What to do about revenues in a declining economy
It was standing room only at Tuesday’s meeting of the Interim Joint Revenue Committee in Cheyenne. Topic: What to do about state revenues in the face of a declining economy.
While there was no shortage of lobbyists, there was a shortage of good data for the committee to work with.
Sarah Gorin of the Equality State Policy Center and Erin Taylor of the Wyoming Taxpayers Association opened the day with a presentation on sustainable tax policy. One item they suggested – the creation of a tax expenditure report (which would show revenues the state is missing due to tax exemptions and exclusions) generated some interest from members of the committee.
It turned out in a subsequent presentation from the Department of Revenue that the Department had begun efforts to quantify revenues lost from tax exemptions. Unfortunately, the data were woefully incomplete, mainly because taxpayers don’t have to apply for tax exemptions – they simply don’t pay. Consequently, it’s very difficult to collect data that doesn’t have to be reported in any way, especially if (as in this case) county governments are involved as well as the state.
Good data are essential to good decision-making. We constantly hear that government should be “run more like a business,” and no business would make decisions involving millions of dollars without any data. Although there is reluctance to spend more while revenues are down, investing in a state employee or whatever it takes to accurately collect and analyze relevant data to inform legislative decisionmaking would be a good move. Wyoming taxpayers deserve it.
Two committee members asked the Legislative Service Office to draft bills to remove tax exemptions for some industry operations and property, according to reporting by Joan Barron of the Casper Star-Tribune.
Rep. Mike Madden of Buffalo wants to eliminate tax exemptions granted industry for underground mining equipment, pollution control equipment and fire protection, the story reported.
But Sen. Cale Case of Lander disputed the report that he seeks to eliminate tax exemptions for private schools, charitable and religious organizations and fraternal organizations.
Sen. Case said he asked for a bill that would require an annual application process to qualify for property exemptions for religious entities, non-profits and private schools. He believes the process would generate useful data about the exemptions.
"This is an effort to consistently determine the impact and appropriateness of the tax exemption for entities that have a broad range of activities and property interests -- some of which should properly be taxed," Sen. Case wrote in an email message. Examples of these "mixed entities" include churches that have taxable rental property or schools that operate a retail store open to the public.
"I am not aware of any member of the revenue committee suggesting that the property tax exemption for these entities be removed," Sen. Case wrote.
Colorado TABOR evangelist offers 'help'
Independence Institute economist Barry Poulson, an evangelical proponent of Colorado’s Taxpayer Bill of Rights known as TABOR, laid out his vision for limiting state government before the committee Tuesday afternoon. Barron reported Poulson's presentation in Wednesday's Star.
One hopes that the members of the Joint Revenue Committee will talk with their legislative colleagues in Colorado to learn how that piece of reactionary 1990s anti-government activism has adversely affected public schools, higher education, road maintenance, fire and police protection and other basic services.
Many of the state’s business and community leaders view TABOR as deeply flawed, limiting the Colorado’s ability to invest in its own future.
TABOR applies to all levels of government, from weed and pest districts to the state legislature. It limits tax increases to a formula based on population increase and the consumer inflation rate.
That might work if everything stayed the same in the world. But Colorado in the 1990s was a young state. Its demographics have changed with the aging Boomer population. Health care costs have gone up at a much higher rate than the consumer price index.
Parents with children in some rural public schools have been forced to hold fund-raisers to buy text books and other school essentials.
Things got so bad in Colorado that voters in 2005 approved a referendum to loosen the strict spending limits TABOR imposes for five years. Even with that, Colorado faces a troubling future. As in Wyoming, revenues have declined, continuing to erode the state’s ability to deliver essential services. Some economists there predict that general fund revenues will not return to 2007 levels even by the end of 2012-13.
Sarah Gorin contributed to this post.
Wednesday, July 29, 2009
Monday, July 27, 2009
Look East for help on healthcare, housing
National policy battles over health care now may be more important to Wyoming residents than anything happening in the state these days.
