Newsom has employed powers given to the governor under the 1970 California Emergency Services Act—a bipartisan measure signed by then-Gov. Ronald Reagan. As amended, the law contains an expansive definition of emergency, which includes “air pollution, fire, flood, storm, epidemic, riot, drought, cyberterrorism, sudden and severe energy shortage, plant or animal infestation or disease, the Governor’s warning of an earthquake or volcanic prediction, or an earthquake, or other conditions.”

Under the law, the state of emergency continues as long as the governor thinks it is appropriate. Or, it can be terminated by a resolution of both houses of the state legislature. According to a March 2022 legislative analysis, 48 states of emergency declarations are currently in force. The oldest, relating to drought and statewide tree mortality, was established by then-Gov. Jerry Brown in Oct. 2015.

Although the COVID-19 state of emergency persists, most of the emergency measures Newsom has taken have expired or terminated, with more declarations sunsetting at the end of this month. While striking down the remaining COVID-19 state of emergency would not immediately free the public from onerous restrictions, it would help protect citizens from further arbitrary use of state authority if the governor decides that the disease spread has become unacceptable.

Some of the public health measures have been arbitrary or even harmful. For example, Gov. Newsom ordered the closure of all state beaches and parks in May 2020, which was highly counterproductive because COVID-19 spreads more readily indoors than outdoors, forcing people to get together indoors rather than at the beach could’ve exacerbated the spread of COVID.

Some emergency orders have been beneficial by relaxing the impact of overly restrictive state laws. For example, one proclamation enables “medical providers to conduct routine and non-emergency medical appointments through telehealth without the risk of being penalized” by “relaxing certain state privacy and security laws for medical providers.” Easing telehealth restrictions has given patients more access to convenient and affordable health care, and the state legislature should make these changes permanent.

Fortunately, the excessive exercise of government power in California has not reached the extremes we have seen in China. As The New York Times admiringly observed in Feb. 2021, “In the year since the coronavirus began its march around the world, China has done what many other countries would not or could not do. With equal measures of coercion and persuasion, it has mobilized its vast Communist Party apparatus to reach deep into the private sector and the broader population in what the country’s leader, Xi Jinping, has called a ‘people’s war; against the pandemic — and won.”

China would eventually experience significant outbreaks, and its oppressive zero-COVID strategy is now an international embarrassment. In Shanghai, the regime of lockdowns, stay-at-home orders, and forced quarantine became a glaring example of tyrannical government overreach.

Thankfully, in the U.S., free expression, democratic procedures, and the Constitution act as a bulwark against China-like abuses of executive power. California’s robust anti-lockdown movement drove a recall election, forcing Gov. Newsom to make his case to voters and modulate some executive actions before being re-elected.

But it’s time for California to learn from this pandemic, further protect individual rights and increase government accountability by altering the Emergency Services Act to automatically sunset states of emergency after a short period, say, 15 or 30 days, unless the legislature votes to extend them. Obliging elected lawmakers to debate and vote on gubernatorial emergency declarations regularly would reinvigorate the state’s tradition of citizen engagement and help prevent future abuses of power.

A version of this column appeared in the Los Angeles Daily News.

The post It’s time to end the COVID emergency and limit Newsom’s state of emergency powers appeared first on Reason Foundation.

We are flooded with data and stories on infections, hospitalizations, and deaths attributed to COVID-19. At nearly 650,000 U.S. deaths as of the beginning of September 2021, those numbers are very large, and the immediate day-to-day impact of the COVID-19 pandemic has tended to dominate the news. But there is also a great deal of underreported collateral damage, costing many lives while shattering hopes and dreams, especially among the working poor.

This collateral damage—unintended consequences—of our personal and policy responses to the virus is immense. Excess deaths from causes other than COVID-19 have been sharply higher than normal during the pandemic. These consequences can be extreme, such as violence and deaths of despair, but many other all-too-human costs—divorces, alcoholism, drug abuse, and derailed careers—have yet to be measured. It will be some time before all the costs can be tallied, but we can start to see and quantify many of them, and also highlight others that need to be investigated.

Understanding the full scope of the damage will help close gaps between conventional wisdom and reality. Ideally, it should also inform our future personal and policy responses to pandemics and other emergencies. We owe it to ourselves to dispassionately study the policy choices that were made so that we can respond faster and better in the future. It will be invaluable if we can also recognize that scientific method does not mean seeking out evidence that supports one’s personal opinion, but involves actively seeking to test our hypotheses, and openly exploring alternative perspectives.

Full Policy Brief: Collateral Damage of COVID

The post Examining excess deaths, years of lives lost, and other health consequences during the COVID-19 pandemic appeared first on Reason Foundation.

With debates about the constitutionality of President Joe Biden’s move, threats of lawsuits flying before the rule has been drafted, and many citizens questioning the federal government’s overreach, it is important to note that what’s happening now looks similar in some ways to the big government playbook laid down by the South Coast Air Quality Management District (SCAQMD) in Southern California back in 1990. The district, as friends and enemies called it, was ground zero for aggressively expansive government public health regulations in Southern California.

In the halcyon days of the late-1980s and early-1990s, California had severe problems with ambient air pollution and traffic congestion. Although a vast swath of industries had been forced to reduce their air pollution emissions (or leave California entirely) in order to combat the menace, one last stubborn source of emissions remained: the dreaded, selfish, “single-occupant vehicle” drivers who would drive by themselves in their very own cars over California’s gridlocked freeways to get to and from work. About 70 percent of total emissions in the South Coast Air Basin at the time came from “mobile sources,” mainly cars and light trucks, and that percentage was rising. At the time, it was estimated that by 2010 mobile sources would contribute 95 percent of carbon monoxide emissions, 80 percent of oxides of nitrogen (an ozone precursor chemical in vehicle emissions), and 40 percent of what were then called “reactive organic gases” — the photochemical smog that covered the Los Angeles skyline at the time.

The dreaded drivers and rideshare-resisters were deemed a sufficient evil that SCAQMD issued a rule to require employers with over 100 employees to find ways to discourage solo-commuters and encourage their employees to carpool, vanpool, or take mass transit to and from work instead. In some ways, it’s similar to the approach that the Biden administration is taking to force the vaccine-resistant into the vaccinated carpool lane.

In 1988, the SCAQMD developed Rule 1501 which required large employers (of over 100 employees) to increase the average vehicle ridership (AVR) of their employees to 30%, 50%, or 75% depending on such things as transit availability in their regions, and the district’s expectations about their ability to achieve such targets. The average vehicle ridership at the time was 1.13, or basically, one person per vehicle. To give you a flavor of the rule’s specificity, the first version of Rule 1501 called for: 

“…employers with 100 or more employees to develop and implement a trip reduction plan for those employees who report to work between 6:00 a.m. and 10:00 a.m. These employers would be required to designate a trained transportation coordinator to develop and implement the trip reduction plan. This plan would include an inventory of current measures used by the employer to increase AVR, a verifiable estimate of the current AVR at the worksite, and a list of incentives the employer would commit to undertake which could reasonably be expected to achieve the AVR target within 12 months of plan approval.”

The requirements of Rule 1501 grew more stringent over time, ultimately requiring the region’s employers, specifically via the personal authority and certification of the company’s executive officer— to submit complex, rigidly standardized rideshare plans to SCAQMD. (We’re talking about full, four-inch binders with prescribed color-coded tabs and a signed letter by the company CEO.) The requirements also included submitting the results of a week-long ridership survey of employees (to be conducted every six months) that met a district-specified 75-percent-response rate from employees who commuted in the previously mentioned time slot.

As two of my doctoral advisors, the University of California-Los Angeles’ Martin Wachs and the University of Southern California’s Genevieve Giuliano, demonstrated, the onerous rules created a new job description of “employee transportation coordinators” and an entirely new class of professionals. Ultimately, many employee transportation coordinators would wind up representing the government and other rideshare-promoting groups more than their own company’s interests. And many of them went on to work at state air pollution agencies once they moved on from their private-sector origins.

As was the case for many environmental regulations, the employer mandates pioneered locally in California by aggressive air pollution control districts would subsequently be adopted at state and federal levels. In 1991, Federal Clean Air Act Amendments and the California Clean Air Act later ratified the district’s approach. The Federal Clean Air Act required that areas with ozone emissions grossly exceeding the Federal Ambient Air Quality Standard for Ozone must require employers of 100 or more employees to achieve a 25 percent increase in AVR levels above a 1991 baseline level by the end of 1996. The 1991 California Clean Air Act reflected the federal mandate but added more specific requirements that severely polluted areas achieve an average of 1.5 or more persons per passenger vehicle during weekday commute hours by 1999. Finally, the California Air Resources Board approved a guidance document that included employer-based trip-reduction measures as strategies to be pursued by air districts in their attainment programs in 1991.

As I noted in my doctoral dissertation back in 1994, Regulation XV was wildly unpopular with large companies in Southern California and while it was not as objectionable to most employees (who could mostly ignore it or accept subsidies that companies were forced to offer them), it was, nonetheless, one of the most hated environmental regulations in California history.

Thanks to California’s Brown Act, the state’s pioneering sunshine law that requires public access to government meetings, employers, trade associations, and other regulatory critics could regularly vent their spleens about Regulation XV at public hearings of the SCAQMD governing board and the California Air Resources Board. Those review boards, with members appointed by the major political parties and governor, were influenced by the negative public relations stemming from these meetings and eventually watered down subsequent versions of the rule.

The change was also spurred by data emerging that showed the employer rideshare mandates weren’t working. For example, as my doctoral research showed, Hughes Aircraft Company, with over 40,000 employees in the region, spent up to $1 million per year to implement massively complicated rideshare incentive programs, only to see single-occupant commuting actually increase. Ultimately, Rule 1501 was de-fanged, and weakened, renamed as the innocuous “Rule 2202,” and largely disappeared from sight as a major bone of contention in California air quality regulations. There is a cautionary note here, however. Government regulations are much like vampires: they rarely die, they just go underground for a while before emerging again at a later date.

Using employers to coerce employees to overcome public resistance to government fiats is not new, but it is an ill-advised way for the government to exert its will under the cover of public health and safety rules. If the Biden administration moves ahead with employer-vaccination mandates through the Occupational Safety and Health Administration, it seems certain the backlash will continue to grow. Opposition to California’s rideshare mandate led to what may have been the first real popular revolt over an environmental public health regulation in the United States.

Mandates didn’t work for California’s environmental regulators then, and won’t likely work for the Biden administration now. President Biden’s COVID-19 vaccine mandate, no matter how well-intentioned to fight the pandemic, can only serve to further politicize and undercut public trust in workplace health and safety regulations and regulators. As legal analyst Walter Olson writes at Reason.com, Congress has armed OSHA “with grossly overbroad powers” but “courts have frequently struck down OSHA actions.” The Biden administration could save America from a lot of regulatory, legal and political fighting over its proposed COVID-19 vaccine mandate by recognizing how this mandate approach failed in California in the past.

The post California’s failed mandates offer some lessons for President Biden’s vaccine mandate appeared first on Reason Foundation.

Millions of California schoolchildren received over a year of subpar remote education, crimping their learning outcomes and social development. The last thing school-aged children need this fall is an increase in COVID-19 cases causing another panic that closes schools to in-person learning.

Additionally, upwards of 30% of California restaurants permanently closed during the pandemic, eliminating hundreds of thousands of jobs in the state. While some restaurants would have failed under any government policy given the reasonable reluctance of many to dine indoors or to sit and eat near strangers during the pandemic, the state’s strict lockdown made matters much worse. Hundreds of gyms and fitness centers also closed, resulting in a reduction in physical health for many Californians.

After bottoming out in June, COVID-19 case rates are once again rising in California, which is making city and state leaders nervous. Most observers blame the uptick on the more transmissible Delta variant hitting unvaccinated populations.

“Over 99% of the COVID-19 cases, hospitalizations, and deaths we are seeing are among unvaccinated individuals,” Los Angeles County Public Health Director Barbara Ferrer said in a statement on July 12.

“We continue to see day-to-day increases of new COVID cases. The majority of cases are among those who were not vaccinated,” Sacramento County health officer Dr. Olivia Kasirye recently wrote to the Sacramento Bee.

If the state reverts to its unnecessary school and business closures, even for a short time, it would exacerbate negative effects on kids, education, the economy, and our health. Ideally, policymakers have learned from their mistakes and know that schools and businesses can safely be open even if cases rise. But, unfortunately, such common-sense policymaking is often absent from our governments. Los Angeles County is already reinstating its mask mandate indoors, even for vaccinated people.

As of July 12, according to USA Facts, California ranks among the 10 most vaccinated states, with 62 percent of eligible Californians having gotten at least one shot and 51 percent fully vaccinated.

Unfortunately, millions of older Californians remain unvaccinated and thus at heightened risk of hospitalization and death from COVID-19. As of July 12, about 73% of Californians over 65 are fully vaccinated and 62% of those aged 50-64 are fully vaccinated.

Vaccination rates are lower in younger age groups, which is understandable since younger people face much lower mortality risks. However, policymakers predisposed to shutdowns frequently note that unvaccinated younger people can get and spread COVID-19 to more vulnerable elders.

While it may be tempting to lambaste the vaccine-hesitant as ignorant or politically motivated, such rhetoric is counterproductive. Vaccines should not be a political issue. As more people get vaccinated, our communities reach higher levels of herd immunity, decreasing the likelihood that individuals will become seriously ill regardless of political ideology.

