Tag Archives: libertarian

Pay for Federal Workers Not Jibing with Market Rates

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Some people think public employees get paid too much. Some say too little. I’d imagine that really depends on the situation, though both examples can likely be found. However, a report from USA Today indicates federal employees may be getting seriously overpaid compared to going rates in the private sector. Public employee unions argue, however, that this is due to an increase in educational requirements to perform federal jobs. Not sure, but it’s tough to see these numbers and not think something is askew:

At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years…

What the data show:

  • Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government’s contribution to pensions. Employees contributed an additional $10,569.

  • Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

  • Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

7-Year-Old Oregonian Gets Valuable Lesson About Business, Government

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Lemonade StandI don’t know what to say. I’m just glad this scofflaw is off the streets. Just read this:

It’s hardly unusual to hear small-business owners gripe about licensing requirements or complain that heavy-handed regulations are driving them into the red.

So when Multnomah County shut down an enterprise last week for operating without a license, you might just sigh and say, there they go again.

Except this entrepreneur was a 7-year-old named Julie Murphy. Her business was a lemonade stand at the Last Thursday monthly art fair in Northeast Portland. The government regulation she violated? Failing to get a $120 temporary restaurant license.

Turns out that kids’ lemonade stands — those constants of summertime — are supposed to get a permit in Oregon, particularly at big events that happen to be patrolled regularly by county health inspectors.

"I understand the reason behind what they’re doing and it’s a neighborhood event, and they’re trying to generate revenue," said Jon Kawaguchi, environmental health supervisor for the Multnomah County Health Department. "But we still need to put the public’s health first."

Riiiiiiight. A little perspective could go a long way, Oregon.

HAPPY UPDATE: After the county chairman urged health inspectors to use "professional discretion," the young lady was allowed to open her stand back up and made nearly $2,000. She and her mother will be celebrating the same place Super Bowl Champions do — in Disneyland. Kudos to government officials involved for ultimately applying common sense to this matter.

Hat tip to Chamber staffer Jonathan Wales for the update.

California Still Not Learning Hard Lessons on Education

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Oh, California. You gave us good wine, the Grateful Dead, and Reggie Miller. We should probably be a little kinder to you than we are. But you don’t make it easy. The Heartland Institute asserts the Golden State just isn’t getting it when it comes to education, throwing money at a failing system instead of letting the system work for the kids. Here’s an excerpt: 

Frustrated by some tough budget years, California public school officials want a court to declare the state’s Byzantine school finance system unconstitutional. The stated goal of the lawsuit is to circumvent lawmakers (and reality) by asking a judge to force billions of dollars in unaffordable education spending increases.

But the system isn’t "unconstitutional" so much as unworkable. The way to achieve an equitable and affordable public school system in the Golden State isn’t more funding to prop up a bloated bureaucracy. The answer is to fund all children equally by letting the funding follow the child. The answer is choice.

This is hardly a radical idea. Arizona, Florida and Pennsylvania, for example, offer tax credits to corporations and individuals who finance scholarships for children from low-income families. Even Sweden lets families choose the school they want, public or private, backed by a tax-subsidized scholarship…

The education establishment views the case as a bureaucracy preservation problem, which evades the real problem – the failure of that bureaucracy to educate California’s children. Students only enter the equation as a pretext for propping up the salaries and benefits of public employees.

The fact is, court-ordered school spending has never translated to academic success. A federal court judge ruled in 1985 that school officials in Kansas City, Mo., had to double local property taxes to fund $2 billion aimed at improving performance in low-income and mostly minority schools. In the blizzard of spending that followed over the next two decades, students got state-of-the-art science facilities, Olympic-size swimming pools, small classes – and no measurable improvement in academic outcomes.

Voters’ efforts to boost school funding haven’t translated to success either. Proposition 98, which Californians passed in 1988, locked California into a budget-busting mandate directing at least 40 percent of the state budget toward elementary and secondary education. Since its passage, California has seen negligible gains in academic outcomes and lagged well behind mediocre national trends.

What the California case needs is a second group of plaintiffs to intervene and argue the only workable way to secure the fundamental right to an education in a truly equitable fashion is to fund every child equally. The court certainly could declare the entire system unconstitutional – and then insist that funding follow the child to any school that meets California’s content standards.

Lasting reform requires shifting from the stifling chaos of the current "bureaucracy-based" system to the spontaneous order that will unfold as we fund the child. That’s the only system that comports with the spirit and the letter of the "equal protection" clause in any constitution.

Here’s Why DISCLOSE is a DISASTER

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Two unrelated observations that come together in this case:

  1. Who is in charge of naming legislation that produces such memorable acronyms? The latest is the DISCLOSE Act, short for Democracy Is Strengthened by Casting Light On Spending in Elections
  2. Any time you can get 300 organizations to agree on something, it must be at an extreme — in this case the bad end of the spectrum

DISCLOSE is the 2010 version of card check, attempting to penalize business voices at the expense of unions. Card check dealt with union elections; DISCLOSE seeks to circumvent a Supreme Court decision and attack First Amendment rights by limiting the business voice in political elections.

The 300-plus organizations (chambers, economic development groups, associations and more) represent businesses of all types and size across the country. They combined to send a letter to all members of the U.S. House. A couple of excerpts below, and here is the full letter:

The legislation’s sponsors admit that the bill’s purpose is to deter corporations from participating in the political process. Senator Schumer has said the bill will make corporations “think twice” before attempting to influence election outcomes, and that this “deterrent effect should not be underestimated.”

Its provisions include a blanket prohibition on election-related speech by certain government contractors. Thousands of corporations regularly participate in contracts with the federal government; under Schumer – Van Hollen, many of them are categorically barred from making their political views known. The bill imposes no comparable restrictions on labor unions that receive federal grants, negotiate collective bargaining agreements with the government, or have international affiliates, even though unions and their political action committees are the single largest contributor to political campaigns and claim to have spent nearly $450 million in the 2008 presidential race.

Free Speech for All

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Look at most polls and you’ll see voters are in a surly mood and wanting to boot incumbents out of office. So no one should have been surprised that congressional leadership wants to move fast to pass new restrictions on speech by those who might disagree with them.

It’s called the Democracy Is Strengthened by Casting Light on Spending in Elections, or “DISCLOSE Act.”  A long and cute title, but the bill is really designed to put duct tape over the mouths of businesses and trade associations. Labor unions and trial lawyers get a pass in the bill, an important preferential treatment with real election impacts.

For-profit corporations doing federal contract business, taking TARP money, or with as little as 20% overseas ownership would be flatly shut-out of making campaign communications. CEOs of any other corporations who tried to speak up would have to go on camera in any advertisement saying they approved the ad and could face criminal complaints. Independent expenditure ads by businesses and associations would be blocked from being on the air from April through November in Indiana.

For decades, federal campaign finance rules and “reform” packages like McCain-Feingold were crafted with some balance for corporations and labor unions. The DISCLOSE Act abandons this important balance and bipartisanship. There was no attempt at a bipartisan approach here, particularly with the current chair of the House Democrat Campaign Committee (Rep. Van Hollen) and immediate past chair of the Senate campaign committee (Sen. Chuck Schumer) actually authoring the bill.

Businesses and trade associations have First Amendment free speech rights, as reinforced by the U.S. Supreme Court in the landmark Citizens United ruling last year. That pesky First Amendment getting in the way of politicians again.

You can take action in fighting this legislation via the Indiana Prosperity Project.

Spangle: Libertarian Party Anticipates Growth, Doubling Filed Candidates

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Chris Spangle is executive director of the Libertarian Party of Indiana.

Since the closing of the polls on November 4, 2008 there has been a rush to find out exactly what a Libertarian is and why a third party may be the only viable option left for responsible government. The word is said more often now than two years ago. The failures of both Republicans and Democrats to keep their promises in the last 30 years have led to a growth of the Libertarian Party base in Indiana by Hoosiers unwilling to reform broken parties that refuse to mend. (Don’t be fooled into thinking we are all "R’s" in "L" clothing. Half of our current statewide leadership are former Democrats. It’s my vote anyways.)

We took to aggressively build our grassroots organizations. In the last year and a half, over 30 county parties began or renewed their efforts to regularly organize their county parties by outreach events and candidacies in 2010. We’ll add four more this month. We also revamped our web site at www.lpin.org and online properties to spread our message to a younger, and more receptive, audience. In fundraising, we’re close to doubling our efforts from one year ago.

