Oregon size. According to the Heritage Foundation, Oregon taxpayers would face a $5.8 billion tax increase, distributed as follows:
- Expiring Bush-era tax cuts: $2 billion;
- Expiring payroll tax cuts: $1.5 billion;
- New ObamaCare taxes: $2.3 billion.
President Obama has indicated that he might want to see the Bush-era tax cuts extended for most taxpayers, but don’t hold your breath on that until there is a bill with his signature on it. And even if Congress and the President reached a deal on that part of Taxmageddon, the remaining parts are bad enough.
To begin with, the cost of the payroll tax hike alone is big enough to place a looming threat of job losses over the Oregon labor market. It remains to be seen how resilient private employers are in the face of this kind of tax hike and just how many private-sector jobs would be on the line. What is absolutely clear, though, is that Oregon cannot afford to lose any private sector jobs: As we reported recently, there has been no real increase in private employment in Oregon over the past decade.
We need more jobs, not fewer.
On top of that, consider the effect of the new ObamaCare taxes. Designed to hit “wealthy” Americans earning more than $250,000 per year, these taxes are eerily reminiscent of the Alternative Minimum Tax (AMT). When first introduced, the AMT was designed to make sure a very small group of very wealthy people could not reduce their tax burden to zero. Today, the AMT is a middle-class problem.
It is more than likely that the ObamaCare taxes will go the same way. For Oregon’s hard-working taxpayers, the $2.3 billion looming to fund the Affordable Care Act are equal to a 23 percent increase in the taxes that Oregonians pay on their personal income each year. That would be a bad-enough tax increase to hit all taxpayers; but since the tax is supposed to be limited to the top two percent of the Beaver State’s earners, the effect will be much more dramatic.
The two percent of Oregonians who earn more than $250,000 pay 38 percent of all personal income taxes in the state. According to the IRS, in 2011 this amounted to a total tax liability of $3.7 billion. If these income earners were hit with the $2.3 billion in ObamaCare taxes, their total tax liability would increase by 61 percent.
Imagine that: For every $100 you pay in taxes this year, you will pay $161 next year.
Added together, the rise in the payroll tax and the new ObamaCare taxes equal the average earnings of 66,139 taxpayers in Oregon. This does not mean that so many people will lose their jobs in 2013 if the payroll and ObamaCare taxes come down on us. But it does raise the question how many more people will have to file for unemployment when Uncle Sam takes $3.8 billion more out of the Oregon economy.
Sven R. Larson, Ph.D., is Senior Fellow in Economics at the Wyoming Liberty Group and a guest contributor for Cascade Policy Institute. He holds a Ph.D. in social sciences with major in economics and has taught economics at colleges in three countries. His research on health policy, taxes, and government budgeting and entitlement reform has been published by free market think tanks across the country.
By Eric Revell
As the state of Oregon struggles to ignite an economic recovery, barriers to economic growth must be removed. Oregon’s overall tax burden is among the highest in the country, both in terms of the 9.9% personal income rate, but also more importantly when it comes to attracting investment, in capital gains, which are also taxed at a 9.9% rate. A commonly held misperception about the capital gains tax is that it only affects the rich. In truth, the chilling effect it has on investment has a much broader reach.
For businesses to make sound choices regarding new projects and hiring that lead to growth, they require a tax code that doesn’t discourage private individuals from risking their assets in the marketplace. When people view a given state as hostile to investment, they simply relocate to a friendlier environment, taking jobs and tax revenue with them.
Such an onerous business climate has become the norm in Oregon, which is vying with Massachusetts for the highest capital gains rate in America. Washington, our neighbor to the north, has no state tax on capital gains, so its investors are only subject to the federal capital gains tax―which is currently 15%―a far more palatable total tax burden than what Oregonians face.
For Oregon to spur the economic growth necessary to put its fiscal house in order, its lawmakers would do well to significantly reduce―if not eliminate―the capital gains tax in the Beaver State.
Eric Revell is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.
In her latest interview with Cascade Policy Institute, Kathryn Hickok talks about her latest commentary on religious freedom and the principles left to Americans as their “Best Earthly Inheritance.”
By Jason Mercier
“The Affordable Care Act is constitutional in part and unconstitutional in part.”
With these words, the Chief Justice of the U.S. Supreme Court John Roberts, in a 5-4 decision, removed the policy fate of the federal health care law from the hands of judges and placed it squarely in the lap of voters this fall to decide what happens next.
Depending on your perspective, Roberts’ decision was either an example of judicial restraint or, as the four Supreme Court Justices who dissented wrote, “carries verbal wizardry too far, deep into the forbidden land of the sophists.”
Either way, the Chief Justice repeatedly made it clear that the Court was not passing judgment on the “wisdom or fairness” of the federal health care law or if it “embodies sound policies.”
Roberts explained, “Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.”
Perhaps it should be no surprise that a vast law that has deeply divided the country and barely passed Congress on a party-line vote would be decided by just one vote in a 5-4 opinion by the Supreme Court.
It is also somewhat fitting that the law about which then-Speaker of the House Nancy Pelosi said Congress “[has] to pass the bill so you can find out what’s in it, away from the fog of controversy” would contain a tax on Americans who don’t buy a product the government wants them to, which no one knew was in the bill until the Supreme Court ruled on it.
This, despite the promises made by President Obama proclaiming to the public that he “absolutely reject that notion” that the proposed health insurance mandate was a tax. Despite these public statements, the President did, in fact, argue to the Court that the mandate was a tax (after first telling the Court it wasn’t on the first day of arguments). This two-faced defense of the law proved to be its saving grace, as otherwise the Court would have tossed the individual mandate and the law as a violation of the Commerce Clause.
