Enlow: Other States Trying to Emulate Indiana on Vouchers, Charter School Law

The following guest blog is part of our weeklong celebration of National School Choice Week:

Around this time last year, the national spotlight was on Indiana because of a battle in the state capital. No, not right-to-work – the Super Bowl. But in the absence of that spectacle, the nation continues to keep a watchful eye on Indiana for the transformative changes made to its education system – particularly in the area of school choice.

Our state continually ranks at the top in the educational opportunities it provides Hoosiers. With vouchers, Indiana has the largest eligibility window of the other 11 voucher-providing states: 530,000 low- and middle-income students statewide, 9,324 of whom opted for vouchers in the program’s second year. The state has the sixth-best charter school law in the nation, according to the National Alliance for Public Charter Schools. And in the Center for Education Reform’s “Parent Power Index,” which compiles a number of education reform measures that empower families, Indiana ranks number one.

Hoosiers should know that other states have tried for years to adopt pieces of the package Indiana approved. And make no mistake, other states need to pass those measures because our country has been woefully lagging, and overspending, in attempting to prepare our young people for college, careers and life.

In 1966, the federal government provided $2 billion for public education (using 2006 dollars). In 2005, that number increased to $25 billion. In 2010, total federal spending on K-12 education reached $47 billion. Meanwhile, data from the National Assessment of Educational Progress (NAEP) show a history of education outcomes not keeping pace with those increased expenditures. In 1971, the average score for eighth graders on NAEP’s reading exam was 255 (on a 500-point scale). In 2011, that number stood at 265. For fourth graders over that same time period, the average score bumped from 208 to 221.

School choice, on the other hand, has proved its positive effect on increasing student outcomes at around half the cost. Of the 10 random-assignment studies – considered research’s “gold standard” – conducted on school vouchers, nine showed they positively impact student performance; one found no effect. And among the empirical studies examining school choice’s effect on other schools, all but one found competition improves traditional public schools; again, one found no effect. None concluded there is a negative impact.

That’s why states – this year’s list includes Alaska, Maine, Mississippi, Tennessee, and Texas – are trying to emulate Indiana. And they must. Such policies may not be as fun as the Super Bowl, but their effects are certainly game-changers for taxpayers, schools, parents, and those who matter most: students.

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Robert Enlow is president and CEO of the Indianapolis-based Friedman Foundation for Educational Choice, which is participating in National School Choice Week, January 27-February 2. More than 100 Indiana schools are holding events during the weeklong celebration for school choice.

Double the Taxing ‘Pleasure’ on April 17

There’s something ironic (not pleasant, but ironic) about Tax Freedom Day this year occuring on April 17 — the same day taxes are due. The day, according to the Tax Foundation, is when people finally work long enough to pay their taxes for the year.

The latest Tax Freedom Day took place on May 1, 2000. With the economy booming that year, Americans paid 33% of their total income in taxes. A century earlier was more pleasant with "freedom" arriving on January 22, 1900.

State tax burdens vary the tax timeframe. Indiana residents will "celebrate" on April 14, which ranks 26th nationally. As for the best of 2012:

  • Tennessee, March 31
  • Louisiana and Mississippi, April 1 (no foolin’)
  • South Carolina, April 3
  • South Dakota, April 4

And the worst:

  • Connecticut, May 5
  • New Jersey and New York, May 1
  • Washington, April 24
  • Wyoming and Illinois, April 23

Column: Right-to-Work States Have Economic Advantage

Andrea Neal of the Indiana Policy Review Foundation penned the following column on right-to-work laws for the Times of Northwest Indiana. The Indiana Chamber has been an advocate for developing a right-to-work law in the state:

It doesn’t take an economist to spot the common thread in these recent economic development headlines:

• Chattanooga, Tenn., July 29: "Volkswagen hires 2,000th employee."
• Shreveport, La., July 28: "NJ-based bag manufacturer to build Louisiana plant."
• Decatur, Ala., July 21: "Polyplex to build $185 million plant."
• West Point, Ga., July 7: "Kia builds vehicle No. 300,000."

