Government Reform Archives - Reason Foundation Free Minds and Free Markets Wed, 01 Mar 2023 19:51:07 +0000 en-US hourly 1 Government Reform Archives - Reason Foundation 32 32 With EMS takeover attempts, California’s fire departments seek more taxpayer funding to do less Wed, 01 Mar 2023 05:00:00 +0000 A level playing field between public and private actors best ensures EMS services in California balance competitiveness and caring for all patients.

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Taxpayers throughout California should be concerned that firefighter unions are trying to convince local governments across the state to reshape and expand municipal fire departments’ control over emergency medical services. This move would have major implications for accountability, public safety costs, and government finances overall.

On a CalChiefs podcast, which its creators describe as “the voice of the California Fire Service,” Southern Marin Fire Protection District Deputy Chief Ted Peterson provided some details on exactly how municipal fire departments are seeking to take over emergency medical services (EMS) delivery from county-level EMS systems: increased reimbursements for transporting Medi-Cal patients through the Public Provider Ground Emergency Medical Transport (PPGEMT) program.  

The federally-funded program is increasing nearly threefold, but the private ambulance companies that perform most of the EMS work for counties in California cannot access it. Thus, union officials argue that since municipal fire departments are already handling the first responder element of EMS and can access PPGEMT funds as a public agency, why not let these municipal fire departments control it all, draw more federal money, and strongarm ambulance contractors already providing services today into accepting less money for the same work by taking over their contracts from counties?  

One reason the fire unions’ desired scenario would be problematic lies in their chosen accounting methods, which ensure fire unions would receive much more money for doing no more actual work. The federal reimbursement of the PPGEMT program doesn’t rely on any formal financial reporting documents, but a standardized, averaged reimbursement rate fueled by informal cost reports that are “proprietary to each agency so they cannot be shared,” as Peterson notes. Basically, each fire department must, on its own, determine how much it costs to perform its first responder function,s and those costs are averaged out to a flat reimbursement rate.  

Setting aside obvious questions like how government cost reporting could possibly ever be considered “proprietary” and not transparently reported like other government budget figures, the podcast mostly served as a rallying cry for fire departments to adopt similar accounting practices and gimmickry to ensure those “informal” and “proprietary” cost reports show losses as high they can get away with, even encouraging colleagues to “appeal” if they get audited over their cost reports. 

Over time, Peterson says, the increases will lead to “billions” of dollars for fire departments “for not doing anything except filling out some forms” and “increase(ing) our cost per transport two to three times what it is today.” 

While shielding private intellectual property and trade secrets from public view is not unusual in private businesses in market competition, the same is not true of governmental budgetary information and financial statements, which require public, transparent reporting. Public agencies should not get special treatment to hide their accounting methods from taxpayers. 

But there’s no reason to stop at accountability of accounting methods. For EMS to maintain effectiveness, much less improve, competition needs to be preserved. That becomes increasingly difficult as municipal fire agencies exploit their ability to access taxpayer funding to dominate EMS, while private ambulance company workers provide most EMS services. Peterson speaks of fire agencies playing a part of the larger EMS “team,” but typically, on a team, those who contribute the most get paid the most. 

Instead, private ambulance companies could find themselves at the mercy of whatever municipal fire department administrators are willing to give them, threatening the exit of providers. The fire takeover of EMS in the city of Chula Vista has already shown that. The city raised the money provided for EMS to nearly $4,000 per trip, but the subcontractor company running the ambulances received less funding than they did under the previous arrangement and, overall, less than the fire agency that managed, but didn’t provide, the actual ambulance services.   

What’s more, the Chula Vista fire department blamed the ambulance company for the rate increase it fought for, even though the incremental new revenue from the rate increase went to the fire department.  

Those tactics threaten the exit of ambulance providers from the system entirely, which would be bad for taxpayers since fire departments are so dependent on them. Even if fire departments invest enough in ambulances, equipment, and services to provide full EMS, without competition and transparency, who is to say whether taxpayers are getting the best allocation of their funds? 

Ironically, the podcast inadvertently highlights the need to emphasize cost and accountability. For example, if it costs over $2,000 for a trip to bring first responders to an accident, as Peterson claims in the podcast, the first thing to ask should be if there’s a way to do that more efficiently. How many emergency calls actually require the use of a ladder truck and personnel? Peterson says that departments charging much less were found to understate costs—should they not be subject to competitive pressure? Are there no better ways? 

A level playing field between public and private actors best ensures EMS services in California toe the line between competitiveness and providing care to all patients. But California’s existing laws prohibit private EMS service providers from dedicated PPGEMT funding, so as fire agencies take over EMS, they can hold that funding over private providers’ heads based solely on their status as public agencies, as Chula Vista’s experience shows.  

More so, EMS providers asking for federal reimbursement should open their cost accounting to the public. Fire departments insisting the cost accounting of their EMS first responder functions that go to determining federal awards remain hidden from public scrutiny should raise a red flag for every taxpayer. If fire departments are so confident their claims are legitimate, they should welcome the added transparency. 

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California should stop relying on taxation by citation Thu, 16 Feb 2023 05:01:00 +0000 Using fines and fees to generate government revenue undermines justice and fiscal responsibility in California.

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Across the country, state and local governments use fines and fees as a source of revenue to fund public services. But reliance upon this taxation by citation is not only a threat to individual liberty, it can also undermine public safety and result in fiscal instability. A new Reason Foundation policy brief shows why using fines and fees to generate government revenue undermines justice and fiscal responsibility in California.

Fines and fees are commonplace throughout the justice system. In many cases, fines are considered desirable because they are an intermediate form of punishment. Slapping someone with a fine is less severe than incarceration but is tough punishment for many low-level offenses. A person may be charged a fine for criminal or civil infractions. In addition to fines, a person might also be charged a host of assessments, fees, and surcharges explicitly intended to raise government revenue and offset the costs of administrating the justice system.

Traffic tickets are among the most common sources of fine revenue in California. The hidden fees attached to traffic fines can add up fast. For instance, the base fine for going 15 miles per hour over the speed limit in Orange County is just $35. But, after a menagerie of assessments, fees, and surcharges are added, the total ticket amount typically climbs to $226. Ticket revenue is then used for many government purposes unrelated to the traffic ticket, including funding the construction and maintenance of court buildings, DNA testing, and county emergency medical services.

Cities, counties, and the state government all get a slice of ticket revenues. Among the various hidden fees in California traffic tickets is a 20 percent state surcharge which adds $7 to a $35 speeding ticket. As State Assemblymember Adam Gray once explained, that surcharge was created in 2002 to help alleviate the budget deficits of that time and was supposed to be rolled back in 2007. But, 15 years after the supposed expiration, California continues to generate revenue for the state government via the surcharge from traffic tickets.

The primary responsibilities of the legal system are to promote public safety and uphold justice. Pressure to raise revenue, at best, undermines—and at worst, directly conflicts with—those responsibilities. A recent report from Catalyst California and the American Civil Liberties Union of Southern California found that the Los Angeles Sheriff’s Department dedicates significant time and resources to traffic stops with few public safety benefits.

Fines and fees are also highly regressive relative to alternative revenue sources. In other words, they tend to burden lower-income individuals disproportionately. A $226 speeding ticket is a minor inconvenience for many Southern Californians but could be catastrophic for many other lower-income drivers. According to a recent Federal Reserve report, nearly one-third of Americans could not afford a $400 emergency expense if it arose.

California lawmakers have wisely passed several reforms in recent years aimed at reducing fines and fees. For example, California notably became the first state to abolish all administrative fees in juvenile delinquency cases back in 2018. And the state’s counties are now no longer allowed to charge fees to cover the cost of incarceration, legal representation, electronic monitoring, probation, home supervision, or drug testing in juvenile cases.

Last year, the California State Assembly rolled back late fees on outstanding court debts. Previously, if someone missed the initial deadline to pay their traffic ticket, they’d be fined an additional $300 regardless of how much they owed. Now late fees are capped at $100. The legislation is estimated to have relieved more than $500 million in outstanding court debts.

Those reforms represent meaningful progress in reducing government’s reliance on fines and fees. Unfortunately, taxation by citation remains widespread across the state. More reform is needed. Reducing the remaining laundry list of assessments, fees, and surcharges that are added to traffic fines would be good next steps.

A version of the column first appeared in the Orange County Register.

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California’s schools need to adapt to the state budget woes Tue, 14 Feb 2023 05:00:00 +0000 Gov. Gavin Newsom’s recently-released budget projects a $22.5 billion deficit, which means school districts will likely need to rightsize operations.

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California’s public school students recently showed historic declines in standardized test scores due in part to school closures and other COVID-19 pandemic-related learning disruptions. Amidst a growing state budget device, state legislators and local school leaders need to help students get back on track with smart policymaking.

California Gov. Gavin Newsom’s recently-released budget projects a $22.5 billion deficit, which means school districts, especially those experiencing dramatic student enrollment declines like the Los Angeles Unified School District, will likely need to rightsize operations. School districts should be finding cost savings in areas such as reductions to the currently very generous post-employment health care and dental benefits for retirees, which are controlled at the district level.

California policymakers should also allocate any remaining federal funding for pandemic relief to tutoring services and programs that allow local school leaders the most discretion over how to use the money to help students. As of Sept. 30, 2022, California schools had spent just over 43 percent of the $21.5 billion federal stimulus funds allocated to the state’s school districts and charter schools during the pandemic. School districts need to ensure they don’t create new costs that outlast federal funding set to dry up. Schools must be shrewd about whether or not to add new staff. Many school districts aren’t in a financial position to make new hires due to their declining student populations.

Los Angeles Unified and Oakland Unified School District have heavily invested in tutoring, universal summer school, and small-group literacy programs since the spring of 2020. These programs may help explain why each school district gained ground in some reading metrics and experienced less significant overall National Assessment of Educational Progress (NAEP) score declines than many other urban school districts across the country. And because different student populations have vastly different learning needs, the more discretion local leaders have on how to use these resources, the better.

At the state level, policymakers should resist the urge to funnel education dollars through specific grants and earmarks. These programs make it difficult for school leaders to prioritize the programs they see helping their students when budget cuts are necessary.

Finally, California must consider ways to provide families with more education choices. Improving the state’s public school open enrollment programs is one way to do so. Ensuring that all public schools are participating in within-district and cross-district open enrollment would allow students to enroll at public schools that better fit their academic and social needs.

A 2021 study conducted by the nonpartisan Legislative Analyst’s Office gave the state’s biggest open enrollment option, the District of Choice program, good marks. Students using the program often enrolled in higher-performing school districts, and districts that lost students to the program showed increased community engagement in an effort to win families back. By consolidating and expanding California’s open enrollment offerings, policymakers would empower more families to find education options that better fit their children’s needs. Unfortunately, a recent Reason Foundation study of K-12 open enrollment policies found California’s open enrollment programs fall short in every key benchmark, so much work is needed.

With the state facing a significant budget deficit, federal COVID funding to schools set to dry up in 2024, and the need to help students make up for learning losses suffered during the pandemic, California’s schools and policymakers have their work cut out for them in 2023. But practical solutions like improving open enrollment policies and rightsizing schools can start to put the state on the right path to providing a higher-quality education to California’s students.

A version of the column previously first appeared in the Orange County Register.

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Cutting California’s budget deficit and reforming state government Fri, 10 Feb 2023 05:00:00 +0000 California’s big spending has continued to grow, as has its overregulation and maze of rules.

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Many Californians are understandably baffled by Gov. Gavin Newsom’s 2023-24 proposed budget and the debate surrounding the projected $22.5 billion state budget deficit. Not long ago, California lawmakers were creating a record-setting budget and spending a $100 billion budget surplus.