While recognizing that many individuals are at low risk for severe COVID-19 outcomes and that vaccines are not always risk-free, for most individuals the benefits of vaccination far outweigh the risk and getting the shot also helps protect friends and family.

I was an outspoken critic of lockdowns, even at the height of the COVID-19 pandemic. And many of today’s vaccination opponents were strong allies in making the case against widespread economic and school shutdowns.

We can have righteous and legally correct objections to mandates and lockdowns, and to establishment and media bias, without disputing the scientific fact that hundreds of millions of people around the world have received protection from COVID vaccines while suffering no more than a mild day-after reaction.

Today, one of the best defenses we have against politicians overreacting to future COVID surges is to get ourselves, families and friends vaccinated.

A version of this column originally appeared in the Orange County Register.

The post Worrying About Mandates and Lockdowns as Delta Variant Hits Unvaccinated Californians appeared first on Reason Foundation.

A recent bipartisan proposal in Congress would allow more foreign health care workers to immigrate to the US to help combat the pandemic. The Healthcare Workforce Resilience Act (HWRA) would recapture up to 40,000 unused employment-based immigrant visas from prior years and allocate them to physicians and nurses. Specifically, the legislation would reserve 25,000 visas for nurses and 15,000 for physicians. The visas issued under the legislation would not be subject to any per-country numerical caps, and additional visas would be made available for spouses and unmarried children of the health care workers. Prospective recipients could petition for the visas up to 90 days after the end of the COVID-19 national emergency declaration. Temporary measures like the HWRA would be beneficial, but America’s aging population will result in physician shortages well beyond the pandemic, and permanent solutions are needed. 

America’s Looming Physician Shortage

According to projections from the Census Bureau, the population of people over the age of 75 will more than double in the next 40 years. Figure 1 below shows that over the same period, the population of people over 85 is expected to nearly triple.

Source: U.S. Census Bureau Population Projections 

Meanwhile, approximately 32 percent of physicians in the United States are already over the age of 60, and 51 percent of physicians are between the ages of 40 and 59. The median retirement age among physicians is about 65- years old, which suggests that a large share of America’s physician workforce is likely to think about retiring over the next decade.

The number of new health care workers entering the workforce may not be sufficient to offset the combined effects of the aging population and anticipated physician retirements. Figure 2 shows recent projections from the Association of American Medical Colleges suggesting the US could face a shortage of between 54,100 and 139,000 physicians by 2033. Allowing more foreign-trained physicians to practice in the United States could help alleviate this shortage.

Source: Association of American Medical Colleges 

The Role of Foreign Medical Graduates 

Immigrant physicians and nurses already play a significant role in the country’s health care workforce. A recent Organisation for Economic Cooperation and Development (OECD) report found that approximately 30 percent of physicians in the United States were foreign-born. However, it can be difficult for more foreign-born physicians to come to the US and practice medicine, especially if they received their training in other countries. 

Data limitations make it difficult to assess how many health care workers in each occupation arrive annually under various visa programs. However, the available data suggest that the US immigration system does not prioritize health care workers. For example, a report from the Migration Policy Institute stated that:

“Just 5 percent (or 4,771) of the 93,615 H-1B petitions approved for initial employment in fiscal year (FY) 2018 went to workers in occupations in health care and medicine, according to Department of Homeland Security (DHS) data. Fifty-one percent of annual H-1B petitions in FY 2018 went to workers in computer-related occupations.”

Expanding immigration opportunities for physicians would likely be beneficial given the anticipated shortage. However, doing so within the current immigration system would involve difficult tradeoffs and disadvantage other occupations. The challenge is that workforce needs and priorities vary across states. Some states may, in fact, benefit more from workers in tech-related occupations than from physicians. 

One solution to this problem is to grant states additional authority to determine their own immigration priorities based on their own workforce demands. Canada and Australia have implemented similar regional immigration programs that could serve as models.

Navigating limited immigration channels is only part of the problem. Foreign medical graduates (FMGs) must also obtain state-level licenses to practice medicine in the United States. Education requirements in the US are different than in most other developed countries, so FMGs often need to receive additional education and training––even if they have substantial experience working abroad.

Licensing requirements for foreign medical graduates can vary considerably from state to state. In general, FMGs are required to pass multiple exams, demonstrate English-language proficiency, obtain sub-specialty certifications, and complete a residency program in the US or Canada. If they wish to meet their residency requirement in the US, they must clear additional hurdles along the way. As the American Immigration Council explains: 

“First, the Educational Commission on Foreign Medical Graduates (ECFMG) must certify that the foreign national is academically prepared to enter a U.S. graduate medical education program (residency). Then, the physician must “match” into a U.S. residency program, in competition with U.S. medical graduates as well as other international peers.”

Residency program requirements can create significant bottlenecks for foreign medical graduates. In many cases, FMGs who completed residencies in other countries are required to repeat them because states may not recognize residency requirements in those countries. Moreover, match rates are considerably lower for foreign-trained physicians than US medical school graduates, leaving large numbers of otherwise capable FMGs unable to practice. In 2019 alone, more than 2,800 FMGs passed their required exams but were not matched with a residency program. 

Most states also require longer residencies for foreign medical graduates than for US medical school graduates and in many cases, these requirements are up to three times longer for FMGs. Holding foreign and US medical graduates to the same standards is a fairly modest reform that would present little risk in terms of quality. A 2014 paper pushed in Public Choice concluded that “over a third of all US states could reduce their physician shortages by at least 10 percent within 5 years just by equalizing migrant and native licensure requirements.”  

Many of the state-level pandemic responses point to opportunities for permanent reform. Early on in the COVID-19 crisis, several governors issued emergency orders that temporarily loosened restrictions on foreign medical graduates. New Jersey even granted temporary licenses to physicians already licensed in foreign countries. Unfortunately, the state is no longer accepting applications for these temporary licenses.   

Conclusion

The aging US population is expected to result in a growing shortage of physicians over the coming years. Inflexible immigration policies and onerous licensing requirements are exacerbating the problem by preventing foreign-trained physicians from practicing medicine in the United States.

The COVID-19 emergency responses at the state and federal levels have specifically recognized the importance of foreign-trained physicians. However, it would be a mistake to dismiss concerns about physician shortages after the COVID-19 crisis subsides. Lawmakers should build on the lessons learned during the pandemic and pursue permanent reforms to expand the physician workforce.  

The post COVID-19 Response Shows How America’s Physician Shortage Can Be Addressed appeared first on Reason Foundation.

State-level certificate of need (CON) laws require health care providers to receive government approval to construct new facilities, expand existing ones, or offer new medical services. To gain approval, health care providers are often required to demonstrate that there is an unmet need for additional capacity. However, existing providers–who have an interest in limiting competition–may block new entrants and competitors by arguing that there is no additional need.

New York became the first state to enact a certificate of need law in 1962. Over the next decade, 26 other states adopted CON laws. Further expansion of certificate of need laws occurred in response to the National Health Planning and Resources Development Act of 1974. The act conditioned federal funding on the enactment of CON laws. By 1982, every state except Louisiana had some form of certificate of need program.

These certificate of need laws were promoted under the misguided notion that unregulated competition could lead to unnecessary spending and increase health care costs. This line of reasoning is, in part, based on the work of Milton Roemer, a public health professor at the University of California—Los Angeles. Roemer observed that the rate and length of hospital stays were greater in regions with a higher number of hospital beds per capita. Based on this observation, Roemer concluded that, in an insured population, an increase in the supply of hospital beds creates ‘induced demand’ for hospital services. In other words, “a bed built is a bed filled.” Roemer’s work was so influential that this theory came to be known as Roemer’s Law.

Following the logic of Roemer’s Law, certificate of need laws were initially intended to slow the growth of health care costs by restricting the supply of services. However, ample evidence suggests that CON laws have failed to accomplish the goals of preventing over-investment and reining in health care costs. CON laws instead serve as an anti-competitive barrier to entry and are actually associated with increased costs, lower quality, and reduced access to care.

Since the federal mandate was repealed in 1987, several states eliminated or modified their certificate of need laws, but 35 states and the District of Columbia maintain some form of CON program.

Experiences during the COVID-19 pandemic have prompted some of these states to consider certificate of need reform. The ideal reform for each state is to fully repeal CON requirements for all facilities, equipment, and services. However, full repeal can be politically challenging given the strong interest and lobbying power of incumbent health care providers in the market.

Incremental reform may be more feasible for legislators. Matthew D. Mitchell and his colleagues at the Mercatus Center have identified several reform options that states should consider. For example, many states have opted to repeal portions of their certificate of need laws while maintaining CON requirements for some facilities and services. Lawmakers could begin with CON laws for facilities and services that provide low-cost care, serve particularly vulnerable populations, or are least likely to be overprescribed.

Where CON requirements are maintained, efforts should be made to ensure that approval processes are subject to transparency and accountability. States should disclose the percentage of applications that are approved and denied. Total application fees, attorney fees, and litigation costs should be reported so that lawmakers and the public are aware of the costs associated with CON laws. Care should also be taken to ensure that CON review boards are not dominated by industry insiders or individuals with financial ties to existing providers in the market.

While these and other incremental approaches would be beneficial, some potential reforms would be counterproductive. For example, states should avoid creating formulas to determine need. While this may appear less susceptible to capture than subjective assessments of need, formulas are often designed to achieve utilization targets that protect incumbent providers from competition.

Lawmakers should also avoid replacing certificate of need programs with similar restrictions on construction. As research on the effects of CON laws indicates, supply constraints are not an effective means for reining in health care costs. Any form of a moratorium, quota, or need-based planning is short-sighted and counterproductive to the intent of CON reform.

Finally, lawmakers should be wary of replacing certificate of need laws with policies that are intended to encourage construction in certain communities or that require providers to serve particular populations. Research suggests that CON requirements reduce access in rural areas and do not promote indigent care. Therefore, CON repeal does not necessitate additional requirements that could have unintended consequences. The essence of CON repeal is the recognition that centralized planning is not more capable of determining the optimal distribution of health care resources than investors and market forces.

While several states wisely suspended their certificate of need laws in response to the COVID-19 pandemic, permanent reform is still necessary. Lawmakers have a variety of options in addition to full repeal, but they should be careful to avoid policies that would continue to limit access to health care.

The post COVID-19 Pandemic Highlights Why States Should Do Away With Certificate of Need Laws appeared first on Reason Foundation.

When Congress debated the American Rescue Plan as a COVID-19 stimulus package for 2021, no one could say how much revenue these entities had lost or could be expected to lose due to the COVID-19 pandemic. Although a lack of data reporting standards is a major driver of the measurement and management problem, the absence of a universal entity identifier for local governments is an even more basic issue and one that should not be difficult to resolve.

In 2017, the Census Bureau enumerated all U.S. local governments. The Census Bureau counted 90,075 local governments overall, including 38,779 “general purpose” governments, which can be counties, townships, cities, towns, boroughs, villages, or other municipal entities that perform a variety of functions. Most of these general-purpose governments are eligible for federal aid under the American Rescue Plan Act and will be required to send reports to the Treasury Department about how they will be using this support.

That’s a lot of governments to track. Making matters more difficult is the fact that many have similar or identical names.

One might think any naming confusion could be rectified by including both the entity and the state in the name, but that still leaves many duplicates. The state of Indiana alone includes 47 Jackson Townships and 46 Washington Townships on its list of townships by county.

Data administrators typically deal with naming conflicts by assigning unique numeric or alphanumeric identifiers to customers, vendors, beneficiaries, or any other universe of counterparties with whom their organizations interact. At the federal level, Social Security numbers are a common way of identifying individuals, and that numbering system has been widely embraced by state and local governments as well as private organizations.

Unfortunately, there’s no similarly ubiquitous numbering scheme for U.S. local governments. Several identifiers are available, but all have limitations.

The Census Bureau assigned 14-digit numeric identifiers to all 90,075 local governments in its 2017 enumeration, but there’s no procedure for newly incorporated governments to get Census identifiers until the next enumeration occurs in 2022.

Federal grant administrators and others often identify local governments and nonprofits by data universal numbering system (DUNS) numbers or employer identification numbers (EINs). Because DUNS numbers are proprietary, the government is beginning to move away from them in favor of a unique entity identifier (UEI) scheme being developed by the General Services Administration. But since UEI is being built on top of the DUNS database, it may not have sufficient data to properly differentiate governments with the same or similar names.

Employer identification numbers are the organizational equivalent of individual Social Security numbers (SSNs). Both EINs and SSNs have nine digits and are used by the IRS for tax filing purposes. Unfortunately, some local governments have multiple EINs, limiting the usefulness of this number as a unique identifier.

A relatively new alternative worthy of consideration is the legal entity identifier (LEI), originally developed in Europe. In the U.S., the need for LEIs came into focus during the 2007–2008 financial crisis, when major banks struggled to figure out exactly who was on the other end of derivative contracts and whether these counterparties had the wherewithal to meet their commitments. Under the Dodd-Frank Act, Congress’ 2010 response to the crisis, a new Office of Financial Research was created within the Department of Treasury. One activity of the Office of Financial Research has been to popularize the use of LEIs in the United States.

