Today's Herald and News featured two articles about how rising tuition might lead to lower enrollment. Then at the same time the school is facing fewer and fewer dollars coming from Salem which means it is having to make tough choices to cut services and some personnel.
This is what the Herald and News and OIT call a budget shortfall.
As mentioned several times in this blog, budget shortfalls are caused by two things — not just one. When looking at budget one must look at the revenues and look at the costs. Both articles in Herald and News focused solely on the revenue side of the equation. The Herald and News was all to eager to report tragic news that state funding is decreasing for OIT and how that translated into higher tuition for students. Students are being told they need to bear a larger burder for their own education. Imagine that?! And yet each article was whisper quiet about ever-increasing rising costs (even when cutting jobs).
Al Switzer has been county commissioner for 16 years. He is trying for another four so he can reach the magic number of "20 years of service" and retire like only kings used to dream.
Having been county commissioner for 16 years Al is most accountable for the condition of Klamath County today. Al's had the most time to shape policies, spend money, raise taxes and all the rest more than anyone else.
I want to spend a moment analyzing Al's response to a question by Ernie Palmer in the Herald and News from Friday, April 13, 2012. Rather than making empty claims, I'm quickly going to put some muscle behind the idea that Al doesn't have a clue and needs to go.
The Klamath Public Safety Advisory Committee — set up by both the City of Klamath Falls and Klamath County to solve the "funding problem" for County patrols and jails — has lost its way. First, there is no longer an urgent need for their service. Initially, they were to recommend a short-term fix to fund Jail Pod B for next year. However, this was solved when the governor waived the restriction and allowed Klamath County to use money it already had in its bank account (nice system when you can't use your own money without special permission). If the PSAC had its way, the citizens of Klamath county would be swallowing a $4.2 million tax increase each of the next three years.
Next the PSAC was to work on a long-term solution to Public Safety funding, so jails could stay open and there would be enough patrols to keep our streets safe. However, unless this committee gets serious about the ever-increasing costs associated with union labor, they will never solve the problem (without ever-increasing taxes that keep pace). So far costs have been missing from their conversation (you see the problem is completely a funding problem).
It's amazing how many smart candidates we have this year. It doesn't matter whether they are running for County Commissioner, County Sheriff, State Representative or State Senate. Almost everyone is saying the same thing:
In order to solve government's fiscal problems, we need to create more jobs.
Seems like a simple statement. Seems like the right thing to do. But here's where the rubber meets the road — how? The way someone answers how they would "create jobs" tells you much more about them as a potential government official, than does their statement that we need more jobs in our local economy. That part is easy. Just say it. Now you are brilliant too.
The Klamath Falls City School and Klamath County School Districts have both approved "Open Enrollment." Open enrollment means that students (grades 7-12) can apply to switch schools before the April 1st deadline. If you don't like the current middle or high school that you are forced to go to based on geographical location, you now have an opportunity to switch and go somewhere else.
While open enrollment is in the direction of liberty, we still aren't there yet. What if someone wants to go to Triad or Hosannah? Since those aren't public schools, those don't count. You can go, but will have to fork out an additional $5-6K/year. Competition works best when pricing is involved. In combination, price and competition always turn out the best product or service — in this case schools.
If the two public school districts would embrace a voucher system, where parents get $10K per student (what is currently spent on each public school student), then we would have real competition. Nothing would be free as each school would have a tuition and parents then can make informed choices on where they want their child to attend. The school that is most popular would probably become the most expensive, but that's okay as other schools would rush to make their schools better. And there is the key, schools that are highly motivated to make their school better than the others. Price, like no other mechanism, automatically does this better than any central planning agency could ever dream.
We can breath a sigh of relief now that the County Commissioners have come to their senses and removed the three year Public Safety levy off of May's ballot. It is amazing that when properly motivated the commissioners could find the needed money that was there all along. Apparently, it was just in a different account they weren't allowed to touch without the Governor's permission. Imagine that. Government regulation getting in the way of being able to govern. Laughable if it wasn't so sad.
So now it's the Klamath Falls City School District's turn. They don't have enough teachers and their text books are old and outdated. Well who has been in charge the past ten years to let such a thing happen? We're supposed to pretend that the powers in charge just found themselves in this situation by no one's fault. It just happened. And now the taxpayer needs to dig deep into their pockets to help the City Schools out (again).
We need to remember that the district receives around $10,000/student per year from the county, state and federal government. If a class room has 22 students it means that class room gets funding of $220,000 each year. If the average teacher's salary & benefits package is $100,000, there is still $120,000/class room per year to account for. Seems one could buy new text books every month with that amount of cash!
