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Wrong on the referendum: breaking down the Herald/Villager editorial

October 31, 2011 by seanolsen 0 Comments

The Chaska Herald and the Chanhassen Villager issued an editorial last week urging a “no” vote on the District 112 Technology Referendum.  While I can understand that reasonable people can disagree on the merits of the referendum, there are a couple of points in the editorial that deserve further discussion.

First, the editorial uses some aggressive language towards the referendum that frankly isn’t warranted.  This referendum isn’t a “money grab”, nor is it a “perpetual a la carte funding source”. (This phrase, of course, is just plain factually incorrect.  The levy goes for 10 years and would have to be re-approved by voters at that time.)  This is about the district having a stable funding source for needed technology upgrades over the next decade.

Why is stable funding important?  Because decisions in St. Paul have caused real damage to the district’s budget.  The last two budgets passed have taken $10.6 million out of the district’s budget over a four-year period.  That’s 40% more per year than this referendum will generate.

Both of the K-12 funding shifts have been supported universally by Carver County’s legislative delegation and signed off by two different governors.  (Although the delegation voted against the first shift for partisan reasons when it was ratified by the legislature in 2010, Sen. Julianne Ortman, Rep. Paul Kohls, and Rep. Joe Hoppe all supported the shift when Gov. Tim Pawlenty announced it as part of his unallotment package in 2009.  This year, Ortman, Hoppe, and Rep. Ernie Leidiger all voted in favor of the second shift.)

Where is the voice of the Herald and Villager holding our legislative delegation and Govs. Pawlenty and Mark Dayton accountable for the damage they are doing to school budgets?

The notion that such strong language is reserved for district leadership now is somewhat strange as well.  This new administration team has proven themselves to be straight-shooters (whether or not you agree with their conclusions) and they haven’t had any of the foibles of the previous leadership team — namely a leadership style that was frequently divisive and some really costly accounting errors.

Perhaps the current administration’s less political approach to their job is a disadvantage when trying to pass a referendum, but I think we’re seeing better management of the day-to-day fundamentals.  And, that’s what is really important.  For example, note that the current administration was able to negotiate a new contract with the District’s teachers that is fiscally responsible without the long, contentious battle that occurred two years ago under the previous leadership.

Secondly, the Herald and Villager are trying to have it both ways in their criticism of the district.  On one hand, the district is criticized for trying to pass a referendum in these difficult economic times.  Then, the Herald and Villager complain that the referendum isn’t large enough to fund the entire technology plan.   Well, you can’t have it both ways.   The referendum is not about getting every item on the wishlist, but rather focused on making sure the most critical items are funded.

Look beyond the fuzzy logic of the Herald and Villager and look at the fundamentals.  The district has been responsible in its handling of the budget.  There are real funding gaps that are preventing necessary improvements in our schools.  This referendum is a responsible response to the challenges the district faces, sized to allow for needed upgrades and enhancements without unduly burdening the community.

I urge you to Vote Yes! on November 8.

Carver County, Chaska, Economy, Legislative Watch, Schools, State Legislature, Taxes
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More Vikings stadium busywork

October 21, 2011 by seanolsen 0 Comments

Sen. John Marty (DFL-Roseville) and Rep. Linda Runbeck (R-Circle Pines) will announce today that they are reviving the Paul Kohls “sell the Metrodome for a buck” plan from early 2010.

This is a plan which has many problems, not the least of which is the fact that the Minnesota Vikings have precisely zero interest in buying the Metrodome at any price.  This is just a cynical political proposal to make it look like something is actually being done on the stadium, and so they can say “but we made an offer” if the team decides to pack up and leave.

As I said back then (just replace the names):

The reality of the situation is that if you’re not willing to spend public money on a stadium for the Vikings they are going to leave.  That’s a perfectly defensible position, especially given the budget mess we find ourselves in.  But if that’s your position, then come out and say it instead of proposing bills that have zero chance of being enacted.  This proposal is an attempt to have it both ways.   If Paul Kohls want to be “serious” about a Vikings stadium then he needs to make a hard decision instead of being a publicity hound:  either give a firm ”No” to the team or put some real work into finding a solution for a rational level of public participation in building a new facility.