Until last year,  legal entity identifiers were only intended for use by private sector entities, although some state and local governments did register for them. Now the LEI Regulatory Oversight Council has published a guidance document explaining how the numbering standard can be applied to general government entities. The Department of Treasury may thus now find LEIs to be a handy way to identify both private and public sector entities with which it conducts business.

Whether LEI is embraced or one of the existing numbering systems is enhanced, we need a broadly accepted, reliable, and comprehensive scheme for identifying U.S. local governments. It’s often said that we can’t manage what we can’t measure. By the same token, we can’t accurately measure what we can’t fully identify.

A version of this column previously appeared in Workvia. 

The post How Local Government Names Make It Difficult to Monitor Their Spending and Other Data appeared first on Reason Foundation.

A patchwork of regulations normally limits the use of telehealth in states across the country. However, emergency actions in Louisiana and several other states have allowed telehealth use to increase dramatically throughout the pandemic.

As Eric Peterson and I explain in a new report published by Reason Foundation and the Pelican Institute, there are many ways to improve Louisiana’s telehealth laws and ensure that telehealth remains a viable option for patients and health care providers after the pandemic subsides.

One of the principal benefits of telehealth is the fact that it enables patients to connect with providers across vast distances. Unfortunately, outdated state licensing schemes often prevent health care professionals from providing telehealth services across state lines. In 2008, state lawmakers passed legislation that allowed out-of-state physicians to practice telemedicine without obtaining full Louisiana licensure. The legislation directed the Louisiana State Board of Medical Examiners to issue special “telemedicine licenses” to physicians licensed in other states.

Similar reforms in 2014 allowed other licensing boards, such as the Louisiana State Board of Nursing, to establish telehealth rules–including rules that would allow out-of-state non-physician health professionals to provide telehealth services to patients in Louisiana. However, the legislation merely provided licensing boards the option, rather than the mandate, to issue rules related to telehealth. Consequently, only seven of the 25 provider types mentioned in the act have any rules governing the practice of telehealth. Of those, only Speech-Language Pathologists and Audiologists have an out-of-state registration process.

Rather than allowing greater flexibility, the lack of rulemaking means that there is little guidance on telehealth for most providers. This creates an uncertain environment for those seeking to provide services in the state and unnecessarily limits patients’ access to care. Additional legislative action is required to provide clarity and expand out-of-state registration to all providers.

New applications of telehealth are constantly emerging, but regulation often fails to keep pace with innovation. In Louisiana, outdated rules and definitions limit the range of telehealth services available to patients and providers. Louisiana law distinguishes between the terms “telehealth” and “telemedicine” even though the terms are often used interchangeably. In general, the state uses the term telemedicine in reference to services provided by physicians. Telehealth, on the other hand, refers to services provided by non-physician health professionals such as nurse practitioners. Combined with a delegation of rulemaking authority, this unnecessary distinction has resulted in overly complicated telehealth policies that create significant disparities between health care providers.

Louisiana’s telehealth policies also present barriers to the use of telepharmacy and important asynchronous store-and-forward technologies.

The state currently allows prescription dispensation through telepharmacy dispensing sites staffed by pharmacy technicians who are overseen by a central pharmacy through telecommunications technology. These sites expand access to pharmacy services in areas without an adequate supply of pharmacists. However, Louisiana law prohibits telepharmacy dispensing sites from operating within 15 miles of another pharmacy. This restriction allows the use of telepharmacy dispensing sites where they are needed most but may unnecessarily limit access in some areas.

Asynchronous store-and-forward technology refers to the digital transmission of health data or information—such as x-rays, MRIs, or photos of skin conditions—between patients and health care providers. Importantly, these interactions do not need to happen live. A patient can send or upload documents for later review by their care provider. Right now, Louisiana’s differing definitions of telehealth and telemedicine complicate the use of store-and-forward technologies. The state’s definition of telehealth includes asynchronous store and forward but the state’s definition of telemedicine includes the “transfer of medical data,” through the use of two-way video and audio transmissions. As a result, non-physician providers are able to use asynchronous technologies, but physicians in Louisiana may not.

Telehealth use has skyrocketed during the COVID-19 pandemic, but its value isn’t limited to times of crisis. Telehealth has the potential to expand access to care and reduce costs, particularly in rural areas and underserved communities. Unfortunately, outdated regulations may hamper the use of telehealth going forward.

Louisiana could improve its telehealth policies by increasing clarity, eliminating disparities between physician and non-physician providers, reducing barriers for out-of-state providers, and recognizing all potential forms of telehealth. Adopting such reforms would ensure that telehealth remains a valuable tool for providing care to those in greatest need.

Full Policy Brief: Medicine in a Digital World—Ensuring Permanent Access to Telehealth Care in Louisiana 

The post Telehealth Reforms Could Expand Access to Health Care in Louisiana appeared first on Reason Foundation.

COVID-19 led to dramatic changes in travel behavior. By April 2020, when much of the country was under stay-at-home orders, road traffic fell 40%, mass transit ridership fell 95%, and air travel fell by 96%. Since then, road travel has largely recovered, with vehicle-miles traveled back to within 10% of the pre-pandemic baseline.

However, travel by shared transportation modes, such as commercial aviation and mass transit, was still down by approximately two-thirds year-over-year by the end of 2020, according to data collected by the Bureau of Transportation Statistics. 

Travel is expected to continue its rebound as the number of people vaccinated grows and the pandemic wanes, but changes in travel behavior driven by factors such as the rise of remote work are likely to persist. To what degree pandemic-spurred changes in travel demand are permanent is unknown at this time, and this uncertainty has rendered pre-pandemic infrastructure planning and investment models nearly useless as accurate guides to the future.

While the drop in transportation demand and the fixed nature of transportation infrastructure supply has significantly reduced the productivity of existing transportation infrastructure, some are calling for large new investments by claiming that the nation’s infrastructure networks are crumbling. However, a review of the available evidence suggests a different and more complicated picture of infrastructure asset quality. 

For example, Reason Foundation’s most recent Annual Highway Report found, “Of the Annual Highway Report’s nine categories focused on performance, including structurally deficient bridges and traffic congestion, the country made incremental progress in seven of them.” 

Similarly, a June 2020 National Bureau of Economic Research (NBER) working paper on transportation infrastructure concluded, “Not only is this infrastructure, for the most part, not deteriorating, much of it is in good condition or improving.”

However, Reason’s Annual Highway Report shows large variation across states and the NBER analysis is limited in that it fails to account for transit infrastructure beyond rolling stock. Rail guideway assets such as tracks and signals have deteriorated in many cities. To be sure, there are sizeable transportation infrastructure needs in the United States.  Reconstructing the Interstate Highway System alone has been estimated by the National Academy of Sciences to cost at least $1 trillion over two decades and mass transit’s maintenance backlog likely exceeds $100 billion.

Given all we know about existing transportation infrastructure needs and the uncertainty surrounding future travel activity, Congress should adopt a risk-minimizing “fix it first” strategy to restore our existing transportation assets to a durable state of good repair. This approach has been endorsed by organizations and think tanks across the political spectrum, from the progressive Transportation for America to the free market Competitive Enterprise Institute. 

Building new infrastructure that will last three to five decades based on pre-pandemic travel modeling is fundamentally imprudent at this time. Physical capacity expansions such as highway widening and new rail lines should at the very least face heightened scrutiny from policymakers until there is more confidence in post-pandemic travel behavior that can be used in transportation infrastructure planning and investment decisions.

The post Right Now, Infrastructure Policy Should Focus on Fixing and Maintaining What We Have appeared first on Reason Foundation.

• Commercial services on Interstate highways
• Urban transit when the pandemic is over
• What we still don’t know about per-mile highway charges
• Does automation threaten truck drivers’ jobs?
• Assessing new monorail proposals
• News notes
• Quotable quotes

It Is Time for Commercial Service Plazas on Interstate Highways

Only 5% of all Interstate highways, only those on the Interstates that are operated as toll roads, offer full services (food, fuel, parking, electric vehicle charging) for motorists. On the other 95% of Interstate highways, federal law prohibits any commercial services at “rest areas,” except vending machines.

In a new study, Reason Foundation suggests three reasons for Congress to repeal the long-standing ban. First, the Interstates need to be equipped with electric vehicle (EV) charging stations, a new national priority. Second, long-distance trucks face a large and growing shortage of safe overnight parking places, especially ones with services like food and showers. And third, state department of transportations (DOTs) are short of funds and plan to shut down some Interstate rest areas that have no available sources of revenue.

The commercial services ban was added by Congress in 1960, to protect small-town gas stations and restaurants that would be bypassed when traffic shifted away from older highways through towns and onto the new Interstates. The ban encouraged locals to build new gas stations and fast-food outlets at or near off-ramps of the new highways. And new companies developed full-service truck stops within a few miles of some of the off-ramps. Their trade association, the National Association of Truck Stop Operators (NATSO), has lobbied hard against all previous efforts to repeal the ban.

NATSO’s argument ignores today’s need for more truck parking, more EV charging, and more food and beverage operations as part of revamped 21^st-century Interstates. NATSO’s argument would be more relevant in a zero-sum world, where every sale at a new service plaza killed a sale at an off-ramp. But today’s and tomorrow’s need is for a large expansion of truck parking and electric vehicle charging. And the study notes that land near off-ramps has become very expensive, according to the Federal Highway Administration, making new or expanded facilities there unlikely.

Another factor is the plight of EV drivers suffering from “range anxiety.” Under current practices, EV charging stations “along” the Interstates can be up to five miles from an off-ramp and still be listed in a federal directory. The last thing an anxious EV driver needs is to get off the Interstate in the dark, in a strange place, and hope she can find her way to the desperately needed charging station.

The study found that existing Interstate rest areas are too small to be converted to commercial service plazas like those on turnpikes. So state DOTs would need to acquire more land for the new facilities. The study cites long-term public-private partnership deals on the Florida Turnpike, Indiana Toll Road, New York Thruway, and other toll roads that are financing the expansion and modernization of their service plazas, based on projected revenues from the revamped plazas. The same approach could be used to develop service plazas on the Interstates.

Previous efforts in Congress to repeal the ban fell victim to NATSO lobbying. The Reason Foundation study cites potential support from portions of the trucking industry (such as independent owner-operators) and likely support from supporters of nationwide EV charging stations. It notes that a House transportation bill that passed last year included an exemption for EV charging stations; that exemption was supported by the progressive Center for American Progress. Perhaps a de-facto coalition including owner-operator truck drivers, women in trucking, and advocates of electric vehicles can gain enough support to repeal this obsolescent ban.

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Urban Transit After COVID-19

Here is a recent set of headlines from a couple of reputable sources, to introduce a discussion of how urban transit will need to change when we enter the post-pandemic period:

• “Remote Work Is Here to Stay. Manhattan May Never Be the Same,” Matthew Haag, The New York Times, March 29, 2021
• “If Rush Hour Dies, Does Mass Transit Die with It?” Henry Grabar, Slate, Feb. 11, 2021
• “Riders Are Abandoning Buses and Trains. That’s a Problem for Climate Change,” Somini Sengupta, et al., The New York Times, March 25, 2021

The reporters of these stories reflect genuine concerns, but my impression is that many in the transportation community have not fully thought through the implications for urban transit in the “after” COVID-19 times.

One expert who has is Steve Polzin, a former transit official, university professor, and most recently as a senior advisor for research and technology at the U.S. Department of Transportation. After reading a detailed paper that he and a colleague produced while at DOT last fall, Reason Foundation commissioned Polzin to write a policy brief focusing specifically on how transit will have to change, and why. The new report, “Public Transportation Must Change after COVID-19,” was published last week and you can find it here.

Polzin first reminds us that in the five years prior to the coronavirus pandemic, transit experienced a significant loss of ridership, before appearing to stabilize at a lower level by 2019. Then the pandemic led to former transit riders avoiding buses and rail transit in favor of cars, bikes, walking, and working at home. Comparing January 2020 (pre-pandemic) with January 2021, unlinked transit trips were 65% less (though transit vehicle miles of service decreased only 23% for the same months).

Alas for those hoping for a post-pandemic return to “normal,” among the factors leading to permanent changes are, of course, some degree of permanent shifts to working from home, either part-time or full-time, along with the continued popularity of network companies like Lyft and Uber, a millennial generation that is getting older and buying houses in the suburbs, and a general movement of people and companies from higher-density to lower-density locations.

Polzin points out that even if many people work at home Mondays and Fridays, but still work in the office mid-week, this will “make it harder to justify peak capacity capital investments and complicate service scheduling.” In terms of permanent work-at-home shifts, he notes that if this share doubles from pre-pandemic levels of 5.7% to about 12% of people working from home, that could mean 15%-to-20% fewer downtown workers, a major change for downtown-focused rail transit systems.

Another section of the brief looks at declining vehicle occupancy by transit mode: bus, light rail, heavy rail, and commuter rail. All four are down significantly, but some much more than others. And this makes a surprising difference in the environmental friendliness of these modes. Here is his comparison of pre-pandemic vs. December 2020 fuel economy of various commuter modes, drawn from the U.S. Department of Energy Alternative Fuels Data Center plus estimated occupancies from the National Transit Database. The metric is passenger miles per gasoline gallons equivalent; hence the highest numbers are best.

