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Hijacking the $timulus Dollars

Education, Government No Comments »

Whether one agrees with the philosophy behind federal stimulus money, it is difficult to argue with the practice of accepting the dollars once they are offered. If you (as a state) turn away the cash, it will go somewhere else.

Another story is how to use the funds, particularly in the case of the soon-to-be-arriving education stimulus. One can make a strong argument for a cautious approach; in other words, why go out and spend now when you’re likely going to need it even more later?

State Superintendent of Public Instruction Tony Bennett put it this way when informing school districts how much they should receive come November. (The federal law says the money does not have to be spent until September 2012).

"With your staffs and budgets set for the 2010-2011 school year, I urge you to be careful with how and when you spend these funds. Please consider reserving this one-time funding until the level of resources budgeted by the General Assembly in the upcoming budget cycle become clearer."

That won’t be clear until late April in 2011, if then.

While timing may be a consideration, I suspect that taking the education dollars and using them to fill a Medicaid budget gap was not what those doing the allocating had in mind. But that appears to be the case in Rhode Island. The Providence Journal reports:

Instead, Governor Carcieri intends to use the $32.9 million Rhode Island is eligible to receive to plug an estimated $38-million deficit in this year’s budget.

His plan drew a strong protest from Education Commissioner Deborah A. Gist, Congressman James R. Langevin and representatives of teachers unions and the state’s school committees.

School districts across the state were hoping that more than 400 teaching jobs would be restored or protected after Congress passed the bill in August. Nationwide, the law allocates $10 billion for schools and $16.1 billion to prevent Medicaid cuts.

Rhode Island is eligible to receive more than $100 million, $32.9 million intended for education jobs and about $70 million for Medicaid reimbursements.

But that’s about $38 million less for Medicaid than the state was counting on when it passed the 2010-11 budget, said Carcieri’s spokeswoman, Amy Kempe.

“While I’m sure it may be technically allowable and that the governor’s office is doing the appropriate thing, I don’t think we are acknowledging the intention of President Obama, [U.S. Education Secretary Arne] Duncan or Congress had for these funds,” Gist said.

Gist said she is especially concerned because the state is facing an even worse budget gap in fiscal year 2012 and the education jobs money could be spent during that year as well. According to the state Budget Office, the overall deficit could be as large as $320 million next year.

The executive director of the National Education Association of Rhode Island also criticized the governor’s plan, particularly after Carcieri and the General Assembly reduced state education aid to schools by 3.6 percent this year, a $29-million cut.

“I voted for this bill to help keep Rhode Island teachers on the job,” Langevin said in a statement. “Properly supporting our state’s education system is the best way to reverse our current economic situation over the long term.”

Officials at the U.S. Department of Education said Tuesday that using the federal money to supplant state funding is not expressly prohibited, although they cautioned they will carefully review each state’s application to ensure it follows the guidelines.

Detroit: The Good & Possible Bad of Health Care Investments

Health Care No Comments »

Can medicine replace motors as the economic engine in the Detroit metropolitan area? Not so fast, says the Center for Studying Health System Change, which recognizes possibilities but warns of potential dangers in high levels of health care capital investment. The Center for Studying Health System Change reports:

Despite a weak economic outlook, Detroit area hospital systems plan to spend more than $1.3 billion in the coming years on capital improvements, leading some to hope that medical care can help revitalize the area’s economy, according to a new Community Report released today by the Center for Studying Health System Change (HSC) and the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR).

Overlooked in the enthusiasm is the possibility that significant expansion of the community’s health care infrastructure may lead to higher health care costs if the hospital systems can’t attract new patients from outside the Detroit metropolitan area, according to the report.

“If all the spending on capital improvements leads to increased use of high-tech services or additional costs from excess capacity, the end result might be higher private health insurance premiums, which could negatively impact employers and employees,” said Paul B. Ginsburg, Ph.D., HSC president and NICHR director of research.

The challenges facing the Detroit metropolitan area’s health care system are intertwined with the challenges facing the community as a whole, including a declining and aging population; major suburban/urban differences in income, employment, health insurance coverage, and health status; and a shrinking industrial base, according to the report.

BRAC to Go Global?

Government 1 Comment »

Most Hoosiers are familiar with the BRAC — Base Realingment and Closure — process that the military executed several times over the past few decades. Hoosier installations, vital parts of local communities, were sometimes directly impacted and other times spared.

Military cutbacks are expected to come again in the effort to trim defense spending, but the targets could be overseas this time. I was unaware that the U.S. has 702 bases or other facilities in 63 countries. Also unknown was the fact that 80% of the international forces are stationed in Germany and South Korea.

Politically, it will easier to save dollars by trimming overseas bases than cutting domestic weapons programs.