But last October, Fitch Ratings warned that “tax revenues from July through September 2022 grew at a median rate of 7.6%” year-over-year in other states, “with only California reporting a [year-over-year] decline” in tax revenues. In other words, all 49 other states saw tax revenues increase. Then, in November, California’s nonpartisan Legislative Analyst’s Office predicted a massive state budget shortfall this year because “income tax payments for 2022 so far have been notably weaker than 2021, likely due in part to falling stock prices.”

Newsom’s budget proposal aims to meet California’s balanced budget requirement without drawing from the state’s reserve funds by making some spending cuts along with various deferments. Nevertheless, Republicans like State Sen. Roger Niello, R-Fair Oaks, offered some cautious praise on that front. “Republicans fought to fill the rainy day fund, and we applaud today’s commitment to not tap into it,” Niello said when the budget was unveiled.

The most significant cuts aim to trim the climate change spending package passed last year, upsetting many progressives and climate change activists. “California can’t afford a short-sighted budget,” Mary Creasman, chief executive officer of California Environmental Voters, said. “To further delay these investments will further compound the climate crisis and the cost of inaction will be far worse.”

State Sen. Scott Wiener, D-San Francisco, was similarly concerned about potential cuts to mass transit projects. “While I fully understand the tough choices we have to make, we must not let our public transportation systems go over the impending fiscal cliff and enter a death spiral — where budget shortfalls lead to service cuts that lead to ridership drops that lead to further budget shortfalls and service cuts,” Wiener said.

Wiener is correct: The state must make tough choices. But one easy choice should be to kill the high-speed rail project once and for all. Over 14 years ago, a 2008 high-speed rail due diligence study by Reason Foundation and the Howard Jarvis Taxpayers Foundation found the travel times promised to voters that year were unachievable, the construction timeline was off by decades, and the price would likely rise to over $80 billion in 2008 dollars. Those predictions have all proven true.

The latest cost estimate for the high-speed rail system is $113 billion, the system is still decades away, and the only major construction is in the Central Valley—a far cry from the full San Francisco to Los Angeles system promised voters, and even if it is ever built the system won’t offer true high-speed rail speeds. As the Los Angles Times reported, the rail authority still claims it will hit promised travel times but:

The premise hinges on trains operating at higher speeds than virtually all the systems in Asia and Europe; human train operators consistently performing with the precision of a computer model; favorable deals on the use of tracks that the state doesn’t even own; and amicable decisions by federal safety regulators.

On high-speed rail, It is time for Newsom and the state to admit failure and stop wasting taxpayers’ money. Newsom would also be wise to encourage every state agency to look for opportunities to utilize public-private partnerships that can improve quality, increase accountability, and lower costs.

Public-private partnerships can shift costs and financial risks from the government, i.e., taxpayers, to the private sector, especially on significant infrastructure projects like highways and airports. And industries from information technology to emergency medical services to recycling have numerous quality private providers available.

In addition to helping solve the immediate budget crisis, public-private partnerships have lasting benefits. The private sector tends to be more likely to embrace performance measures, ensure ongoing maintenance schedules are adhered to, invest in technological upgrades and modernization efforts that can further reduce costs, and bring highly specialized knowledge and expertise to solve problems plaguing a bloated bureaucracy.

While the $22.5 billion state budget deficit is troubling, it was also predictable. Great economic times don’t last forever. California’s big spending has continued to grow, as has its overregulation and maze of rules. Rather than solving the state’s biggest problems, the government has made most of them worse.

Gov. Newsom should take this opportunity to start to eliminate regulations stifling things like infrastructure and housing projects and right-size government by pushing performance-based measures and public-private partnerships that can help produce the outcomes Californians deserve.

A version of the column first appeared in the Orange County Register.

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National Microschooling Center founders illustrate how microschools are changing K-12 education Wed, 01 Feb 2023 15:48:39 +0000 Microschools provide an innovative alternative for families looking to leave the traditional K-12 education system.

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Many families reconsidered their relationships with K-12 education amid the COVID-19 pandemic. During this time, microschools came to the fore.

Instead of building large schools accommodating hundreds or thousands of students, microschool leaders plant schools in storefronts, libraries, and empty dance studios. These small schools can range in size, serving anywhere from 5 to 100 or more students in multiple grade levels. 

Don Soifer is the co-founder and Chief Executive Officer and Ashley Soifer is the Chief Innovation Officer and co-founder of the National Microschooling Center. Their organization provides information about microschools to parents, policymakers, and school leaders, and supports founders to launch their own. In this interview, we ask the Soifers why families are drawn to this alternative education model, what challenges microschool leaders face, how they are funded, and much more.

Jude: What is a microschool and how is it different from other education models?

Ashley: A microschool school is a small, intimate, flexible learning environment. There’s no cap on a microschool and school sizes can range anywhere from eight kids sitting around the living room to over 100 in an office building. But that group of 100 is likely broken up into smaller groups for learning. 

Jude: How are microschools different than a traditional classroom? 

Ashley: As a microschooling parent myself with three children in a microschool, it’s so exciting to have that connection with the educators that are with my children and to really tailor their individual education for each kiddo. If a child is working on a particular math program and the educator decides it’s just not working as well as it could be, they can adapt mid-year and shift to a different program. Some microschools follow state academic content standards while others may focus on social-emotional learning, use a science-based curriculum or utilize project-based learning.

Christian: What are the pitfalls of trying to set a standard definition for microschools?

Don: Since microschooling is so flexible, we’re reluctant to adopt definitions that might be too restrictive down the road. Once you define something, you put a bullseye on its back and that makes it very easy for regulators to find problems with it. At the end of the day, some amount of definition sounds helpful for parents, but let’s make sure that we don’t do it in a way that hamstrings the movement’s effectiveness or its potential to grow.

Jude: Why do families use microschools?

Don: Millions of families across the country have reevaluated their relationships with the institutions that they had historically relied upon to meet their educational needs. This looks very different in different places. In rural communities, we’re seeing a lot of interest in microschooling taking advantage of this golden age of digital content. Others, like Montessori microschools don’t rely on technology. 

At the same time, the hybrid aspects of microschooling haven’t really existed before. Families realized that they don’t need to have one exclusive provider for all of their educational needs. For example, some kids are in a microschool three days a week while the rest of the time is spent with a combination of tutors or classes. In terms of microschooling’s market share and the potential for students’ transformation – the sky’s the limit.

“Three-quarters of our microschool kids were more than two grade levels behind. But the microschool we ran for the city of North Las Vegas changed all that.”

Don Soifer

Jude: The public-private microschool you started in 2020 gained almost instant popularity. Why do you think microschools gained so much attention during the pandemic?

Don: When the pandemic began, it became obvious that the fifth largest school district in the country and all of the other educational options were not adequate during the pandemic for North Las Vegas residents. Ashley and I worked up two briefing books, dropped them on the city manager’s desk the next morning and ran microschools for the city of North Las Vegas in their rec centers and library. The city made it free for all of their residents so long as microschools were in person every day with safe procedures in place aligned wih government mandates. Participating residents would withdraw from the school district and follow homeschooling rules.

Three-quarters of our microschool kids were more than two grade levels behind when they arrived. But the microschool we ran for the city of North Las Vegas changed all that. Academic results and parental satisfaction were through the roof because we trusted them as partners in their children’s learning trajectories.

As we got more positive press for what we were doing, we realized we had 25 microschooling leaders coming to our office regularly who were building this exciting, vibrant, dynamic sector that had never existed before. This led us to launch the National Microschooling Center.

Jude: What advice would you give someone who wants to start a microschool? 

Ashley: The first thing is to talk to people in your community, gather interested families, and hear about their children. At the National Microschool Center, we take calls from folks that are interested in starting a microschool and provide support and resources. Don’t be afraid to jump in and microschool! 

Don: has a lot of resources from free training and learning tools about how to microschool. Many of our calls and emails are parents looking to join a microschool, but we often shift them into building mode. Researchers tell us that we’re at about a 2% market share nationally, which is about where Catholic schools are in this country. But I believe microschooling could get to a 10% market share. 

“One of the biggest barriers that microschool leaders experience is zoning because even though microschooling has been around for quite some time, local regulators don’t always know where to put microschools.”

Ashley Soifer

Jude: What sort of financial or policy barriers are there for families interested in microschooling? 

Don: Policymakers should avoid making deals that could hamstring the effectiveness of microschools. For instance, overbearing accountability provisions can make it difficult for microschools to operate. Some microschools care more about the social and emotional growth of their learners than they do about their academic growth. Some never want to subject their learners to a norm-referenced assessment, let alone a criterion-referenced assessment. Others reject their state’s academic content standards as not being entirely pertinent to the future of their own learners.

Ashley: One of the biggest barriers that microschool leaders experience is zoning because even though microschooling has been around for quite some time, local regulators don’t always know where to put microschools. They start asking questions like: Do we need to do a traffic study? Are you a school? Do we need to figure out if pickup and drop off is going to cause backups on this major road? What does your parking lot look like? When those really aren’t things that usually matter because microschools are so small. So often the barriers we encounter come from local regulations, such as business licensing.

Jude: How are microschools funded exactly?

Ashely: It varies from state to state. In the city of North Las Vegas, the kiddos withdrew from the public school system and all the parents filed out their notice of intent. So they became homeschoolers but were coming to the microschool five days a week and learning The program was funded by city appropriation, completely outside of traditional education funding streams.  

In other states, some microschools are private schools or are inside traditional public schools. And there are some really innovative things happening in Arizona and Idaho with charter schools. Bottomline, it depends on your state’s frameworks and what tools let you serve the needs of your community best. 

Don: When we did a microschool for the City of North Las Vegas, we did it in rec centers and libraries that the city owns already. While Nevada is not historically a school choice-friendly state, Nevada’s TOTS (Transforming Opportunities for Toddlers and Students) Grants gives $5000 grants to families with special needs kids that can be used broadly for education purposes. Those funds supported microschools. Another example from Nevada is a microschool that operates out of a library in a rural area. The free library building covers a major facility cost, while other library-funded services can be used for microschooling purposes. States with social impact bond programs or pay-for-performance programs that could be accessed for microschooling are another possibility.  

Jude: What are the major costs associated with operating a microschool?

Ashley: Facilities are one of the major costs. If it’s a partnership microschool and there’s an employer providing the facility or house of worship providing the facility, that cuts down a ton on cost. Independent microschool leaders should connect with underutilized buildings. For instance, dance studios that are only open in the evenings could be happy to rent their space out at a much cheaper cost during the day.

Being creative with facilities is crucial because that cuts down some of those big-ticket items. Staffing is another big ticket item. Sometimes we purchase bulk licenses for different learning tools that will also provide free training so that microschool leaders can use them. That way, we can help them keep their bottom line low.

“We see the answer to scale as growing more microschool leaders. By creating more leaders you can have more microschool options popping up all over the country.”

Ashley Soifer

Jude: To what extent can microschools be scaled by operators? 

Ashley: Provider networks like Prenda play a crucial role in the microschool movement making resources for microschool leaders. The independent microschool leaders really don’t want to scale. They want to create a small intimate learning environment that families love, and they often aren’t looking to add multiple campuses or to grow their existing campus. We see the answer to scale as growing more microschool leaders. By creating more leaders you can have more microschool options popping up all over the country.

Jude: Are there any states where the microschool movement has grown significantly in the last few years? 

Don: In Southern Nevada, we have about 24 microschools. Other emerging hotspots include the Atlanta area, Southern Florida, Wichita, to some extent parts of New Jersey. It’s just a matter of time until Indiana, West Virginia, and Arizona with their school-choice vehicles join the microschooling community with a big-time presence.