*assumed to be unchanged

As of December 2020, the most fuel-efficient means of commuting was the car, followed by light trucks—but only because occupancy embedded in the transit calculations was so drastically low. Obviously, when we get past the pandemic those figures should rise but whether mass transit will be able to rebuild enough ridership to be more fuel-efficient (and hence more carbon-friendly) remains to be seen, and as you can see from the current numbers, transit has a long way to go.

A major premise of the Biden administration’s transportation agenda is to greatly increase federal spending on transit, compared with only modest, constrained increases for highways (with very little scope for adding highway capacity). This approach poses major risks of putting billions of taxpayer dollars into projects that will have costs far greater than their benefits (e.g., light rail systems for medium-sized cities, megaproject expansions of heavy rail and commuter rail systems, etc.).

At the very least, it is premature at this juncture to commit funding for major new rail transit projects before we have some idea of the extent of transit ridership in the first several years after nationwide vaccinations.

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How to Not Win Support for Mileage-Based User Fees

Since serving on a Transportation Research Board special committee on the long-term viability of per-gallon fuel taxes in 2005 (see TRB Special Report 285, 2006), I have supported the eventual need for this country to transition from per-gallon fuel taxes to per-mile charges. The latter was the approach selected after more than a year of study by the National Surface Transportation Infrastructure Financing Commission in its final report released in February 2009; my Reason Foundation colleague Adrian Moore was a member.

Since then, Congress has appropriated modest sums for state-based pilot projects to test various ways of recording and reporting miles traveled by cars and by trucks, coming up with new technologies and trying them out with volunteer drivers, and figuring out what forms of explanation resonate with motorists and truckers about replacing per-gallon with per-mile.

Unfortunately, the general public is still a long way from being sold on the concept. This is partly due to bad reporting, which all too often portrays a mileage-based user fee (MBUF) as a “tax” (which most people believe they would pay in addition to their existing gas taxes) and which generally implies that only a GPS unit in every vehicle can do the job—which people reject as Big Brother in Your Car. Even MBUF-friendly organizations sometimes use loaded words like “tracking your mileage,” which feeds the Big Brother paranoia.

Another bad influence is some advocates of mileage-based user fees (who generally refer to it as a vehicle-miles tax—VMT), who see in this needed change an opportunity to make evil drivers and truckers pay through the nose for all the damages motor vehicles do. I have sat through many TRB presentations that seek to quantify the per-mile costs of every externality they can think of, adding them up to as much as several dollars per mile, with only a few cents of the total dedicated to the capital and operating costs of the roadways themselves. An example of this was the headline on a March 24 webinar sponsored by the Information Technology & Innovation Foundation (ITIF) and the Institute for Policy Integrity: “Addressing the Social Costs of Driving Through a Vehicle Miles Traveled Fee.” This is absolutely the wrong way to win support from motorists and truckers.

Another kiss of death for reaching political consensus is singling out the trucking industry to be first. Some advocates of this point to Germany, where a truck-only toll program began back in 2002 with little fuss. But that ignores the fact that Europe does not have fuel taxes dedicated to highway funding, that a large fraction of the trucks on German autobahns are from other countries, and that they used to pay little or nothing to drive on those costly German highways. Both ITIF and the Congressional Budget Office have published reports suggesting that trucking be the pioneer to be per-mile charged. Just last month Politico reminded us that a senior Republican, Sen. John Barrasso (R-WY), last year proposed a per-mile truck tax, when he was still on the Environment and Public Works Committee.

I have debated this subject at several trucking conferences and I’ve seen first-hand how this industry is deeply opposed to a per-mile charge or tax, especially if it were to be applied first or only to trucks. The depth of this opposition was made plain when the trucking industry research group, ATRI, last month released “A Practical Analysis of a National VMT Tax System,” available on request from TruckingResearch.org. It’s a detailed 50-page analysis, but it appears to systematically err on assumptions and terminology to make a per-mile charge look as costly and impractical as possible.

First, it refers to the charge as a new federal tax (though acknowledging that it might end up being a fee rather than a tax). It downplays the impact of the ever-increasing fuel economy and seems blind to the increasing plans of auto and truck producers to shift to electric propulsion in coming decades. And its graph of federal fuel tax revenue is entirely historical, when credible projections of declining fuel tax revenues are plentiful. In its discussion of technology options, it lists five, all of which have been or are being tested in state and multi-state pilot projects. By defining system requirements maximally, it concludes that only a GPS-based system in every vehicle will suffice.

When it comes to the cost of per-mile charging, the report again seems to err systematically on the most-costly assumptions. First, it repeats the industry’s obsolete claim that the cost of collecting tolls consumes 15 to 30% of the toll revenue, which reflects late 20th-century costs when mostly cash tolling was mixed with some electronic tolling, and all toll systems had cumbersome back-office procedures. Empirical Reason Foundation research on new all-electronic toll roads found collection costs between 5 and 10% of revenue, and projected that all-electronic toll systems with incentives for pre-paid accounts linked to transponders could bring collection costs down to 5% or less.

The report’s long section on deployment, collection of mileage data, administration, and enforcement raises a number of questions, but draws mostly from state pilot projects numbering typically no more than a few thousand vehicles. Economies of scale that could apply in a large state system (California, Texas, Florida), a multi-state region, or a national system are acknowledged but not credibly estimated.

In its assessment of a potential “national VMT tax system,” the report calculates federal highway spending per vehicle mile traveled, for urban and rural roads, and concludes that “urban drivers currently subsidize rural roadways,” at least in terms of federal spending. By contrast, an admittedly dated Reason study of California’s total (state plus federal) highway system in 1995 found that rural motorists driving mostly on low-cost roads subsidized urban motorists driving on high-cost roads, since both paid essentially the same rate per mile via their gas taxes. ATRI’s report draws selectively from several state MBUF pilot projects to raise bizarre objections—for instance, assuming a county or metro area that has its own MBUF and charged time-of-day rates would somehow mean that “through a local VMT tax program . . . local governments could have more power over the nation’s transportation system in terms of collecting and spending revenue.” No, I don’t know what that means, either, especially since state and local governments own and are responsible for nearly 100% of the “nation’s” road system.

One of the report’s most egregious assumptions in doing calculations for a national VMT tax is assuming that 40% of whatever is raised by the tax would be needed for administrative costs, based on the tiny OReGO program in Oregon. This ignores the huge economies of scale likely in any nationwide MBUF implementation. And in its comparison Table 5 on cost to collect $33.5 billion in gross revenue, it pulls out of the air, with no source, a cost to collect the federal fuel tax of 0.2% of the revenue generated, rather than the industry’s usual 1% (and a more accurate 2% according to NCHRP Report 623). This is compared with the ridiculous 40% estimate for MBUF.

I will stop here, with two summary comments. First, it is very clear that at a national level, the trucking industry is seeking to make the case for per-mile charges look as bad as possible, despite the active participation of trucking companies in several state pilots and a more-recent multi-state pilot organized by the Eastern Transportation Coalition, that I summarized in Issue 206, December 2020.

Second, however, the ATRI report does identify numerous questions about technology, policy choices, scope, etc. that are being worked on in the state and multi-state pilot projects. More such research is vitally important, both to address the many unknowns but also to get a much better understanding of what highway users (including truckers) need to see before deciding that per-mile charging is the path this country will—at some point—need to embark on. It is very clear that it is much too soon for any government—state or federal—to implement a change-over from per-gallon to per-mile for all highway users. We have many miles to go and much more to learn.

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Overblown Concerns about Workforce Impacts of Automated Trucking
By Marc Scribner

In recent years, the prospect of automated vehicles has caused concern among organizations representing those in driver occupations. This fear is understandable since automated driving systems (ADS) that can fully automate the entire driving task would surely reduce demand for human drivers. However, the present state of ADS technology and realistic deployment scenarios suggest these fears are overblown. Since deployable ADS for long-haul trucking remains years away, and a gradual phase-in appears much more likely than an overnight switch, any future workforce displacement is likely to be dwarfed by normal driver turnover and attrition.

A recent Journal of Commerce story by William B. Cassidy highlighted growing interest in ADS among major transportation firms (“No assistance required,” Feb. 15, 2021). Automated truck developer “TuSimple announced a new executive advisory board that includes top executives from Schneider, Werner, US Xpress Enterprises, and Canadian National Railway,” writes Cassidy. “Each of these companies has invested in TuSimple, along with Union Pacific, UPS, vehicle manufacturers Navistar, Traton, and Volkswagen AG, and Nikola owner and advisory firm VectoIQ.”

But this interest has been tempered by a growing awareness of the challenges of achieving full automation. “Instead of replacing drivers, think of autonomous technology as ‘enhancing’ a truck driver’s ability to do his or her job, while improving his or her safety,” writes Cassidy. This is to say, lower levels of automation offer the potential to improve truck driver workplace conditions, rather than replace the workforce.

The prospect of completely eliminating the role of human drivers in heavy-duty trucks is likely many years away. Finch Fulton, formerly the deputy assistant secretary for transportation policy at the U.S.DOT and current vice president at automated trucking startup Locomation, recently told FleetOwner (“FMCSA driverless truck message stokes workforce fear,” March 17, 2021), “If you are a trucker today, you are unlikely to lose your job due to automation.”

In contrast, John Samuelsen of Transport Workers Union of America recently wrote to DOT urging a “reboot” on ADS policy to “carefully consider job impacts and workforce training and readiness as you ferret out policy choices around emerging transportation automation technologies.” (“Labor to DOT: Scrap Trump administration’s automated vehicles plan,” FreightWaves, March 24, 2021)

Setting aside the issue that safety regulators at USDOT are generally forbidden by law to take into account the workforce concerns Samuelsen expresses, unions representing drivers would better serve their members by reviewing and communicating the findings of a recent USDOT-commissioned study.

That study (“Macroeconomic Impacts of Automated Driving Systems in Long-Haul Trucking,” Jan. 28, 2021) by authors from DOT’s Volpe National Transportation Systems Center and Australia’s Centre of Policy Studies at Victoria University developed slow, medium, and fast adoption scenarios for ADS deployment in trucks and modeled various economic impacts, including those to the driver workforce. The researchers conclude:

“Assuming the occupational turnover remains near today’s levels, employment levels in the long-haul trucking sector will necessarily fall due to automation but will not force lay-offs in the slow and medium speed adoption scenarios. Only under the fast adoption scenario are lay-offs observed, but they are at most 1.7 percent of the long-haul workforce in a single year and the layoffs only occur during a five-year period. As a result, we conclude that long-haul truck drivers should be able to find employment as short-haul truck drivers, so the issue of lay-offs should not be a significant concern when considering the adoption of automation in long-haul trucking.”

To be sure, no one can predict the future. But absent a major breakthrough in ADS technology that would enable it to be deployed much more cheaply and quickly than experts expect, normal driver attrition from retirements and shifts to non-driver occupations is likely to equal or exceed any future driver layoffs caused by fully automated trucks. Indeed, it is quite possible that unfounded fears stoked by organized labor about imminent automation-spurred driver job losses may reduce the pool of drivers more than ADS technologies, if potential new recruits avoid driving occupations and existing drivers seek out other opportunities.

As required by current federal law, DOT policy should focus exclusively on the safety impacts of driving automation—and the potential of ADS and even lower-level advanced driver assistance features to improve highway safety is large. Claims suggesting imminent truck driver workforce catastrophe are baseless and serve only to degrade the quality of conversation on the societal impacts of automation.

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Monorail Projects Proposed in Los Angeles and Maryland

Some transportation ideas seem to pop up periodically, such as personal rapid transit and monorails. Yet neither has become mainstream, and I think that’s for good reasons. In this article, let’s take a look at recent proposals for a monorail on I-270 in Maryland and on the I-405 in Los Angeles. In both cases the proposed system would interface with an existing heavy-rail system and would be built as an alternative to links in planned networks of express toll lanes.

The I-270 proposal is being advanced by opponents of the governor’s plan for priced express lanes on the I-495 Beltway and I-270. It would extend for 28 miles, serve six stations, and have an average speed (accounting for stops) of about 36 miles per hour The nominal cost is $4.4 billion, which works out to $157 million per mile, which is quite low for rail transit. A study by Maryland DOT found that the project would be “feasible” but would attract most of its ridership from existing transit in the corridor, such as MARC commuter trains and express bus services. And since there is no identified funding source, this project is unlikely to be built.

In Los Angeles, LA Metro has decided against converting the high-occupancy vehicle (HOV) lanes to high-occupancy toll (HOT) lanes in the highly congested Sepulveda Pass portion of I-405, in favor of two competing rail transit alternatives: a subway tunnel underneath the mountains and a monorail built in the I-405 median. It has just signed pre-development agreements with the highest-ranked proposers of each alternative. The monorail would cover 15 miles, serve eight stations, and have an average speed of 37 miles per hour, including stops. At an estimated cost of $9.5 billion, its cost would be $633 million per mile, somewhat less than the subway alternative, which is estimated to cost $10.8 billion. As a point of reference in the DC metro area, the current extension of the Metro system’s Silver Line is $5.7 billion for 23 miles ($248 million/mile), but that project is way over its originally budgeted cost.

Were I asked, I would recommend against the monorail in both cases, on several grounds, even if it turned out to be somewhat less expensive in construction costs than conventional heavy rail. One reason is that it would add another type of vehicle and infrastructure to a region’s transit system. That would likely require separate maintenance facilities, different service workers (electrical, mechanical), and a different parts inventory—i.e., higher operating and maintenance costs. Second, in the event of monorail vehicles being offline for maintenance, heavy-rail cars could not be substituted, since these are two entirely different kinds of rail systems.