Economy, State Legislature
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With logic like this, he can’t go wrong

October 20, 2011 by seanolsen 0 Comments

I took some time today to visit the web page of Republican U.S. Senate candidate Joe Arwood.  Here’s a sample of what is posted there:

We can no longer afford the price tag of ineffective leadership, we shouldn’t have to pass a balanced budget amendment to get a balanced budget.  This is why I support a balanced budget amendment, to keep those in Washington accountable to us.

We shouldn’t have to pass the amendment to balance the budget, which is why he supports the amendment?  My head hurts.

It’s a wonder he hasn’t been able to raise more than $10,000 so far…

 

2012 Election, U.S. Senate
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Leidiger opposes new taxes for Vikings stadium

October 20, 2011 by seanolsen 0 Comments

Rep. Ernie Leidiger was one of the authors of an op-ed in today’s StarTribune.  In it, Leidiger (one of 16 authors of the piece) vows to vote against any stadium proposal that includes any new taxes of any sort.

It’s interesting that the piece spends a lot of time attacking Gov. Mark Dayton.  Say what you will for Dayton’s willingness to support certain plans, but he at least is bringing this issue to a conclusion.  The previous governor dithered on this issue for eight years with no progress in any direction.  The citizens of Minnesota and the Minnesota Vikings organization deserve a final decision — yes or no — on whether or not this state is going to participate in the funding of a new facility.

And if the answer is “no”, then we shouldn’t criticize the Vikings if they do choose to leave the state.  That’s the reality of the situation.

Legislative Watch, State Legislature
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112 per pupil funding

Rebutting arguments made against the technology referendum

October 20, 2011 by seanolsen 1 Comment

This week’s Chaska Herald featured some letters and commentary against the Eastern Carver County Schools Technology Referendum.  Let me rebut some arguments and set some facts straight.

There was a letter to the editor by John Brunette that indicated that District 112 had higher per-pupil expenditures than most other neighboring districts.  Brunette’s data is incorrect.  Per the Minnesota Department of Education, District 112 is one of the lowest spending school districts of its type.  Check out the graph below, which shows the actual per pupil funding for the last three years, plus the projected funding for next year if the referendum passes, for like school districts (suburban school districts with +/- 1,500 students).

More importantly, I’d like to address the argument made by Kristi Jackson about voting “no” to enact change.  Jackson argues that she can’t support the referendum because of the inequities between Chanhassen High School and Chaska High School.  Let’s talk about those inequities and why voting “no” would be precisely the wrong response.

Certainly, as Jackson suggests, Chanhassen High has newer facilities and more advanced technology.  That comes with the Chanhassen High being in its third year of operation, while the current Chaska High School building is now 15 years old.

And, yes, enrollment between the two schools has become somewhat unbalanced.  Why is that?  Two primary reasons — first, the boundaries were drawn before the collapse of the housing market.  Had the housing market stayed afloat, Chaska Township would be undergoing significant residential construction.  The second factor is that parents are taking advantage of open enrollment to have their children go a short distance down the road to a newer facility.

Yes, math scores are unbalanced between the two high schools as well, as has been previously discussed here.  Those variances can be explained largely by the demographic differences between the schools.

Jackson advocates that the District abandon the community-based boundary system currently in place.  While this is a topic that many will have strong feelings about, I tend to agree with the District’s position that we need to give it a couple of more years to shake out.  Constant transition of school boundaries isn’t good for the District, either, and we need to be very solid on the rationale for doing so before we undertake such changes.  (Living here since 2003, we’ve been assigned to three different elementary schools over that period of time.  I’m glad that my daughters were young enough to avoid having to make those transitions.)

As a parent of children who will attend Chaska High School when they get older, I certainly understand Jackson’s concerns.  But voting “no” is exactly the wrong thing to do.  Voting “no” is only going to make it harder for the District to address the technology, facilities, and performance gap between Chanhassen High School and Chaska High School.

Currently, all the schools in the District are fighting over small amounts of capital improvement dollars.  Allowing technology funding to be supported by this levy will increase the pool of money available to upgrade all aspects of the Chaska High facility.  The district has just posted a school-by-school list of projects in the first two years of technology referendum funding, and Chaska High School is the largest recipient of that funding.

Much of the technology funding will also go to programs specifically designed to address STEM (Science, Technology, Engineering, and Mathematics) subject areas.  These programs will only help Chaska High students perform at a higher level over the coming years.