All four stories have Southern datelines. All come from states with right-to-work laws, which prohibit labor contracts that require employees to join a union or pay a union representation fee.

This is the issue that prompted the five-week House Democratic walkout during the 2011 Indiana General Assembly. The Democrats — a minority in both House and Senate — had no other leverage. So when a right-to-work bill came up unexpectedly in a session that was supposed to be about the budget, redistricting and education, they bolted. Republicans capitulated and took the legislation off the table.

In 2012, it will return with a vengeance, and this time Democrats can’t avoid it. Right-to-work has been promised a full public airing. The Interim Study Committee on Employment Issues, chaired by Sen. Phil Boots, R-Crawfordsville, is taking a first crack this summer and hopes to recommend a bill by November. Gov. Mitch Daniels, who didn’t support the bill last session, has hinted he might this time around.

The debate goes back to 1935 when Congress passed the National Labor Relations Act protecting employees’ rights to form, join and be involved in unions. One section of the law permitted contracts that made union membership a condition of employment. Congress modified that language in 1947 when it said states could prohibit these. In response, 22 states passed right-to-work laws. Indiana is one of 28 that currently does not have such a law.

Predictably, at last week’s study committee hearing, business interests favored right-to-work while union leaders opposed it. The economists were divided. Richard Vedder, of Ohio University, summarized research showing that right-to-work states have higher rates of employment, productivity and personal income growth. Marty Wolfson, of the University of Notre Dame, testified that right-to-work laws result in lower wages and benefits.

Their conclusions are not mutually exclusive. If you grant Wolfson’s point, the policy question remains: Which is better? A state with higher wages for some but a weaker economy overall or one with lower wages for some and more vibrant growth, not to mention freedom of choice for the worker?

Companies are voting with their feet. To the extent that manufacturers are expanding in the United States — and few are — they are choosing the South and West where right-to-work is prevalent.

Alabama Gov. Robert Bentley, in announcing the $185 million project by Polyplex, the world’s fourth-largest manufacturer of thin polyester film, was blunt: "Alabama is a right-to-work state, and we will continue to be one. That’s one of our advantages for companies who are looking to build on new sites."

Companies won’t readily admit this because what they say can and will be used against them. Currently pending at the National Labor Relations Board is a case against Boeing, which recently opened a second production facility in South Carolina for its 787 Dreamliner airplane.

South Carolina has a right-to-work law. Boeing’s other production site is in Washington state, which does not. The board’s complaint alleges that Boeing chose South Carolina in retaliation for strikes by Washington workers in violation of the National Labor Relations Act. Its proposed remedy would force Boeing to move its South Carolina operation to Washington. This would be an extraordinary use of federal power to promote the cause of organized labor at one company’s expense.

Right-to-work does not destroy unions. It gives workers the right to decide for themselves whether to join. "This greater accountability results in unions that are more responsive to their members and more reasonable in their wage and work rule demands," the Mackinac Center for Public Policy said.

It should come as no surprise to Indiana legislators that expanding industries favor that kind of relationship. The legislative choice is between protecting unions as we know them or protecting the long-term interests of Hoosier workers.

Online vs. Main Street Tax Debate Continues

The dispute over collection of online sales taxes is not a new one. The Alliance for Main Street Fairness argues that online-only retailers have a distinct advantage, but the author offers that convenience (not avoiding sales taxes) drives the buying decisions for many. TechJournal South offers analysis:

Federal law currently requires retailers to collect sales taxes in states where they have a nexus (a physical presence such as a store, warehouse or other facilities). Since Internet-only retailers do not have a nexus in most states, they are not currently required to collect the taxes.

Other states wrestling with the problem include Arkansas, California, Florida, Illinois, Indiana, Minnesota, New Jersey, Pennsylvania, Tennessee and Texas. The National Conference of State Legislatures says states lost about $8.6 billion in 2010 in failing to collect sales tax from online and catalog sales. The number is projected to be approximately $37 billion from 2009 to 2012.

