Speed Gibson

It's time to round up the last of Gregg J. Cavanagh's list of structural Sacred Cows that today trample reasoned attempts to get control of our runaway State spending in Minnesota

1. Cut the size of the Legislature.
   
2. Eliminate the education monopoly.
   
3. Turn off the welfare magnet.
   
4. Place a moratorium on light-rail projects.
   
5. Reduce or eliminate the corporate income tax.
   
6. Outsource whenever possible.
   
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   
   "The state prevailing wage law requires nonunion contractors to pay union-scale wages and benefits on state-funded construction projects. It also forces them to adopt inefficient union work practices. It drives out competition and subsidizes construction unions with taxpayer funds. It performs no valid public function and should be repealed.
   
   "The state often requires nonunion construction contractors to become signatory to union collective-bargaining agreements in order to work on state projects. This practice drives out competition on such projects and subsidizes unions with taxpayer dollars. The use of such agreements should be banned."

***

In a word, the favorite pastime of the Minnesota Legislature is meddling. In many cases like the above, it's for fun and political profit, too often the latter.

Price-fixing is one of their favorites. In some cases it's overt, like telling private businesses not to lower gasoline prices or setting minimum wages. In most cases, however, it's indirect, by limiting our options. They tell us who we can hire, as in points 7 and 8 above. They rig K-12 education funding so that few families can afford anything but the "free" public schools. Naturally, those who benefit from such favored treatment show their appreciation to those responsible and/or send delegations to encourage them to stay the course.

Some of it is just feel-good, to satisfy some inner calling to do what they feel we constituents are too stupid to do for ourselves, like buckle our seat belts. It seldom dawns on them that they might be the ones that are too stupid to comprehend the situation, as in the "Baby Huey" bill to require car seats up to age 8. Add a measure of hubris and you get the Smoking Ban; the scientific research does not matter.

The point is, this all costs us money. Money to pass and enforce the law. Money paid in needlessly higher prices. Money lost in reduced economic activity, which also means reduced tax revenue to the state, exacerbating the budget deficit.

Even non-taxpayers suffer from this interference in our lives. They may get an inferior education, a prisoner of their failing school to which they have no feasible alternative. They may get an inferior job, or no job, the de facto union requirements for many jobs and projects having sawed off the lower rungs of the economic ladder.

What they will get is welfare and a pat on the head, leaving them to think that it's not their fault they're not getting ahead. They might be right.

Let's examine another Sacred Cow from the Star Tribune opinion piece by local attorney Gregg J. Cavanagh.

1. Cut the size of the Legislature.
   
2. Eliminate the education monopoly.
   
3. Turn off the welfare magnet.
   
4. Place a moratorium on light-rail projects.
   
5. Reduce or eliminate the corporate income tax.
   
6. Outsource whenever possible.
   
   "Law enforcement should be performed by state employees. Most other tasks should be evaluated for possible outsourcing. If let competitively, rather than simply assigned to ever-growing state departments staffed by union employees, most tasks could be performed more cheaply by the private sector."
   
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   

My favorite example of this is the Minnesota Association of Professional Employees ("MAPE"), a union representing over 25,000 state employees. You may remember that MAPE went on strike in 2001, shortly after the 9/11 attack, which drew criticism even from the left.

I remember reading a Minneapolis Star Tribune breakdown of all the disparate professions MAPE represented. I remember thinking how odd this was for a union. The only tie that bound was that they drew government paychecks. I also remember noting that every one of the many listed professions in the article provide services readily available in the private sector. Based on the article, there was no reason for any of these people to be government employees.

Assuming this hasn't changed since then, these jobs should be outsourced, opened to competitive bidding. MAPE would be free to continue representing such employees, of course, so this isn't union busting per se.

***

A related thought is school bus transportation. Some districts own and staff their own fleets, like Robbinsdale and Minneapolis. Others like Osseo outsource with companies like Laidlaw Education Services.

I won't pretend to know which is ultimately cheaper, certainly not on a district by district basis. But having watched my own District 281, I have a nagging feeling that even if it were slightly more expensive, maybe we'd be better off outsourcing it.

The reason I say that is that it seems like we're continually fine tuning the schedule to save money. That's an honorable goal, but it seems that we're setting school hours to meet this need, not what actually might best, grade by grade. Private operators with larger fleets or more flexible staffing may be able to provide the optimum starting times with comparable costs. But fundamentally, we elect School Boards and hire Superintendents to educate our children, not transport them.

Getting back to the general point, we all tend to be better buyers than builders in most areas. We may not know a thing about brewing beer but we know what we like and what we're willing to pay for it. Define what you want, solicit bids, award contracts, and review the results periodically. Focus on your primary mission, your core competencies. Don't waste your time and money trying to be proficient in someone else's.

Moo-ving right along with Gregg J. Cavanagh's list of the sacred cows of Minnesota spending, it's time to look at the revenue side.