Finally, we need to remember that changing the boundary lines to equalize the demographic makeup of the two schools doesn’t fundamentally do anything to solve the problem — it just moves it around.  While it may look better (and may make some people feel better) to have two schools at 60% proficiency instead of one school at 50% and one school at 70%, we’ve still got 40% of students who aren’t passing the test.  Regardless of where these students are going to school, the District has to find a way to reach them.

It’s understandable that parents are frustrated about some things.  I certainly haven’t agreed with every decision that has been made over the years.  But voting “no” to send a message isn’t going to help students.  There are ways to send a message to the School Board and administration without harming the very goals you are trying to pursue.

Vote “yes”, and give the District the resources it needs to address these issues and then let’s hold them accountable for achieving results.

Carver County, Chaska, Schools
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The impact of Herman Cain’s 9-9-9 plan, in graphs

October 19, 2011 by seanolsen 0 Comments

The nonpartisan Tax Policy Center has done a detailed evaluation of Republican presidential candidate Herman Cain’s 9-9-9 Plan.

The plan would replace the existing federal individual income tax, corporate income tax, payroll tax, and estate tax with three taxes:   a nine percent flat individual income tax, a nine percent flat corporate tax rate, and a nine percent national sales tax.  Deductions on the plan would be minimal.  Corporation could deduct dividends paid to shareholders from their tax base, individuals would be able to deduct charitable contributions and capital gains would be exempt from taxation.

Cain claims that this plan would unleash the American economy and would be “fair, simple, efficient, neutral, and transparent“.

Well, let’s look at how the numbers actually shake out.  First, let’s look at how many people would be getting a tax cut or  seeing their taxes increase because of this plan.

Fully 84% of households would see an increase in their federal taxes under the 9-9-9 Plan.  Let’s check on the distributional effects of the 9-9-9 Plan.

This graph shows that the effective tax rates paid by income level would effectively flip under the 9-9-9 Plan.  Under current law (blue line), the poorest taxpayers pay the least percentage of their income in taxes, while the wealthiest pay the most.  Under the 9-9-9 Plan (red line), middle class taxpayers (between $40,000 and $100,000) would pay the highest percentage of their income (23.8%) in taxes, while millionaires would pay the least (17.9%).

Let’s look at these impacts further.

This graph shows the change in after tax income by income level under the 9-9-9 Plan.  This shows just how large of a giveaway this plan is to the wealthy.  Those with incomes under $10,000 would see their after-tax incomes reduced by 20%, or an average of $1,1,22.  Meanwhile, millionaires would receive an average tax cut of $455,247, a boost in their after-tax income of 22.4%.

Most Americans can agree that the federal tax code needs to be made more simple.  Just because a plan is simple, though, doesn’t mean it is good.  Americans should expect a better and more fair plan than Herman Cain’s 9-9-9 Plan.

 

 

 

2012 Election, Economy, National, Taxes
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Job creation is about young businesses, not small businesses

October 17, 2011 by seanolsen 1 Comment

Building off last week’s post about disturbing labor market trends, I want to look at some additional insights from John Haltiwanger’s research regarding job creation.

We hear commonly that small business is the engine of job growth in this country.  But, if you look at the numbers closely, the reality is more complex.  As we’ve previously discussed, the American small business sector is rather small compared to other developed economies.

And, there’s no doubt that small businesses have accounted for much of the job destruction in the recent recession.  Falling incomes and declining confidence from consumers has decimated many small retailers and restaurants — as we’ve seen in spades here in Chaska.

But when you think about it, many small businesses aren’t likely to be the engines of job creation.  The number of jobs in the local dry cleaners or a particular fast-food restaurant is going to be capped at some point.

Where the growth comes from is young businesses — large and small.  This is intuitive, if you think about it, and Haltiwanger has the data to back it up.  Young businesses tend to break down into three categories over their first few years — they either fail, they grow until they reach their natural limit (think of the dry cleaners), or they grow significantly and quickly.

One real problem we’re having in the economy is that business start-ups — the number of young businesses — are at historically low levels according to analysis done by economist Jared Bernstein.  That’s perhaps not surprising given the difficulties of the current economy and the challenges many entrepreneurs are having getting access to credit.  What’s more surprising, though, is that the rate of such start-ups has been falling for quite awhile, at least back to the year 2000.