Jude: How is microschooling different from homeschooling? 

Ashley: Oftentimes, it depends on your state. Some are taught by parents or other family members who say, “Hey, we need a better solution for our kiddos.” Others come from a variety of career fields. In the microschool venture with the city of North Las Vegas, our star middle school math teacher ran pyrotechnics at one of the shows on the Strip here in Las Vegas. What middle school kid doesn’t want to hear how he uses math every day to blow things up? 

Others are veteran teachers. One of our best microschool leaders in Nevada taught in an independent school and got tired of shutting her door to teach the way that she wanted. So she opened a microschool so that she can now teach the way that’s best for kids.

Jude: What advice do you have for policymakers interested in supporting microschools in their cities and states? 

Don: They should call us! What’s exciting to me is that this is truly a permissionless education and systems don’t always know what to make of microschools. We can help people navigate the existing frameworks and especially those in their state, municipal, or locality. It’s time to upgrade and update the frameworks in which microschools operate.

Jude: What final thoughts do you have for readers?

Don: This is about empowering families to build and not join, and to be active partners in learning in ways that fundamentally change the relationship people have historically had with education. Microschooling represents a new frontier with some great forward-thinking people, it has diversified in ways that we maybe haven’t seen in school choice experiments during the past 15 years. We have as many microschooling leaders who are as hard left as hard right, and it brings together a community that in some way raises the ceiling on what happens when school choice becomes a possibility and families project into it their own values and what they want for their own kids. 

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Innovators in Action: James Small, public safety director of Palmyra, Wisconsin Mon, 12 Dec 2022 05:01:00 +0000 In the time Small has served in this role, the property crime rate has plummeted by 88% to just over five property crimes per 1,000 residents.

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When James Small took command of the Palmyra police department in 2015, the Wisconsin village’s public safety agencies were in bad shape. High turnover and the absence of a consistent vision for police, fire, and emergency medical services contributed to poor response times and a lack of public trust. The small town of about 1,800 residents had an annual property crime rate of approximately 44 crimes per 1,000 residents––a high rate for a town of its size. The village also generated a substantial amount of revenue from ticket fines.  

Small oversaw the implementation of an innovative public safety program that combined police, fire, and emergency medical services under the new Palmyra Department of Public Safety, with Small becoming Palmyra’s first public safety director. In the time Small has served in this role, the village’s property crime rate has plummeted by 88% to just over five property crimes per 1,000 residents. The village managed to accomplish this feat while simultaneously reducing its fine revenue by more than two-thirds. 

Reason Foundation’s Vittorio Nastasi and Austil Stuart recently sat down with James Small to discuss his successes in Palmyra which he credits to an outcome-based policing approach.  

James Small, the public safety director for the village of Palmyra
James Small

Nastasi: Can you describe how Palmyra’s public safety agencies were performing before you were hired? 

Small: Things hadn’t gone well in public safety in general for a long time. For both police and fire, there was a real vacuum in leadership. For example, the previous police chief really struggled in his role, was removed by the board, and had not been replaced for 3 years after he was removed. So, we had a police department, we had cars that said ‘police’ on them, and we hired police officers to go out and do police things. But there was no vision beyond that. 

Without any clear leadership, the mentality was, “Okay, we’re going to go out and enforce some things.” But there wasn’t any purpose behind that enforcement effort, so officers would go out on the highway in the 25 MPH zone writing speeding tickets. But ultimately, that wasn’t doing anything for the community. There was a high property crime rate that was running about twice the state average, you weren’t seeing things getting prosecuted properly, and there was just a variety of breakdowns in the system.  

Nastasi: What was the community’s perception of the police department? 

Small: There was a real breakdown in trust in the community. I would go out to introduce myself to the community, and people would just tell me about their awful experiences with the police department. Some people described retaliation for making a complaint about an officer. I don’t think it had gotten as far as some of the excessive use of force cases you see on the news, but it was an escalation of conflict within the community. I think that is something we’re seeing in law enforcement in general, and it’s really a failure from a customer satisfaction perspective.  

Nastasi: Writing traffic tickets on the highway was bringing in a lot of revenue for Palmyra, though. Did you get any pushback when you started implementing changes? 

Small: The police department was issuing about $90,000 in fines every year, and that would account for about 10% of the village’s budget. Now, did they actually collect $90,000? That’s a different question, but that’s how much they were budgeting for. I think our number last year was about $27,000, so we’re at about 30% of where we started. The revenue issue definitely came up at points with the board. I had a village board member come up to me one time and say, “All these warnings are costing us a lot of money.” 

Nastasi: Was reducing fine revenue the goal, or just a byproduct of your mission? 

Small: The mission of our department isn’t to raise money. It is to go out and reduce victimization in the community, and we’re doing that extremely well. Reducing victimization required us to change our tactics and stop seeking out enforcement to raise revenue. Some revenue may be generated from some of our work, but it should never be the objective.  

I subscribe to what I call an ‘outcome-based strategy.’ I believe our actions should result in our desired outcomes: reducing victimization in the community, improving trust in the police, and creating a sense of community safety. We need to be focusing on facilitating those outcomes. So, we shifted into this problem-solving mindset to move the vision from the police being punishers to the police being facilitators. 

I think there is a place for tickets, but I think we’ve seen such an overreliance on punishment. We’ve forgotten that the real goal is to change behavior. We should be asking ourselves, “What can we do to facilitate changing behavior and remove obstacles from this person’s path?” 

Nastasi: What does that look like in practice? 

Small: Sometimes it involves referring people to the human services system or coordinating with a probation officer––actions you might think of as being beyond the scope of a traditional law enforcement officer. Take somebody, for instance, that had their license suspended because they weren’t paying their fines. What we do in that situation is give that person a 30-day notice from us saying they need to pay their fines. We print out a document from the Wisconsin Department of Motor Vehicles saying what they need to do to get their license reinstated, how much they owe, what court they must go to, and the court’s address. If they need to extend that 30-day notice, that’s fine. We’ll do that if they’ve made progress or set up a payment plan that might take a little longer than our initial deadline. It’s not a free pass. There are consequences on the other end if they don’t pay their tickets, but we’re giving them a chance. Most people take that chance when you tell them what they need to do.  

Stuart: Can you describe briefly the decision to consolidate Palmyra’s public safety agencies?  

Small: I was hired as the director of public safety providing administrative supervision over the fire and rescue services. I was also hired as the chief of police, and we were going to have a separate fire chief and an emergency medical service director. It was never the plan for me to be the director of all three.  

We had a very severe personnel issue in the fire department. I want to say there were eight chiefs in the 15 years prior to my arrival. My initial recommendation to the board was to dissolve the entire fire service agency. We went around and thought about partnering with one of the neighboring agencies. None of them were interested, so that wasn’t going to be an option in our case.  

One day one of our board members looked at me and said, “Well, I’ve seen you in a police car, a fire truck, and an ambulance all in the same day. Why can’t we just get more people like you?” My answer was that nobody had done it that way. I mean, this model is out there, but every example of it was created on day one as a consolidated public safety department. Previous efforts to merge two departments on the fly like that hadn’t been successful. By the end of 2017, we had fully implemented the combined public safety model. 

Efficiencies gained by consolidating the two budgets together ended up allowing us to add two additional full-time positions. Some of the freed-up funds also absorbed some of the lost revenue from traffic citations. We also trimmed down our vehicle fleet.  

Stuart: How did consolidating the departments help you implement your vision? 

Small: All our police officers have fire and EMS training, so the staff can fill multiple roles on one call. For example, they may need to take law enforcement action during an EMS call. We were concerned that the public wouldn’t want someone with a jacket that has ‘police’ written on the back in their house for some EMS calls where there might be drugs or something involved. That fear hasn’t materialized. I think that has a lot to do with how our police officers interact with people.  

When we’re on an overdose scene, for example, we’re primarily concerned with resolving the medical issue and getting the person whatever treatment they need. Some cases might involve criminal elements that need to be investigated, but by the time we get there, everyone has been cooperative, and they trust the system. Usually, when we take someone like that through the criminal process, it’s to get them to a drug court so they can get into treatment. We work with the district attorney’s office to send them to drug court because giving them a $400 ticket in municipal court isn’t going to change their behavior.  

Stuart: Do you think any of Palmyra’s experience could inform other jurisdictions? Palmyra is a relatively small town with a relatively small police force. How scalable do you think your model is? 

Small: The combined public safety model can work well in rural communities where call volumes are low enough to share personnel across the agencies. This isn’t a good model for large cities with high call volumes, but the philosophy behind it is scalable. Getting police out of this mindset of punishing people into submission is important because I think that’s one of the problems we’ve seen in the criminal justice system. There is too much emphasis on punishment and not enough on changing behavior. There are people that need to be held in prison because the public needs to be protected from them. But in most cases, we should be looking to solve problems. That’s not just a philosophy for police and fire services, it’s how we should be operating as a government generally. That’s how we build trust. I haven’t received a complaint about an officer in five years. When I first got in, I was getting several a month.  

This interview has been lightly edited for clarity. 

The post Innovators in Action: James Small, public safety director of Palmyra, Wisconsin appeared first on Reason Foundation.

Florida must stop relying on taxation by citation Fri, 09 Dec 2022 05:00:00 +0000 No Florida program or agency should be specifically funded by fines and fees revenue.

The post Florida must stop relying on taxation by citation appeared first on Reason Foundation.

Across the country, state and local governments use court fines and fees as a source of revenue to fund public services. This ‘“’taxation by citation’ is not only a threat to individual liberty, but it can also undermine public safety and result in fiscal instability. Taxation by citation must end here in Florida.

Fines and fees are commonplace throughout the justice system. In many cases, fines are considered desirable because they are an intermediate form of punishment. In other words, slapping someone with a fine is less severe than incarceration but is tough punishment for many low-level offenses.

A person may be charged a fine for any criminal or civil infraction. In addition to any fines, they might also be charged a host of fees meant to cover court costs. The state court system in Florida is funded through general revenues, but a large share of funding for the state’s clerks of courts is provided by filing fees, service charges, and court costs that are collected from individuals when they interact with the court system.

Because fines and fees are not generally scaled based on income, they tend to disproportionately harm low-income people who are unable to pay. Failure to pay outstanding fines and fees can result in driver’s license suspensions and even incarceration. A recent report by the Fines and Fees Justice Institute found that nearly two million Floridians have their driver’s licenses suspended because of unpaid fines and fees. Considering that approximately 80% of Floridians drive themselves to work and many jobs require a driver’s license, suspending driver’s licenses for non-driving offenses reduces the likelihood those individuals will be able to pay their fines and fees. It is counterproductive to make it even more difficult for individuals to pay off their debts and create additional administrative costs for governments.

The fact that many people are financially unable to pay may provide some explanation for why governments are notoriously bad at collecting outstanding court debts. A report from the Brennan Center for Justice found that only 36% of the fines and fees assessed in Florida between 2012 and 2018 were actually collected, resulting in over $1.13 billion in cumulative unpaid fines and fees.

Even setting aside problems with collection, fines and fees are not a particularly stable source of revenue. In Florida, statewide fines and fees revenue has declined significantly over recent years—a fiscal issue that has been exacerbated by the COVID-19 pandemic. Florida’s courthouses were shuttered during the early months of the pandemic, leading to a substantial backlog of cases and disrupted revenue flows. Over that same period, lockdowns and stay-at-home orders kept many drivers off the road, reducing the number of traffic violations­­––a major source of fines and fees revenue in the state.