Possible closure targets, according to the Kiplinger report: Kadena Air Base, Torii Army Station and Camp Butler Marine Corps Base, all in Okinawa, Japan; Army stations in Stuttgart and Schweinfurt, Germany; an airfield in Heidelberg, Germany; Aviano Air Base in Italy; and an Army garrison in Schinnes, the Netherlands.

If the effort goes toward somehow reducing the massive federal deficit and shifts some of the world’s peacekeeping responsibilities to other countries without jeopardizing our safety, it sounds like a sensible plan. 

Education: Adding It Up (2 + 2 = $)

Education No Comments »

They’ve tried it in Dallas, Chicago, New York and Washington, D.C. among other places. The results have been mixed at best. Overall, in this writer’s view, there’s something that just doesn’t feel right.

It, in this case, is paying students for academic performance. And it, in this case, adds the twist of rewarding parents with cold, hard cash if their kids pass certain math tests and if the parents go "above and beyond" by attending conferences with teachers.

Shouldn’t parents already have an interest in the education progress of their offspring? Shouldn’t students take the responsibility, with the help of their parents, to try and perform to the best of their abilities? I know the answer and also realize what should happen doesn’t happen all the time. But high expectations, in my opinion, instead of high rewards, would yield more productive results.

Your thoughts? Here’s an excerpt from the Houston Chronicle:

The Houston school board signed off Thursday on the $1.5 million program, which is funded by the Dallas-based Liemandt Foundation. The incentives will go to students and parents at 25 elementary schools that rank among the lowest in math achievement.

The pilot program — thought to be the first that offers joint incentives for parents and students — will allow fifth-graders to earn up to $440 for passing short math tests that show they have mastered key concepts, according to the draft proposal. Parents will get slightly less money for their children doing the work, and they can earn an extra $180 for attending nine conferences with teachers to review the youngsters’ progress.

Combined, the students and their parents can pocket $1,020.

Parents can opt out of the pay program, which also is expected to include money for teachers – up to $40 per student – for holding the parent conferences. The Houston Independent School District already has the nation’s largest program that rewards teachers and school staff for boosting students’ scores on standardized tests.

Nationwide, public support is low for school districts paying students for specific behaviors, such as reading books, attending class or getting good grades, according to the 2010 Phi Delta Kappa/Gallup Poll. About one in four Americans favor the idea. A similar number said they had paid their own children for academic accomplishments.

The Houston program appears to be based on the Dallas work. Second-graders in Dallas were paid $2 for each book they read once they passed a simple quiz to confirm they had done the reading. A study found that the students who were promised money improved in reading comprehension and language more than those who weren’t offered the reward.

The idea of paying parents intrigues Dan Ariely, a Duke University professor who studies human behavior, but he said he expects little long-term benefit from the cash rewards for students.

"The parents actually have some control over the kids," he said. "They can tell the kids to study."

For the students, he said, the monetary incentive will do nothing to instill in them a love of learning. "What is questionable is whether you could create short-term learning or not," he added. 

Tax Issues Taxing Voters Across the Country

2010 politics, Tax/Finance No Comments »

Statewide ballot measures are much more common outside Indiana than on Hoosier ballots. More than 140 such initiatives are being left to voters this fall, with significant fiscal consequences for many. The efforts include both tax increases and cutbacks:

Washington State is one of nine states without a state income tax. Bill Gates Sr., the father of the Microsoft founder, wants to change that. Gates is lending his high-profile name and influence to a ballot measure that would tax the income of individuals who earn more than $200,000 and couples who earn more than $400,000. His son — the world’s second-richest person — definitely falls into that category.

The elder Gates, who also co-chairs the Bill and Melinda Gates Foundation, says Initiative 1098 would generate $1 billion a year in new revenue dedicated to education and health care. He also says it would put an end to Washington being “the most regressively taxed state in the country.” If approved, the measure would gin up an extra $11 billion over five years by taxing 38,400 high-wage earners in Washington, while lowering certain business and occupation taxes and cutting property taxes by 20 percent. “The very future of Washington hangs in the balance,” Gates says.

Opponents of Initiative1098 contend the measure would open the door to taxing not just the rich, but residents who earn all levels of income. They also say the measure, if it passes, would eliminate a key advantage the state has to lure businesses. “Don’t Calitaxicate Washington,” they plead.

Washington is one of several states where voters this fall will weigh in on ballot measures that, if passed, would have enormous fiscal consequences. Voters in California, Colorado and Massachusetts will take up tax questions that could expand or shrink the foundations on which future budgets are built. Drama awaits on the spending side of budgets, too. In Arizona, voters could blow a $450 million hole in the state’s current budget if they reject two key measures this fall. And in Florida, voters will decide whether to save billions of dollars by relaxing limits on class sizes at schools.

In total, more than 140 statewide measures have qualified for the November ballot, according to the National Conference of State Legislatures. Stateline has compiled a guide to the most crucial ones to watch here.