Things have been grim in Wyoming. The House killed the expansion of the KidCare program in the last week of the session. The governor decided against investing any effort to continue the Wyoming Healthcare Commission, a group that veered across the spectrum of policy options as its membership changed over the years. Though few tears were shed at its death – speeded up when the governor terminated it in April rather than letting it run through the end of the fiscal year – it at least provided a forum for discussing Wyoming’s healthcare system.
Nationally, there is a gathering consensus that changes must be made to fix our system, which is the costliest in the world but fails to match the achievements of the systems in many other countries. The President was right when he said no one would choose the expected future of the existing system if it was advanced by some advocate. (See "Trends in the Absence of Reform.") But there’s little agreement beyond the assessment of the current system’s shortcomings.
The administration says it wants ideas from across the country. One effort to solicit those ideas is on Linked In, one of the Web’s networking sites. Linked In is featuring a Council of Economic Advisors request for comment from small business operations. Here’s the pitch:
The White House wants to know: What are the most important issues for small businesses when it comes to health care?
CEA Report: The Economic Effects of Health Care Reform on Small Businesses and Their Employees
The Council of Economic Advisers in the White House has just released a new report on the impact health insurance reform would have on small businesses. Download and look through the report, then give the White House your feedback, comments, questions, or objections. CEA Chair Christina Romer will answer some of the most penetrating responses, as chosen by LinkedIn, in a live video online discussion at WhiteHouse.gov on Wednesday, July 29th, at 3:00 PM EDT.
I want to know: “What are your experiences with health care as somebody involved in small business, and what are your thoughts and questions on the new CEA report in light of those experiences?”
Clarification added 2 days ago: The report can be downloaded at the link below:
http://learn.linkedin.com/CEA-smallbusiness-july24.pdf
Still looking for a soft landing
Also on the national front, the economic crisis threatens many homeowners facing foreclosure and eviction. The Center for Economic and Policy Research today released a study suggesting a Right to Rent program could keep people in their foreclosed homes by enabling them to rent them.
The Center for Economic and Policy Research study by Dean Baker and Hye Jin Rho notes that the different mortgage modification programs put forth by Presidents Bush and Obama did not benefit the large majority of people facing home foreclosures.
In contrast, Right to Rent legislation would “give homeowners facing foreclosure the option to remain in their homes as tenants paying the market rent for a substantial period of time (e.g. five to ten years).”
The study argues that the program would give homeowners facing foreclosure some security because they could not be thrown out of their homes and onto the streets.
“Right to Rent rules may also increase homeownership, since it will make foreclosure a less attractive option for lenders. If they knew that they could not foreclose and get a house free and clear, they may put more effort into arranging modifications that homeowners can afford,” Baker and Rho assert.
The idea benefits homeowners because the study shows that renting is cheaper than owning in many U.S. metropolitan areas.
“During ordinary years, homeowners would not gain much from having a right to rent, since the gap between ownership costs and rental costs is usually not very large. However, because of the run-up in house prices during the housing bubble years, ownership costs vastly exceeded rental costs in many bubble markets.”
That may not be true in Wyoming, at least not yet. (The study's appendix does not include Wyoming MSAs.) But the idea is definitely worth considering as national policy. I like the anti-blight effects of Right to Rent, since it holds the promise that in neighborhoods located in the most troubled areas, renters would continue to occupy homes that otherwise would be vacant.
Here’s the conclusion reached by Baker and Rho:
“Many of the homeowners currently facing foreclosure would likely be able to afford the market rent on their home. If, recognizing the extraordinary situation, Congress were to temporarily alter the foreclosure laws to allow foreclosed homeowners to remain in their homes as renters, it is likely that many would choose to take advantage of this opportunity. This path would offer savings for former homeowners, as well as help stabilize families and communities that are blighted by foreclosures. In addition, Right to Rent offers the advantage that it could immediately benefit all homeowners facing foreclosure without any bureaucracy and would require no taxpayer dollars.”
Things have been grim in Wyoming. The House killed the expansion of the KidCare program in the last week of the session. The governor decided against investing any effort to continue the Wyoming Healthcare Commission, a group that veered across the spectrum of policy options as its membership changed over the years. Though few tears were shed at its death – speeded up when the governor terminated it in April rather than letting it run through the end of the fiscal year – it at least provided a forum for discussing Wyoming’s healthcare system.
Nationally, there is a gathering consensus that changes must be made to fix our system, which is the costliest in the world but fails to match the achievements of the systems in many other countries. The President was right when he said no one would choose the expected future of the existing system if it was advanced by some advocate. (See "Trends in the Absence of Reform.") But there’s little agreement beyond the assessment of the current system’s shortcomings.
The administration says it wants ideas from across the country. One effort to solicit those ideas is on Linked In, one of the Web’s networking sites. Linked In is featuring a Council of Economic Advisors request for comment from small business operations. Here’s the pitch:
The White House wants to know: What are the most important issues for small businesses when it comes to health care?
CEA Report: The Economic Effects of Health Care Reform on Small Businesses and Their Employees
The Council of Economic Advisers in the White House has just released a new report on the impact health insurance reform would have on small businesses. Download and look through the report, then give the White House your feedback, comments, questions, or objections. CEA Chair Christina Romer will answer some of the most penetrating responses, as chosen by LinkedIn, in a live video online discussion at WhiteHouse.gov on Wednesday, July 29th, at 3:00 PM EDT.
I want to know: “What are your experiences with health care as somebody involved in small business, and what are your thoughts and questions on the new CEA report in light of those experiences?”
Clarification added 2 days ago: The report can be downloaded at the link below:
http://learn.linkedin.com/CEA-smallbusiness-july24.pdf
Still looking for a soft landing
Also on the national front, the economic crisis threatens many homeowners facing foreclosure and eviction. The Center for Economic and Policy Research today released a study suggesting a Right to Rent program could keep people in their foreclosed homes by enabling them to rent them.
The Center for Economic and Policy Research study by Dean Baker and Hye Jin Rho notes that the different mortgage modification programs put forth by Presidents Bush and Obama did not benefit the large majority of people facing home foreclosures.
In contrast, Right to Rent legislation would “give homeowners facing foreclosure the option to remain in their homes as tenants paying the market rent for a substantial period of time (e.g. five to ten years).”
The study argues that the program would give homeowners facing foreclosure some security because they could not be thrown out of their homes and onto the streets.
“Right to Rent rules may also increase homeownership, since it will make foreclosure a less attractive option for lenders. If they knew that they could not foreclose and get a house free and clear, they may put more effort into arranging modifications that homeowners can afford,” Baker and Rho assert.
The idea benefits homeowners because the study shows that renting is cheaper than owning in many U.S. metropolitan areas.
“During ordinary years, homeowners would not gain much from having a right to rent, since the gap between ownership costs and rental costs is usually not very large. However, because of the run-up in house prices during the housing bubble years, ownership costs vastly exceeded rental costs in many bubble markets.”
That may not be true in Wyoming, at least not yet. (The study's appendix does not include Wyoming MSAs.) But the idea is definitely worth considering as national policy. I like the anti-blight effects of Right to Rent, since it holds the promise that in neighborhoods located in the most troubled areas, renters would continue to occupy homes that otherwise would be vacant.
Here’s the conclusion reached by Baker and Rho:
“Many of the homeowners currently facing foreclosure would likely be able to afford the market rent on their home. If, recognizing the extraordinary situation, Congress were to temporarily alter the foreclosure laws to allow foreclosed homeowners to remain in their homes as renters, it is likely that many would choose to take advantage of this opportunity. This path would offer savings for former homeowners, as well as help stabilize families and communities that are blighted by foreclosures. In addition, Right to Rent offers the advantage that it could immediately benefit all homeowners facing foreclosure without any bureaucracy and would require no taxpayer dollars.”