In the fiscal year ending in Sept. 2020, clerks of courts collected $377 million in fines and fees compared to $432 million in the year prior. Revenues in both years represent a dramatic decline from the $539 million collected in 2009. Declining revenues are already causing trouble for organizations and programs that depend on fines and fees revenue. Epilepsy Florida, for example, pulls in $5 from every seatbelt infraction in the state. In 2020, that translated to $240,000 compared to the whopping $1.1 million the group received in 2014, according to reporting by FL Keys News.

Fortunately, fines and fees revenue make up a very small portion of Florida’s budget, and there are many options for reform. Generally speaking, no program or agency should be specifically funded by fines and fees revenue. Instead, court revenue should be sent into the general fund to avoid poor incentive structures within the justice system.

Fees, which only exist to raise revenue, should arguably be eliminated. Meanwhile, fines, which serve as punishment, could be scaled to account for an individual’s ability to pay.

Florida could also eliminate fines and fees in juvenile cases and abandon the counterproductive practice of suspending driver’s licenses for failure to pay.

These basic reforms would help realign incentives for law enforcement and reduce the disparate impact of fines and fees on low-income communities. Florida lawmakers would be wise to address the fiscal challenges presented by declining fines and fees revenue and put an end to taxation by citation.

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Nikki Fried is right to sue for medical marijuana patients’ gun rights Thu, 08 Dec 2022 14:14:33 +0000 The Justice Department’s regulations against gun ownership for medical marijuana patients violate those patients’ Second Amendment rights.

The post Nikki Fried is right to sue for medical marijuana patients’ gun rights  appeared first on Reason Foundation.

Florida Commissioner of Agriculture and Consumer Services Nikki Fried has appealed her case seeking to restore the rights of medical marijuana patients to buy and possess firearms. Fried, who ran for governor in 2022 but lost in in the Democratic Party’s primary, initially filed the suit against the United States Department of Justice in April. She argues that the Justice Department’s regulations against gun ownership for medical marijuana patients violate those patients’ Second Amendment rights and run afoul of appropriations riders that restrict the department from using any resources against state-regulated medical marijuana programs. 

The case was dismissed last month by United States District Court Judge Allen Winsor, who did rule that Fried held standing to bring the suit as she holds oversight over both Florida’s concealed carry licenses and medical marijuana programs.

Fried was joined by two plaintiffs who are registered medical marijuana patients and were barred from purchasing a firearm and a third co-plaintiff who is a gun owner with a qualifying medical condition who would like to participate in Florida’s medical marijuana program. The standing of all plaintiffs was affirmed by Judge Winsor because they suffer direct harm from the Justice Department’s enforcement actions. 

The Justice Department, through its Alcohol, Tobacco, Firearms, and Explosives (ATF) Division, bars participants in state medical marijuana programs from owning or purchasing a firearm. One method for enforcing this prohibition is the inclusion of a question on ATF background checks about whether the prospective gun buyer uses illegal drugs. Although marijuana is legal for medical use under some state laws and legal for adult use in some states, it remains illegal at the federal level. By contrast, the use of federally legal pharmaceuticals with intoxicating characteristics, such as oxycontin, is not necessarily a reason for ATF to deny a gun purchase.

In court briefings, DOJ argued that there is a public interest in prohibiting marijuana users from possessing guns and that its regulations are consistent with historical restrictions on the Second Amendment. The department pointed out that the federal government has previously barred Catholics, Native Americans, panhandlers, and the mentally ill from obtaining firearms, so it has adequate historical precedent to bar medical marijuana patients. The Biden administration received backlash for relying on these comparisons and eventually backed off its claims that marijuana use makes individuals more inclined toward crime. Yet, the administration has continued to argue—in spite of the evidence—that medical marijuana patients might be more disposed to engage in domestic violence. 

Central to Fried’s claim is that congressional riders to federal appropriations bills specifically restrict the Justice Department from using any financial resources to impair state-regulated medical marijuana programs. Judge Winsor seemingly dismissed this claim prematurely, arguing that the department can bar gun possession because marijuana possession is a federal crime: 

Regardless of whether Plaintiffs are prosecuted (or whether Congress allocates funds for their prosecution), possession of marijuana remains a federal crime. The Rohrabacher-Farr Amendment at best precludes prosecution now; it does not forever bless the plaintiffs’ actions. 

Winsor’s opinion does not consider that the Justice Department presumably spent financial resources to include its question about marijuana use on ATF background-check forms and pays staff to review these forms. While DOJ might argue that these enforcement actions are related to the regulation of gun ownership and not medical marijuana programs, it clearly has the effect of discriminating against medical marijuana patients using funds appropriated by Congress. On this basis, the ATF’s screening of prospective gun buyers on the basis of whether they use marijuana for medical purposes would appear as a clear violation of congressional appropriations directives. 

Also, there is no evidence that medical marijuana patients are any more disposed to engage in violent crime than other groups. On the contrary, the available evidence indicates that medical marijuana is associated with slightly lower crime rates. Fried expressed her disappointment in August that the Justice Department “would perpetuate such harmful and offensive prejudicial stereotypes that cannabis users are dangerous or mentally ill.” 

As Fried continues the appeal process, cannabis consumers in Florida and elsewhere should remain highly interested in the outcome. After all, any ruling against the Justice Department could result in positive outcomes for medical marijuana patients across the nation. 

The post Nikki Fried is right to sue for medical marijuana patients’ gun rights  appeared first on Reason Foundation.

Florida should learn from the mistakes of California and European privacy laws Thu, 08 Dec 2022 03:55:46 +0000 As people increasingly move their lives into the digital world, demands will inevitably grow for greater data protection rules and more restrictions on what private companies can do with this information.

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As people’s lives increasingly take place in the digital realm, concern is growing about how private companies and government entities store and use sensitive data. These anxieties have led to demands that state legislatures pass data privacy laws. In 2021, a Morning Consult poll showed 86% of Democrats and 81% of Republicans said passing a federal data privacy standard should be a priority for Congress.

Despite this rare bipartisan agreement in an increasingly polarized political climate, Congress has failed to pass such a data privacy law. Earlier this year, Rep. Frank Pallone (D-RI) introduced the American Data Privacy and Protection Act (ADPPA), which has serious flaws but is the closest Congress has ever come to enacting a federal data privacy policy.

House Speaker Nancy Pelosi (D-CA) refused to bring the bill to the floor because it did “not guarantee the same essential consumer protections” as California’s California Consumer Privacy Act (CCPA), the state’s 2018 harmful data privacy law. The ADPPA would not solve the developing state patchwork issue because it only acts as a floor for minimum required regulations where states could add additional regulations. California’s law is an example where the state regulations are heavier than the federal standard would be if ADPPA is passed. The federal standard for data privacy should instead act as a ceiling and should not be as extensive as the CCPA.

In the Senate, the ADPPA faced an equally hostile reception, with Sen. Maria Cantwell (D-WA), chair of the powerful commerce committee, refusing to hold a hearing because of her concerns surrounding “enforcement holes.” The ADPPA would require annual algorithmic assessments, which would create recurring compliance costs for firms and would also require considerable federal resources to enforce. These enforcement difficulties suggest that an entity like the government may not be in the best position to regulate something as dynamic and technical as algorithmic decision-making.

This begs the question of whether a data privacy law is needed at all. If it is, it would ideally be a bill that would address all these issues and create a reasonable data privacy standard for the country that solves the patchwork problem. But without that standard, more states may feel compelled to address privacy concerns and should be aware of pitfalls to avoid.

Since the implementation of California’s Consumer Privacy Act in 2020, four states—Colorado, Connecticut, Utah, and Virginia—have enacted their own privacy laws. Complying with a regulatory system in which data laws vary from state to state is the least efficient method for the economy. Most businesses have an online presence and more and more operate in all 50 states. The costs of regulatory compliance in this type of environment stifle competition—only businesses with sufficient capital can comply, and many smaller upstarts can’t.

For several years, it looked like Florida would join the growing number of states passing data privacy laws. Florida Gov. Ron DeSantis supported a data privacy bill in 2021, but the state legislature was split over a private right of action, which would have granted Floridians the right to sue and receive financial compensation for violations. With Florida’s 2023 legislative session approaching, it’s time to consider what a data privacy bill in Florida should look like, especially if Florida lawmakers want to avoid the mistakes of CCPA and Europe’s General Data Protection Regulation.

The most serious mistake would be including a private right of action in legislation. On the surface, allowing individuals to bring lawsuits against violators may seem like it would help hold firms accountable, but the unanticipated reality is much different. Even laws that govern more serious and personal information, such as the Health Insurance Portability and Accountability Act (HIPAA), do not include a private right of action. In other laws, like the Americans with Disabilities Act (ADA), a private right of action exists but has been significantly curtailed to reduce the number of “serial” cases abusing the ADA. If Florida passes a data privacy law with a private right of action, it would inevitably feed a cottage industry of frivolous lawsuits that trap businesses in litigation cycles, suppressing innovation and raising costs.

Burdensome data privacy regulations also stagnate innovation. For example, a Cato Institute study of the Fair Credit Reporting Act (FCRA), which regulates how credit bureaus manage consumer data, argues that because of data privacy requirements, the industry has become so tightly regulated and costly that innovation has stagnated and new entrants cannot enter the market. It is likely that only large and resource-rich firms will have the continued ability to comply with complex laws like data privacy.

Evidence from the European Union (EU) may support this claim. Two months after the EU implemented the General Data Protection Regulation (GDPR), 30% of US news sites blocked EU access due to an inability to comply. An HEC Paris study of 6,286 EU websites found a general 10 percent reduction in internet traffic, resulting in millions of lost dollars. The study also found that GDPR’s rules hurt smaller websites (10-21% drop) more than larger ones (2-9% drop), suggesting that similar to credit score regulation, data privacy regulation may help entrench current large websites while deterring entrants.

Policymakers may also consider that many consumers’ ‘rights’ commonly included in data privacy bills could eventually become regulations that negatively impact consumers. For example, the right to opt-out of the sale and sharing of data sounds simple but becomes a prescription for how websites earn revenue and handle data. Websites share consumer data with advertisers and data processing companies to generate revenue. Florida lawmakers should note that allowing users to opt-out of this transaction, the primary form of revenue for many websites, would alter the fundamental business model at the internet’s core. Some websites may shut down if forced to accept users but cannot monetize their data through advertising because users have opted out. In other cases, they may have to charge these users for previously free websites to keep servers running. Policymakers should consider these downstream impacts on consumers as they decide what data rights consumers may have.

In addition, there is certain to be confusion around what constitutes the sharing of data. For example, if a website provides a temporary interface for advertisers to determine which data segment they want to market, that could reasonably be considered sharing. However, there is no industry-accepted definition of sharing data. Therefore, when considering data privacy legislation, Florida policymakers must provide clear guidelines for what constitutes data sharing.

Data privacy can happen without such burdensome regulations. Other rights, such as the right to correction and deletion, as long as they are given appropriate curing periods, such as 90 days, can be of minimal impact. Privacy notices with continued opt-in, which prevent users from having to accept cookies every time they visit a site, can smooth the experience while providing consumers with a transparent and understandable privacy contract available at any time. Distinguishing between personally identifiable data and de-identified data can also prevent needless regulations on non-personal data.

As people increasingly move their lives into the digital world, demands will inevitably grow for greater data protection rules and more restrictions on what private companies can do with this information. However, crafting data privacy rules that balance individuals’ demands and the needs of businesses is a perilous task that either risks providing too few protections or overregulating the digital space, ultimately harming Floridians. While perilous, if the Florida state legislature pushes forward on a data privacy law, it can start to strike this balance by excluding a private right of action, limiting the right to opt-out, and providing clear guidelines for data sharing with an open and transparent privacy agreement.

Florida can do better than California and Europe’s data privacy laws, but only if lawmakers recognize the promise and perils.

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California’s public pension debt grows Tue, 06 Dec 2022 07:56:19 +0000 CalPERS’ unfunded liabilities roughly translate to over $4,000 in debt for every Californian.

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The California Public Employees’ Retirement System, the retirement system for California’s state, school, and public agency workers, suffered investment losses of almost $30 billion in 2022. For the nation’s largest public pension system, this is an additional $1 billion in losses from its results reported in July.

CalPERS announced that its investment losses were -7.5% for its fiscal year, a further downgrade from the -6.1% returns reported a few months ago. These losses were in stark contrast to last year’s outstanding investment results when CalPERS posted 21.3% gains, which were mistakenly taken by many as a sign of stabilization.

Currently, the retirement system’s annual assumed rate of return—an estimate of the plan’s investment gains—is 6.8%. Through the years, CalPERS’ failure to meet its assumed rate of return has been the main driver of the system’s unfunded liability. With the latest investment losses applied, Reason Foundation estimates CalPERS’ debt is now $164 billion. This public pension debt roughly translates to over $4,000 in debt for every Californian.

Another marker of a pension plan’s financial health is the ratio of its debt to assets, also known as its funded ratio. After this year’s financial losses, CalPERS reported that its funded ratio plummeted from 81% in 2021 to 72% as of June 30, 2022, which means the pension system now has just 72 cents of each dollar needed to provide the pension benefits that have already been promised to current workers and retirees.

California’s public sector workers’ pensions are guaranteed by the state—meaning that state and local taxpayers are ultimately on the hook for CalPERS’ debt. When pensions are underfunded, like CalPERS is, the state must compensate for the debt through increased contributions. The 2022 fiscal year’s financial losses will likely cause state and local government contribution rates to rise in the next few years as governments, i.e., taxpayers, make up for the difference between the assumed rate of return of 6.8% and this year’s -7.5% loss.

The nonpartisan Legislative Analyst’s Office has determined that required public pension “contributions may increase 5%-12% of payroll over the next several years.” When a more significant chunk of state and local budgets is shifted to cover the rising costs of these pension benefits, other government services must be cut, or governments must pursue tax increases to maintain their current spending levels.

Recognizing that long-term investment forecasts are warning of lower annual returns in the coming decade, CalPERS has wisely lowered its assumed rate of return over the last several years. It has also created an asset liability management process that sets the ground for better balancing the cost of pension payments with expected future investment returns.

However, this year’s dismal financial returns, ongoing worries about a possible recession, the economic slowdown hitting California’s technology sector especially hard, and a state budget deficit that the Legislative Analyst’s Office says will reach $24 billion in 2023-24 are sending strong signals that further action is needed.

CalPERS should be even more proactive in accounting for these economic trends by further lowering its investment return expectations. Based on market expectations of asset growth for the upcoming decades, CalPERS should lower its expected rate of return to under 6.25%.

In addition, the pension plan’s leadership should encourage more government agencies and employers to take advantage of the California Employers’ Pension Prefunding Trust. Prefunding allows employers to generate investment income to pay the required contributions and reduces budget dependency on investment income. Moreover, it helps government employers during challenging financial times by offsetting their pension costs. This strategy would help pay down pension debt faster and stabilize some local government budgets.

During this economic uncertainty, many CalPERS stakeholders likely recognize that the problems that have kept so many public pension systems underfunded for the last few decades still exist. As a result, public pension plans—and thus taxpayers—are as vulnerable to financial shocks as they were in the past. California should prioritize solutions that minimize these risks in the future, making efforts to pay down its pension debt and making CalPERS more resilient and prepared to deal with the ups and downs of an uncertain economic future.

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

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Long-range transportation plans need to be grounded in reality Thu, 01 Dec 2022 16:54:32 +0000 Many metropolitan planning organizations are moving from traditional fixed-point planning to scenario planning for their federally mandated long-range transportation plans.

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Many metropolitan planning organizations are moving from traditional fixed-point planning to scenario planning for their federally mandated long-range transportation plans. But the scenarios these organizations use to build and evaluate potential plans need to be built on actual data and trends if they are going to produce good transportation plans.

For example, Plan Bay Area 2050, the official regional long-range plan finalized by San Francisco’s Metropolitan Transportation Commission and the Association of Bay Area Governments in Oct. 2021, used a scenario-based process they called Futures Planning to examine “which strategies that could be advanced by local jurisdictions, regional agencies, or the state in the coming decades are effective under a variety of uncertain conditions?”

The first part of the process created three divergent scenarios it called “futures.” The second part analyzed and simulated how the Bay Area would likely fare under each scenario, assuming no changes to regional strategies. The third part identified strategies to address future challenges assuming changes to regional strategies. The future challenges were different in each scenario but consistent in the second and third parts.

In the first hypothetical scenario, “Rising Tides, Falling Fortunes,” the federal government reduces funding to cities and states, and international cooperation declines. In the second scenario, “Clean and Green,” an “aggressive” carbon tax is implemented, “electric vehicles become nearly universal,” and automation and telecommuting increase. In the third scenario, “Back to the Future,” the Silicon Valley economy is thriving, there is increased infrastructure investment, and a comprehensive immigration reform bill helps drive population growth in the Bay Area.

To test each of these scenarios, the Metropolitan Transportation Commission (MTC) examined a variety of external forces, including two environmental forces (like earthquakes), four economic forces (such as tax rates), five land-use forces (like shifts to telecommuting), six transportation forces (autonomous vehicles, for example), and nine political forces (like changes to trade and immigration policies). After compiling these forces, MTC created 35 strategies: one revenue strategy, six economic strategies, six environmental, nine housing, and 13 transportation strategies.

For the transportation inputs, each of the 13 strategies is rated on a scale from one to three stars, with three stars being the most effective at meeting the program’s goals and one star being the least effective. For some reason, operating and maintaining the region’s road and transit network received only one star. Meanwhile, adding new general-purpose lanes and interchanges, as well as converting high-occupance vehicle, or carpool, lanes to high-occupancy toll (HOT) lanes and adding additional HOT lanes received three stars. Adding new transit capacity, including rail lines, earned two stars. Creating a network of bus lanes received three stars. Building a new transbay rail crossing received two stars.

One problem with this approach is that MTC created an overly complex process with so many arbitrary decisions embedded in it that only people with a master’s degree in transportation planning can even begin to figure out what the plan is claiming. And even for those folks, this confusing process is a puzzle that requires a lot of effort to piece together.

A second problem with this scenario planning is the evaluation process used. Building new capacity should never receive a higher score than operating and properly maintaining useful existing assets. It’s not clear what unbiased model based on moving people and goods effectively would prioritize building new rail lines in the Bay Area when per capita ridership has been dropping for years or how that would score better and be more of a priority than maintaining highly relied upon roadways, which are also what buses use. Clearly, the scenarios are either ineffective or logically flawed.

To MTC’s credit, the agency ignored some of the results of the scenario planning and prioritized maintenance and existing operations over new projects in the long-range plan. But that did not noticeably change the exercise’s bias in favor of rail transit.

A third problem is that the 2050 plan spends 56% of all its funding on transit projects and another 4% on projects to support transit. Most of the transit funds go to new rail projects even though existing rail lines are underused. In the final plan, less expensive, more flexible bus rapid transit seems to be an afterthought, despite scoring higher than rail in the scenario planning process. Only 6% of trips in the Bay Area were made by transit in 2015, a number that is now far lower as many Silicon Valley workers and companies continue to embrace remote work after the COVID-19 pandemic. There is almost no new roadway capacity in the final version of the plan, even in parts of the Bay Area suffering from significant traffic congestion, despite more road capacity enhancements receiving three stars in the exercise.

A fourth problem is, despite federal law requiring it to be primarily a transportation plan, only six of the 26 criteria used to select plan projects are related to transportation. Compare that to the nine related to political dynamics. There is no escaping politics and things like trade policy certainly impact infrastructure needs, but guessing about nine unknowable and arbitrary political forces is too high a number to significantly influence a 30-year regional transportation plan.

How do cities and regions learn from the Bay Area to avoid or fix these problems? First, urban planners need to come up with realistic scenarios. One could favor realistic technology such as electric vehicles, one could forecast slow population or economic growth, and one could favor something resembling the status quo.

However, for a long-range transportation plan to be useful, it has to be realistic based on the best data and trends we have access to now. The status quo scenario cannot resemble an apocalyptic wasteland from a movie, nor should the technology scenario predict everyone getting to work on shared hoverboards. In Silicon Valley computer firms, the saying used to be garbage in, garbage out. Put in bad data, and you’ll get nonsense from it. Transportation planners could run the Bay Area scenarios and models it chose dozens of times and still not get credible data to create an effective, viable long-range mobility plan for the region.

Planners need to be sensitive to real-world conditions and budget constraints. It does not make sense to spend so much money on new rail capital projects when rail ridership is declining and showing no sign of returning amidst telecommuting and technological trends. Similarly, he amount of money devoted to maintenance in Plan Bay Area 2050 cannot bring highways and transit to a state of good repair. California’s highway system is perennially in the bottom 10 nationwide, largely because the roadway pavement is in terrible condition.

Rather than creating dream scenarios and the transportation systems planners would like to build from scratch, scenario planning is only effective if planners utilize realistic user and budget scenarios with solid data and extrapolation techniques that create realistic models designed to best serve the people who will actually be using the transportation system in the next few decades.

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Funding Education Opportunity: Midterm school choice success, new K-12 open enrollment report, and more Tue, 29 Nov 2022 15:41:19 +0000 Plus: California's new education spending mandate.

The post Funding Education Opportunity: Midterm school choice success, new K-12 open enrollment report, and more appeared first on Reason Foundation.

While the midterm elections will likely leave Congress in political gridlock, candidates from both major political parties supporting school choice policies won impressive victories. On the Republican side, with the exception of Arizona, every state in which the GOP held a trifecta—governor and both legislative chambers—going into the election and had “enacted large, new school-choice programs or significantly expanded existing ones in the past two years kept that trifecta,” noted The Heritage Foundation’s Jason Bedrick and Lindsey Burke.

The midterms helped illustrate school choice can be a winning policy issue for candidates. Voters in Florida’s Miami-Dade County, where about 75% of students are enrolled in school choice programs, issued a strong rebuke to Charlie Crist, a former Republican governor running as a Democrat, and his anti-school choice running mate Karla Hernandez-Mats, president of United Teachers of Dade. While President Joe Biden won Miami-Dade by seven points in 2020, Gov. Ron DeSantis trounced Crist with an 11-point victory in the county.

And this trend is not unique to school choice bastions like Florida. Corey DeAngelis pointed out in The Wall Street Journal that Democrats like Pennsylvania Gov.-elect Josh Shapiro, Gov. J. B. Pritzker of Illinois, and Gov. Kathy Hochul of New York won their races while supporting school choice policies.

Earlier this year, Pennsylvania Democrats in the state legislature, in particular, showed significant support for school choice when most “joined all legislative Republicans in enacting the largest expansion of the Keystone State’s school-choice policy in state history.”

In the wake of the COVID-19 pandemic, support for school choice policies is strong. For instance, nearly 80% of Pennsylvania respondents, 76% of Illinois respondents, and 80% of New York respondents with school-aged children supported education savings accounts, according to an EdChoice poll.

Support for more flexible education options is unsurprising. Gallup polling from August 2022 showed that 55% of respondents were either somewhat or completely dissatisfied with the state of K-12 education, the highest level of dissatisfaction in the poll since 2018. 

As the American Enterprise Institute’s Fredrick Hess noted, “Parents don’t really want to return to the status quo ante of public education. Indeed, more than half of all parents say—after the pandemic experience—that they’d like to retain some element of homeschooling going forward.” 