1. Cut the size of the Legislature.
   
2. Eliminate the education monopoly.
   
3. Turn off the welfare magnet.
   
4. Place a moratorium on light-rail projects.
   
5. Reduce or eliminate the corporate income tax.
   
   "Minnesota has one of the most burdensome corporate income taxes in the world. This tax discourages businesses from staying or locating here. Corporations employ people, and people pay income and sales taxes. The reduction or elimination of the corporate income tax would likely increase overall state revenues."
   
   
6. Outsource whenever possible.
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   

Prime Minister Pawlenty is already promoting this idea, based on what appears to be some pretty good research by his task force. Our rates are high and I doubt few would argue that high corporate tax rates draw, keep or create more business in Minnesota.

I'm really not swayed by the argument that lower rates would bring in more revenue per se, even though it's likely true. I think the ideal corporate income tax rate is zero for the simple reason that corporations don't pay taxes. They only collect them, and inefficently.

If you have any corporate headquarters experience, you've seen the people, desks, square feet, office equipment, and paper involved with preparing state income tax returns and issuing checks. The Department of Revenue has similar expenditures in processing those returns and managing the receipts, not to mention the auditors both sides hire. And none of this produces anything valuable, like food, clothing, shelter, transportation, education, or entertainment.

Direct taxation of the people for the equivalent amount avoids almost all of this. When hidden via the corporate income tax, we pay this extra overhead. It's like we're paying for our own deception.

The one remaining "yeah, but" is progressivity, if that's truly a word. Many assume that the corporate income tax falls on the upper class, but I'd argue that it's in fact regressive, disproportionately falling on the lower class. As I said, corporations only collect taxes, either from customers (higher prices), employees (lower wages, fewer jobs), or investors (your 401K). McDonalds makes their millions one Happy Meal at a time.

One of the most flaming liberals of my acquaintance readily agrees that the corporate income tax is regressive, pointing to the State's tax incidence data that estimates who pays all the indirect taxes. (His solution is to make the individual tax still more progressive to compensate!) In doing a few Google searches, the jury seems out on this, that the corporate income tax is somewhere between regressive and neutral, but not progressive.

I like simple and the lower costs it brings. I like honest and the transparency it brings. Eliminating the corporate income tax is a step in both of these directions.

It’s time for another installment of Gregg J. Cavanagh's herd of Sacred Cows that are blocking the road to sustainable Minnesota State spending.

1. Cut the size of the Legislature.
   
2. Eliminate the education monopoly.
   
3. Turn off the welfare magnet.
   
4. Place a moratorium on light-rail projects.
   
   These projects are incredibly expensive to build, serve only a small percentage of state residents, and run perennial operating deficits. A state flush with cash might construct such projects as a luxury. A state with a huge deficit should focus on moving the most people with the fewest dollars. That's what roads do.
   
   
5. Reduce or eliminate the corporate income tax.
   
6. Outsource whenever possible.
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   

***

Mr. Cavanagh says it well, but I'll go further. Light Rail never was and never will be necessary, significannt or viable as a transportation solution.

Spending a fraction of Light rail money on buses would have improved transit service far more. Don't forget, existing bus service along the Hiawatha was gutted to create artificial demand for it. The same fate awaits Routes 16 and 94 when (if?) the Central Corridor starts running.

Spending the same money on roads, which could include some bus lanes, would benefit most of the area, not the narrow segment served today. As a part time bus rider, it upsets me that we're raising bus fares solely to help cover the hemorrhagic losses being rung up by Light Rail. Let me also note for the record that I requested such figures three times from Met Council last year, via three different people. I'm still waiting.

Spending any more on Light Rail is totally irresponsible. Any Legislator voting to expand this system cannot claim to be at all serious about getting control of State spending.

Continuing Gregg J. Cavanagh's list of Sacred Cows that feed without mercy on our state tax dollars:

1. Cut the size of the Legislature.
   
2. Eliminate the education monopoly.
   
3. Turn off the welfare magnet.
   
   "Minnesota offers the most generous welfare benefits in the Midwest. Many people relocate here, not to sample our lakes, but to partake of our welfare benefits. Taking care of your own is one thing. Drawing in welfare recipients from all over the country is absurd. The financial incentives for people to relocate here should be eliminated."
   
   
4. Place a moratorium on light-rail projects.
   
5. Reduce or eliminate the corporate income tax.
   
6. Outsource whenever possible.
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   

***

It may become moot later with the repeal of the 1995 Clinton / Gingrich Welfare Reform hidden inside the "Stimulus" bill, but Minnesota never really embraced the spirit of that law. Our bloated Health and Human Services budget is proof enough of that.

More instructive, though, is to talk to some police officers. You may need to go undercover, away from the Chief [insert your favorite doughnut quip here], but they can tell you who's committing much of the crime. Let's just say they're from out of town.

