Nevada Supreme Court to Decide Future of ESA School Choice Program

The State of Nevada is known for having trail-blazed the development and expansion of Empowerment Scholarship Accounts (ESAs).  ESAs are public funds which go directly to accounts parents can access for school choice options as diverse as private school, tutoring, textbooks, online courses and even a portion that can be saved for university.

Teacher unions and school bureaucrats have been natural opponents to the program and two outstanding Constitutional challenges have finally reached Nevada’s highest court.  Arizona has endured similar challenges to its ESA legislation, overcoming claims that the program violated “The Blaine Amendment,” a provision in 37 state constitutions with roots in 1800’s discrimination against Catholics, which prohibits state funds going to sectarian schools.

ESA programs have legally fared better than traditional voucher programs and offer a more comprehensive approach to parental choice.  Though voucher programs specifically compensate religious schools for providing services to lower-income families; ESAs provide accounts directly to parents.  A parent may choose to use those public funds on a number of education services that are specially tailored to their children’s learning requirements.  The difference is salient; public funds go to parents, not to schools.

In Arizona ESAs have been relegated to qualifying low-income students, students whose local public school is considered “failing”, students with disabilities, and most recently Native American students living on reservations.  However, Empowerment Scholarships are completely changing the dialogue around education.  With the growth of charter schools and alternative methods of schooling, parents are savvier about their children’s options and are demanding more choice and control.

Despite their prevailing sentiment, this competition is good for district schools too.  Currently most states fund ESAs at a lower cost per student than public schools.  But successful charter schools have proven a higher-quality education can be provided at lower costs with more efficiency.  Challenging the monopoly on k-12 education by allowing more providers has put pressure on district schools to respond to parents and students.  This is especially true for low income households who are tied to their district school by virtue of their zip code and where they can afford to live.  These families have no viable way to provide a better education to their children other than these ESAs.

Nevada ESAs have successfully emerged from lower court challenges; school choice advocates are keeping a keen and optimistic eye on its final appeal to the Nevada Supreme Court.  If Nevada is ultimately triumphant, Arizona will have another motivating example for expanding our own ESAs to every family in the state.

City of Phoenix Using Taxpayer Subsidies to Bargain with Developer

At first glance, it appeared taxpayers scored a major victory when A proposed 19-story tower development in the heart of the Roosevelt Row District in Phoenix was denied access to the lucrative GPLET tax break.  Unfortunately, it appears that the denial of the property tax subsidy is not about protecting taxpayers—it is really about seeing what additional concessions neighborhood groups and city hall insiders can extract from the developer.

Although the City of Phoenix has currently called an impasse, halting discussions on giving the developer a government property lease excise tax (GPLET,) it is obvious this is simply being held as a bargaining chip.  Instead of the community dialogue revolving around the viability of the “Stewart” development, it has been around what concessions the developer can offer to acquire heavy subsidization.

GPLET’s is a crony capitalist land use gimmick that allows a city to take ownership of private property in order to utilize their tax exempt status; in turn they lease their property back to the private owner.  GPLETs are often used as bait by cities to dangle in front of developers in order to dictate design specifications and create more bureaucratic centralized urban planning.

In the past Phoenix has handed GPLETs out in the downtown like candy; this has created a Swiss-cheese property tax district.  The inevitable effect has been higher property taxes for everyone except the handful of politically connected developers in the area.  In fact, the city has sheltered downtown development from more than $1.5 billion in property taxes, contracting the tax base, and shifting the tax burden on residents and small businesses.

Taxpayers in Phoenix shouldn’t hold their breath.  If the past is a predictor of the future, Phoenix has not shut the door on handing out millions in a tax carve out for the Stewart Development or others.  However, given the City Council recently approved a property tax increase for the rest of Phoenix, one would hope taxpayers would see this as an opportunity to draw a line in the sand and demand their elected leaders refuse to pick winners and losers.

August 14th – 20th National Employee Freedom Week

August 14th – 20th National Employee Freedom Week

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National Employee Freedom Week is a campaign to raise awareness for the rights of American workers to choose without penalty whether to participate in a union or not.  The results from a recent survey are a promising sign for employee freedom but also show there is still a lot of work to be done to educate workers about their rights.

When asked “If it were possible to opt out of membership in a labor union without losing your job or any other penalty, would you do it,” almost 30 percent of union members nationally said “yes.” Of the Arizona union households asked, 28.4 percent said they were not aware of their right to opt-out of union membership and dues without losing their job or incurring penalty.

More than two-thirds of union members surveyed said that employees who have opted-out should have the right to represent themselves in negotiations with their employers — meaning more than two-thirds of union households believe in “Worker’s Choice” (where members can completely opt-out of paying any dues or “agency fees,” and instead negotiate directly with their employer).  This sentiment was particularly high in strongly unionized states such as California (66.2 percent,) Michigan (70.1 percent,) and New Jersey (65.3 percent.)

In support of further study on this important policy issue, the Heritage Foundation and Nevada Policy Research Institute researched the cost of collective bargaining.  According to their study, if union membership was simply made voluntary nationwide, state and local governments would have been able to save between $127 and $164 billion in 2014 alone.

There are still many employees in the United States who feel coerced into belonging to a union.  Considering Big Union Bosses are in front of workers on a nearly constant basis, it is imperative we all spread the facts about employees’ freedoms and rights.