In light of some sweeping school choice victories, policymakers and candidates on all sides of the aisle should embrace school choice policies that help students and appeal to parents and voters.

From the States

Reason Foundation’s new report, “Public schools without boundaries: A 50 state ranking of K-12 open enrollment,” shows that most states need to implement better student transfer policies.

Unfortunately, the study finds most states’ open enrollment options fall short of good policy. In fact, only 11 states require all school districts to participate in open enrollment, just three states require state education agencies to publish annual reports on student transfers, seven states require school districts to post their open seats by grade level, and only 24 states prohibit school districts from charging transfer students tuition. While no state meets every policy best practices on Reason Foundation’s open enrollment checklist, some states provide good models for other states to replicate. 

Florida: The state’s open enrollment law could serve as a model for other states. All school districts in the Sunshine State are required to participate in both cross-district and within-district open enrollment and must regularly report the number of available seats by grade level so parents have access to this important information. Moreover, Florida cannot charge transfer students’ families tuition or fees, and the state’s school districts are allowed to provide transportation to transfer students, two barriers families in many other states face.

Wisconsin: The most laudable facet of Wisconsin’s open enrollment option is the state’s funding mechanism for transfer students, which ensures state and local education dollars follow transfer students. This approach maximizes transparency and financially incentivizes all districts to participate in open enrollment. Moreover, the Badger State is one of the few states to have robust, transparent open enrollment reporting. Every year Wisconsin publishes an open enrollment report which provides important data on student transfers, such as the number of transfer students, how many transfer applications were rejected, and the reasons for their rejection. 

The study also highlights policies in each that are limiting students’ options and need to be reformed. For example:

Tennessee: Although Tennessee established a good within-district open enrollment policy in 2021, the state falls short in other important ways. For instance, cross-district open enrollment is voluntary in Tennessee, and all student transfers are at the discretion of the receiving local boards of education. Moreover, school boards can charge tuition or fees to transfer students. This can be a mammoth barrier for students whose families cannot afford the cost and creates perverse incentives for schools to “sell” their seats.

Ohio: Many wealthy and high-performing suburban school districts surrounding Ohio’s eight major cities refuse to participate in the state’s voluntary cross-district open enrollment program. This policy effectively keeps inner-city and nearby rural children from transferring to better schools in the suburbs. All too often, voluntary open enrollment means that the best schools with open seats can continue to exclude children from outside their boundaries, fundamentally undermining the program’s purpose. 

Texas: In Texas, cross-district open enrollment occurs only upon the approval of the receiving school district. Similarly, voluntary within-district transfers are at the discretion of the school district, and parents must petition their school district, making a case for why their children should be transferred to another school. The school district then decides to accept or reject the transfer students’ petitions. To make matters worse, Texas allows school districts to charge transfer students tuition even though they receive additional state aid for transfer students.

What to watch

Report: Enrollment declines were larger in schools that stayed remote for the longest
A new Education Next report by Nat Malkus and Cody Christensen showed that schools that remained fully remote for longer periods suffered more significant drops in K-12 enrollment. In particular, the largest enrollment drops involved younger children in kindergarten and elementary school grades.

California voters support mandated K-12 arts funding as deficit looms
Over 60 percent of California voters approved Proposition 28, a ballot initiative that increases funding for K-12 music and arts education by approximately $1 billion. The Los Angeles Times reported that the new law establishes a “guaranteed annual funding stream for music and arts education by requiring the state to set aside an amount that equals 1% of the total funding already provided to schools each year.”

While music and arts can play important roles, the need will vary, and this new law illustrates how mandated state spending can encumber local education leaders’ decision-making and prevent them from putting resources where they are needed most. California policymakers recently approved increasing K-12 education funding by $9 billion for the 2023 school year–an increase of nearly 13% even though K-12 student enrollments dropped by 4.4% during the pandemic, so most schools should’ve already had the money needed for music and arts. As California’s state leaders predict a $24 billion deficit for the upcoming year, the new spending mandate could very well take funds away from other instructional programs educators would normally prioritize. 

Recommended Reading 

A Crypto Warning From the Ontario Teachers Pension Plan
Mike McShane at Forbes
“Making teacher benefits more portable and flexible would allow teachers to determine their own risk tolerance and invest accordingly. It would free up state funding for classrooms and the salaries of the people that work in them. And, it would help eliminate the incentives for these large pension funds to take on more and more risk, hopefully helping stabilize our financial system writ large.”

As New York City Schools Face a Crisis, Charter Schools Gain Students
Troy Closson at The New York Times
“As traditional public schools in the nation’s largest system endure a perilous period of student loss and funding shortfalls, New York City’s charter schools are on an upward trajectory. The schools gained more than 10,000 children during the pandemic, though the expansion slowed last year, even as enrollment at other schools across the city — both public and private — fell steadily.”

Beyond School Choice: A Conservative K-12 Agenda
Fredrick Hess at American Enterprise Institute
“Conservatives have generally lacked a cohesive K–12 agenda, but they can win parents over by enhancing educational choice, increasing school accountability, and adhering to standards of academic excellence.” 

The post Funding Education Opportunity: Midterm school choice success, new K-12 open enrollment report, and more appeared first on Reason Foundation.

Properly designed impact fees could help Wakulla County accommodate population growth Tue, 22 Nov 2022 05:01:00 +0000 Wakulla County, Florida, should consider implementing well-designed impact fees that accurately reflect the marginal cost of new development.

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Wakulla County, Florida, welcomed more than 4,100 new residents between 2010 and 2021, a 14% increase in the county’s population. New residential development provides an opportunity for economic growth. But costs are also associated with extending utilities and other services to new residents. Well-designed impact fees could help ensure that existing residents aren’t bearing undue costs.

Over the last few years, Wakulla County has added between 300 and 500 new homes annually. Higher home prices in Tallahassee have made Wakulla a relatively affordable and attractive place to settle for commuters. The rise of remote work during the COVID-19 pandemic has also drawn many residents from other states.

Impact fees are regulatory fees imposed by local governments to pay for the cost of infrastructure investments necessary to accommodate new development. Impact fees are typically charged for infrastructure and services, including roads, water, and wastewater. According to data from Florida’s Office of Economic and Demographic Research, 38  of the state’s 67 counties reported collecting some form of impact fee revenue in 2020. In fact, Wakulla County is the only county in the state that has grown more than 10% over the last decade that does not impose impact fees.

When properly designed and implemented, impact fees act as user fees. They raise money directly from those who benefit from the infrastructure and services funded by the fees. Because of this, impact fees can effectively offset the need to raise additional revenue from other fees and taxes, such as property taxes.

Unfortunately, impact fees are often poorly designed or used as a source of funding for services more appropriately funded through other channels. Many municipalities impose flat fees that are not adjusted to the size or impact of individual housing units. In cases where the impact of development is not uniform, flat fees are highly regressive, meaning that they disproportionately burden low-income families.

Practical limitations can also inhibit rural jurisdictions like Wakulla County from implementing highly complex fee structures. But the objective should be to develop fee schedules that come close to reflecting the relative impact of development without being overly complicated. Scaling impact fees to the square footage of homes or the number of bedrooms is a possible approach to making them less regressive.

To the extent that impact fees reduce the burden of infrastructure costs required by new development, they may serve as a bulwark against more exclusionary land-use policies. In fact, economic research on the subject suggests that impact fees can result in increased housing construction.

Earlier this year, Wakulla County commissioners issued a request for proposals (RFP) seeking bids to conduct an impact fee study to guide the design and structure of impact fees in the county. Yet, commissioners voted 4-1 against moving forward with the RFP after receiving three bids ranging from $69,350 to $99,850.

Commissioners, however, might want to revisit this decision. Impact fees are efficient, user-based revenue sources when they accurately reflect the marginal cost of development to local governments.

The growing pains experienced by Wakulla County are not unique. Rather than rejecting the benefits of growth or forcing existing residents to bear the brunt of new infrastructure costs, Wakulla County should consider implementing well-designed impact fees that accurately reflect the marginal cost of new development.

A version of this commentary first appeared in the Tallahassee Democrat.

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Public schools without boundaries: Ranking every state’s K-12 open enrollment policies Thu, 03 Nov 2022 15:00:00 +0000 Only 11 states have mandatory open enrollment laws that allow students to easily transfer public schools and 26 states allow public schools to charge families tuition.

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In the United States, school assignments are determined by families’ residences, casting unseen dividing lines in communities throughout the country. These government-imposed district boundaries or catchment zones divide communities, sorting children—often by wealth or ethnicity—into schools based on where they live. Many are unaware of these divisions until they realize that access to certain public schools often comes down to where you live.

Open Enrollment Best Practices by State

For example, Kelsey Williams-Bolar—a single mom completing her degree and working as a teacher’s aide—realized that she could not continue to enroll her daughters in their assigned public school in Akron, Ohio. Not only were her daughters being bullied at school, but Akron public schools were low-performing and in poor condition.

She decided to have her children live part-time with her father in the suburbs. While there, she enrolled her children in the Copley-Fairlawn School District, where her father’s home was zoned. However, Williams-Bolar and her father were charged with felonies after a private investigator, hired by the Copley-Fairlawn School District, discovered that Williams- Bolar did not live inside the school district. Williams-Bolar received two concurrent five-year sentences (suspended to 10 days) for using her father’s address to enroll her children in a better school district. Nineteen cases, similar to Williams-Bolar’s, have been reported in eight states since 1996.

Williams-Bolar’s story illustrates how school district boundaries often serve as barriers to better education options for many families. Residential assignment can have long-term ramifications for students, even after they graduate from high school. For instance, Advanced Placement (AP) courses are a valuable tool for high school students, allowing them to receive college credit while still in high school. As of 2021, however, US News reported that nearly a quarter of high schools—mostly in rural areas—did not offer AP courses. This means that students assigned to rural public high schools could end up paying thousands of dollars more for college.

In fact, the Missouri Business Alert reported in 2020 that the difference in AP courses offered at two Missouri high schools, located less than 20 minutes from each other, could cost their respective graduates thousands of dollars. Students assigned to the rural Southern Boone High School could earn a maximum of five college credits, whereas students assigned to its more urban counterpart, Hickman High School, could earn a maximum of 18 college credits. This difference in available AP courses means that graduates from Southern Boone could end up paying nearly $4,000 more in college tuition at the University of Missouri than their peers from Hickman High.

These examples show that residential assignment locks students into their assigned schools even if they aren’t a good fit. Students need flexible education options that may not be available in their assigned district, such as specialized programming, school culture or learning philosophy, or better academic opportunities.

K-12 open enrollment provides a solution for families assigned to public schools that aren’t a good fit for their children. This policy would allow children to enroll in any public school so long as it has open seats. While 43 states have some sort of open enrollment, only 11 states have mandatory open enrollment laws.

This analysis is a roadmap for developing robust open enrollment. It explores the benefits of open enrollment, outlines the core tenets and best practices for open enrollment, examines which states have the best open enrollment policies on the books, and provides an open enrollment snapshot of all 50 states. These state snapshots show policymakers what each state is doing well, where each state falls short, and the necessary steps to establish robust open enrollment.

Reason Foundation’s Five Best Practices for Open Enrollment

  1. Mandatory Cross-District Open Enrollment: School districts are required to have a cross-district enrollment policy and are only permitted to reject transfer students for limited reasons, such as school capacity. Policies, including all applicable deadlines and application procedures, must be posted online on districts’ websites.
  2. Mandatory Within-District Open Enrollment: School districts are required to have a within-district enrollment policy that allows students to transfer schools within the school district, and are only permitted to reject transfer requests for limited reasons, such as school capacity. Policies, including all applicable deadlines and application procedures, must be posted online on districts’ websites.
  3. Transparent Reporting by the State Education Agency (SEA): The State Education Agency annually collects and publicly reports key open enrollment data by school district, including transfer students accepted, transfer applications rejected, and the reasons for rejections.
  4. Transparent School Capacity Reporting: Districts are annually required to publicly report seating capacity by school and grade level so families can easily access data on available seats.
  5. Children Have Free Access to All Public Schools: School districts should not charge families transfer tuition.