After winning the legal debate by arguing the health insurance mandate was instead a tax, the President is back to telling the American people it isn’t a tax but a penalty. The White House proclaimed after the Court’s 5-4 ruling, “It’s a penalty, because you have a choice. You don’t have a choice to pay your taxes, right?”
The one choice we do have is to decide what happens next.
Some would have the Court’s decision be the last word on the policies of the federal health care law. While it is in the legal sense, to paraphrase Winston Churchill, the Court’s decision is not the end. It is not even the beginning of the end; but it is, perhaps, the end of the beginning of the policy debate.
Placing the ultimate decision on the fate of the federal health care law back in the hands of voters, Chief Justice Roberts wrote, “The Framers created a Federal Government of limited powers, and assigned to this Court the duty of enforcing those limits. The Court does so today. But the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.”
This November, we the people will have the opportunity either to affirm the policies of the federal health care law or to pursue a different direction.
Jason Mercier is director of the Center for Government Reform at Washington Policy Center in Olympia and a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center. Washington Policy Center’s 10th Annual Health Care Conference on July 10 will focus on the next steps for state policymakers on implementation of the Affordable Care Act.
By Randal O’Toole
Many Oregon counties, particularly in Southwestern Oregon, are in deep financial trouble. Coos, Curry, Douglas, Jackson, Josephine, Klamath, Lake, and Lane counties historically received 15 to 33 percent of their revenues from the federal government as payments in lieu of property taxes for the national forest and Bureau of Land Management (BLM) lands in those counties.
Those payments came out of timber sale revenues; but as concerns over the spotted owl and other environmental issues led to a decline in timber sales after 1990, the payments also fell. To ease the transition to more sustainable revenue sources, Congress provided “temporary” funding out of general funds.
Each time temporary funding was set to expire, though, counties complained about a financial crisis; and Congress extended the funding. The latest extension was added to a transportation bill that Congress passed on June 29. But this bill extends the funding only one more year, so county treasuries may be emptied next year. Curry County has threatened to simply shut down, and the Oregon state auditor recently reported that all of these counties have a high risk of financial distress.
The truth is that taxpayers in these counties (of which I am one) have been getting a free ride for decades. While federal lands impose little cost on counties, the payments out of timber receipts have been many times greater than the federal government would have paid if it had paid ordinary property taxes.
Counties throughout the country that have national forests in them receive 25 percent of timber sale receipts. In most cases, this was more than property taxes before sales declined. But the greatest difference was in Oregon, whose valuable old-growth timber produced 40 percent of national forest revenues in the 1970s and 1980s.
Congress allowed the states to divide these “25-percent funds” between schools and county road departments. Most states gave half to each, but Oregon gave 75 percent to roads and 25 percent to schools. This meant that Oregon county road departments were literally rolling in cash in the 1970s and 1980s, but it also meant that the decline in timber sales hit them the hardest.
To make matters worse, the BLM paid a whopping 50 percent of the revenues from most of its western Oregon timber sales to counties. This compares with just 10 percent of timber receipts paid by the BLM to counties elsewhere. While the national forest funds were split between roads and schools, all BLM funds went straight into county general funds.
The result is that these counties have some of the lowest property tax rates in the state. While the average Oregon property owner pays more than $2.80 per thousand dollars in assessed value to the county, property owners in Curry and Josephine counties pay only 60 cents, and rates are also much lower than average in Coos, Douglas, and Jackson counties.
Raising property taxes to somewhere around the statewide average would solve the problems in all of these counties except Lake and Lane. But Oregon law prevents counties from raising taxes without voter approval, and county commissioners suspect that few voters will be willing to double or quadruple their county tax burden.
Representative Peter DeFazio has proposed to divide western Oregon BLM lands into two chunks. One portion, containing mostly old-growth timber, would be set aside for conservation. The other portion, mainly second-growth timber, would be managed as a source of revenues for the counties.
While some environmental groups oppose this plan, I don’t see anything wrong with managing cutover land for timber. But I have to wonder why Southwest Oregon counties should continue to live off of federal taxpayers, who otherwise would get any receipts from Forest Service and BLM sales.
County leaders say these BLM lands (which Congress originally granted to a railroad, then took back when the railroad failed to live up to the terms of the grant) would have been private had they not been taken back by Congress. Perhaps so, but the amounts the counties are asking federal taxpayers to pay—either through an extension of timber payments or via DeFazio’s bill—greatly exceed the amount that private forestland owners pay in property and harvest taxes.
Most of these counties spend the largest share of their funds on public safety, including the sheriff, courts, and jail. Other funds go for health and human services. But most also spend a significant amount of money on what might be called luxuries, including recreation, cultural resources, and community development programs (which mainly means land-use planning).
County leaders need to accept reality and make some hard decisions about their budgets. Recreation, culture, and most public works programs should be funded out of user fees rather than taxes. If users aren’t willing to pay for them, then they aren’t really needed. Counties could also stop funding land-use planning and let the state pay for those programs if it feels they are needed.
To the extent that these cuts aren’t enough to maintain public safety and human service programs, county leaders will have to make it plain to voters that they will have a choice between somewhat higher property taxes or accepting major cuts to these programs. There is no justification for forcing federal taxpayers elsewhere to subsidize county taxpayers in Oregon.
Randal O’Toole is a senior fellow with the Cato Institute and author of American Nightmare: How Government Undermines the Dream of Homeownership. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.