Why is that?  Everybody has their list of reasons, including:

  • lack of availability of health care for entrepreneurs reduces incentives to strike out on one’s own
  • financial resources diverted to (and then lost in) the housing bubble
  • excessive wealth concentration has reduced the pool of entrepreneurs
  • excessive wealth concentration has reduced the overall demand level in the economy
  • regulations and taxes reduce the incentives to strike out on one’s own
Regardless of what you think about the causes, this is the framework in which we need to work on the solutions.  We need a more dynamic economy, we need to encourage start-ups — and particularly those that have the potential be in that third group:  those that can grown significantly and quickly.
We should expect our policymakers to end the notion that size is what matters in terms of encouraging job creation, and focus instead on the industries and types of firms that have the potential to grow significantly and quickly.  Focus on how we can encourage people to take the risk, and focus on how we can build the support — in the private and public sectors — to help these young businesses be successful.
Chaska, Downtown Issues, Economy, National
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The dramatic impact of poverty on K-12 test scores

October 17, 2011 by seanolsen 0 Comments

A few weeks ago, we looked at the performance of the Eastern Carver County School District on the MCA Math and Reading tests.

The St. Paul Pioneer Press did a follow-up on the test results, doing a statewide analysis of scores, looking at the type of district and whether the students were on free or reduced-price lunch programs.  The results are most interesting, as you can see from the graph below.

What the graph shows is that students of middle- and upper-class incomes perform similarly across all school districts.  Such students who attend Minneapolis and St. Paul schools perform within a point or two of their peers at suburban schools.

Students from poor backgrounds, however, fare significantly worse across the board.  In every type of district, there’s at least a 20% gap and as much as a 43% gap.  (Just on a raw statistical basis, these results explain much of the gap in performance in math scores between Chaska and Chanahassen High School, as Chaska has nearly 3x as many students as a percentage of enrollment on free or reduced-lunch programs.)

The sociological impacts of poverty on school performance are little different from Minneapolis to northern Minnesota.  Most experts note that the performance of poor students in the core cities tends to be worse because the level of poverty tends to be more extreme, and students in such situations in the core cities are more likely to be homeless or transitory.

What these numbers also show, though, is that districts all across the state should be able to share strategies and best practices for dealing with these problems.  And the solutions to these issues are larger than just redrawing boundary lines.  It requires imagination and engagement — not just with the students, but with their families to ensure that there is proper support at home.

 

Carver County, Schools
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Surly passes on Chaska

October 14, 2011 by seanolsen 0 Comments

The staff report for the October 17 City Council meeting includes an update from City Administrator Matt Podhradsky on the wooing of Surly Brewing Company to build on the former Chaska Building Center site.

According to Podhradsky, Tegra Group (which is handling the firm handling the site search for Surly) notified the city earlier this week that Chaska was not selected to be a finalist for the new brewery.  Tegra Group felt the site was “nice”, but did not have the central location that Surly is looking for.

Chaska, City Administrator, City Council, Downtown Issues, Economy
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Disturbing labor market trends

October 14, 2011 by seanolsen 0 Comments

Economist John Haltiwanger of the University of Maryland is one of the nation’s leading experts on job creation and firm dynamics.  Some graphs from his recent research (also summarized here) reveal some disturbing trends in job creation that help to explain what is going on in our labor markets.

The first chart breaks down the net change in employment into its component parts — job creation (expansion by existing companies plus new companies) and job destruction (contraction by existing companies plus firms that go out of business).

Focus on the orange line — the rate of job creation.  Since the economy started to turn towards recession in the late 1990s, the rate of job creation has never recovered to the level seen throughout the 1990s.  So the large spike in unemployment that resulted from the 2008 recession was less about job destruction (which was at similar levels to the 1990s) but more about the lack of new jobs being created.  Even today, in the slow recovery we are seeing, changes in unemployment are more the result of reduced levels of job destruction — not increased levels of job creation.

The second graph shows a figure called the unemployment escape rate — the percentage of people unemployed who find a job in the next 30 days (the blue line on the graph).

What you see on the graph tends to reflect what you would expect to see — the escape rate drops during a recession (the gray shaded areas) and then recovers fairly quickly once the recession ends.  The disturbing thing about this graph is that the escape rate is trending lower in recoveries over time.  The unemployment escape rate during the best time of the 2000s was roughly equivalent to the escape rate during the recession of the early 1980s.  That has made the drop during the most recent recession tougher to overcome.  A lower escape rate translates into more people unemployed for longer periods of time.  We already had a larger than normal number of long-term unemployed before the 2008 recession, and now we have an extremely serious problem.

Economy, National
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