Hello. My name is J. Madison. Well,... not really, but that is my pen name and I'm new to KlamathNews.net. Below is my first blog here and I hope you will provide feedback. One of the hallmarks of this site is to promote conservative ideas and then to show why they make more sense than the conventional wisdom paraded around as the only reasonable game in town. Part of that process is to get feedback from readers, so I would encourage you to enter the arena of ideas and let me know what you think. We may agree; we may disagree. The point is for robust discussion and finding the truth of a matter, rather than a complacent nodding of heads.
So onto my question: What If Government Ran Dutch Bros? What would we expect? Well first we would see an option for "free coffee." The government would claim that there are some people who can't afford a cup of coffee and that is not fair, and government must be fair. So there would be "free coffee". But really it wouldn't be free, because government has to pay for the coffee and the labor to make and serve it — and of course that labor would be union labor. Therefore a special levy would need to be passed. It may start as a seemingly harmless three year ballot initiative. It may be as little as $0.03/$1,000, but it would be there and everyone would pay it, even those who don't like coffee or don't drink coffee. The paper and government officials would claim that the Klamath County resident would only pay $75/year. Those who would stand opposed to this tax would be demagogued as mean spirited, selfish and the privileged class that don't care about the less fortunate.
How about the other coffee shops in the area? What would happen to them. Well one of two things: they would close shop or their prices would increase. In our market economy when a competitor (in this case the government) offers something for free, others in the industry lose business. So to make up for lost business and in order to stay profitable, either costs need to be reduced and/or prices must increase. Expect a little of both. Moreover, expect the quality of the coffee to decline. Since coffee is now free, the government will offer the minimal USDA and FDA level coffee in order to say the coffee is "safe". Whether it tastes great or not, is far less important. Government has a budget too and with unlimited demand, quality will be the first thing to suffer.
The 1992 Presidential race between then President George H.W. Bush (41) and Governor Bill Clinton can be remembered by a simple slogan, "It's the economy stupid!" The notion was that President Bush was too stupid to understand the problem that the nation wanted solved was a slumping economy. President Bush didn't get the message and Governor Clinton went onto be President Clinton (42).
Back home in Klamath County we could use a similar expression: "It's the Costs Stupid." While almost every government agency characterizes their financial problems as a "funding shortfall" this characterization is only a partial truth. A much better description is that the county government is facing a deficit problem. That may sound like a distinction without a difference, but that's not true. There is a big difference. By characterizing Klamath County government's financial problem as a funding shortfall, the natural reaction is to try and replace that revenue. Yet that only looks at half of the ledger.
To understand the real problem — the complete problem — we need to begin describing government's financial problem as a deficit problem. Deficits are caused by one of three things:
The statement that raising taxes often lowers tax revenues seem to be anti-logical. If the government raises tax rates shouldn't it follow that tax revenues also should rise?
Well not necessarily. This logic often falls flat because it makes a large assumption: tax payers will behave identically after a tax increase as they did before. The beauty of capitalism is the ability for capital to move from one person to the next, from one business to the next or from one location to the next. This free flow of capital is what makes for a robust economy. If Bob's baseball card deal is the same as Billy's but Billy's is less expensive, then Billy gets the sale. No one forced us to buy from Bob who had more expensive deal, so we went with Billy. The same goes for businesses and taxes. When a businesses' tax burden becomes too great, businesses will look for a more tax-friendly location.
People behave the same way — just look at California. California has the highest taxes in the nation. You would think they were doing well then. Well not really. Tax receipts were down 22% this past February compared to February 2011. What happened? Both people and businesses continue to leave the Golden state for more friendly havens. According to Spectrum Locations Consultants,
It seems "sustainability" is all the rage these days. There is great emphasis on sustainable forms of power, sustainable business practices, and sustainable design. But while we are being told to be good to the environment and our fellow citizen, there seems to be a real lack of sustainability in one area: government.
Government seems to be able to create laws and regulations that tell us how we must behave in a more sustainable fashion, but government never seems to be accountable to the same proclamations. Specifically, government's own model for spending tax dollars are not economically sustainable. Take for instance union labor. Every year over 400 union labors at Klamath County get a raise, no matter what. It's just part of the gig. They get a raise. It doesn't matter if revenues are down. It doesn't matter if funding for schools, parks or public safety may be at jeopard, union labor get's their raise. This means each year for the same set of services, government is more expensive to operate. Now how sustainable is that?
This model for government is only sustainable if one of two following occur: