Fixing Public Education Despite The Washington Political Class

One of the great ills of our times is the less than adequate job that our schools do in educating our children. Consider some statistics that were researched in the development of our book, "Love My Country, Loathe My Government:"

•In 2006, the Program For International Student Assessment (PISA) conducted their tri-annual study of educational attainment by fifteen year old kids from fifty seven nations.

•In science literacy, the United States finished below the overall average and trailed the scores of kids from twenty two other nations.

•In mathematics literacy, the U.S. finished well below the overall average and trailed the scores of kids from thirty one other nations.

•Countries such as Estonia, Slovenia, and Macao finished higher than the U.S. in both categories.

Looking at more recent statistics on education, a December 26, 2010 issue of the St. Petersburg Times (now the Tampa Bay Times) also addressed the poor performance of our public school system. The main feature in the article was a bar chart that displayed the percentage of 15 year olds performing at the advanced level in math proficiency many countries, including the United States, and every one of our fifty states.

The output from the graph was based on the work of Stanford economist Eric Hanushek and two others. They were very careful to accurately adjust and slice the raw data from the testing that was done to exclude the impact of the following factors, factors that had been used as excuses for the poor performance of American kids in the past:

• They only looked at math test scores since math is math, it is not affected by language or culture, as much as language skills.

• They adjusted for household income and wealth using reliable proxies.

• They adjusted for whether or not the there was a college educated parent in the child's household.

• They adjusted for whether or not there was a race impact.

• They adjusted for how much each state spends per student in their states' public schools.

The bottom line conclusion after trying to look at the data from every conceivable angle? Now matter how you cut it, the United States does a horrid job of preparing public school students for proficiency in math. How bad is it:

• Only 6% of U.S. 15 year olds performed at an advanced proficiency in math.

• This places them behind 30 other nations including Estonia, Lithuania, Slovenia, and Slovakia, far poorer countries.

• The top three performing countries, Korea, Hong Kong, and Taiwan, had about four times as many of their students performing at high math proficiency.

• Only two states, Massachusetts and Minnesota, had more than 10% of their kids performing at high levels which were behind sixteen other nations.

• New York state, which spends the most on public education per student, $17,000 per year per student, had only 6.3% of their students perform at high proficiency, trailing 30 countries and 15 other U.S. states.

• A 2010 study found a very high correlation between how well teachers are trained and how well students perform. In the United States, researchers tested 3,300 middle school math teachers-to-be in almost 40 states. They found that these future math teachers performed at about the same levels of would be teachers in Oman and Thailand and far behind teachers in Taiwan and Singapore. (Note: for Thailand, only 1% of their 15 year olds perform at a high proficiency level in math; for Oman, it was not even listed in the graph discussed above).

These horrid results have been attained even though the American taxpayer has probably spent over a TRILLION dollars at the Federal government level to try and do a better job of educating our kids. We have been doing the same thing and taking the same approach for decades without anything positive to show for it, bringing to mind a famous Albert Einstein quote: “The definition of insanity is doing the same thing over and over and expecting a different result.”

But we should expect nothing less from a set of politicians that care only about their own greed and ego, making sure that established entities such as teachers’ unions are protected and keep donating to incumbents’ reelection campaigns.

But what if did did education a different way in this country? Could we finally get our money’s worth and hopefully get some of our money back without endangering our kids; education?  Consider a different approach that actually exists today and exists within the shadows of the Washington politicians and bureaucrats that get nothing right:

• The following success story comes from an article written by Akash Chougule who is the senior policy analyst at Americans for Prosperity.
• The Opportunity Scholarship Program in Washington D.C.  serves almost 5,000 students, 95% of whom are African-American.
• The program funds private-school tuition for poor families in order that their kids can go to schools  they would otherwise not be able to afford.
• The Federal tax dollars spent on the program  accounts for a minute 0.0005% of the federal budget.
• Ninety one percent of the students in the program graduate high school compared with 56% for D.C. public schools.
• Families who benefit from the Opportunity Scholarship Program have described it as “a godsend for our children,” a “life-saver,” and “our salvation.” One father is quoted in the article saying, “I truly shudder to think where my son would be today without it.
• The program was set up by the Bush administration when it was funded with $20 million of funding while at the same time DC public school, who would lose students to private schools under this program so that the public schools would not be financially disadvantaged.
• But giving more money to schools does not appear to be the solution since according to the article, the country has more than doubled education spending over the past 40 years with no gain in education attainment to show for the investment.