In terms of operational effectiveness, far more bang for the buck would be achieved in both Los Angeles and Maryland by express bus service in priced express lanes. This alternative would provide transit service much closer to being door-to-door, rather than from station to station. That’s because a smart express bus system uses the same vehicle to pick up commuters in their neighborhoods in the morning (often from park & ride or kiss & ride lots), speeds them past congestion faster than a monorail, and then drops them off near various employment centers.

From an environmental policy standpoint, remember that major transportation investment decisions that we make today are for projects we expect to be in service for many decades. Early in that time period, a transition to electric buses and personal vehicles will be underway in earnest. And under current review and planning requirements for major projects, neither a monorail, heavy rail or express toll lanes system that we decide upon today would be in operation until a decade or so in the future, and will then be in service for something like 50 years. If much of the Biden administration’s electric vehicle transition goals are achieved, we will be well on the way to an electric vehicle future by 10 years from now.

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News Notes

Conflict Between Restricting VMT and Reducing Carbon Footprint
In my March column in Public Works Financing, I took issue with the idea that federal and state policy should focus on reducing vehicle miles of travel and on not expanding highway capacity, on grounds that motor vehicles are and always will be carbon polluters. Highway modernization is a decades-long process, during which time electric vehicles will increasingly supplant petroleum-fueled vehicles. Likewise, within a decade or two, Level 4 autonomous vehicles will make highway travel more competitive with short/medium-length airline trips. Hence, long-term highway modernization (such as rebuilding the aging Interstate highway system) should continue. The column is posted here.

Texas Bill Would Allow P3 Toll Lanes for Austin’s I-35
The $7.5 billion project to rebuild congested I-35 through Austin could emulate the successful rebuild of a portion of the LBJ Freeway in Dallas, including express toll lanes and being procured as a long-term public-private partnership. That would be allowed if Rep. John Cyrier’s House Bill 2114 is passed in the current legislative session. Since 2017, no TxDOT project involving tolls or public-private partnerships has been allowed by the Texas Legislature, in response to a populist, anti-tolls backlash. Without this legislation, TxDOT plans to build the project without express lanes and to use billions in highway funds that would otherwise be spent on other projects statewide.

Traffic Back To Pre-Pandemic Levels
At the end of March, transportation data firm Inrix reported that daily VMT had exceeded pre-pandemic levels nationwide, though specific metro areas differed. Overall, passenger VMT was 112% of pre-COVID levels for the week ended March 19. Inrix uses anonymous data from cell phones to estimate VMT, and its reports generally predate those of the Federal Highway Administration by several months.

Pennsylvania Legislators Seek to Block Toll-Financed Bridge Replacement
PennDot’s ambitious $2.2 billion program to replace eight major Interstate highway bridges and rehabilitate another—carried out as long-term design build finance operate maintain (DBFOM) P3s and financed by newly authorized tolling—is being challenged in the state legislature. Companion bills in both houses would forbid any public-private partnerships (P3) that involve tolls unless the legislature explicitly approves the project. It would also make other changes to the state’s P3 law, which would constrain PennDOT’s ability to use this procurement method and might make the state less attractive to private infrastructure investors.

Restoring Trust in the Highway Trust Fund
In a recent commentary, I pointed out that the annual gap between federal highway user-tax revenue and federal surface transportation spending is almost entirely due to Congress’s spending on transit and other non-highway programs. The piece, therefore, suggests that if the highway user taxes were spent only on highways (and Congress then directly funded all the non-highway spending), two results might follow. First, highway users might be more likely to accept increases in user-fee taxes for better highways, and, second, there might be more careful scrutiny of surface transportation programs funded out of general funds.

Appeals Court OK’s Death of Miami’s Excellent Toll Road Provider
The Florida legislature’s 2019 law to abolish the Miami-Dade Expressway Authority (MDX) and replace it with a no-expansion, more-politicized Greater Miami Expressway Authority, was upheld by an appeals court on April 1. That ruling overturned last year’s lower-court ruling that the law conflicted with Miami-Dade County’s home rule authority. While MDX is likely to appeal its death sentence, the force of that appeal would likely be diminished because the current county mayor supported the bill to abolish MDX, in contrast to the former mayor, who is now a member of Congress.

Electric Vehicle Transition Needs Massive Electric Power Expansion
Mandates for automakers to produce only EVs, and large federal expenditures for charging stations, will not ensure a viable transition to all-electric mobility. A study released in January by the National Renewable Energy Laboratory found that if 66% of personal vehicles are electric by 2050 (along with increased shares of electric space and water heating), the nation’s electricity system would have to nearly double. (Reuters, “EV Rollout Will Require Huge Investments in Strained U.S. Power Grids,” March 5, 2021). In other words, the challenge is not simply to replace remaining fossil fuel electricity production but to double the size of the electricity industry.

DOT Secretary Endorses Expanded Private Activity Bonds for Transportation
On March 25, Transportation Secretary Pete Buttigieg expressed support for increasing the cap on tax-exempt private activity bonds (PABs) to bring more private capital into surface transportation projects. As reported by Inframation News, his comments were in response to questions from Rep. Daniel Webster (R-FL). Buttigieg also endorsed the creation of a national infrastructure bank, as reported by Debtwire Municipals. In that same congressional session, the secretary also expressed strong interest in a per-mile charge to replace per-gallon fuel taxes, a statement that was later walked back by the White House.

“Could the Pandemic Spell the End of the U.K.’s High-Speed Rail?”
That was the surprising headline in a March 29 article in the New York Times. It focused on growing environmental opposition to HS2, the British high-speed rail project to link London with Birmingham (about 100 miles) and with two future links from there to Manchester and Liverpool. The first phase, under way, has ballooned in cost to $69 billion, and the total would be more than twice that if the later phases are built. Among opponents’ points is that it will take 120 years for the project to become carbon-neutral, due to the very large carbon footprint of HS2’s construction.

Over 220,000 U.S. Bridges Need Repair—ARTBA
An analysis of U.S. DOT’s National Bridge Inventory database reveals that in addition to 45,000 structurally deficient bridges, over 220,000 bridges need major repair or replacement. The American Road & Transportation Builder Association also noted that there is an average of 3,900 daily crossings on each of the 45,000 structurally deficient (SD) bridges. At the current pace of replacement, it would take 40 years to repair or replace the current backlog of SD bridges, but as bridges continue to age, more can be expected to be designated SD each year into the future. The states with the most serious SD bridge problems, in order, are Iowa, Oklahoma, Illinois, Missouri, and Louisiana.

“For Infrastructure Projects to Succeed, Think Slow and Act Fast.”
That was the headline on a March 31 Boston Globe op-ed by infrastructure experts Bent Flyvbjerg and Dan Gardner. Using the California high-speed rail project as an example of failure, they argue for more careful analysis prior to committing to a megaproject and then a streamlined path to approval and construction. It is politics that leads to both hasty approvals without serious benefit/cost analysis and to a convoluted and seemingly endless process of getting final approval to build. Flyvbjerg’s policy paper with many more details is available here.

I-80 Tolling Bill Makes Progress in Wyoming
Senate File 73, which would authorize a toll-financed master plan for redeveloping I-80 across the state—has passed its first vote in that chamber. The Wyoming DOT estimates annual unmet needs of $300 million. Among other things, I-80 needs more truck climbing lanes, and its pavement is aging, like that of most of the 50-60-year-old Interstate system. The bill contemplates the implementation of all-electronic toll collection on I-80 for both cars and trucks, though the 10-fold differential between car rates (2.5 cents/mi.) and heavy trucks (25 cents/mi.) is unprecedented, and this is sure to stimulate robust trucking industry opposition. The measure needs two more votes in the state Senate before being sent to the House.

The Painful Economics of Japan’s High-Speed Rail System
Many Americans, including new Transporation Secretary Pete Buttigieg, would like to see the United States emulate Japan’s national system of high-speed trains. From reading Randal O’Toole’s excellent book, Romance of the Rails, I already knew that this system was far less impressive than most non-Japanese believe. But O’Toole has recently published a fact-filled policy brief, recounting the actual costs, losses, and adverse consequences of this system whose first train began service in 1964. No one interested in a possible U.S. version should miss this brief, “Japan’s Addiction: The Dark Side of the Bullet Train.”

Electric Vehicle Share at Record Levels
According to an assessment by data firm IHS Markit, new EVs registrations in the United States reached 1.8% during 2020, a year with lower-than-normal new car sales. As the car industry began recovering late in the year, EV registrations in December 2020 reached 2.5%, the highest monthly total ever. The data company forecasts that EV sales in 2021 will be 3.5% and reach 10% or more by 2025. Market share is highest in the west, where 4.8% of new registrations are EVs; it’s 11% in the San Francisco Bay Area (which is no surprise to anyone who has driven around near Silicon Valley in recent years).

Ohio Turnpike Moving to Open-Road Tolling
By 2023, the Ohio Turnpike will have eliminated stopping at toll plazas for vehicles equipped with E-Zpass toll transponders, the Turnpike Authority announced last month. However, other major east-west toll roads, including the New York Thruway and the Pennsylvania Turnpike are far ahead. The former has recently eliminated all cash tolling, and the latter is underway on eliminating toll booths, aiming for all-electronic tolling by the end of this year.

Useful Overview of Federal Highway and Transit Programs
With both an infrastructure bill and reauthorization of the federal highway and transit program on this year’s agenda, an up-to-date guide on which federal transportation programs exist and what their revenue and spending data show would be very useful. The Congressional Research Service has done this, with its March 1 bulletin, “Highway and Public Transit Funding Issues.” Unlike some years ago when CRS reports were not readily available to the public, they are now all accessible here.

Should All Highways Be “Complete Streets”?
In another in a new Reason Foundation series of Debatable Ideas, I wrote a commentary explaining that repurposing certain local streets and roads with wider sidewalks and other amenities can make sense. But it takes issue that this concept should be applicable to major (six-lane or more) urban arterials, which serve a vital function as relatively fast supplements to the freeway system for cars, buses, and trucks. Go here.

Correction re Vehicle Occupancy Detection
Alert newsletter reader Brian Patno emailed to correct a statement in my paper on lessons learned from the US experience with HOT lanes, part of an OECD International Transport Forum workshop last fall. The original paper stated that several firms had prototype camera systems to count vehicle occupancy for HOV and HOT lanes, but that none were in regular use. Brian pointed out that Indra’s system is in use on Transurban’s growing system of HOT lanes in northern Virginia, beginning in summer 2020. I am glad to set the record straight on this.

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Quotable Quotes

“The administration (to its credit) is trying to move beyond the traditional framing of infrastructure policy as being all about how much money is spent. By the money metric, $1 billion spent on a project that brings tremendous benefits is the same as $1 billion spent on a dumb project that should never have been approved in the first place, and both support about the same number of construction jobs, which is why construction jobs are a bad metric of success or failure as well. . . . [I]t would be very ahistorical for Congress to give the Administration this much money and just let them choose projects without a very tight set of strings attached. It is doubtful that Congress could get away with actually earmarking projects that large, but a lot of negotiation between the Hill and DOT would need to take place in order to shake anything like that amount of money loose.”
—Jeff Davis, “What’s In the $2.3 Trillion Biden ‘Investment’ Plan?”, Eno Center for Transportation, April 2, 2021

“The New Starts [transit] process has historically been meaningfully influenced by ridership forecasts, which are now very difficult to do with any credibility until we have some sense of a post-COVID ridership/mode-choice response. It will be interesting to see if ridership is ignored and whether the non-federal share expectations change. It will also be interesting to see how communities react as it relates to providing capital match and operating funds. Given the zeal for free truly discretionary monies, we are likely to see some cringe-worthy New Starts applications.”
—Steven Polzin, email to Robert Poole, April 6, 2021 (used with permission)

“‘Intelligence’ needs to be in the [automated] vehicles. The “ways” (roadways in this case) need to be as simple, ‘dumb,’ and as cheap as possible to build and maintain. Consider air transportation: air is the way; consider maritime: water is the way; consider railroads: a couple of pieces of metal, some wood, and gravel is the way; consider pipelines: a pipe is the way; and finally roadways: a reasonably smooth hard surface with some paint is the way. We can barely afford to keep the hard surface somewhat smooth, and the paint situation is really bad. There is zero money to pay for and maintain a lot of gizmos along it to make it ‘intelligent.’”
—Alain Kornhauser, “Analysis: Will Intelligent Roads Finally Move Self-Driving Cars Into the Fast Lane?” Safe Driving Cars, Feb. 26, 2021

“Most toll roads did not need to draw on cash balances to pay debt service or balance financial operations, thus leaving them with solid liquidity positions well into the crisis. The combination of healthy debt service coverage ratios, a rapid traffic recovery, and solid liquidity leave toll roads well-positioned to withstand another potential time-limited shock, such as a period of weaker-than-expected economic growth or a second wave of lockdowns.”
—Scott Monroe (Fitch Ratings), in Kalliope Gourntis, “Demographics Will Also Determine US Toll Roads’ Comeback“, Infrastructure Investor, March 18, 2021

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The post Surface Transportation News: Commercial Services on Interstate Highways, Mileage Fees, Urban Transit After COVID-19, and More appeared first on Reason Foundation.