Thursday, July 9, 2009
A boost for a primary seatbelt law??
A primary seatbelt law may get a big boost from the industry and other safety advocates after data presented at a meeting of the Wyoming Worker Safety Task Force today (July 9) revealed that a high percentage of worker fatalities occur in crashes that involve workers who were not using seatbelts.
Wyoming requires the use of seatbelts. The law is not a primary requirement, however, and police officers cannot stop a driver simply for failure to buckle up.
Governor Dave Freudenthal formed the safety task force earlier this year. It has been focusing its work on Wyoming’s worst-in-the-nation worker fatality rate. Task Force Director Gary Hartman invited the Alaska office of the National Institute of Occupational Safety and Health (NIOSH) to assist the task force.
Dr. Paul Anderson of NIOSH presented fatality data he developed in conjunction with Tom Gallagher, director of the Research and Planning division of the Wyoming Department of Employment.
Anderson and others described the data as preliminary and warned that no recommendations should be developed from it. The fatality data needs further refining before recommendations should be made to the governor or the Wyoming legislature.
But the preliminary data revealed that more than half the workers killed from 2003-2007 died in crashes on highways or roads. About three-quarters of those crashes involved tractor-trailers or pickups, and many of those killed failed to use seatbelts.
Department of Transportation representatives at the meeting said the data reflects similar highway crash information compiled by the DOT. It shows again the need for a primary seatbelt law, they said.
Small company fatalities
Data presented by NIOSH’s Ryan Hill showed that the Wyoming oil and gas injury has a fatality rate roughly four times higher than the rate for all workers nationally. His data further revealed that the risk of fatality is much higher among small drilling industry companies (with fewer than 20 employees) than for mid-sized and large drilling companies.
EnCana’s Paul Ulrich said the number of oil and gas industry deaths is “embarrassing for Wyoming” and said his company wants to drive down the numbers. The data further shows that more than half “of our people aren’t wearing their damn seatbelts” while driving at work, Ulrich said.
Others at the meeting said they support setting up a central data collection point on workplace fatalities. Hartman said the task force may be able to obtain a grant to pay for that work. He strongly indicated he will recommend to the governor that the state pursue the grant and establish the office.
Marion Loomis of the Wyoming Mining Association said the task force needs to study the factors that precede to the crashes. Dr. George Conway of NIOSH said his group will look at work schedules, Circadian rhythms and other factors that may contribute to vehicle crashes as they investigate Wyoming’s fatalities further.
Wyoming requires the use of seatbelts. The law is not a primary requirement, however, and police officers cannot stop a driver simply for failure to buckle up.
Governor Dave Freudenthal formed the safety task force earlier this year. It has been focusing its work on Wyoming’s worst-in-the-nation worker fatality rate. Task Force Director Gary Hartman invited the Alaska office of the National Institute of Occupational Safety and Health (NIOSH) to assist the task force.
Dr. Paul Anderson of NIOSH presented fatality data he developed in conjunction with Tom Gallagher, director of the Research and Planning division of the Wyoming Department of Employment.
Anderson and others described the data as preliminary and warned that no recommendations should be developed from it. The fatality data needs further refining before recommendations should be made to the governor or the Wyoming legislature.
But the preliminary data revealed that more than half the workers killed from 2003-2007 died in crashes on highways or roads. About three-quarters of those crashes involved tractor-trailers or pickups, and many of those killed failed to use seatbelts.
Department of Transportation representatives at the meeting said the data reflects similar highway crash information compiled by the DOT. It shows again the need for a primary seatbelt law, they said.
Small company fatalities
Data presented by NIOSH’s Ryan Hill showed that the Wyoming oil and gas injury has a fatality rate roughly four times higher than the rate for all workers nationally. His data further revealed that the risk of fatality is much higher among small drilling industry companies (with fewer than 20 employees) than for mid-sized and large drilling companies.