Most importantly, it’s difficult to ask people to vote Libertarian if you don’t run candidates. In 2008, the party ran less than 30 federal and state level candidates combined. We anticipate that number to more than double and possibly triple. We’ll have quality candidates in all 10 federal races. For the first time ever, we had a contested federal Senate race at our version of the primary — a nominating convention. We will have anywhere from 25 to 50 candidates in the state legislative races. We nominated over 20 state legislative candidates this past weekend, and have more ballot vacancies to appoint. A complete slate of candidates is close to completion in Marion and Lake County alone.

The most important race for 2010 is the Secretary of State race. Our candidate is Greenfield resident Mike Wherry. We’ve achieved two percent in every Secretary of State’s race since 1994 to achieve consistent, automatic ballot access. We’ll need to hit that number again in 2010 to maintain automatic ballot access for the next four years. We believe now more than ever, Hoosiers need that third option. In many state legislative races, we are the second option. (At this moment, almost 38 state legislative races have one candidate.) Ballot access is crucial to the survival of our message. By achieving 10 percent we will have attained major party status, and would hold primaries (we currently have nominating conventions) and “register” Libertarian voters in Indiana. That data would greatly increase our ability to spread the libertarian message.

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EDITOR’S NOTE: Out of respect for our guest bloggers, we will not be allowing anonymous comments on their blogs this week. Additionally, the Indiana Chamber does not necessarily share the opinions of our guest bloggers.

Primarily Speaking, It’s a Crucial Voting Period

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Primaries have always been my favorite. In most districts, the primary election is the election that will decide who gets to raise his or her right hand and take office. The pressure is generally more intense and often more personal given that the political parties see them as “their fights.” Not us. We represent the business community (employers and employees) and recognize the opportunities presented by a good primary fight no matter the party. Primaries are usually the best, if not only, chance to take out many of those incumbents who say they are pro-business, but their voting record and actions indicate otherwise.

Just a few months ago, the only race in town was for control of the Indiana House. With only eight days to go until the last day of the primary election voting season, there are several others that are just as compelling. What was once a cakewalk U.S. Senate re-election race for Evan Bayh has turned into a competitive Republican primary that people are paying close attention to and a November contest that will be one of the most watched in the country. There are highly competitive primaries in the fourth, fifth, eighth and ninth Congressional districts. And of course, there are a bevy of state legislative primaries that are hotly contested.

After the 2008 failure of the political parties to recruit enough pro-jobs, pro-economic development candidates, (even leaving several competitive districts uncontested), we decided to fully implement our own candidate recruitment and development program. Since December 2008, we have met with well over 100 potential candidates and recruited several who decided to run.  Following this effort, Indiana Business for Responsive Government (IBRG) is now leading or playing a significant role in no less than seven highly competitive Indiana General Assembly primaries.  

This post kicks off an impressive lineup of guest bloggers we have assembled this week. They include state chairmen, a former state chairman, media representatives, popular Indiana bloggers and leaders/communicators from the state’s largest three political parties.

Please check back this afternoon as one of the most insightful and respected individuals in Hoosier politics weighs in. Robin Winston is a former Democratic state chairman, Indiana Week in Review panelist and key strategist for Hoosier Democrats. Grab a nice hot tea or caffeinated drink of your choice and enjoy. I certainly will.

Business Owner: Entrepreneurs Stunted by Excessive Taxes

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Michael Whalen, policy chairman of the National Center for Policy Analysis and owner of a chain of restaurants and inns in Iowa, offers a personal anecdote about the struggles American entrepreneurs are facing — and he insinuates most elected officials have no clue about the impacts of the many taxes and charges placed upon business owners:

One of the properties my company owns is a 100-room limited-service hotel in Iowa. Let me talk about the taxes this one place pays.  I’ll use 2008 numbers.

For starters, we pay property taxes to the tune of about $199,000 annually.

Next, there is a 7 percent "pillow tax" that generates about $162,000 annually. Then we pay a 6 percent sales tax on revenue that yields about $124,000 annually. Then we also pay sales tax on things like toilet paper, shampoo, soap, continental breakfast food and amenities and other items that the state of Iowa says are not really part of the product we sell because it says we are selling space.  It may come as a surprise to you that toilet paper is not part of what you are buying when you rent a hotel room in Iowa, but the state considers it a gift. Those extra sales taxes come to about $1,800 per year.