Wow, a simple solution that improves results by about 80%, a solution that parents like and want to continue, and a program that avoids some of the typical bureaucracy we find in public schools today. Would go wrong?

Well, according to the article, President Obama and many Congressional Democrats have been trying to kills this program for years and years. Which is especially disturbing from the President’s perspective since he sends his kids to one of the most exclusive, if not the most exclusive, private schools in the DC area, the Sidwell Friends School, a school that costs tens of thousands of dollars a year to attend. Some serious hypocrisy if you ask me, he can afford to pay for the best education for his kids but wants to deny the opportunity to the poorer residents that live around the White House.

Why would one want to do that? That answer is simple: political election and reelection money. Go to the following link at the fabulous Open Secrets website and you will see that the National Education Association, and other teacher union related entities, donate tens of millions of dollars each year to politicians, the vast majority of which goes to Democrats like Obama:

https://www.opensecrets.org/industries/indus.php?ind=L1300

Teachers unions are scared of successful voucher and private school initiatives like this since it threatens their current monopoly hold on education in this country. Thus, they have found friendly political allies in the Democrats serving in Congress and you can make the correlation case that campaign donations come with the strings attached that private school programs like Opportunity Scholarship Program are discouraged or killed outright, the welfare and education of the inner city youth be damned.

Two steps from “Love My Country, Loathe My Government” would help alleviate this conflict of interest and maybe lead to more inner city kids getting opportunities in spite of political considerations:

• Step 6 would allow only private citizens to contribute to political election campaigns. No PACs, no Super PACs, no dark money, no corporations, no unions, etc. would be allowed to contribute to election campaigns. Nowhere in the Constitution’s First Amendment did the Founding Fathers guarantee that a corporation or union or PAC had freedom of speech protection.
• Step 35 would limit all Federal politicians to one term in office, one and done. Much of the election sleaze that happens in American politics is driven by incumbents desperately hanging onto their office and granting favors to those that will help finance that hanging on.

This program proves that we can resolve problems in this country, in this case when it comes educating our kids. But as we often see, it is the political class that prevents problem resolution in this country,not that our problems are insolvable. The above two steps would go a long way to fixing not only our education issues but who knows what other problems we can resolve once the political class is removed as a road block.

If you agree with us, please visit our companion website to find out how to help get term limits installed at the Federal government level:

www.howmuchworsecoulditget.com

Because really, how much worse could it get if we replaced every current Washington politician with new ones?

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

California Dreaming Becoming The California Nightmare, Financially Speaking

Let’s get away from Federal government political class insanity and wasteful government spending for a little while. Today, let’s revisit one of our most dysfunctional states, California. We have already covered the dire state of California’s economic status in the following posts:

http://loathemygovernment.blogspot.com/2012/10/why-californias-distressed-economy-is.html

http://loathemygovernment.blogspot.com/2012/07/why-california-is-failing-while.html

http://loathemygovernment.blogspot.com/2012/07/state-level-economic-musings-california.html

These posts talked about the bad financial management skills of California politicians, most notably how they have allowed state government employees’ salaries, benefits, and pensions to escalate out of control. In an attempt to get the state financially solvent, late last year the state voters approved a flawed economic recovery plan which raised many state taxes to record setting levels.

The plan is flawed for two simple reasons:

1. California state government, like the Federal government, has a spending and cost problem, a problem that can only be solved by reducing spending and costs.
2. It cannot fix its problems by raising taxes. The amount of taxes raised is never enough to cover the ever escalating spending. Also, ever rising taxes start to force high producing individuals and businesses to leave the state for better financial conditions, further depressing tax revenue without fixing the underlying spending problem.