Personally, we can see how buying a big ticket item from an online retailer might save a significant pieces of change, but even there, we doubt that most people buy online just so they won’t have to pay sales taxes. We buy online because it is convenient. We can do our shopping from our desks, which has inherent advantages that will not disappear when online retailers collect sales taxes.

We shop online because we often find a much wider selection available at the lowest possible prices online, whether we are looking for a book, a camera, or a refrigerator. We save gas and wear and tear on our vehicles and ourselves. But we have never bought an item online to avoid paying a sales tax.

Sooner or later, we suspect, this problem will be resolved through legal means that require online retailers to collect state sales taxes. That’s fine with us, although we think states threatening to collect years of back taxes are certainly wrong-headed as well as on legally shaky ground.

In the meantime, the way states and the online retailers are going about dealing with the problem is just causing more problems: such as Amazon dismissing its associates in North Carolina and other states attempting to use their status to say the reatailer has the physical presence in the state to create a nexus.

That move causes grief for many online startup businesses. Some larger ones actually left North Carolina when Amazon fired its state associates, and others complain it makes it harder to get that early revenue necessary to achieve outside growth funding.

Amazon is not helping matters by negotiating not to pay sales taxes even in states such as Texas, Indiana, Nevada and Tennessee where they have distribution centers.

The whole mess will likely require action on the part of the US Congress.  “The Main Street Fairness Act,” H.R. 5660 was introduced in the US House in July 2010, and it would behoove Congress to vote on the bill.

Tennessee Battles for Top Billing in Internet Speeds

Hearing a dial-up computer tone today is a little like listening to the crackling sound of a phonograph from the early 20th century. It’s out of place and just a little creepy.

In Indiana, we’ve come a long way from the days of waiting for our computers to connect to the Internet. Some of the most rural areas now have access to broadband capabilities and advanced mobile services.

Much of that is due to the Telecom and Video Reform Act (HEA 1279) that the Indiana General Assembly passed and Gov. Mitch Daniels signed in 2006. The act deregulated the telecommunications industry and put Indiana on the map as a leader in expanding broadband services. The capabilities have also attracted investments from a number of entities.

Now, it looks like another quasi-Midwestern state is gaining attention in the world of broadband. Chattanooga’s city-owned electrical utility has started offering an Internet service that is among the fastest in the world.

The Chattanooga Electric Power Board’s new Fiber Optics network will provide a 1 gigabit-per-second Internet service. The utility said the service is more than 200 times faster than the average national download speed today.

At a cost of $350 a month, it’s also much more expensive than the typical residential plan. Harold DePriest, the Chattanooga Electric Power Board’s president and CEO, said residential customers don’t really need that fast a service, but businesses might.

He said the high-speed service won’t be costly for EPB to operate, yet it should put the Chattanooga community at the forefront of attracting businesses – possibly Internet providers – that can benefit from having it.

“Chattanooga represents the next frontier in communications technology, with limitless potential for new applications for education, entertainment, health care, industrial development, and more,” DePriest said in a statement.

The article goes on to quote Chattanooga Mayor Ron Littlefield saying the announcement has put the city “on the short list of progressive communities in the world.” A New York Times article says that only Hong Kong and a few other cities in the world offer such fast services and that Chattanooga will be the first in the United States to do so.

Fast, but not cheap. Would you pay $350 a month for this kind of capability?

GOP Senators Tout Their Own Energy Plan

If you have been "capped and traded" to exhaustion by the climate change and energy proposal pushed by Democrat leaders and President Obama, there is another alternative to consider. While the Senate will debate cap and trade (or the national energy tax as termed by some) in the fall, the 40 Republicans in that chamber appear united in their own proposal.

Among the highlights:

  • Building 100 nuclear power plants in the next 20 years. Nearly all of the current 104 units came about in a similar time frame before the brakes were put on nuclear development 30 years ago
  • Options for states to drill for oil and natural gas off their coasts. States would get a guaranteed share of production revenue
  • Research and development for advanced batteries would help reach the goal of 50% of all cars and trucks being electric-powered within 20 years
  • Projects to spur research for carbon capture and storage, solar power, safely recycling nuclear waste, greener buildings and creating energy from fusion

Tennessee Sen. Lamar Alexander says the nuclear expansion will be the centerpiece of the plan. Senators are expected to tout the message "on the road in August" during recess, as well as utilize it (whether successful or not in the Senate) to try and gain seats in the 2010 congressional election.