Now on to Round 2. This little hotel also pays about $3,000 a year in various licenses and fees. Payroll taxes come to about $60,000. The federal government says the depreciable life of a hotel is 39.5 years, but we refurbish the hotel on a constant basis and pay sales tax on related purchases, such as new carpet, mattresses and bedding, and even paint. Anyone who does not believe we already have a partial value-added tax (VAT) like Europe, isn’t in business. Now, between Round 1 and Round 2, we are at $548,000 in taxes annually.

So, even if we don’t make a dime of profit, and before we pay the mortgage to the bank or buy new stuff, we pay $548,000 in various taxes, licenses and fees.

Round 3 is income taxes at the federal and state level.  I am not going to tell you these numbers, but I can tell you they can be substantial. Because the hotel is owned by a Subchapter S corporation, in which taxes are paid by shareholders rather than the corporation, the income is reported on my personal income-tax return even though it’s not really my personal money.   But President Obama and many in Congress think we don’t pay enough in taxes because we are "rich."

A few years back, I was telling this story of taxes on one little hotel to an important elected official. He replied, "You don’t pay those taxes, your customers do. I don’t get your point." I stood there dumbfounded and simply replied, "My customers pay all of our taxes? Where do you think money comes from?" I swear this is a true story.

I understand that most folks in state legislatures and Congress have never been in business, paid these taxes or met a payroll.  But I cite the experience of venerable pro-tax Sen. George McGovern, who went into the bed-and-breakfast business after he retired from the Senate. Unfortunately, he went bankrupt. When asked what this experience had taught him, he said that he would have voted a lot differently if he had been in business before going to Congress. He is an honest man.

For-Profit Schools Growing in Several Ways

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Each day this week public university presidents are sharing their insights as guest bloggers in this space. Private colleges and universities play a critical role in communities across the state. But what about for-profit or proprietary institutions?

There are more than 200 operating in Indiana (I had no idea until reading colleague Candace Gwaltney’s story in the current BizVoice). You’ve heard some of the names: University of Phoenix, ITT Technical Institute. Harrison College and more. Others carry a far lower profile.

What needs do they meet? How do they do it? Are they competitors of the traditional higher ed providers (we tried to answer that, but most who were asked declined to tackle that one)? A national expert from Penn State University provides some interesting analysis.

And we provide a sidebar story on what separates Franklin College from Franklin University. Again, check it out here, and come back later today for comments from Ivy Tech Community College President Tom Snyder.

Cato Scholar: Price Controls Didn’t Work for Rome, Won’t Work for U.S.

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On February 22, President Obama suggested the federal government should be able to regulate health insurance premiums. Michael Tanner of the Cato Institute claims that idea is hardly new, and hardly primed for success:

In 301 AD, the Roman emperor Diocletian imposed price controls on most commodities and professions in the empire. The penalty for raising prices was death. Yet the controls failed utterly, leading to shortages, more inflation and the near collapse of the imperial economy.

Now, nearly two millennia later, President Obama seems determined to demonstrate how little we’ve learned.

Yesterday, the president proposed giving the federal government the power to regulate insurance premiums. Undoubtedly, this will be politically popular — at least, in the short term. Insurance companies aren’t exactly America’s most loveable industry. Recent premium hikes will result in real hardship for many Americans.

There is, of course, a certain arrogance in the assumption that Obama, Nancy Pelosi and a bevy of government bureaucrats know exactly what something should cost. No doubt, as soon as they finish setting insurance prices, they’ll move on to negotiating Tracy McGrady’s contract renewal…

Insurers unable to charge more for an increasingly expensive product can be expected to trim costs in one of two ways:

  • They can drop their most expensive customers — in this case, the sickest, who consume the most health care. Many companies are already doing this, a major source of dissatisfaction with the health-care system. In fact, the president wants to prohibit companies from doing this.

  • They can cut back on their reimbursement rates to hospitals and physicians. But neither doctors nor hospitals, any more than insurance companies, are willing to operate at a loss. If payments fall below their costs, they’ll simply stop taking patients. One only has to look at government programs like Medicare and Medicaid to see how this works.

     

This health care situation is regretably complex. How do you think we should improve health care costs for Americans?