We have seen this happen in other states. Maryland once raised tax rates on millionaires in its state only to find that overall tax revenue from millionaires actually decreased even though the tax rates were higher:

http://loathemygovernment.blogspot.com/2012/12/day-7-eight-days-of-logic-and-sanity.html

Illinois also recently raised tax rates rather than slashing spending. It ended up giving businesses massive tax breaks to keep those businesses located in the state, putting more pressure on individual taxpayers without reducing spending or solving the deficit spending:

http://loathemygovernment.blogspot.com/2011/12/illinois-case-study-why-raising-taxes.html

Let’s take a look at what is happening with those tax increases five months after they were approved relative to education spending, based on the following facts from a March 23, 2013 Bloomberg article:

• As we discussed above, late last year California politicians persuaded voters to support a seven-year, $50 billion tax increase, promising that the money would all go to public education.
• This promise was enshrined in the first five words of the initiative’s title. “Temporary Taxes to Fund Education.”
• However, just four months after the election, the state’s Legislative Analyst’s Office has found that the California State Teachers’ Retirement System will need an extra $4.5 billion a year for 30 years , a grand total of $135 billion, or about $30 billion over the next seven years, to cover its unfunded liability for teacher pensions.
• Thus, while the original tax increase plan was to raise $50 billion for actually educating California kids, now about 60% of that will be needed not to educate kids but to shore up the teachers’ union pension plan, a classic example of bait and switch.
• The article points out that this financial mess should not be a surprise since a number of people had already pointed out the disastrous financial course the state’s financials and pension funding were on, including the article’s author, a report called the Volcker-Ravitch report, and a report/analysis done by Bill Gates.
• Unfortunately, the $4.5 billion-a-year shortfall is based on the retirement fund’s self-reported unfunded liability estimate, a shortfall which assumes that its investments in the stock market will double every ten years, a highly unlikely assumption since to attain this growth rate, the Dow Jones Industrial Average would have to be around 30,000, more than double its current level.
• Any stock market performance less than that assumption will increase the pension fund shortfall, making the $4.5 billion a year way too low.
• The article reports that economists working for the Volcker- Ravitch analysis estimated last year that under a more reasonable stock market investment earnings assumption, the cost to meet the retirement fund’s unfunded liability is closer to $7 billion a year.
• This $7 billion a year shortfall estimate would be about equal to the seven year, $50 billion tax increase that was passed in November, wiping out any education funding for the kids since $7 billion more a year would be needed just to fund the teachers’ pension liabilities.

The article goes on to point out why this happened, including intentional repression of facts, but that story is for another post.

Another ill fated attempt to fix a government spending problem by not attacking excessive spending but by ignoring the underlying cause and trying to fix it with tax increases. It seems that this approach never works since the expenses grow faster than the tax revenue needed to pay for the ever rising expense stream. The article concludes by putting the blame for this California bait and switch right where it belongs, with the California political class:

Teachers, who don’t receive outlandish wages or pensions, didn’t cause this problem, and the good news for them is that they will get their pensions because the state is legally required to back up school districts if they can’t meet their commitments.

Likewise, this problem wasn’t caused by defined-benefit pension systems, which can work perfectly fine so long as promises are funded properly when they are made.

But many politicians don’t want to fund pension promises properly. Most want to keep doing the opposite so they can keep making promises that can’t be kept, except at great expense to innocent people down the road.

There’s no free lunch here. To the extent that school districts pick up the cost, kids in school today will be hurt because more dollars will go to pension costs and fewer dollars will go to classrooms. To the extent that the state picks up the cost, residents will receive fewer services. Either way, voters will get little for the tax increase they approved in November.

No free lunch, truer words regarding politicians have never been more appropriate and have never been more ignored. Better to enrich themselves and buy votes today and not worry about fewer services and financial burdens to imposed on citizens down the road. Classic politician bait and switch, promise today, reneg tomorrow.

But this is just one financial problem facing California today. A new financial report by the California State Auditor and the Bureau of State Audits shows that California is heading quickly down the financial road of disaster:

• California now has a negative net worth of $127.2 billion.
• Which actually gets worse since although the report estimated the state's total long-term obligations at $167.9 billion, that number did not count unfunded liabilities for state employees' future pensions or the $60 billion in unfunded liabilities for retiree health benefits (see the $135 billion liability identified above by the Bloomberg article).
• These costs have been identified by the Government Accounting Standards Board and Moody's as costs that state and local governments should include in their budgetary assessments.
• If those costs were included in California’s budget sheet, the state’s net worth would decline hundreds of billions of dollars more.
• The report states that California spent $1.7 billion more in the 2011-12 fiscal year than it took in, leaving the state in arrears almost $23 billion.
• Of the $127.2 billion spent by the state that fiscal year, roughly half of it resulted from the state issuing general obligation bonds which were then distributed to local governments and school districts for public works projects. Those assets were listed on the balance sheets of the localities involved, while the state accrued the bonded debt.

Nasty reality coming home to roost in California. Politicians have been spending way beyond their state’s ability to pay. And rather than cut spending to be in line with their ability to pay, they keep raising taxes, which are now never going to be able to pay for the extravagant and probably wasteful spending.

Tax increases, at best, slightly postpone the facing of reality. The tax increases from last November, for example, did not make life better for state residents, it just went to paying off a small portion of the out-of-control spending.

To give you an idea of how bad the state’s debt is, let’s do a little math. If we take the $167.9 billion shortfall and add in the $135 billion of unfunded liabilities for the teacher pensions, and divide by the number of U.S. households, we see that if the rest of the country wanted to bailout California, each household would have to write a check for about $2,600. This would be more than 5% of every U.S. household’s gross household income. Outrageous.

We review the California situation as a forewarning of what is happening at the Federal government level. At some point, and we may have already passed that point, the exponential growth in expenses, especially interest payments on existing debt obligations, can never be overcome by raising taxes. As in California, raising taxes only slows down the march into unrecoverable debt levels, only reducing spending can solve the problem. Just ask California, Maryland, and Illinois.

Raising taxes without fixing the underlying spending problem eventually results in fewer government services for its citizens, a collapsing economy, and dire hardships for the most unfortunate in our society. But at least at the Federal level, there is a way to solve the spending problem without raising taxes and with minimal harm to most citizens. This plan would take an amazing $9 TRILLION out of the Federal government debt and spending stream without raising taxes. The details are in the following link:

http://loathemygovernment.blogspot.com/2012/12/part-8-eight-days-of-logic-and-sanity.html

The question is whether the Federal political class will follow this common sense advice or the rest of the country will be subjected to the California bait and switch fallacy of just a little more taxation will fix everything.

Note: for an insightful view of how this California spending problem is unfolding in a major California city, Stockton, take a few minutes to view the following video:

http://www.youtube.com/watch?v=dUv77v4qyrw

Stockton is the largest American city to ever declare municpal bankruptcy. It will probably not be the last or the largest when the whole financial deck of cards collpases in California and elsewhere across the country.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w 

Inaugural Monthly Political Class SANITY, September, 2012 - You Cannot Cure Stupid, 911 Good Samaritans, New Jersey Teachers Now Must Actually Teach

Every month since we began this blog over two years ago, we have dedicated time at the beginning of each month to the latest insanity, idiocy, and wasteful ways of the American political class at all levels of government. It has not been a pleasant trip, as we have uncovered and reviewed unbelievable greed, selfishness, and just boneheaded behavior from our politicians.

Their actions have resulted in major unresolved issues that persist over many decades, a crushing $16 TRILLION national debt, declining respect for the nation's political and government processes, a substantial loss of freedom, and a heavy tax burden for nothing in return.

However, there is a glimmer of hope. For the first time in what seems forever, we actually came across some rational, sane, and worthwhile activities and actions of the political class. Be warned: these small positive steps will not solve the issues listed in the previous paragraph. However, as we discussed yesterday, the road to sanity has to start somewhere, so let's begin with these small steps to a rational, minimalistic government operated by dedicated, courageous, and unselfish leaders.

1) Like most local governments over the past few years, the town of Milton, Washington has also suffered. According to Reason magazine, the town's tax base has shrunk from $4.9 million in 2010 to an expected $3.9 million this year. Rather than try to do what it did when its revenue base was 33% larger or raise taxes on already overburdened residents (typical political class responses), the politicians in Milton decided to do less, eliminating non-vital government services to meet its tight budget.

Milton cut deals with neighboring towns to share firefighting and library services, it eliminated the position of "activities director,"  and when an insurance consultant pointed out that unenforceable laws are a huge liability risk, the city council repealed many of its unnecessary laws, laws that were vague or unenforceable. One of the laws it repealed was the one that required bike riders to wear helmets.