We're also high on the list of where illegal aliens like to settle. My mother was about as liberal as they come, but even she couldn't understand why Minnesota was "waving everyone else in" to collect our more generous welfare benefits.

I grant you this is all anecdotal at best but prove me wrong. I'm just using the time honored Minneapolis Star Tribune editorial policy - if it fits the template, no further fact checking is necessary.

Continuing with Gregg J. Cavanagh's list of Sacred Cows that need to be corralled to get Minnesota's State Budget under control:

1. Cut the size of the Legislature.
   
2. Eliminate the education monopoly.
   
   "The teachers' union has a stranglehold on K-12 education in this state. The result is high per-pupil education costs and a never-ending demand for increases in funding, despite questionable performance in many districts. Private schools should be allowed to compete for K-12 students and dollars."
   
   
3. Turn off the welfare magnet.
   
4. Place a moratorium on light-rail projects.
   
5. Reduce or eliminate the corporate income tax.
   
6. Outsource whenever possible.
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   

***

This is one of those polarizing issues where few minds get changed no matter what the latest budget figures, test scores, or research correlating them might indicate. But recent news prompts me to try again anyway. It's for the children.

Hidden away in the "Stimulus" Bill is the revocation of Washington DC's voucher program. As I understand it, there's a long waiting list/lottery to get in. It pays out about half what the DC schools typically spend per student. The "Stimulus" Bill does provide that the program can continue if Congress so votes. If they do nothing as seems the intent, it lapses. I also heard today that two classmates of the Obama children use this program.

The program is tremendously popular with the parents. The program is tremendously unpopular with the unions, or at least the unions' leadership. The compromise? Slide it in legislation in the middle of the night, feign surprise when the press uncovers it later.

The academic gains appear to be substantial and undeniable. The unions argue that the same level of parental involvement would achieve similar results in the public schools. The tie breaker for me? More than 25 percent of Washington and Baltimore area teachers send their own children to private schools.

Closer to home, what harm would a voucher program do in Minnesota? We can structure it to hold the public school harmless, even a modest profit center by getting money to educate students that aren't even there. The competition would be positive, forcing both public and private to truly look at issues like teacher quality and paying accordingly.

You sometimes hear budget deficits or a portion of them described as "structural" in nature. This is to say that the current laws bring in too little revenue and/or spend too much money. In Minnesota where revenues triple every 20 years, it's safe to say we have a spending problem.

Local attorney Gregg J. Cavanagh had his guest commentary published recently in the Minneapolis Star Tribune: How to make state budget easy to balance. In it, Cavanagh claims that "balancing the state budget would be easy — if our leaders were willing to kill a few sacred cows." He lists nine of them, and it's a great list, worthy of several posts, to wit:

1. Cut the size of the Legislature.
   
   "Minnesota has far more legislators per capita than even a geographically and economically complex state like California. Maintaining this large a Legislature is expensive. Even more expensive is the unnecessary legislation the senators and representatives must generate to demonstrate they are 'doing something.' The Legislature should be reduced in size, and legislators' compensation and per diem should be reduced to a level appropriate for a part-time Legislature."
   
   
2. Eliminate the education monopoly.
   
3. Turn off the welfare magnet.
   
4. Place a moratorium on light-rail projects.
   
5. Reduce or eliminate the corporate income tax.
   
6. Outsource whenever possible.
   
7. Repeal the prevailing wage law.
   
8. Ban project labor agreements.
   
9. Stop trying to run everything.
   

***

I'm afraid that the position of Legislator will never be considered part time again. They might get shamed into shaving their excessive per diems a little, but they're not going to cut their own pay or benefits. And you're certainly not going to get them to reduce their numbers for fear they're one of the "reducees." Not unless...

Many disagree with me, but I'd like to see a unicameral Legislature. The two house concept was a grand political compromise needed to adopt the U.S. Constitution, not any model of good government; quite the opposite. There's no accountability if you can blame the other chamber or the conference committee conveniently stacked by the leadership. A lot of busy work is created in coordinating the operation of those two chambers. And if two are better than one, why aren't three better than two?

What's the right number? If the Senate can claim to do full justice to all the legislation it handles, clearly 67 is adequate, especially if the above coordination and busy work is eliminated. So close the House, use the existing district boundaries, just shift the terms to elect half the body every two years.

Who survives among the three current office holders in each district? I'd say whoever has been there the longest. Senator wins the ties with the House, otherwise that district is in the first group of elections.

What's the right pay? This is the key. As part of the Constitutional Amendment that would obviously be required, set it high enough to get that Amendment through the current bodies. Include money for lavish expansion and remodel of their offices. Install a Zagat-rated cafeteria and Olympic-class workout facilities, including a pool. Provide Superintendent-level retirement and severance packages.

In other words, spend whatever it takes. Buy those votes! It will still be chump change as part of our $25+ billion annual state spending. If it makes it impossible for the remaining Legislators to generate all the extra nonsense they pass each year, it's almost certain to be a net plus.