This report evaluated each state on these best practices to get a snapshot of where each state stands and provides recommendations for each state to improve open enrollment practices.

State-by-state Open Enrollment Analysis
StateTotal Best Practices (out of 5)Cross-District Open EnrollmentWithin-District Open Enrollment Transparent SEA ReportingSchool Capacity ReportingLaw Against Public School Tuition for Students
New Hampshire1XXXX✔
New Jersey0XXXXX
New Mexico0XXXXX
New York0XXXXX
North Carolina0XXXXX
North Dakota0XXXXX
Rhode Island1XXXX✔
South Carolina0XXXXX
South Dakota0XXXXX
West Virginia1XXXX✔
Total States Implementing Best Practices 9/49 7/50 3/50 7/5024/50

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Privatization and Government Reform News: Impact of occupational licensing, ESG investing, and more Mon, 24 Oct 2022 16:32:16 +0000 Examining privatization, outsourcing, contracting, and more.

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Occupational Licensing Reduces Consumer Benefits from Online Platforms 

“The share of U.S. workers required to hold an occupational license has exploded from around 5% in 1950 to 25% in 2020,” writes Reason Foundation’s Vittorio Nastasi. Occupational licensing has a documented history of limiting competition and stifling innovation while making certain classes of professionals into protected classes. Nastasi reviews recent literature pointing to yet another negative impact of occupational licensing: making it harder to use the online platforms that rate home improvement contractors. Using data from the popular home improvement site Angi’s HomeAdvisor, a Harvard researcher estimated that a recent New Jersey pool contractor licensing law resulted in customers becoming 16% less likely to find at least one qualified contractor on the site, with an overall negative impact of licensing as high as 25%. As Nastasi notes, licensing, in this case, squanders some of the benefits buyers and sellers can enjoy from online platforms. 

ESG Investing Violates Fiduciary Duty in Public Pension Plans 

Investing based on environmental, social, and governance (ESG) standards is a hot topic. Reason Foundation Senior Fellow Richard Hiller argues that ESG investing must be subject to clear fiduciary standards for public pension funds, so they first ensure secure retirement benefits for their members and limit costs to taxpayers. Hiller points out the important differences between individual investors, who are free to pursue any investment strategies—such as boycotts of companies and industries for ESG or activist reasons— they want and pension systems, whose advisors have a fiduciary duty to pursue the best strategies to maximize returns. When public pension fund managers make decisions based on ESG or any other political motivations, they violate that fiduciary duty, Hiller writes. 



West Virginia University Seeks Potential Energy P3: Inframation News revealed that West Virginia University released a request for proposals (RFP) for financial advisors to assist in developing a public-private partnership (P3) for the school’s utility systems, including energy and chilled water facilities. According to the RFP’s language, the school “envisions some form of public/private partnership, whether in the form of a concession agreement, design-build-finance-operate-maintain agreement, or some other transactional structure.” 

Hawaii Rejects P3 for Aloha Stadium: After three years of planning and millions spent on the project, Hawaii Gov. David Ige revealed he would reject using a public-private partnership to redevelop Aloha Stadium near Honolulu. Instead, a state agency (The University of Hawaii has been mentioned, though a final decision is still pending) will pursue the project itself with $350 million set aside by the state legislature earlier this year, according to the Ige administration and the state’s Department of Business, Economic Development, and Tourism. 


Mississippi City Begins Outsourced Public Works: This month, the city of Petal, Mississippi, began a contract with Alabama-based ClearWater Solutions to take over most of the duties of the town’s public works division. Aside from solid waste management, which WastePro handles for the city in a separate contract, the ClearWater contract will cover all other division functions, including water and sewer operations, as well as road and fleet maintenance. Town aldermen voted to enter into the contract in August, citing difficulties in hiring and keeping employees, performance and compliance issues, as well as rising costs of pensions and health insurance.     

Towamencin Faces Vote That May Make Sewer Sale Illegal: In November, residents in Towamencin Township, Pennsylvania, will vote on a referendum that could potentially void a pending sale of the city’s sewer system to NextEra Energy for $115 million. Supporters of the referendum hope that by creating a home rule charter, the sale of the sewer system could be canceled, but admit the strategy “hasn’t been tested yet.” In May, town supervisors approved the deal, which still awaits an approval decision by the Pennsylvania Public Utility Commission. 

Economic Study Shows Benefits of Police Work Outsourcing: A report by the Montreal Economic Institute showed how large American cities can save taxpayers money by delegating non-critical police functions to private employees. By outsourcing a combination of administrative work and traffic enforcement, the study found that Los Angeles, Miami, and Milwaukee could annually save anywhere from $31 million, Milwaukee’s low estimate, to over $350 million, Los Angeles’ high estimate. The authors also cite the advantages of competitive bidding to ensure those functions are handled by the most capable and accountable actors. 

Texas City Releases RFP for Publicly-Owned Waterfront Parcel: The city of Beaumont, Texas, released a request for proposals to seek a purchaser and developer for 555 Main Street, a 2.7-acre downtown lot that sits on the Neches River waterfront. The city is providing $25 million for the project and also cleaned up a rail yard site to facilitate the purchase. Attracting economic development is a primary concern the city says. Beaumont’s population doubled from 1940–1960 but has mostly remained stagnant for the past 60 years. 


U.S. Air Force Releases Microreactor RFP: The United States Air Force released an RFP for a pilot program dedicated to creating a nuclear microreactor at Eielson Air Force Base in Alaska. The Air Force hopes to develop microreactors for its more remote installations, citing their adaptability to changing conditions and ability to operate independently from the power grid. The microreactor resulting from the project will be privately owned and operated. 


“Our (Public Employees Retirement System), we pay 17.4 percent on that, which kind of hurts us,” Ducker said in a previous story. “And we’ve noticed over the last year or so that we’re losing people that are going into construction and other jobs that are just able to pay more…So the privatization could be a good thing for some of the employees because they would get a pay increase. It’s tough when you’re paying folks $15 and $16 an hour, and other municipalities and private entities are paying $19 to $22 an hour.” 

—Petal Mayor Tony Ducker on the decision to outsource the city’s public works division 

“(T)he reality of policing in the United States is that we have asked police to take on more and more responsibilities that are increasingly far removed from critical policing tasks.” 

—From “Enhancing Public Safety While Saving Public Dollars with Auxiliary Private Security Agents” by the Montreal Economic Institute

“I am concerned that we spent three years and $25 million to get to this point, and we were all ready to go. And here we are two months before the end of their term, they’re saying that they somehow have a miraculously better idea to hasten this project?” 

–Hawaii State Sen. Glenn Wakai on the decision not to pursue a P3 for the redevelopment of Aloha Stadium 

“The release of the RFP for the Eielson AFB micro-reactor is a critical next step in furthering the development and deployment of reliable and clean energy technology at Department of the Air Force installations. This program is extremely important to mission assurance and sustainment in the face of climate change and continued national defense threats, and demonstrates the department’s commitment to ensuring our installations have a safe, reliable supply of energy, no matter their location.” 

– Deputy Assistant Secretary of the Air Force for Environment, Safety, and Infrastructure Nancy Balkus on a pilot program to develop a nuclear microreactor at Eielson Air Force Base

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Biden administration grants Puerto Rico a waiver, but the Jones Act should be repealed Tue, 18 Oct 2022 17:35:00 +0000 The Jones Act’s worst impacts are after a disaster, but even during the best of times this law has Puerto Ricans paying more.

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Despite Hurricane Fiona’s devastation of Puerto Rico in mid-September, recovery efforts to help the United States island territory have been sluggish at best. A century-old law has hindered relief efforts from day one—the Merchant Marine Act of 1920, which is colloquially known as the Jones Act.

The Jones Act restricts all domestic shipping to U.S.-flagged, built, owned, and staffed vessels, making it harder for cheaper foreign vessels to transport goods around the United States, particularly to the remote states and territories of Hawaii, Alaska, and Puerto Rico. It also raises shipping costs by shielding domestic carriers from international competition.

The Biden administration waived the Jones Act for one ship carrying diesel fuel to Puerto Rico after Hurricane Fiona. This week, almost a month later, the Biden administration lifted Jones Act requirements for liquefied natural gas (LNG) imports to the island. This most recent waiver revealed exactly how the Jones Act hurts those it was intended to help. The U.S. Jones Act-compliant fleet has zero LNG carrier ships, so the Jones Act is currently working to protect an industry that doesn’t exist domestically while Puerto Ricans suffer as a direct result.

Previous presidential administrations have also waived the Jones Act in the aftermath of other natural disasters, including the Obama administration following Superstorm Sandy in 2012 and the Trump administration after Hurricanes Harvey and Irma in 2017. But the history of these waivers points to a troubling trend: Lacking voting power in Congress, Puerto Rico has no say in whether the Jones Act should be waived or repealed.

Despite widespread political divisions on other issues, namely statehood, “Puerto Rican politicians […] are in agreement that the Jones Act only harms Puerto Rico’s ability to import goods,” writes Carlos Edill Berríos Polanco.

Imports are critical to Puerto Rico. The island imports 85% of its food and all of its petroleum, the latter being critical to keeping grocery stores and hospitals operational after a hurricane like Fiona. In Puerto Rico, where 40.5% of the population lives in poverty, the cost of energy averages around 22.7 cents per kilowatt hour7.2 cents more than the U.S. average—largely due to the high cost of importing petroleum.

The costs of importing goods from the mainland United States to Puerto Rico (on U.S. ships) are so high that the island has come to rely on international carriers for their lower transportation costs. As the Congressional Research Service (CRS) noted in 2017, “Puerto Rico and Hawaii now receive more cargo from foreign countries than they do from the U.S. mainland.”

Due in large part to the Jones Act, it is cheaper and easier for Puerto Rico to import goods directly from Europe or Columbia than the U.S., despite Puerto Rico being part of the United States.

The Jones Act’s worst impacts have been seen after recent natural disasters, but even during the best of times, this law hurts Puerto Ricans. A study by John Durham & Associates found that Puerto Rico paid $568.9 million more for shipping, and prices were $1.1 billion higher than they would be without the Jones Act. Paired with the projected job creation a free market for ocean freight would have provided, the study concludes that the Jones Act costs Puerto Rico nearly $1.5 billion a year.

More ships and carriers would increase competition and lower costs, helping alleviate these problems. But, the Jones Act has had the opposite effect on U.S. domestic shipbuilding capacity while also banning foreign competition. Figure 1 below shows that the domestic Jones Act fleet has been shrinking rapidly, from 434 ships in 1950 to 99 in 2018.

The domestic fleet’s size has recently started to stagnate, and shipbuilding capacity has suffered due to the Jones Act. U.S. shipbuilding costs are much higher, with American-built merchant marine vessels costing “4-5 times as much as those built abroad.” The CRS found that the oceangoing Jones Act–compliant fleet is almost entirely operating “in areas where shippers have little alternatives.” Thanks to the scarcity of compliant vessels, shipping costs have risen sharply while capacity has plummeted. 

Colin Grabow, a research fellow at the Cato Institute, explains

The Jones Act U.S.-build requirement has incentivized American shipyards to orient themselves away from the competitive international market and toward this captive domestic shipbuilding market. This, in turn, means reduced output, […], less competition, and the failure to develop a specialized market niche.