From a freedom perspective, the reason why they killed the helmet law was very refreshing. The politicians realized that riding a bike without a helmet and doing other dangerous activities could lead to injury but that it was not the duty of the government to intrude on personal decisions.

A council spokesperson summed it up quite nicely: "Of course you should wear a helmet. But this is a parents' issue - parents need to be supervising their children, making sure their children are well dressed and have helmets on. Wearing flip flops and shorts and no helmets on skateboards and bikes is just stupid." And the government, no matter how hard and how expensively it wants to intrude into our daily decisions and freedom, cannot cure stupid.

Better to focus on the most important issues and resolve them than try to enforce many unenforceable rules and laws and get nothing resolved. Kudos to Milton, Washington politicians for recognizing reality: focus on the important issues, get creative with limited resources, and trust citizens to understand what is best for them.

2) Until recently, if two friends were using illegal drugs and one of them overdosed, the other friend faced a tough dilemma: if they called police and EMTs for their overdosing friends, they faced the real possibility of being arrested for illegal drug usage. If they did not call for help, their friend would suffer further damage and possibly death. Just another perverted consequence of our lost war on drugs: citizens die for no reason because of our existing drug laws.

Fortunately, there are some scattered politicians across the country who recognize that protecting the lives of citizens, even if they are using illegal drugs, is more humane and passionate than boosting drug arrest statistics. Starting with New Mexico in 2007, followed by seven other states, a series of 911 Good Samaritan laws were implemented. These laws offer immunity from prosecution laws that arise during emergency response situations.

Thus, in our example above, the non-overdosing friend could feel free to call for help for his endangered friend without worrying about being prosecuted for illegal drug use. Since Reason reports that there are over 40,000 overdose deaths a year, the spread and publicizing of these types of laws would go a long way to reducing the death rate.

This is how politicians and government should work. Rational laws that provide a tangible benefit to its citizens at minimal cost. Kudos to 911 Good Samaritan laws.

3) Earlier in August, the state government of New Jersey enacted a far reaching, positive first step in reforming what ails our failing public education processes in this country despite what had been one of the more stubborn, state wide teacher unions in the country. Politicians dealt a heavy blow to the oldest teacher tenure law in the country:

• Democratic State Senator Teresa Ruiz spent two years drafting a bill to reform the 103-year-old teacher tenure law and tie teacher job security to student performance, legislation that was signed by the state's Republican governor, Chris Christie.
• This cooperation proves that bipartisanship is actually possible in our divided nation.
• Under this legislation, all teachers will have to undergo annual evaluations based primarily on student performance.
• Any teacher who receives two consecutive negative evaluations can lose tenure.
• The hope is that these evaluations and repercussions will not only lead under performing teachers to seek other career options but also encourage talented, tenured teachers to maintain strong teaching performance.
• The legislation also changes the process for gaining tenure. Under the current system, all teachers, regardless of performance and talent, receive tenure after only three years of employment.
• The new law stretches the amount of time teachers must teach beyond three years before being awarded tenure, and teachers must achieve two positive evaluations in their first three years in the classroom to stay in the good graces of the process.

Great first steps to improving public education for the kids of New Jersey. It begins to treat teachers like other workers in other industries: perform your job to at least minimal standards, keep your job.

Now, it does not get rid of the other major stumbling block to improving public education. New Jersey, like most other states, allow their teachers' staffs to function under a seniority process, i.e. first in, last out. When teaching staffs need to be reduced, those teachers with the longest tenure, regardless of how lousy they are at their job, get to keep their jobs vs. younger but possibly better teachers on staff.

But this legislation is a great first step. Kudos to the Democrats, Republicans, and teachers' union in New Jersey who have come up with a rational, logical, and fair solution to a major problem. Rational, logical, fair: three adjectives you rarely associate with any American politician.

Three pieces of good news, politicians delivering value added services with minimal cost. Its a small start towards sanity but it is a start.

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment

Why Overtaxing The Rich (In New Jersey) Is Often A Stupid Idea - Third In A Continuing Series

This is a third in a continuing series of posts where we discuss why it is often a stupid idea to unfairly overtax the rich. Standard disclaimers: first, my family is no where close to being considered  "rich." We pay our Federal income taxes at the 15% tax bracket level. We live in a typical middle class, 2,000 square foot suburban home. I drive a seven year old vehicle and my wife drives a five year old vehicle. Thus, we do not have a direct stake in how much the rich are taxed.