The data void at the federal level regarding the fiscal position of state and local governments is not due to the absence of state and local government financial data. All states and most sizable local governments produce annual audited financial statements, but these usually appear 6-9 months after the end of the fiscal year. Most states and a few local governments produce monthly or quarterly financial reports—typically on a cash basis and limited to general fund activity—with a much shorter time lag.

Most annual audits comply with pronouncements from the Governmental Accounting Standards Board yet appear in widely varying formats. Interim reports are not governed by national standards and lack even a modicum of consistency.

The Securities and Exchange Commission (SEC) has raised the issue of stale municipal financial disclosure in recent years. For example, an SEC transparency subcommittee observed:

[T]he average municipal issuer provided its annual financial information within 12 months of the end of its fiscal year provided such annual information 188 days after the end of the applicable fiscal period. If a municipal issuer does not provide interim financial disclosures and it files its annual financial disclosures within the averages referenced above, the financials available to investors could be over 500 days old as the next submission date approaches.

During the coronavirus pandemic, the lack of timely and standardized state and local disclosure prevented policymakers from quickly determining with any degree of accuracy how much revenue was lost as the pandemic unfolded.

If every state, major city, and county produced monthly cash reports in a standardized, machine-readable format within two weeks of month-end, federal policymakers would have had a much better picture of how revenues and expenditures are evolving.

At the federal level, the Treasury Department shows the way by producing its Monthly Treasury Statement in Excel format each month. Excel files are easier to parse and thus consolidate than Adobe PDF files. Even better than Excel are non-proprietary formats such as CSV, JSON and XML. All of these options are supported by Treasury’s new FiscalData website, which includes an exportable dataset of Monthly Treasury Statements.

Among states, Texas provides its monthly state revenue collections in both Excel and CSV formats. Connecticut offers a monthly revenue data set exportable to Excel, CSV and XML formats. Local governments are generally less advanced, but New York City—as the nation’s biggest city—does provide extensive revenue and expenditure data in a Google Sheet updated quarterly.

If the nation’s 200 largest state and local governments provided data like this, the vast majority of state and local financial activity would be available in near real time. But collecting this data would still be non-trivial due to variances in the number, type and identification of the data elements provided. Ideally, of course, all state and local governments would adopt a single reporting taxonomy (i.e., data dictionary) that could be readily consolidated. Our Standard Government Reporting working group at XBRL US has produced a draft taxonomy for annual financial reporting. A small subset of items from this taxonomy could be applied to monthly reporting. Our taxonomies can be used with CSV, JSON and human-readable HTML reports.

In the absence of this standardization, data collection is typically handled by organizations that are willing to make the investment of time and energy to process all the varying government disclosures. This too often means that compilations are not available to the public for free or that the data is selectively reported in support of a certain political narrative (e.g., state and local governments are suffering and need a large federal aid package, or they are doing just fine and do not require a bailout).

The federal government—through the Census Bureau—undertakes a parallel data collection effort which is likely free of commercial or ideological motives. The Census Bureau conducts an Annual Survey of State and Local Government Finance and produces a Quarterly Summary of State and Local Tax Revenue. Unfortunately, these products appear after significant time lags, and because they are based on separate data collection instruments than those of state and local governments they may not fully agree with public financial reports issued by each state and local government. The Census Bureau’s efforts could be improved by the availability of public, standardized, machine-readable data

Commercial and ideological players also dominate the discussion of projected revenue losses and spending, using proprietary models to reach their findings. There’s nothing wrong with that, but as we learned during the global financial crisis of 2007-08, if government agencies rely on proprietary models operated by self-interested parties with financial stakes in the game, these models can help produce unacceptable results for taxpayers. Although the Congressional Budget Office is not always correct, it has achieved a level of openness and objectivity that instills confidence across most of the ideological spectrum. As federal involvement in state and local finance increases, citizens need institutions whose analyses and projections of state and local government finances would be met with similar levels of confidence. Perhaps CBO could expand into this area, or a non-ideological, non-profit could take on this challenge. In any case, taxpayers should have easy access to the data and modeling software code and assumptions would ideally be placed in the public domain so that third parties could fully review the analysis.

Economic historians will ultimately weigh in on the question of whether the American Rescue Plan’s $350 billion state and local aid component was reasonably sized and allocated. For those of us condemned to live in the present and without the benefit of hindsight, we should be taking every opportunity to improve our data and analytics to make the best possible decisions during the next financial emergency.

A version of this column previously appeared on Federalism US. 

The post COVID-19 Pandemic Response Illustrates Need for Better State and Local Financial Data appeared first on Reason Foundation.

Without seasonal adjustments, the Census Bureau estimates 2020 aggregate state and local tax revenues of $1.62 trillion, or about 2 percent above the 2019 total of $1.59 trillion.

The Census Bureau also provides an aggregate state-only tax revenue estimate. State tax revenue was down about 1 percent in 2020: from $1.01 trillion in 2020 versus $1.11 trillion in 2019. In this case, increases in personal and corporate income tax receipts mostly offset a drop in sales tax revenue during the pandemic.

Results from the two series imply a slight increase in local government revenue, likely due to increased property tax receipts amid the strong residential property market.

The Census Bureau does not provide a specific local government-only tax revenue series.

More detailed Census revenue data (displayed in the below map) show that tax revenue performance varied greatly across states. Alaska and North Dakota, for example, suffered the two largest tax revenue drops due to lower energy prices. It is worth noting that these two states have accumulated large cash reserves that allow them to absorb the effects of price shocks. Also, energy prices have been rebounding in early 2021, suggesting that the revenue loss could be transient.

State Government Revenue Growth From 2019 to 2020

The only other state suffering a double-digit percentage revenue decline was Hawaii, which saw an understandably dramatic falloff in tourists and the tax revenues they generate. Nevada, another tourism-dependent state, ended the year down less than 3 percent.

Idaho registered the biggest increase in tax revenue from 2019 to 2020, gaining over 12 percent in 2020. Some of this increase is likely to stem from people temporarily, or permanently, relocating to the state in search of greater distancing than is possible in urban areas and/or in search of less onerous lockdowns than ones imposed by some states, including those on West Coast.

Despite out-migration and strong shelter-in-place restrictions, California registered a small revenue increase due to strong income tax collections. Many of California’s white-collar tech workers were able to work from and many businesses in the tech industry are thriving during the pandemic.

In the aggregate, the increase in state and local tax revenue further undermines the case for the large state and local aid package included in the most recent stimulus and relief bill, the American Rescue Plan Act, signed by President Biden in mid-March.

When it is over and taxpayers and lawmakers look back at the COVID-19 pandemic, it will be clear that states and local governments did not need a huge federal bailout in 2021.

While we’re continuing to see claims and headlines, such as, “With Federal Aid, Washington State Revenue Returns to Normal,” the fact is that state and local government revenues weathered the pandemic and have now received a large federal-taxpayer-funded windfall.

The post More Census Data Shows Government Tax Revenue Hasn’t Been Negatively Impacted By COVID-19 appeared first on Reason Foundation.

While the legislation, the Arkansas Child Academic Opportunity Scholarship and Grant Act, is being applauded by school choice supporters, state leaders also need to address longstanding problems with the state’s public school funding system that create funding disparities and hurt low-income families and students. Simply pouring more money into a broken school finance system will not help the Arkansas students most in need of assistance.

The problems in the Arkansas school finance system that are most detrimental to students and staff include the school finance system’s way of funding special education and low-income students, its inequalities—stemming from varying degrees of property wealth across the state, and the lack of discretion given to principals and local school leaders when it comes to deciding how to spend their school budgets.

A report commissioned by the state House last year found that Arkansas’ special education funding system does not provide dollars based on individual student needs. While Arkansas’ education department assumes a uniform distribution of special education students across the state, data on student populations and student disability classifications show that there is significant variation in school districts’ special education needs.

Consequently, the school districts that aren’t receiving the necessary funds to serve these students are forced to either neglect providing special education students the services they need or to dip into various other budget areas to cover the special education costs—thus shortchanging other students.

Similarly, low-income students are not treated equitably under the state’s funding system. While Arkansas does provide additional education dollars for low-income students, school districts with nearly identical percentages of economically-disadvantaged students can receive very different amounts of resources.

Even more problematically, Arkansas continues to use federal free and reduced-price lunch enrollments as a measure of student poverty, even though these figures are becoming an increasingly inaccurate measure of student poverty.

As a broader problem, state and local funding per student is often higher in Arkansas school districts with greater property wealth. Because local voters in wealthy school districts are more easily able to leverage property taxes for bonds to pay for school facilities and operations, Arkansas schools with the highest levels of property wealth per-pupil receive significantly more money—23.9 percent more funding—than the most property-poor school districts in the state.

Extra local funds often translate to higher teacher salaries and better school facilities, but only for the families that are lucky enough to live in the right zip codes. These problems are made worse by the fact that more than half-a-billion dollars from the state’s education budget are allocated for “restricted” grants that are subject to a myriad of rules which prevent local leaders from using these funds in ways they believe would best serve their students.

Principals, superintendents and teachers are best equipped to know what spending strategies will best benefit students at any given school. Nonetheless, Arkansas’ leaders have set restrictions for these grants, which comprise 10.4 percent of all state and local education funds. Furthermore, these grants come with extensive reporting requirements that don’t appear to make much of a difference in academic outcomes.

A straightforward way to make progress on all these issues is to streamline Arkansas education funding into a weighted student formula system. Under this type of funding system, most education dollars are disbursed on a transparent, per-student basis. Greater resources flow to students with greater needs and education dollars can be used flexibly by local school leaders.

Make no mistake—overhauling Arkansas’s school funding formula will require substantial political effort. But doing so would go a long way toward giving Arkansas students better educational opportunities.

The post Arkansas’ School Funding System Is in Need of Reform appeared first on Reason Foundation.

SARS-Cov-2, the coronavirus at the origin of the COVID-19 pandemic, provides a good opportunity to review different models of public health. These models range from protection against epidemics of contagious diseases up to social justice. Based on different methodologies and different theories of the social world, the various meanings of public health lead to very different prescriptions for government intervention and public policy—including in a pandemic like the current one.

As Ilona Kickbusch says, “We have reached a point where we need to make a choice of what kind of model of global public health we want to promote.”

This paper addresses a double question: What are the main concepts and models of public health? To which extent do public health considerations require government intervention?

“In many respects,” says a major textbook of public health, “it is more reasonable to view public health as a movement than as a profession.”

Since a movement is based as much on ideology as on rational inquiry, understanding it requires a grasp of its ideological beliefs. This is especially true in the current emergency, where the movement and its experts claim more influence on public policy. Moreover, the foundations of public health have changed through history, especially in modern history, which provides another reason to consider its different models.

This paper addresses four models of public health.

Part 2 considers the concept of public health as an instance of what economists call public goods. The nature of public goods is reviewed as it relates to different means of protection against epidemics, including immunization when available. It can be argued that this economic approach corresponds historically to the “old public health,” as opposed to today’s “new public health,” even if the history of public health has not been linear.

Part 3 explores public health as government medical care. Public health as a public good can easily drift to this newer concept, as “public” can be taken to mean “governmental” and “health” to mean “medical care.” This part of the paper explores how public health came to be understood as government medical care at different moments of history.

In the expression “public health,” “health” can have many meanings. Depending on how expandable the term is, government health care can become very expansive, up to total government care, the model reviewed in Part 4. Of course, “total” cannot be taken literally, but it will be seen to represent an ideal for the public health movement. This drift of public health was typical of the 20th century. This part will examine how a new definition of health, as well as a new conception of “public”, led to the “new” public health.

Part 5 explores the feasibility of the opposite model of public health: voluntary cooperation. The question is: Can vaccination decisions or measures to control an epidemic be left to the domain of private choices? This part of the paper will also examine the limits of coercion, which suggest both that the total government care is infeasible (at least, in a free society) and that voluntary cooperation should be considered.

The conclusion will advance some broad policy orientations, organized around a presumption of liberty and the general goal of minimizing coercion.

Any rational public policy must deal with the questions raised by the different models of public health. By sketching an economic approach that is too often missing in discussions of public health, the paper hopes to contribute to a better understanding of the issues involved and, hopefully, to better public policy. That the label “public health” can mean, and has historically meant, many different things should always be kept in mind.

Full Policy Study—Public Health Models and Related Government Interventions: A Primer

The post Public Health Models and Related Government Interventions: A Primer appeared first on Reason Foundation.

It is important to note that these estimates are nationwide averages, which provide little policy-relevant information. The National Safety Council also breaks down state-level estimates, which show a wide variation in the number of crash fatalities across states. Nine states saw year-over-year declines in the number of estimated deaths, while eight states saw more than 15% increases in the estimated number of deaths.

But variations within states and between road types can be even more significant. Importantly, the COVID-19 emergency appears to have resulted in different impacts on rural and urban travel. By examining monthly Traffic Volume Trends reports from the Federal Highway Administration, one can see that while nationwide vehicle-miles traveled (VMT) on arterial roads declined by 13.98% between 2019 and 2020, urban declines were steeper than rural declines, at -14.77% and -11.84%, respectively. This resulted in rural arterial traffic’s share of total arterial vehicle miles traveled increasing from 27.09% to 27.76%.

