Category Archives: Public Policy and Governance

The Tangled Web Politicians Weave

When three separate people send you an article, you read it.

That’s what happened to me; three readers of this blog evidently live in or around Florida, and independently emailed a link to this column from the Palm Beach Post.

Here are the pertinent sections:

 The challenge to the Obamacare law was aimed at declaring it unconstitutional. While that didn’t work, foes of the new law were given a small consolation prize by the U.S. Supreme Court — a chance for the states to opt out of the expansion of Medicaid under the new law.

Florida, like 23 other Republican-run states, hung onto that thread and waved it around like a victory flag.

“For all of those who are about fiscal sanity and protecting the taxpayers of our states, the court’s decision on the Medicaid issue was a big win,” Florida Attorney General Pam Bondi said two summers ago at an event sponsored by the Koch-brothers group, Americans for Prosperity.

It certainly wasn’t a “big win” for the estimated 750,000 Floridians who have incomes that fall below 138 percent of the federal poverty wage, which is about $26,000 for a family of three and $15,000 for an individual.

Not only did Florida refuse to accept an expansion of Medicaid that would have used federal dollars to cover health-care costs for these people, but the state did its best to make it as difficult as possible for the rest of Florida’s 3.8 million uninsured residents to purchase plans under the new health-care law.

Umm…Hoosiers, does this sound familiar?

The state refused to set up an insurance exchange, spent no money to encourage citizens without medical insurance to sign up for the plan, and banned federal workers from helping Floridians sign up for insurance at county health departments. Even so, Florida led the nation with sign-ups for Obamacare plans, accounting for nearly 1 million insured state residents……

The state is losing $66.1 billion in federal Medicaid funding over the next 10 years, costing hospitals in the state $22.6 billion in lost reimbursements, the Robert Wood Johnson Foundation reported.

No other state has turned its back on so much money, the foundation found. If Florida invested $5.3 million in Medicaid expansion from now until 2022, it would get back $13.41 in federal funds for every dollar it invested in its citizens’ health care, the report said.

“Every comprehensive state-level budget analysis of which we know found that expansion helps state budgets, because it generates state savings and additional revenues that exceed increased Medicaid costs,” the report said.

Not to mention helping people like Charlene Dill, 32, a working mother of three from Central Florida. Dill died earlier this year from a lingering heart condition.

She worked a variety of part-time jobs and was selling vacuum cleaners when she collapsed and died. Dill couldn’t afford health insurance, but she would have been covered under Medicaid if Florida had expanded it under the law. But unlucky for her, she lived in a state that put her on the losing side of a “big win.”

How do you calculate that cost?

I have watched Republican governors tie themselves into pretzel-shaped knots trying to explain their hysterical opposition to a program originally developed by conservative think tanks and promoted by GOP leaders like Bob Dole and Mitt Romney (pre-presidential campaign). I’ve been amazed by the governors’ willingness to forgo billions of  dollars for their states–not to mention their willingness to let uninsured citizens continue to die–in order to deny President Obama a “win.”

(As Americans have begun to use the program, and warmed to it, some of those Republican governors have begun back-tracking. Indiana’s Governor is a case in point–his version of Medicaid expansion isn’t as inclusive as the real thing, but it’s a start.)

Here’s the thing. I’m one of many people who don’t think the ACA is particularly good public policy, although it is demonstrably better than nothing. If these naysayers proposed a better approach, I think a lot of us would consider it. Instead, we’ve been treated to a particularly ugly expression of high dudgeon–how dare the government use tax dollars to provide medical care to these worthless “takers”? 

I know that everything these days is politics, but shouldn’t there be some games even politicians won’t play?

 

The Political Climate

This introductory paragraph from an article from Grist reprinted in Mother Jones is incredibly depressing–not just because  one of our major political parties  is controlled by people unwilling to acknowledge accepted science on climate change, but because that unwillingness is symptomatic of the party’s current approach to reality generally.

It’s hard to believe, surveying the GOP field of possible presidential nominees, but back in 2008 the parties were not that far apart on climate change. Sen. John McCain of Arizona, the Republican nominee, backed cap-and-trade for carbon emissions. After joining his ticket, so did Sarah Palin. But back then, lots of Republicans and conservatives also supported an individual mandate to buy health insurance. The Republican Party of 2008 was a big enough tent to include people who admitted demonstrable problems existed and supported free-market-oriented solutions. Not anymore. The rise of the Tea Party movement and the rightward shift of the Republican base and the politicians who pander to it put an end to all that. Whoever is the Republican nominee for president in 2016, it’s a safe bet that he—and yes, it will be a he, as all the leading contenders are male—will oppose taking any action on climate change. Chances are that he won’t even admit it exists.

I don’t believe that all of these candidates are that divorced from reality. It is actually worse: those who know better are willing to ignore the threat of widespread devastation in order to pander to a frightened and uninformed “base.”

I know I sound like a broken record, but what drives me nuts about climate denial is the illogic of the “bet” being placed.

Let’s just say that the science is far less conclusive than it really is. Pretend it’s only 50-50. If policymakers decide to act on the premise that climate change is real, and prove to be wrong, there will have been some up-front costs, but the steps taken to address the problem will clean up the air and water, conserve finite resources and create new industries and jobs. If they decide to ignore the warnings, and they’re wrong, however, the earth will become less habitable. Weather disruptions and climate change will cause devastation, and mass migrations and social upheavals will follow. And that’s the best-case scenario; in the worst case, we wipe out much of humankind.

It’s Pascal’s wager on steroids.

 

Why We Need a Commuter Tax

Can we talk?

The Chamber of Commerce has been getting a lot of grief for championing a commuter tax to be paid by folks who work in Indianapolis and reside elsewhere. But the Chamber is right.

Some folks may still picture Indiana as a patchwork of small, quaint towns and family farms, but those days are gone. Indiana’s workforce and population are increasingly metropolitan. Indiana’s growth has been and will continue to be in our urban centers.

The entire state economy depends upon a strong, thriving Indianapolis. Much as our legislators like to ignore fiscal reality, Marion County, along with the state’s other metropolitan counties, is—and has long been—a donor county. Our taxes support more rural areas. (A report published by the Indiana Fiscal Policy Institute in 2010, identified the donors: in addition to Marion County, they included Lake, Allen and Vanderburgh.)

If we want to talk about “makers and takers,” Indianapolis is a maker, and rural Indiana is a taker. Big time.

Despite the GOP’s resistance to taxing most wealthy “makers,” Republicans in control of the Statehouse have continued to ensure that Indiana’s tax structure–which has historically disadvantaged the very areas that generate Hoosier jobs–will continue to bite the hand that feeds the rest of the state. The disastrous, politically-motivated decision to constitutionalize property tax caps has only made matters worse.

Here in Marion County, we are further disadvantaged by the large number of government and nonprofit institutions that pay no property tax. Add the tax caps and the exempt properties together, and we have a revenue crunch of massive proportions—one that cannot be relieved by reliance on the local income tax, or by naïve demands to “cut fat and waste.” We can all argue about the wisdom of certain expenditures (cricket, anyone?), but the amounts involved are—in the larger scheme of things—a drop in the bucket. We’ve cut fat, we’ve cut muscle, and we’re now into bone.

The foregoing are simply facts. Here’s the sermon: Government is not an irrelevant luxury. Businesses as well as individual citizens depend upon the services provided by municipalities—infrastructure, public safety, transportation, garbage collection and a myriad of other services that collectively comprise a city’s quality of life. If we want to continue receiving those services—if we don’t want to be Detroit—we have to pay for them. Taxes are not theft; they are the dues we pay for civilization. We cannot survive without them; the best we can do is ensure that government operates responsibly and that the “dues” we pay are fairly assessed.

That fairness is what has motivated the Indianapolis Chamber of Commerce’s proposal for a commuter tax.

More than two hundred thousand workers commute into Indianapolis each day. They use our streets, are protected by our police and firefighters, flush toilets into our sewers, and enjoy the other elements of the quality of life our taxes have provided, but they don’t contribute to their cost. They pay their taxes to the places where they live.

Paying taxes to the county where your income is generated is hardly a new and oppressive idea. A good number of Indianapolis’ peer cities around the country have adapted to the realities of regional economies and regional workforces. The Indianapolis Chamber has studied commuter taxes extensively, issuing reports in 2002, 2006 and 2007. Its current advocacy is informed by those studies and by the experience of other cities.

Every economic analysis of the Hoosier state confirms that the health of Indiana is inextricably bound up with the health of the Indianapolis metropolitan region. Starving Indianapolis—making it impossible for even the most creative public servants to deliver the services we all depend upon (and incentivizing “smoke and mirror” solutions that give away the store)—is simply not an option.

 

 

About Those “Illegals”

The Economic Policy Institute recently released a comprehensive report on immigration and the economy. The report was massive, and it included reams of information on both legal immigrants and the undocumented persons often labeled “Illegal.”

In one section of the report, researchers addressed a common accusation–that undocumented workers are a burden on government, and a net cost to taxpayers.

Unauthorized immigrants are a net positive for public budgets because they contribute more to the system than they take out. Unauthorized immigrants generally cannot receive benefits from government programs, except in some cases, such as when unauthorized immigrant children receive public education, and in some states that allow unauthorized immigrants to attend state colleges at in-state tuition rates. Nevertheless, most of these unauthorized immigrants will still pay taxes. The vast majority pay sales taxes in states with sales taxes, and property taxes through properties that they own or rent. Additionally, most unauthorized immigrant workers also pay payroll and income taxes. The Social Security Administration estimates that 75 percent of unauthorized immigrants are actually on formal payrolls, either using fraudulent Social Security numbers or Social Security numbers of the deceased. Unauthorized immigrants pay into Social Security via automatic payroll deductions, but they can never claim Social Security benefits. In 2005, it was estimated that unauthorized immigrants paid about $7 billion per year in Social Security taxes that they will never be able to reclaim.

Unauthorized immigrants are also unlikely to receive any income credits available through the tax code, or to receive a tax refund if they overpaid in their regular payroll withholdings. The Tax Policy Center estimates that 78 percent of American households that earned less than $33,000 owed no federal income taxes in 2011.19 Many low-income taxpayers only paid marginal amounts if they did owe. Because of their low income levels, most unauthorized immigrants would likely fall into either of these categories. A significant portion of unauthorized immigrants file taxes using Individual Taxpayer Identification Numbers (ITINs); however, many unauthorized immigrants don’t file because they fear deportation. If they don’t file, they are never refunded money that was automatically withheld from their paychecks.

The research also addressed another common belief: that unauthorized immigrants use (abuse?) public support programs like welfare, unemployment insurance, and food stamps. The data suggests otherwise.

While it is possible that an unauthorized immigrant could benefit from a U.S. citizen or legal permanent resident family member receiving income support through a federal or state program, unauthorized immigrants themselves by and large are ineligible for such programs because of their immigration status.

In response to the repeated demands of our contemporary Nativists that we just deport the 11.7 million unauthorized immigrants, the report noted:

Aside from the astronomical costs it would impose and the fact that it’s likely to be a logistical impossibility, it would actually hurt, not help, the economy and the jobs situation…while unauthorized immigrant workers add to the supply of labor, they also consume goods and services, thereby generating economic activity and creating jobs. One way to think of this is to remember that the labor force is growing all the time due to both immigration and native-born population growth, and that’s okay, because the economy expands too. We all understand this intuitively; that’s why we don’t worry when a new graduate enters the labor force. We know those new graduates buy food and cars and clothes and pay rent. By the same token, unauthorized immigrants are not just workers, they are also consumers. We could remove them, which would indeed reduce the number of workers, but it would also reduce the jobs created by the economic activity they generate. So the right choice is to bring the unauthorized immigrants who are already here out of the shadows so they can help the country realize its economic potential.

Finally, the report also addressed the influx of unaccompanied children from Central America:

Tens of thousands of migrant children (or minors) from Mexico and Central America arrive at the Southwest border every year without a parent or guardian, but more recently, they have been arriving in increasing numbers from the Northern Triangle of Central America: El Salvador, Guatemala, and Honduras… some of the principal reasons for their arrival are violence and criminality in their home countries (El Salvador, Guatemala, and Honduras have some of the highest homicide rates in the world), including being forced to join criminal gangs under threat of violence or death; false rumors that children will receive some sort of legal status if they show up on the border and turn themselves in to immigration authorities; and the desire to reunite with family members living in the United States.

(What the dry language of a research report fails to note is that these are children–frightened, alone and desperate for safety, and that the vitriol with which they are being met is shameful, and should be a national embarrassment.)

Those of us who have a forlorn attachment to hard evidence and documented facts can continue to hope that eventually, reality will inform policy.

Eventually.