Ambush in the Ozarks
Little Rock, Arkansas -- Higher taxes may be popular in Bill Clinton's White House, but back where Clinton comes from, they're about as welcome as subpoenas at the Rose Law Firm.
By a whopping tally of 87 percent, Arkansas voters last January rejected Governor Jim Guy Tucker's plan for a huge increase in state spending for highways. Tucker sought approval to issue $3.5 billion in bonds, to be repaid by hikes in the state's general sales tax and diesel-fuel tax, and by a new excise tax on wholesale gasoline. Thanks to voters, Arkansas motorists avoided having to pay the highest diesel-fuel and gasoline taxes in the South.
Tucker had barnstormed the state, attempting to convince voters that the additional state debt and higher taxes would yield better roads and a stronger economy. Opponents argued that the excessive growth of state spending over the years had crowded out funding for the roads, and therefore Little Rock should tighten its belt and finance highways by cutting general spending.
Proving that good research and persuasive ideas can move public opinion, the Arkansas Policy Foundation (APF) joined the fray and played a key role in the Tucker proposal's lopsided defeat. Together with Arkansans Against Unreasonable Tax Hikes, a grass-roots organization, APF offered a convincing case that:
- The plan would cost the average Arkansas family $500 in additional taxes;
- Tucker's rosy forecast of economic growth from new state spending was careless guesswork at best, political snake oil at worst;
- With an annual budget one-seventh the size of the bond program itself, the bureaucracy at the state highway department was ill-equipped to administer so many massive new road projects at one time.
Voters were swayed by the argument that state government was too fat for its own good. The foundation showed that, from 1962 to 1993, total state government spending in Arkansas soared by 327 percent after inflation. The number of state employees grew by 189 percent during the same period. Government in Arkansas, APF declared, had become "the state's number-one employer, as well as its largest growth industry."
Speculation is that the 13 percent who voted for the tax hikes were all state employees.
The Arkansas Policy Foundation can be reached at 8201 Cantrell Rd., Ste. 325, Little Rock, Ark. 72227. Tel: 501-227-4815, fax: 501-227-8970
Revising Michigan's History
Midland, Michigan -- If those who forget history are condemned to repeat it, then those who rewrite history are surely condemned to eat their own words.
Revisionist history is under fire in Michigan in a new study from the Mackinac Center for Public Policy. In "Are Michigan History Textbooks Reliable?" senior fellow Burton W. Folsom documents the biases and distortions that are shaping the way youngsters think about the development of their state and the role of government.
Courses on state history are typically taught at the fourth- and eighth-grade levels in Michigan schools. Almost every student reads one or two of only four texts on the subject. Folsom's review turned up several common and disturbing themes: Greedy private enterprise creates problems while always-helpful government solves them, labor unions are the worker's best friend and never harm the worker's interests, taxes enable worthy projects to be funded and produce few harmful consequences. Is it any wonder that American business spends $40 billion in remedial education programs?
Almost immediately after achieving statehood in 1837, Michigan's fledgling government embraced socialized railroads, canals, and other "internal improvements." The experience proved so disastrous that the state constitution was rewritten in 1850. Its replacement expressly barred the state from starting or owning any portion of any commercial enterprise, and even banned the state from having anything to do with further internal improvements. A liberated economy led to an explosion of entrepreneurship, producing world-class industries in autos, furniture, and breakfast cereal. That lesson is omitted entirely from all four books.
The worst of the four texts, Folsom found, is larded with politically correct multicultural themes. In Michigan: The World Around Us, the "struggles" of minorities and women are set against the backdrop of white males who seem rarely to do anything that isn't mean-spirited and selfish. In one instance, author JoEllen Vinyard rewrites the story of a famous 1763 massacre of British settlers at Fort Michilimackinac, informing her student readers: "The Native Americans fought bravely to defend the land and the freedom that the British were taking away from them." Every single sentence about events in Michigan since 1960 deals with civil-rights turmoil. One wonders how anybody in Detroit ever found time to make cars.
The study prompted extensive press coverage throughout Michigan and a cascade of orders from concerned parents and school-board members. One textbook author pledged to make corrections in his next edition. Parents in other states might want to ask, "What are our kids learning under the guise of history?"