Second disclaimer: the words "overtaxing" and "rich" are very subjective terms and concepts. Thus, the purpose of these posts is not to convince anyone what rich or unfair or overtaxing should be but to illustrate what can happen when taxes are increased on those high earners in our society. Wanting to tax the rich more is everyone's right but the reality of what happens when taxes are raised is what everyone should be aware of.

Today's post is centered around my old home state of New Jersey. Visiting the state this week caused me to see a number of billboards that were sponsored by a group sarcastically calling itself "Millionaires For Christie." Chris Christie is the current governor of New Jersey. The billboards and associated website were trying to raise the issue that as a result of Christie refusing to increase the state income tax on New Jersey millionaires, others in the state were suffering.

The associated website goes through some of the budget cuts that were made under Christie's watch, all of which seemed to be associated with education programs. This turned out not to be surprise once you paged down to the bottom of the website's page and saw that the primary New Jersey teachers' union was operating the site. The Governor and the union leadership have had a number of public confrontations since the governor was elected. Thus, I started to understand where the sarcasm and Millionaires for Christie effort was coming from, his main political opponent.

Before going through some of the items on the website, let's look at some independent sources of analysis and data to understand where New Jersey is currently sitting from an economic perspective:

- When Christie came into office, New Jersey faced a $10.5 billion budget shortfall, according to http://www.nj.com/ in a July 7, 2010 article.

- According to the Center On Budget and Policy Priorities, an organization that appears to be an expert on state government budgets and economics, the state will again face a budget deficit in excess of $10 billion in fiscal year 2012.

- This 2012 fiscal shortfall places New Jersey's deficit as the third worst state budget from a total dollar deficit ($10.5 billion) and the second worst state from a percentage basis (37.4%).

- A November, 2010 article from Kiplinger ranked New Jersey as the third worst state to retire in from a taxation perspective.

- A recent Forbes article placed New Jersey as the fifth most taxed state in the union.

- A detailed state-by-state analysis by the Tax Foundation in 2008 found that New Jersey had the worst state and local tax burden in the country, 11.8%. Knowing what I know about New Jersey, it is doubtful that this position has changed radically over the past few years.

- A recent article from Reason magazine quoted an expert source which calculated that the New Jersey public employee pension fund would run out of money in about seven years, requiring all of the pension outlays to then be paid out of current year state tax dollars.

Thus, it really cannot be argued that New Jersey is in bad fiscal shape even though it is one of the highest taxing state governments by anyone's measure or criteria.

Now, back  to the Millionaires For Christie effort. According to their website, if Christie had approved an additional tax for millionaires in the state, the state government would have annually received an additional $637 million. However, there are a few problems with this assertion:

- Even if the state received the additional $637 million, according to independent budget estimates from neutral parties, this would leave the state short about $9.9 billion or 94% of its needed revenue. Isn't the bigger problem still on the table even if the additional money is received? Shouldn't that be the focus, how to wipe out the inherent, structural fiscal problem that results in billions and billions of budget shortfall every year rather than only 6% of the shortfall?

- Even if the state received the additional $637 million in the first year, if no action was taken to correct the underlying cost structure problem, what happens when the "Maryland effect" kicks in a few years later.

You recall in a previous post in this series we documented what happened when the state of Maryland instituted a millionaire's tax. The number of millionaires filing state income taxes dropped by 30% very quickly and the state expectation of receiving an additional $106 million turned into a $267 million deficit relative to tax receipts from millionaire's. If that was to happen in New Jersey, which is more than likely, then the rest of New Jersey taxpayers, the non-millionaires, would end up paying the freight since the state government and political class never fixed the underlying cost structure.

- The website lists how much money was cut from various programs. However, it does not say what percentage of the total program costs that represents. For example, if a program costs $2m to operate and $1 million is cut, that is significant. However, if the program costs $100 million to run and $1 million is cut, that is not significant.