Rural roads are generally far more dangerous than urban roads and this proved no different during the pandemic. Preliminary research from the National Highway Traffic Safety Administration (NHTSA) that examined fatal crashes in the first half of 2020 shows that the rural fatality rate—already at a higher base—increased considerably more than the urban fatality rate. The table below reports relevant fatality rates (deaths per 100 million VMT) by roadway functional classification for June 2019 and June 2020.

Similar NHTSA research by crash subcategory that covers the full year of 2020 will likely not be available until the middle of 2021, but June 2020 appears to be the beginning of the persistent higher fatality trend seen in NSC estimates. In June 2020, NHTSA estimates that 53% of total fatalities took place on rural roads, up from 47% in June 2019, even though less than 20% of the U.S. population resides in rural areas. 

Fatalities also skewed toward younger age groups that tend to engage in riskier behaviors, with 16-24-year-olds accounting for 19% of fatalities in June 2020 compared to 15% in June 2019, and 25-34-year-olds accounting for 21% versus 18%. The proportion of fatalities for the 65+ age group actually fell quite substantially, from 19% to 14%.

If these trends hold, popular policy responses may do little good. Politicians and the news media tend to focus on urban roadway fatalities, hence the professional advocacy around “vision zero” campaigns and associated “road diets,” which aim for zero traffic-related deaths by reducing vehicle speeds and promoting alternatives to driving in dense cities.

While urban areas have seen an uptick in motor vehicle fatalities during the pandemic, the trend is mostly coming from rural areas. As NHTSA put it, the 2020 fatalities it analyzed “were more rural, involved more people 16 to 24 years old, were associated with risk-taking behaviors such as riding without a seat belt, and involved rollovers and ejections (which occur more often at high speeds and when occupants are unrestrained).”

As more data come in, policymakers should seek out careful analysis of these troubling trends. It is also possible these trends may reverse themselves, at least to some degree, as the pandemic ends and the “new normal” in travel behavior likely returns to something closer to the old normal. But policymakers’ and professional activists’ usual tools that focus on addressing urban traffic safety are likely to be of little value in rural areas, which appear to be strongly driving the trend in COVID-era vehicle fatalities. A patient, data-driven approach is needed.

The post What’s the Story Behind Increased Traffic Fatalities During the Pandemic? appeared first on Reason Foundation.

But since the massive federal spending bill has already been passed and signed, it would be wise for state and local governments to use this one-time revenue boost to reduce unfunded retiree health care obligations, which total $1.2 trillion nationally.

Because the new federal aid is not an ongoing revenue stream, using it to expand existing programs or start new ones would be imprudent fiscal policy and invite budgetary pressures down the road. Restrictions in the new law added by the Senate prohibit federal funds from being used to reduce taxes or pay down unfunded pension obligations. But the law does not explicitly mention other post-employment benefits, known in the government accounting world as OPEBs, which primarily take the form of health care coverage for retirees.

In some cases, state and local governments show net OPEB liabilities, which is the total amount of benefits already promised to retirees, as large or larger than their net pension liabilities. Although the total future cost of retiree health care benefits is smaller than pension benefits, which are intended to replace income, most governments have at least partially prefunded their pension benefits while setting aside little or no money to cover their future OPEB costs. This is often attributable to the strong legal protections granted to public pensions but that largely do not extend to OPEB benefit promises made to workers in most places. Nonetheless, by failing to set aside funds for retiree health benefits as employees accrue them, government employers are burdening future taxpayers with growing debt. The size of the problem is also raising doubts among prospective retirees about whether the benefits promised to them will really be there when they retire.

In this post, I consider two potential strategies for using the temporary increase in governments’ fiscal capacity to address unfunded other post-employment benefit liabilities: (1) prefunding and reforming defined retiree healthcare benefits, and (2) switching employees to defined contribution retiree health care benefits.

Option 1:  Prefund and Reform OPEBs

Many state and local governments currently finance OPEBs on a pay-as-you-go basis, meaning that they set aside no money while employees are working and then pay their health insurance premiums in retirement as the bills become due.

Under Government Accounting Standards Board (GASB) Statement Number 75, the present value of future OPEB costs (less any assets held to cover these costs) must be shown on a state or local government’s balance sheet. When that government uses a pay-as-you-go funding method, the future costs must be discounted at a “tax-exempt, high-quality municipal bond rate.” Some governments meet this definition by using The Bond Buyer 20 Index, which is the average yield for 20 general obligation municipal bonds with an average rating of AA from Standard & Poor’s and/or Aa2 from Moody’s. This index declined from 3.50 percent on June 30, 2019, to 2.21 percent on June 30, 2020, obliging many governments to report increased net OPEB liabilities for their most recent fiscal year.

But GASB Statement 75 allows governments to apply a higher discount rate “to the extent that the OPEB plan’s fiduciary net position is projected to be sufficient to make projected benefit payments and OPEB plan assets are expected to be invested using a strategy to achieve that return.”

This could be interpreted to mean that if a state or local government adopts a policy of paying its actuarially determined employer contribution each year, it can discount its future OPEB payments at the same rate it uses to discount pension obligations, typically around 7 percent (although the Reason Foundation and other pension reform advocates typically recommend more conservative discount rates).

A hypothetical case can demonstrate the significant balance sheet benefits of implementing an OPEB prefunding policy. Consider a public sector entity that expects to pay $100 million in retiree health caare benefits this year and for its costs to grow 6 percent each year, reaching almost $542 million in 30 years. Discounting this stream of benefits at a rate of 3 percent yields an OPEB liability of $4.55 billion. But, if we apply a 6 percent discount rate to the same set of annual costs, the liability shrinks to just $2.83 billion.

Now, before we continue, a caveat is in order. Many researchers and practitioners would argue that this balance sheet benefit is just an accounting trick. Their contention is that future benefits should be discounted at a rate based on the likelihood of the future benefits being paid rather than the expected rate of return on the assets being set aside to cover these costs. But irrespective of whether such a large balance sheet savings is theoretically justified, few would deny that prefunding benefits is both fiscally prudent and fairer to future taxpayers and retirees, many of whom will be our children and grandchildren.

That said, prefunding OPEB costs is a permanent commitment that lasts long beyond the 2024 deadline for using American Rescue Plan funds. Thus, OPEB prefunding will require an additional budgetary commitment from states in the near and intermediate-term (while saving money in the long-term as investment gains cover a portion of future retiree healthcare costs).

Given the increased short-run budgetary burden, state and local employers should also use any shift to pre-funding as an opportunity to reassess their OPEB packages. Retiree health care benefits were often initiated decades ago at a time when health care costs were much lower. Now that health care insurance premiums are so much higher, especially for retirees who have yet to reach the Medicare eligibility age of 65, benefit enhancements may require a second look. Among the items that should be reviewed are:

• The inclusion of spousal and dependent coverage;
• Whether dental and vision plan premiums should be covered along with medical premiums;
• Whether retiree health plans should incorporate such cost-saving elements as copayments, deductibles, and provider network limitations; and
• Whether to continue offering employer-paid life insurance plans (since this perk is not among those likely to promote employee retention).

Although public employees may not welcome skinnier retiree benefit packages, they would benefit from the fact that prefunding reduces the risk that their post-employment benefits will be suddenly canceled, as they were during the 2012 bankruptcy of the city of Stockton, California. Since OPEBs typically lack the legal protections afforded to pension benefits, employees should be willing to at least consider a tradeoff between the generosity of the OPEB package and the likelihood of ultimately receiving it.

Option 2: Replace Defined OPEBs with Retirement Health Care Savings Accounts

The prefunding approach leaves the Total OPEB Liability in place while increasingly offsetting it with assets. Another alternative is for public sector employers to replace their OPEB plans with defined contribution plans that provide comparable value to retirees.

Retirement health care savings accounts provide employees with 401(k)-like accounts to which both the employer and employees can contribute. Employee contributions and investment returns on the saved assets are not taxable until the account is used to pay healthcare premiums in retirement.

Governments could use some of the extra budgetary space created by the American Rescue Plan’s funding to make initial deposits into each employee’s health care savings account. They could then make smaller annual contributions each year until the employee retires. Although these annual deposits create a similar cost stream to prefunding a defined OPEB plan, they do not create a liability on the government’s balance sheet because there is no commitment to provide a specific level of benefits upon retirement.

Although a shift to retiree health savings accounts transfers risk to employees, it may actually offer a better benefit to shorter-tenured employees—who make up the bulk of people hired into public service today. These employees often do not stay with their government employers long enough to vest in the defined retiree health care benefits. But they could use their retiree health savings account balance at retirement, regardless of where they were last employed.

Conclusion

The two potential strategies outlined here are not necessarily exclusive. Retention of the defined retiree health care benefit with prefunding may be more appropriate for employees nearing retirement, while transitioning to retiree health savings accounts may be a better fit for more junior employees and new hires.

Either strategy, or a combination of the two, can set government employers on a path toward having zero net OPEB liabilities on their balance sheets at some point in the future. The removal of these unfunded obligations would be welcomed by credit rating agencies and municipal bond investors today and would provide a better fiscal legacy for taxpayers and employees tomorrow.

The post How to Spend Stimulus Money to Reduce State and Local Retiree Health Care Debt appeared first on Reason Foundation.

There are about 39,000 local governments across the country, and, unlike the 50 states, most do not post monthly tax collection statistics. That said, we have reason to believe that, with some exceptions, the COVID-19 pandemic’s impact on local government tax revenues has been modest.

A key reason for this optimism is the fact that local governments primarily rely on property taxes which have been largely insulated from the COVID-19’s economic impact. According to data from the Census Bureau’s Annual Survey of State and Local Government Finances, in 2018, 72 percent of all local government tax revenue came from property taxes.

Unlike during the Great Recession (2007-2009), property tax revenues have mostly remained stable, and may even increase as the country emerges from the COVID-19 downturn. In most areas, property values have performed well during the pandemic.

Looking back at the Great Recession, home prices, as measured by the Zillow Home Value Index (ZHVI), peaked in early 2007, fell rapidly later that year, and then continued to decline until early 2012. Over the entire period from February 2007 to February 2012, the ZHVI fell 33 percent.

By contrast, ZHVI has risen every month during the coronavirus pandemic.  The latest available reading shows the ZHVI was up 8 percent from its pre-pandemic level (February 2020) as of January 2021.

Unlike residential real estate, however, commercial property has performed poorly during the pandemic. According to Green Street Advisors, commercial real estate values were 7 percent below pre-pandemic levels at the end of January 2021. But, in most cities and counties residential parcels account for most of the property tax base. At the end of 2018, nationwide owner-occupied home values were estimated at $27 trillion versus an estimated $16 trillion aggregate value for commercial real estate.

Commercial real estate is also more concentrated in specific cities and counties. New York City is one entity with a high concentration of commercial property.  New York City’s commercial properties accounted for 8 percent of all local government tax revenue reported by the Census Bureau in 2018. New York City is not only America’s most populous city by a wide margin, but it also carries out the functions normally reserved to county governments because the city encompasses five counties.

Fortunately, New York City is among the local governments that report quarterly revenue data. According to its recently updated revenue data set, New York City’s 2020 calendar year tax revenue was $64.8 billion,1.9 percent above 2019 levels. Comparing the second quarter of its fiscal year 2021 (October 2020 through December 2020) with that of the same period during 2019, the city comptroller reported:

The largest revenue source, the real property tax, increased 18.1%. The personal income tax was flat.  The sales tax declined $695 million, or 29.1%.  NYC retail stores continue to suffer from reduced sales as the City’s cultural attractions remain closed and out-of-town visitors remain home.

Some other large cities and counties have also posted interim revenue results.  Phoenix, for example, reported its 2020 calendar year revenues were 11.4 percent above the prior-year levels.

On the other hand, some other major cities reported declines. Columbus (OH), the city of Houston, Texas, and the country it is in —Harris County, along with Philadelphia, all reported tax revenue decreases in 2020, ranging from 1 percent to 7.2 percent.

A final indication of local tax revenue performance across the country can be inferred from quarterly Census surveys. In December 2020, the Census Bureau published data for two series: National Totals of State and Local Government Tax Revenue and National Totals of State Government Tax Revenue. The difference between the two series should represent local government revenue collections.

The Census data for the first three quarters of 2019 and 2020 are presented in the accompanying table.

State and Local Revenue, Q1-Q3 2019 v 2020

Source: Census Bureau Quarterly Tax Revenue Surveys

This analysis implies a nationwide increase in local government tax revenue of almost $60 billion for the first three quarters of the year, according to the Census Bureau Quarterly Tax Revenue Surveys data. Because these data are preliminary and there may be sampling differences across the two surveys, we cannot be sure that this estimate is definitive.  But these results do not support the notion of a nationwide local government revenue crisis.

As time passes, annual disclosures from cities and counties will trickle in, allowing us to make a more definitive conclusion about local government revenue performance during the COVID-19 pandemic. But, for now, it appears that the most pessimistic revenue scenarios outlined at the beginning of the COVID-19 crisis are failing to materialize for most local governments.

The post Most Local Governments’ Tax Revenues Haven’t Been Hit Hard By COVID-19 Pandemic appeared first on Reason Foundation.