Repealing the Jones Act would have major benefits. A study by the Organization for Economic Co-Operation and Development (OECD) found that repealing the Jones Act would increase shipbuilding output and demand and produce “significant economic gains.”

The Jones Act is an expensive failure. The two Jones Act waivers issued by the Biden administration, while helpful at the moment, should not have been necessary in the first place. Long-term relief for Puerto Rico can best be secured through the wholesale repeal of the Jones Act.

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California’s Prop. 28 would erode local control of education budgets Tue, 18 Oct 2022 04:00:00 +0000 California's Proposition 28 dedicate $800 million to $1 billion a year for arts and music programs.

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Proposition 28 advocates in California warn that chronic underinvestment in arts and music education is risking the state’s future competitive advantage. Prop. 28, on the statewide November ballot, would change California’s constitution to dedicate $800 million to $1 billion a year for arts and music programs.

In 1989, the state constitution was changed by voters through Prop. 98, a school finance mandate setting minimum education funding levels. Today, through Prop. 98’s formula, California is required to spend roughly 40% of the state’s general funds on K-14 education—public schools and community colleges. California is spending $95 billion on K-12 education in its most recent state budget.

Advocates are right to worry whether California’s next generation will be equipped for jobs of the future. Despite spending the equivalent of $17,000 per pupil, California’s students are underperforming the national average on standardized testing. For example, the National Assessment of Educational Program, which is called the nation’s scorecard, shows only 29% of California’s eighth graders were at or above proficiency in mathematics, and 30% were at or above proficiency in reading in 2019, the most recent year available.

It’s fair to ask, why should arts and music education spending be mandated by the state constitution, especially when student proficiency in core areas like reading and math is far from desired? Only a few years ago, then-Gov. Jerry Brown championed eliminating so-called “categorical funds” which earmark state education money for specific programs. However well-intentioned the funding restrictions are, they inevitably narrow local school officials’ budgeting options. Brown saw this problem plague Oakland during his time as mayor of the city. When he returned to Sacramento, Brown reformed the state’s K-12 finance system by reducing formula complexity and empowering local policymakers who are, by definition, closer to students. Several studies have given this reform high marks, and California school district superintendents have shown widespread support for the new funding formula.

The state government already mandates that school districts provide visual and performing arts instruction for students in first through sixth grade. It also requires them to be offered as an elective, for seventh- and eighth-graders.

To graduate from a California high school, students must also complete a year’s coursework in the arts or supplement this requirement with a foreign language or career technical education. Additionally, nearly half of California’s school districts have independently adopted even more rigorous arts and music graduation requirements on top of the state’s.

The best practices in education finance policy show that governments should be moving away from state spending mandates and toward giving local leaders and schools more control over how money is spent to best serve their students. The more that local school districts are empowered by state government and held accountable by parents and voters, the more that education reforms and innovation can be responsive and effective.

For example, under California’s 2017 District of Choice Program, a school district may designate itself as a District of Choice, which allows students from other localities to enroll in its programs as long as space permits. Under this environment of open enrollment, school districts have been incentivized to build tailored programs, including some schools specializing in the arts, foreign language, science, and technology. Expanding and improving the state’s open enrollment program so that every school district in the state participates could further benefit students.

Going forward, California would benefit from implementing “learn everywhere” policies. The state board could approve education providers offering curricula that allow students to take courses from California’s large array of businesses and nonprofits in the music, arts, and entertainment industries. Students could earn credits while developing skills with professionals from diverse artistic backgrounds.

Arts and music are important for students, and many innovative options are available to California’s schools. Unfortunately, decades of rising state education spending show that an influx of tax dollars does not guarantee improved student outcomes. In this case, Prop. 28 would tie the hands of legislators and school officials with unnecessary budget mandates that ultimately mean less flexibility for students and teachers.

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

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Biden’s marijuana pardons are a good step, but descheduling marijuana would be a massive step Mon, 10 Oct 2022 22:05:00 +0000 “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.“

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Last week, President Joe Biden announced some excellent news: The administration is granting pardons to individuals carrying federal convictions of simple possession of marijuana. Simple possession means an individual possessed a small amount reflecting personal use and is a misdemeanor punishable by a minimum fine of $1,000 and can include up to one year of imprisonment. Biden administration officials said around 6,500 individuals had been convicted of federal charges for simple possession since 1992.

Those individuals carrying this conviction on their record face potential barriers to engaging in healthy and productive behaviors, including finding employment, attending college, or securing a home or small business loan. So, the mass pardons will accomplish a great feat for these individuals, even if the overall scope and depth of the pardons are limited. 

However, President Biden’s accompanying message and announcements could have much broader and deeper implications for America’s war on drugs and failed experiment with drug prohibition.

The vast majority of marijuana possession convictions in the United States are under state law. In his remarks, the president urged governors around the nation to take similar actions to pardon those convicted of simple possession under state laws. 

“Just as no one should be in a federal prison solely due to the possession of marijuana,” President Biden said, “no one should be in a local jail or state prison for that reason, either.”

Further, Biden revealed that he would direct Secretary of Health and Human Services Xavier Becerra and Attorney General Merrick Garland to conduct a review of marijuana’s scheduling status under the Controlled Substances Act. This directive could easily become the most consequential portion of President Biden’s actions.

The Controlled Substances Act directs the Department of Health and Human Services, in concert with the Drug Enforcement Administration, to control the manufacture and distribution of substances believed to hold some potential for abuse. The federal agencies divide these substances into five schedules, supposedly representing those with the most purported potential for abuse to the least. 

Marijuana, along with heroin and LSD, are Schedule 1 drugs, meaning the agencies believe they hold no medical value and a high potential for abuse. Those drugs are strictly prohibited in any form. Drugs in lower schedules may be available with medical prescriptions, as federal agencies have recognized some medical value for those substances. These include drugs like cocaine, methamphetamine, fentanyl, and hydrocodone in Schedule 2 and range down to anti-diarrheal medications in Schedule 5. 

In other words, the federal government’s official position is that marijuana is more dangerous than fentanyl. The Centers for Disease Control and Prevention (CDC), meanwhile, reports that fentanyl is 50 times more powerful than heroin and kills 150 Americans every day.

Moreover, the federal government’s outdated position that marijuana holds no medical value is patently absurd. A recent meta-analysis of medical research published by the Journal of the American Medical Association found marijuana can effectively reduce pain, vomiting, and cellular spasticity. Even the National Institutes of Health, a federal agency, now recognizes the effectiveness of cannabinoids in treating various medical conditions. It’s tough to conclude that marijuana fits the Schedule 1 definition in light of these and other facts.

This, along with the president’s urging, means it is likely marijuana could be assigned to a different schedule or de-scheduled entirely due to the review process. That change would effectively end the national experiment with marijuana prohibition, which was based from the beginning on misrepresentations and a desire to create a new role for federal bureaucrats who had just lost their role as alcohol prohibitionists.

Multiple proposals are circulating in Congress to direct federal agencies to remove marijuana from scheduling under the Controlled Substance Act. However, that feat would not require an act of Congress. The executive branch has always held the authority to reschedule or de-schedule marijuana on its own, either through the agency review process or by simple executive order. Congress has gotten involved only because the executive branch has not pursued either action.

A variety of drug policy reform groups and advocates note that Biden’s steps and pardons are important progress. That said, the Biden administration could have gone further and descheduled marijuana itself, but his initiation of the review process signals a major turnaround for someone who was once a primary sponsor of the infamous 1994 crime bill that stiffened penalties for drug-related offenses and significantly escalated the war on drugs. 

President Biden seemed to acknowledge this last week when he said, “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”

Biden’s pardons and review process are very positive steps, but there is still much more to be done.

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Occupational licensing undermines some of the value of technological innovation Fri, 07 Oct 2022 19:00:00 +0000 A new study finds that occupational licensing reduces value-creation within digital marketplaces.

The post Occupational licensing undermines some of the value of technological innovation  appeared first on Reason Foundation.

Technological innovation in the form of digital marketplaces has the potential to radically improve consumer well-being through expanded choice, convenience, and access to information. But government regulations sometimes stymie that innovation in ways that are tangibly harmful to consumers.  

One particularly prevalent and pernicious form of regulation is occupational licensing. Occupational licensing is essentially a government-issued permission slip required to enter certain regulated occupations. The share of U.S. workers required to hold an occupational license has exploded from around 5% in 1950 to 25% in 2020. Many occupations within the home services industry––which employs nearly six million American workers––require an occupational license, but states vary widely in which occupations they license. 

In a recent National Bureau of Economic Research working paper, Harvard researcher Peter Q. Blair examined the effects of occupational licensing on consumer experiences with Angi’s HomeAdvisor, a popular digital marketplace platform for home services such as home repairs, maintenance, and remodeling tasks. In their analysis, Blair and his co-author examined a 2019 New Jersey law that created a new licensing requirement for pool contractors. The researchers also used national variation in state licensing requirements to assess the impact of licensing across a wider range of service tasks. 

The paper authors use the ‘accept rate’ to measure the impact of licensing. The authors define accept rate as “the likelihood that a customer engaged in search on a digital platform finds at least one worker who is legally permitted to perform the task given the licensing requirements for the task.” They found that New Jersey’s decision to license pool contractors reduced the accept rate by 16 percent. Their analysis of national variation in licensing requirements across a broader set of occupations revealed that licensing reduced the accept rate by 25 percent. In other words, in states where a license is required to perform a task, consumers are significantly less likely to find a qualified service provider relative to states that do not require a license for those same tasks.  

Their findings add to a growing body of literature on the subject which finds occupational licensing reduces the value of these digital marketplaces for consumers. Previous research has shown that occupational licensing’s effects on digital platforms do not result in higher consumer satisfaction or safety, only higher prices. Economists have broadly found that occupational licensing increases prices by limiting the supply of workers in regulated occupations. Typical requirements to obtain a license include education, training, and the payment of fees. These requirements act as a barrier to entry for many prospective workers, especially the poor, formerly incarcerated individuals, and other disadvantaged groups. Given the consistent finding that licensing does not meaningfully improve quality or consumer safety, the presence of licensing is a net loss for consumers. 

This new research, and other similar studies, are important to understanding the impact of government regulation on consumers. Occupational licensing is a perfect example of a well-intentioned policy gone awry; while policymakers may have had noble intentions of protecting consumers and ensuring quality, research has demonstrated that licensing often fails to achieve these goals. Instead, occupational licensing creates barriers to opportunity, raises prices, and, as this new NBER paper suggests, reduces the value created by technological innovations. These research findings further suggest that occupational licensing reform is necessary and that policymakers should be mindful of unintended consequences when establishing regulatory frameworks.  

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Voters’ guide to the 2022 California ballot propositions Mon, 26 Sep 2022 23:30:44 +0000 Reason Foundation’s policy analysts are examining some of the statewide ballot propositions on the California ballot in November 2022.

The post Voters’ guide to the 2022 California ballot propositions appeared first on Reason Foundation.

Reason Foundation’s policy analysts are examining some of the statewide ballot propositions on the California ballot in November 2022.

California Proposition 1 (2022): Amends the state constitution to protect abortion rights, guarantee reproductive freedom

California Proposition 26 (2022): In-person sports betting regulation and tribal gaming expansion

California Proposition 27 (2022): Legalizes online sports betting, funds homelessness and mental health programs

California Proposition 28 (2022): Art and music K-12 education funding

California Proposition 29 (2022): Dialysis clinic requirements

California Proposition 31 (2022): Banning flavored tobacco products

Voters’ guides for other states and policy issues can be found here.

The post Voters’ guide to the 2022 California ballot propositions appeared first on Reason Foundation.