Avoiding the Late Afternoon Lull

Human Resources 2 Comments »

Maybe 5-Hour Energy drink should have sponsored this one. In a none too surprising result, a new survey by Accountemps finds that 4 p.m. to 6 p.m is the least productive time of the day for employees, with 2 p.m. to 4 p.m. a close second.

More than 1,000 senior managers were surveyed. A couple of highlights and Accountemps’ advice for battling the late afternoon blues.

Managers were asked, “In general, what is the least productive time of day for employees?” Their responses:

8 a.m. to 10 a.m.  – 10%
10 a.m. to noon – 4%
Noon to 2 p.m.     – 19%
2 p.m. to 4 p.m. – 28%
4 p.m. to 6 p.m. – 37%
Don’t know – 2%

“All professionals experience lulls in productivity, but the late afternoon, in particular, may not be a good time to hold brainstorming sessions or take on highly challenging projects,” said Max Messmer, chairman of Accountemps and author of Managing Your Career For Dummies®, 2nd Edition (John Wiley & Sons, Inc.). “High-performing individuals are typically attuned to their most productive times of the day and, when possible, schedule their critical tasks during those hours.”

Accountemps offers five tips to help professionals avoid the afternoon slump and maximize productivity:

  • Plan ahead. Don’t push challenging projects off until the end of the day, when your energy may wane. Use your less-energetic periods to catch up on more routine tasks, such as responding to e-mails and reading industry publications.

  • Get out and smell the roses. If you feel your energy beginning to dip, stretch or take a short walk to recharge. Try eating your meals or holding afternoon meetings outside.

  • Eat well. Remember to make time for lunch and nutritious snacks throughout your workday. Avoid high-carb foods, which can cause you to crash later.

  • Track goals. Keep a to-do list to remain focused, and ensure it’s visible on your desk so you can check items off as they’re completed. There’s nothing more motivating than making progress on your projects.

  • Switch gears. If you’re struggling to focus, take a quick break and research something new. Changing tasks can help increase your productivity late in the day.

Too Much Government in Too Many Places

local government reform No Comments »

Check out these words of New York Attorney General (and candidate for governor) Andrew Cuomo:

Our system of local government is broken … New York has more than 10,521 overlapping governments, including counties, towns, villages, school districts, special districts and public authorities. These entities impose layer upon layer of taxing structures — with citizens receiving multiple tax bills annually — resulting in the highest local property tax burden in the nation … To hold government to account the people must have a government they can understand. But what they have today instead at the local level is a ramshackle mess. The current local government system is the product of sheer historical accumulation — not logic, reason or common sense.

Well said. No, make that very well said. The Indiana Chamber and many, many others have put forth a strong case in recent years that township government in our state is beyond repair. Each new revelation of outlandish township reserves, unsightly administrative costs to deliver poor relief and outright criminal behavior further makes the point.

But like most challenges, it’s not just an Indiana problem. The Governing magazine article that featured the Cuomo quote also included the following. Maybe, just maybe, the momentum will grow, lawmakers will step up to the plate and all Hoosiers will benefit.

Rich Pahls, a Nebraska state senator from Omaha, has proposed merging many of his state’s 93 counties. The jurisdictions were designed for the days of the horse and buggy, he pointed out to the New York Times, not an era when “people will drive 100 miles to the grocery store.”

New Jersey, meanwhile, has some of the highest property taxes in the country, thanks in part to its 567 municipalities, a third of them with fewer than 5,000 residents, along with 611 school districts and 486 local authorities. Bergen County alone has 70 school districts and 76 superintendents.

New York State has more than 10,500 governmental entities that levy taxes and fees, and that depend on state largesse for any number of needs. This includes towns, villages and a multiplicity of water, sewer, lighting, school, 911 and other districts. Erie County, which is where Buffalo is located, has over 1,000 such local governing entities alone.

But while political leaders in the U.S. have been talking about local government rationalization, in Denmark, they’ve actually done it.

In 2007, Denmark shrunk the number of municipalities from 271 to 98. County government was completely eliminated. Fully 455,000 local government employees were involved in the restructuring; and 30,000 physically relocated to a new site. The government projects $274 million (1.6 billion DKK) in savings from the restructuring.

The implementation of this massive reform, which began in 2002, offers important lessons as other governments look to achieve big cost savings through rationalizing local government.

Anyone hoping to rationalize the delivery of services from the state level on down must first understand where the opportunities lie to eliminate duplication and inefficiency. Then, you need to lay the groundwork for public acceptance of the change. Both of these goals can be served by gathering hard data on what every unit of government does, how much it spends and what it gets for its money. Only after these goals have been achieved can you make that information readily available to the public.

This is not an easy task. The collection of data alone is enormous. But data gives you the ability to shine a light on what is taking place under the status quo, making the tough task of driving change a little easier.