Alexander says the senators’ plan seeks to control climate change "without the taxes and mandates" in the Democrats’ proposal. Nuclear power, he adds, does not emit heat-trapping greenhouse gas emissions, the primary target of the cap and trade program.

Expect to hear more about it in the coming months. Will any of it find its way into serious Senate consideration? It’s too early to tell as some of the 40 Senate Republicans, while pledging support, will certainly also negotiate with Dems on a potential compromise.

Controversy in Tennessee Has Speaker Ousted by His Own Party

No matter how loathsome it often appears, even the harshest critic of the American political game must admit that it’s rarely boring. Case in point — a fine mess has erupted in the Tennessee legislature, with the new speaker being labelled as a turncoat by his own party for voting for himself:

The Tennessee Republican Party stripped House Speaker Kent Williams of his GOP affiliation on Monday as punishment for the Jan. 13 vote in which Williams joined all 49 House Democrats to elect himself as speaker (over Majority Leader Jason Mumpower) …

On Nov. 4, the GOP gained a razor-thin 50-49 majority, giving the party control over the entire General Assembly for the first time in 140 years. Smith acknowledged Monday that the party’s actions nudges the House into an exact split of 49 Republicans, 49 Democrats and Williams.

But the move may create still more uncertainties. Williams issued a defiant statement in which he appears to refuse to relinquish his GOP affiliation, saying "I remain a Carter County Republican with the same principles that brought me to the General Assembly in the 2006 elections."

Pretty wild. But don’t get too down on Tennessee. The state has had a lot going for it through the years, too (Beale Street, Sun Studio, Stax, Graceland, Opry, Smoky Mountains, Jerry Lawler – all great stuff). Definitely in my personal top five of America’s greatest states.

Check out the full story on the speaker ordeal in The Tennessean.

Hat tip to Ballot Box.

2008 Election Tidbits

A recent article in State Legislatures magazine, titled "The Perils of Success," outlines the respective battles going on at the state level throughout the country. I found the following passage to be most interesting:

The last time Democrats controlled more than 23 states was before the 1994 election, when Republicans walloped Democrats by seizing the majority in 21 chambers. Currently, Democrats have a 57 to 39 edge in control of individual chambers. There are two legislative bodies that have an equal number of Republicans and Democrats — the Oklahoma and Tennessee senates.

History suggests that success for either Senator John McCain or Senator Barack Obama will produce a coattail effect. Since the 1940 election of Franklin Roosevelt, the party winning the presidency has gained legislative seats in 11 of the 17 elections. That trend did not hold in 2004 when Republicans suffered a net loss of 25 seats despite George Bush’s reelection. On average, the party that wins the White House adds more than 125 legislative seats to its column.

Going into this election, there are 3,993 Democratic legislators — almost 55 percent of all seats held by the two major parties. There are 3,310 Republican legislators — 45 percent of the total. Only 21 legislators are independent or from other parties.

In Indiana, Democrats currently control the House by a slim 51-49 margin.

Ohio Truly Qualifies as Battleground State

Presidential politics and intrigue have been rarely used together in Indiana in the last 44 years. Hoosiers have backed the Republican candidate for the White House every four years since 1964.

While Hoosiers are back in the spotlight this year, our neighbor to the east has been at the forefront in the last two election cycles. Ohio has a few interesting election facts of its own:

  • No Republican has ever won the presidency without winning Ohio
  • Ohio (along with Kentucky, Missouri and Tennessee) is one of four states to back the presidential winner in each of the elections since 1964
  • John F. Kennedy was the last Democrat to win the presidency while losing the vote in Ohio

It will be interesting to see what happens in both states this time around, in regard to potential vice president nominees and the November vote.