One key factor driving parental exasperation is the obvious contrast between what public schools have done during this period and what private schools have done. While public schools in many cities remain closed, private schools and daycare centers have been fighting to safely reopen their doors for months. In fact, private schools in Kentucky went all the way to the Supreme Court to fight for the right to provide in-person services to their customers. A private school in Sacramento County, Calif., even rebranded itself as a “daycare” by training its employees as child-care workers in an attempt to get around the government’s arbitrary closure rules. Nationwide and state-specific data confirm that private schools have been substantially more likely to reopen in-person than nearby public schools. And four rigorous studies have each found that public-school districts with stronger teachers’ unions have been significantly less likely to reopen in person.

Even more frustrating, there is no major medical reason for this disparity. In fact, keeping schools closed for in-person instruction flies in the face of the science. Last month, Center for Disease Control (CDC) researchers reported in the Journal of the American Medical Association that “the preponderance of available evidence from the fall school semester has been reassuring” and that “there has been little evidence that schools have contributed meaningfully to increased community transmission.” In New York City, for example, the latest positivity rate reported in schools was less than a tenth of the positivity rate in the overall community. Additional studies from other countries — including Sweden, Ireland, Norway, and Singapore — similarly suggest schools are not major contributors of community spread. UNICEF also reported that “data from 191 countries show no consistent association between school reopening status and COVID-19 infection rates.”

Yet certain examples of public-school behavior are particularly egregious even by these standards. For instance, while some public K–12 providers insisted on keeping classrooms fully remote, they were opening the same school buildings for in-person childcare services and charging families hundreds of dollars per child per week out of pocket. If the schools could reopen for in-person childcare services, why couldn’t they open for in-person learning? And more recently, a Chicago Teachers Union board member was caught vacationing in Puerto Rico while rallying teachers on social media to not return to work in person. But if was safe enough to travel to another country and vacation in person, then why wasn’t it safe enough to return to work in person?

Of course, some high-risk teachers have real health concerns and are looking for good-faith ways to make schools safer for them to be in. Unfortunately, unions have largely taken an all-or-nothing approach to their demands for reopening. In fact, many teachers’ unions across the country have been fighting to remain closed since the start of the pandemic. The public-school monopoly sought to protect itself at the expense of families as soon as the lockdowns began last March. The Oregon Education Association successfully lobbied that same month to make it illegal for families to switch to virtual charter schools. The Pennsylvania Association of School Administrators lobbied for the same thing that month to prevent desperate families from taking their children’s education dollars to schools that had years of experience operating virtually. California took similar action by passing a bill that effectively prevented families from taking their children’s education dollars to public charter schools.

That’s not the only evidence that some teachers’ unions often prioritize politics and power over the needs of families. Take a look at some of their demands. In their report on safely reopening schools, the Los Angeles teachers’ union called for things unrelated to reopening schools, such as defunding the police, Medicare-for-All, a wealth tax, and a ban on charter schools. At least ten teachers’ unions joined with the Democratic Socialists of America to hold a “National Day of Resistance” to “Demand Safe Schools” on two occasions in less than a year. Included in their list of demands, in addition to more funding and staffing, were police-free schools, rent cancelation, unemployment benefits for all, and a ban on standardized tests and new charter schools.

Meanwhile, families have been left scrambling for nearly a year now and many children are falling behind academically, mentally, and physically. After all this, parents are beginning to realize that it is time for a change in the relationship between students and schools. They’ve recognized that it does not make any sense to fund closed school buildings when we can fund students directly instead. Think of it this way: If a grocery store doesn’t reopen, families can take their money elsewhere. If a school doesn’t reopen, families should similarly be able to take their children’s taxpayer-funded education dollars elsewhere. After all, education funding is supposed to be meant for educating children, not for protecting a particular institution.

Recent nationwide polling from RealClearOpinion Research found that support for the concept of school choice jumped ten percentage points in just a few months — from 67 percent in April to 77 percent in August 2020 — among families with children in the public-school system last year. Another national survey conducted by Morning Consult found that support for several types of school choice — education savings accounts, vouchers, tax-credit scholarships, and charter schools — all surged between the spring and fall of 2020. The same national poll found that 81 percent of the general public — and 86 percent of parents of school-aged children — now support funding students directly through education savings accounts.

These initiatives allow families to take a portion of their children’s K–12 education dollars, which would have otherwise automatically funneled to their residentially assigned public-school district, to cover the costs associated with any approved education provider, such as private schooling, tutoring, homeschooling, microschooling, and “pandemic pods.” And, of course, families would still be able to take all of their children’s education dollars to their residentially assigned public school if they prefer.

It isn’t just voters who are changing their minds. Legislators in at least 23 states have introduced bills in the past two months to fund students instead of systems. Five of these states — Arizona, Iowa, Indiana, West Virginia, and Kansas — have already passed school-choice bills out of a chamber, and three others — Florida, Missouri, and South Dakota — have passed bills out of committees.

Language in some of this new legislation also suggests that the push to fund students instead of systems is the direct result of the inability or unwillingness of some teachers’ unions and school systems to reopen in person. Legislators in states including Utah, Maryland, and Illinois introduced bills to allow families to take their children’s education dollars elsewhere if their public schools didn’t reopen in person. The proposal to fund students directly in Georgia includes several eligibility categories — one of which happens to be for students assigned to public schools without full-time in-person instruction. Congressman Dan Bishop also introduced federal legislation to allow families to take some of their children’s K–12 education dollars to private providers if their public schools don’t reopen in person.

Families are also fighting back in other ways. Parents are filing lawsuits against school districts over their inadequate reopening plans. Others are pushing to recall school-board members.

The good news is that teachers’ unions and others who oppose safe in-person instruction have done more to advance school choice in the past year than anyone could have ever imagined. The pandemic has revealed the main problem with K–12 education: There is a massive power imbalance between the public school system and individual families.

Families have always gotten the short end of the stick on K–12 education. But it’s more obvious now than ever, and families are figuring out they’re getting a bad deal. The only way that we’re ever going to fix that uneven power dynamic is to give families real options by funding students directly.

It’s about time we get our priorities right and fund students, not systems.

The post COVID-19 Pandemic Continues to Show the Need for Funding Students, Not Systems appeared first on Reason Foundation.

Due to factors including aging patient populations and doctor retirement rates, the U.S. is expected to see a shortage of between 54,100 and 139,000 physicians by 2033, according to a recent report from the American Association of Medical Colleges. Among the states predicted to be hardest hit by the shortfall are Louisiana, Mississippi and New Mexico.

To address the public-health problems the current shortage has caused during the pandemic, some states have temporarily allowed out-of-state doctors to practice within their borders with little to no additional training or certification. State policymakers now have a great opportunity to make the temporary permanent.

Since 1847, the American Medical Association has lobbied every state to enforce their own medical-licensing laws, with peripheral federal oversight, even though licensing qualifications to practice medicine are generally dictated by national specialization organizations such as the American Board of Surgery and are practically identical from state-to-state. Such consistency should make state-level licensure redundant and unnecessary.

However, until recently, doctors were unilaterally barred from practicing in states where they had not been licensed. They couldn’t even provide telemedicine support to patients beyond their state borders. These laws were defended on the grounds that they promote safety, but as with most professional licensing laws, the real motivation was, at least in part, money. Medical boards have used licensing regimes to rake in over $100 million annually in certification and testing fees from aspiring doctors.

When the COVID-19 crisis hit the U.S. health-care system last year, the limitations of state licensing quickly became apparent. Hospitals in regions with high COVID-19 case numbers were in desperate need of more physicians, and the temporary relaxation of cross-state licensing restrictions enabled hard-hit hospitals to staff up quickly to better cope with surges in COVID cases. As a result of this successful experiment born of crisis, even the AMA is now beginning to support the idea of universal licensing within the United States.

One state is pointing the way to more sensible licensing regimes. Utah has not only permanently opened its doors to doctors from other states but also implemented policies to speed up their licensing processes. In fact, Utah has been at the forefront of medical access for years, even allowing doctors licensed in Canada to practice within its borders since 2014.

And the state has continued to build on these sensible policies: Anticipating the COVID-19 hospitalization surge in late March 2020, Gov. Gary Herbert signed legislation to streamline licensing in nearly all non-medical fields. That freed up resources for Utah’s Division of Occupational and Professional Licensing to focus on approving new doctors who wanted to work in the state, and division staff were able to approve 22 percent more doctors in 2020 compared to 2019. It’s likely that these additional doctors are contributing to Utah’s low COVID-19 death rate, currently the nation’s sixth-lowest.

Technically, Utah is willing to license doctors certified in any country, but the state gives preferential treatment to Canadian-certified doctors because that country’s licensing requirements are so similar to those in the United States. Non-Canadian foreign doctors still must complete two years of Utah medical residency before they can practice in the state. Many other states require Canadian doctors to complete this two-year residency as well, but Utah’s policy has allowed a number of Canadian doctors to treat COVID-19 patients in the state immediately.

But why stop at Canada? New Jersey did temporarily allow physicians from other countries to practice in the state at the start of the COVID-19 pandemic. Unfortunately, the state has already suspended new applications, but such provisional licensing for all foreign doctors should be the next step for all states.

The COVID-19 pandemic has shed light on regulations that have prevented the U.S. health-care system from operating as efficiently as possible. States with immediate physician needs amid the pandemic, and those expecting to see doctor shortages in the coming years, should follow Utah’s lead. It’s never been more important to allow doctors to practice where they are most needed.

A version of this column previously appeared in Governing. 

The post How State Policies Are Worsening The U.S. Doctor Shortage appeared first on Reason Foundation.

Of the $350 billion that would go to state and local governments, just under $200 billion is earmarked for the 50 states, the District of Columbia, and five overseas territories. Excluding those territories, the state aid averages $593 per resident, based on 2020 population estimates from the Census Bureau.

The allocation formula includes a flat $500 million for each state and a special $750 million allocation to the District of Columbia to compensate for the fact that it did not receive a state allocation under the CARES Act. But the bulk of the funding is allocated according to the average number of unemployed people in each jurisdiction during the last three months of 2020.

Setting aside the District of Columbia, the allocation formula used by the legislation benefits low population states and those that had high unemployment rates at the end of last year, relative to other states. Among the states benefitting from this scheme are low population Vermont, which is slated to receive $1,050 per person, and California, which would expect to receive $667 per person, in part because the state ended 2020 with a 9 percent unemployment rate—well above the December national unemployment rate of 6.7 percent. It should be noted that because December 2020 unemployment statistics from the Bureau of Labor Statistics are still preliminary, allocations are still subject to change.

Vermont and California do not appear to be the neediest candidates for federal aid given their relatively strong tax revenue performance. For the calendar year 2020, revenues in Vermont exceeded prior-year tax revenues by 12.8 percent, according to a Reason Foundation analysis of monthly state revenues. The state’s economy benefited from an influx of residents escaping urban areas and it is less dependent on businesses hit hardest by the COVID-19 pandemic, such as restaurants and hotels.

In California in 2020, the state’s general fund revenues rose 4.2 percent year on year. Despite the pandemic driving high unemployment, lockdowns, and extensive business closures, the state’s revenues were helped by income tax receipts from its high-income technology and finance professionals who enjoyed stable employment and capital gains.

California did lose a lot of jobs, but most of them belonged to individuals with modest incomes. Due to the highly progressive nature of California’s income tax system, the state’s tax revenue gains from upper-income workers who continued to work during the pandemic far exceeded its losses from those who became unemployed.

By contrast, Florida stands to receive only $474 in state aid per resident from the House coronavirus aid bill, despite suffering a calendar-year tax revenue loss of 7.8 percent. Without a state income tax, Florida did not have an income stream to offset its declining tourism-related tax revenues. Three other large states that will also receive less than $500 per person of federal aid from the COVID-19 stimulus bill are Georgia ($438), Virginia ($442), and Ohio ($486).  Unlike Florida, these three states saw small revenue gains for the calendar year.

Unemployment rates may seem to be a reasonable basis for state aid allocations, but when one gets into the details of state finance, they can prove to be less relevant. States certainly have higher unemployment insurance and health care costs due to the pandemic. California’s unemployment insurance payments increased from $5 billion in 2019 to at least $24 billion in 2020. But unemployment insurance is already partially covered by the federal government as well as taxes on employers. And states can borrow additional money from the federal government if these tax revenues are temporarily insufficient, as they were during the Great Recession and again last year. Unemployment also impacts Medicaid enrollment. Although Medicaid is typically a state’s largest expenditure, the federal government has already offset some of the added state costs arising from COVID-19 by increasing the share of each Medicaid claim it covers.

On a per-capita basis, the allocations to the 50 states in the House stimulus bill are dwarfed by those going to four US territories with small populations. American Samoa and the Northern Mariana Islands stand to receive over $8,000 per person from the House bill. Both territories have fewer than 60,000 residents but benefit from the fact that the aid bill allocates $450 million to each of the five territories regardless of their population. The rest of the territorial funding formula is based on population. Guam and the US Virgin Islands also stand to receive outsized per capita allocations, while Puerto Rico’s funding is on a par with some smaller states.

As we and others have reported, state revenue losses are proving to be far less than originally feared and are almost certain to be a small fraction of the $200 billion in federal support now included in the latest reconciliation measure.

State and Territorial Aid Per Capita in Budget Reconciliation

The post House COVID-19 Stimulus Bill Has Big Differences In Per Capita Money Going to States appeared first on Reason Foundation.