The Mackinac Center for Public Policy can be reached at P.O. Box 568, Midland, Mich. 48640. Tel.: 517-631-0900, fax: 517-631-0964.
Cease-Fire in the Midwest?
Dayton, Ohio -- An alliance of five state-based think tanks in the Midwest is working to bring an end to the War Between the States, a war fought not with bullets but with subsidies and gimmicks designed to lure businesses from one state to another.
Assembled by the Buckeye Institute for Public Policy Solutions, in Dayton, Ohio, the Mackinac Center for Public Policy, in Midland, Michigan, and other think tanks in Indiana, Illinois, and Nebraska, a group of more than a hundred distinguished economists and policy analysts recently signed a joint resolution calling for an end to state-run "industrial policy." The experts want states to compete with each other, but by reducing overall tax and regulatory burdens instead of by granting special favors to selected firms.
"Government cannot pick winners and losers in the marketplace effectively," says economist Sam Staley, a vice president of the Buckeye Institute. "The best economic-development policy is one that cultivates a 'fair field with no favors,' in which states attempt to attract businesses by improving the general climate for enterprise and making government itself lean, unobtrusive, and inexpensive." Adds Bill Styring of the Indiana Policy Review Foundation, "States must recognize that each can foster superior and sustainable growth if they spend less energy on a few trees and care instead for the forest as a whole."
The resolution urges state governments to "terminate targeted business assistance such as direct grants, selective tax incentives, and abatement programs and adopt comprehensive strategies of tax relief for all firms and citizens, deregulation, and competitive systems of education." Ohio state senator Chuck Horn, the chairman of the Economic Development Committee in the senate, is taking the advice of these distinguished economists one step further: He is planning a regional conference of legislators to address the problems created by state-sponsored "industrial policy."
The resolution is the latest volley of criticism launched against the economic war between the states. Studies show that harmful subsidies and discriminatory tax policies are proliferating, and governors like Michigan's John Engler are urging a cease-fire.
Contact the Buckeye Institute for Public Policy Solutions at 131 N. Ludlow St., Ste. 317, Dayton, Ohio 45402. Tel.: 513-224-8352, fax: 513-224-8457.
Northwest Reform
Olympia, Washington -- All over America, limited-government advocates are way ahead of the Big-Government crowd when it comes to "the vision thing." They are churning out blueprints while the other side -- often demoralized and devoid of ideas -- campaigns to preserve a failed status quo.
This hopeful trend is evident in Washington state, where voters in 1994 dethroned the Speaker of the U.S. House of Representatives and elected Republicans in seven of the state's nine congressional districts. In the state legislative elections, voters handed control of the state's house of representatives to the GOP.
Taking advantage of the friendlier climate for conservative ideas, the Evergreen Freedom Foundation (EFF) has released "Reducing the Size and Cost of Government," a 115-page report that calls for sweeping change. Authors Bob Williams and Lynn Harsh outline broad principles for guiding virtually every aspect of government in the state of Washington, from tax policy to welfare reform. If public policy were to be consistently developed within the legal constraints and purposes of both the state and federal constitutions, they argue, the result would be a radical reduction in government itself.
Mike Lowry, Washington's Democratic governor, proudly calls himself a "liberal," but he lauds EFF as "an important source of ideas about how to make state government operate as efficiently and effectively as possible." The document addresses various proposals for "reinventing government," advances the principles for reform, and explains how to develop new accountability mechanisms for government.
EFF calls on Washington to join the privatization revolution. In Washington, it's illegal for private contractors to wash windows in state office buildings even if that's the cheapest and best way to get the job done. Only state employees are allowed to mow lawns at public sites. No private firm can manage the state's mail rooms, maintain its computers, or assist in procuring supplies.
The reason? Public-employee unions have secured ironclad provisions in state law that keep such work in the hands of overpaid, underperforming, unionized bureaucrats. For legislators and concerned citizens everywhere, the paramount question of the day is, "What should government do and what should it leave alone?" The answers are found in this latest volume from the Evergreen Freedom Foundation.