EnCana’s Paul Ulrich said the number of oil and gas industry deaths is “embarrassing for Wyoming” and said his company wants to drive down the numbers. The data further shows that more than half “of our people aren’t wearing their damn seatbelts” while driving at work, Ulrich said.
Others at the meeting said they support setting up a central data collection point on workplace fatalities. Hartman said the task force may be able to obtain a grant to pay for that work. He strongly indicated he will recommend to the governor that the state pursue the grant and establish the office.
Marion Loomis of the Wyoming Mining Association said the task force needs to study the factors that precede to the crashes. Dr. George Conway of NIOSH said his group will look at work schedules, Circadian rhythms and other factors that may contribute to vehicle crashes as they investigate Wyoming’s fatalities further.
Tuesday, July 7, 2009
Facing down the bust -- thoughtfully
Wyoming faces another bust as lower natural gas prices reduce mineral revenues. The ESPC is out in front offering numerous ideas to help craft sustainable taxing and spending policies that both invest in Wyoming’s people now and save for the future.
In a recently-published guest editorial, we talked about the need for thoughtful budgeting. Rather than taking a meat cleaver to state spending, we said programs should be evaluated to see if they’re still needed and working efficiently. And we suggested the state look at the revenue side of the budget, including tapping its considerable savings, ending some tax exemptions, and increasing severance tax rates. We noted:
“All the things we Wyomingites say we want – a more vibrant and diverse economy, a clean environment and wildlife, and low crime rates – depend on continued investment. Main Street survives on people with jobs and spending money, not laid-off employees. Department of Environmental Quality inspectors are barely covering the ground as it is; cuts will mean regulatory delays and spotty enforcement. When the cuts trickle down to local governments, police and sheriff departments will take a hit just like everyone else.”
It will take a major effort from all of us to convince our legislators that we don’t have to slash budgets and turn away from the progress the state has made with investments in infrastructure and education. Unfortunately, too many state policy-makers, including Gov. Dave Freudenthal, have rushed to cut spending, again subjecting the state to yo-yo budgeting that reduces the ability to deliver services when they are most needed. We need to protect investments in public education, health care and child care.
Cutting programs like KidCare insurance and Medicaid will shove those costs off on the private sector when people show up in doctors' offices and hospital emergency rooms. We've already decided that we're not going to turn sick people away. By cutting those budgets, the state expects private providers to take on the costs.
There's a better way. But we've got to look at more options, including putting savings on the table and considering tax hikes if we can't otherwise cover those costs.
In a recently-published guest editorial, we talked about the need for thoughtful budgeting. Rather than taking a meat cleaver to state spending, we said programs should be evaluated to see if they’re still needed and working efficiently. And we suggested the state look at the revenue side of the budget, including tapping its considerable savings, ending some tax exemptions, and increasing severance tax rates. We noted:
“All the things we Wyomingites say we want – a more vibrant and diverse economy, a clean environment and wildlife, and low crime rates – depend on continued investment. Main Street survives on people with jobs and spending money, not laid-off employees. Department of Environmental Quality inspectors are barely covering the ground as it is; cuts will mean regulatory delays and spotty enforcement. When the cuts trickle down to local governments, police and sheriff departments will take a hit just like everyone else.”
It will take a major effort from all of us to convince our legislators that we don’t have to slash budgets and turn away from the progress the state has made with investments in infrastructure and education. Unfortunately, too many state policy-makers, including Gov. Dave Freudenthal, have rushed to cut spending, again subjecting the state to yo-yo budgeting that reduces the ability to deliver services when they are most needed. We need to protect investments in public education, health care and child care.
Cutting programs like KidCare insurance and Medicaid will shove those costs off on the private sector when people show up in doctors' offices and hospital emergency rooms. We've already decided that we're not going to turn sick people away. By cutting those budgets, the state expects private providers to take on the costs.
There's a better way. But we've got to look at more options, including putting savings on the table and considering tax hikes if we can't otherwise cover those costs.
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