Medicaid Expansion Proving to Be a Failure

It has been six years since the sweeping healthcare legislation “Obamacare” passed.  In that time states have grappled with the prospect of instating their own exchanges to cover all adults living within 138 percent of the federal poverty line.   The feds have dangled 100 percent matching funds until 2016 and 90 percent after that for the states that expand Medicaid.  Thus far, 32 states have taken the bait, including Arizona. And as many of the critics predicted, expansion has failed to deliver on any of its promises and has now trapped states into a fiscally unsustainable program.

Higher than Expected Costs

The financial architecture of the Medicaid expansion was predicated on a larger pool of new enrollees being cheaper than that of current Medicaid members.  This premise has proven to be a complete miscalculation.  According to a recent report by the Department of Health and Human Services, new ACA enrollees cost an average of $6,366 annually, 49 percent higher than their initial predictions.  Apparently not factored into the costs were the states’ response to economic incentives – given the feds were flipping the bill – most states have exceptionally high capitation rates.  This economic fact never changes, if someone doesn’t have to personally pay for it, they will spend more.  This apparently applies to states as well as individuals.  Once again, the government has under-estimated the costs of their healthcare bureaucracy.

Lower than Expected Benefits

Proponents often cite the metric of new insured individuals as the evidence of Obamacare’s success.  There is no debate here.  Without a doubt, under penalty of a fine, more people have insurance.  However, the data surfacing reveals a deeper truth about the healthcare law.  A study conducted by economists at MIT found every one dollar of government spending on Medicaid resulted in 0.20 – 0.40 of benefit to Medicaid recipients.  Not only are the costs ($425 billion in 2011 alone) to fund Medicaid extraordinary, but the efficiency of those dollars are so low, one must ask the question, what are we even paying for?

This corroborates what past studies have already demonstrated.  In 2008, Oregon conducted an expansion of its Medicaid program, prior to the advent of Obamacare.  What was deemed as “The Oregon Experiment” showed simply insuring more individuals did not correspond to improved health outcomes for those individuals.  And yet we continue to dump more dollars into a system which does not deliver the health results for Americans.

Competition is Disappearing

Even with high capitation rates, private insurers are losing money on ACA plans.  The gorilla of private insurance, UnitedHealth Group, reported $200 million in ACA losses just in the second quarter of this year.  They are pulling out of most state exchanges.  Anthem is in the midst of acquiring Cigna Corp, they are threatening pulling out of the exchanges, should the feds stymy their merger plansCentene who recently acquired HealthNet, is facing structural financial woes as HealthNet has suffered extreme losses of its ACA plans.  Humana too is fleeing many of its exchange plans.  Aetna anticipates $300 million in losses on marketplace plans this year and has since stalled plans to enter into new markets.  Many of the Blue Cross Blue Shield Insurers are losing money in exchange states as well.  One fact is for certain, the private insurance industry is bleeding out in the public exchange market.  As higher risk consumers flood the exchange and low-risk, healthy consumers hedge their bets with no insurance, private insurers are either cutting their losses or eliminating popular PPO plans in lieu of thin network, high deductible and co-pay plans as well as higher premiums.  In rural areas, like Gila County in Arizona, the lack of choice is particularly acute.  This obvious crisis of competition is spurring the Obama Administration to call for Congress to develop its own public plan.  What could possibly go wrong with that?

The deficiencies of heavily subsidized public healthcare systems are well documented.  In the 1990’s several states tried their hand at developing their own state systems.  They provided “guaranteed issue” and “modified community ratings” which eventually led to the squeezing of the individual health market, the decline in the number of private carriers, and eventually a bust of the system over all.  Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, New York, Vermont, and Washington have all been down this road before; all have suffered the same obvious disastrous results.  Furthermore, though the Obama Administration and supporters had a rosy outlook of the Medicaid expansion effort, critics at the time were spot-on accurate with the consequences we are seeing today.

At the end of the day, the failings of Obamacare and Medicaid expansion should be a surprise to no one.



The Hypocrisy of the Citizens Clean Elections Commission

As many will recall, last month Governor Ducey announced in an executive order a prohibition on state agencies using taxpayer money to hire contract lobbyists. Now it appears that the publicly funded Citizens Clean Elections Commission (CCEC) is asking for a special exemption, claiming that contract lobbyists are essential to carrying out their mission.

What is the CCEC’s mission? According to the 1998 initiative and their own website, the entire program exists in order to reduce the influence of special interest money in politics. Yet they want an exemption to hire more lobbyists to expand their own influence. The hypocrisy is stunning, but not surprising.

The truth is the CCEC believes that they should be the only group with a voice in the political process. That is why they see no problem with asking for the exemption; since they are the only “legitimate” special interest, it is OK for them to hire contract lobbyists. The ends, therefore, justify the means. This follows a pattern for the CCEC, who believe they are exempt from all sorts of administrative oversight including the formal rule making process that governs all other state agencies.

This is a tremendous amount of arrogance for an agency that was approved with only 50.1% of the vote 18 years ago and has had their authority curtailed by the Supreme Court. The fact that the CCEC now thinks they are carrying out the will of the voters by contracting hired guns to lobby for them is absurd.

The elimination of contract lobbyists for state agencies is a win for taxpayers.  Besides the actual money the state will save, more importantly it stifles the government’s ability to lobby for their own expansion and funding, which is more often than not contrary to the interests of the taxpayer.  The Citizens Clean Elections Commission is no exception to this principle and so should be swiftly denied any exemptions.