Thus, by not showing both the absolute and the relative size of the cuts, the website leaves the impression that everything is a crisis where that may not be the case to suspicious people like myself. If all of these cuts are relatively small on a percentage basis, their cause will lose my sympathies, given the overall disaster that the total state budget is in.

- Christie's cuts in trying to get spending in line with revenue fell heavily on everyone and every program in the state including education. But since education is one of the biggest budget lines, there was no way that education funding could not be affected.

That is a fact that seems to be lost on the Millionaires for Christie effort and backers. All of the examples they cite are relative to education and the interests of the teachers' union. They provide no constructive input on how else to get state budget costs under control, it is nothing more than a rant about their interests getting cut.

Given the overwhelming evidence that New Jersey is on the edge of a fiscal collapse, it would have been more constructive and credible to come to the table with a plan that could solve the education problem and the budget problem as opposed to ranting about "Christie's Cuts."

- The group and website act as if Christie is personally holding back funds and is just a bastard. The fact of the numbers is that the state does not have the revenue, Christie cut in order to fulfill the state constitution requirement of a balanced budget. To infer these are
Christie's personal cuts is a juvenile way to approach a problem and reality.

Should millionaires be taxed more in New Jersey? I do not know, that is a subjective opinion. That is up to the residents of New Jersey to determine. But understand that if they do raise the taxes on millionaires without fixing the underlying cost structure, in a few years they are likely to have much less revenue from millionaires, ever higher state government costs, and the need to raise taxes on everyone, not just millionaires. That is the likely long term reality. The root cause of the problem is out of control state spending, not Christie personally making budget cuts.

And higher taxes on everyone to meet today's out of control state government expenses will eventually bump into the reality of raising taxes still more in about seven years to pay for state pension shortfalls. All of these events will eventually cement New Jersey's reputation as the most taxed state in the union.

And that is why I am no longer a New Jersey resident. I grew up in New Jersey and after graduating from an out-of-state college, returned to New Jersey. My wife also grew up in New Jersey and together we worked almost a combined fifty years in New Jersey jobs. I started a successful small business in New Jersey. We have a ton of friends and family in New Jersey. We enjoyed the Jersey shore, the Jersey mountains, and just about every other aspect of life in New Jersey.

However, we left in 2005 and moved to Florida for the simple reason of a New Jersey political class that did not have any fiscal sanity or clue, both Democrats and Republicans. What have we gained by moving to Florida:

- In 2005, the year we left New Jersey, we paid over $12,000 a year in property taxes. We did not have any municipal services and were served by the state police and a volunteer fire company. I cannot imagine how much our property taxes would be today, six years later, in that typical suburban New Jersey house.

- In 2011, we will pay under $4,000 a year in Florida property taxes. Thus, at a bare minimum, we are saving $8,000 a year vs. New Jersey or about $670 a month, in property taxes.

- Our Florida property taxes have gone down every year since we moved here and they are capped at no more than a 3% increase a year.

- We pay absolutely no state income taxes in Florida.

- Florida was not listed in the Reason magazine as having a looming state pension problem like New Jersey has.

- We still see a lot of New Jersey friends and family as the escape New Jersey winters for the warmth of Florida.

- Some New Jersey teachers might claim that Florida schools are not as good as New Jersey schools and that is why taxes are so much higher in New Jersey, the taxes pay for a higher quality education. Why that may have historically been the case, Florida has been working hard over the past decade to improve their schools' quality. In fact, according to the latest Newsweek annual analysis of the nation's high schools, eighteen of the top 100 schools are currently in Florida, only one is in New Jersey, deflating the whole argument that New Jersey pays more taxes for a better level of education.

Thus, there were plenty of reasons for us to stay in New Jersey but the state government, the state political class, and the state tax burden made that impossible. I believe we were net contributors to the state of New Jersey. We never collected unemployment, we never went on welfare, we paid our taxes on time, we volunteered in our community, we used our disposable income to frequent New Jersey restaurants, movie theaters, and other businesses.

However, I would bet that we are not alone in the decision we made to leave, that individuals, families and businesses have reached the same conclusion or will soon reach that same conclusion. Raising taxes on millionaires in New Jersey is certainly a budget option. So is the nasty downstream implications if the state's political class does not fix the underlying root causes of excessive spending since those root causes will not go away but the millionaires might.



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