Can the State of Idaho Reduce its Budget by $200 million?
The legislature is faced with a growing shortfall in state tax revenues. I would like to offer suggestions on how to reduce costs by $200 million or 8 percent of the total state general fund budget. I chosen an organized approach to approach with this problem.
1. Choose a target number - $200 million
2. Determine the percent of the budget – 8 percent
3. Determine the size of the 5 areas of the budget.
a. K-12 - $1.2 billion
b. Other education - $360 million
c. DHW – $463 million
d. Public safety - $222 million
e. All other - $120 million
4. Reduce each area of the budget by 8 percent to establish a baseline goal for each budget.
a. K-12 - $96 million
b. Other education - $28 million
c. DHW - $36 million
d. Public safety - $17 million
e. All other - $9.6 million
5. Start identifying targeted budget cuts to try to reach goals in section 4. I started with k-12 education and have developed several strategies for comparison purposes only. The following options are designed to help understand the ramifications of different approached to budget cutting ideas with the hope that the least harmful can be identified.
Option #1: Fund a six week summer kindergarten program to get kids ready for school rather than the current 36 week program. Potential Savings - $50 million
Option #2: Reduce wages and benefits to all teachers and administrators by 12 percent – Potential Savings $89 million.
Option #3: Create a statewide medical insurance pool for teachers that had a high deductible policy with a Health Savings Account – Potential Savings $15 to $35 million
Option #4: Cut technology improvements by 25 to 50 percent – Potential Savings $6 to $12 million
Option #5: Cut all or some teacher aids – Savings unknown
Option #6: Increase teacher size by 2 – Potential Savings $100 million
Option #7: Encourage motivated students to take enough summer classes to graduate one year early – Potential Savings between $13 million and $90 million
Which of these options, in your opinion, should be pursued and considered?
http://chum.ly/n/621125
Wednesday, January 26, 2011
Wednesday, January 19, 2011
Solutions for Medicaid Spending
Concerning: Medicaid and other entitlement spending
Fellow Legislators:
The question that is before us is how to provide social services to the needy at reduced costs. Medicaid spending consumes most of the DHW budget and is growing every year. The reason is simple. It is an open-ended program with no limits. If a person qualifies, then the state taxpayer must pay.
There are two main budget items in the state budget that consume 85 percent of all spending: education (65 percent with k-12 taking up 50 percent) and DHW (20 percent). Public education, under the direction of Tom Luna, is developing a strategy so that better outcomes can be achieved at less cost. This is being done through the use of technology, flexibility, and allowing students to learn at accelerated rates. Public education is well positioned to move into the future even with reduced funding. This is not the case for the DHW.
While it is necessary to address this year's budget problems which will require fairly small changes to or eliminations of current programs, this ‘tinkering-around-the-edges' approach will not solve the underlying problem. If we do not develop a long-term strategy, we will be back next year simply trying to get through another year.
It is my hope that we consider and develop a long-term strategy to improve DHW services while reducing and controlling costs this legislative session. A long-term strategy would place us in a proactive position allowing the legislature to improve the quality of services. I would offer several suggestions for your consideration.
1. Caps and limits: Medicaid and other social programs were designed to help the neediest of the needy. They were not designed to provide services to a large percentage of the population. We learned during the Clinton years that lifetime limits on programs like Aid to Families to Dependent Families could actually work. In Idaho, AFDF or TANF has a two year limit. This program is not growing and is working as intended. I propose two types of limits; first, lifetime limits, and second, limits to a percent of the population. For example, 13 percent of the population of Idaho is now on Food Stamps. Limiting this program to 10 percent or 8 percent of the population could be achieved by changing eligibility requirements. This could also be done for Medicaid and other programs while still helping the neediest of the needy.
2. Each person should, especially for the working poor, have an Individual Improvement Plan (IIP). The purpose of the IIP would be to help them achieve independence and self-sufficiency through skill development and personal growth. This could be best accomplished through a non-paid mentor.
3. The state of Idaho needs flexibility in order to use the resources we have in more reasonable ways. The regulations of the federal government drive up costs without significant regard to the actual needs of the people or common sense.
The adoption of these three principles (and others) would change the DHW discussion and place Idaho on firm footing for future changes and improvements. Without these changes, I don't see any real change taking place. I recognize that some of these changes are not now possible under current federal rules. Rules can and should change.
#Medicaid #Long-term #solutions #for #Idaho
http://chum.ly/n/5e9b34
Fellow Legislators:
The question that is before us is how to provide social services to the needy at reduced costs. Medicaid spending consumes most of the DHW budget and is growing every year. The reason is simple. It is an open-ended program with no limits. If a person qualifies, then the state taxpayer must pay.
There are two main budget items in the state budget that consume 85 percent of all spending: education (65 percent with k-12 taking up 50 percent) and DHW (20 percent). Public education, under the direction of Tom Luna, is developing a strategy so that better outcomes can be achieved at less cost. This is being done through the use of technology, flexibility, and allowing students to learn at accelerated rates. Public education is well positioned to move into the future even with reduced funding. This is not the case for the DHW.
While it is necessary to address this year's budget problems which will require fairly small changes to or eliminations of current programs, this ‘tinkering-around-the-edges' approach will not solve the underlying problem. If we do not develop a long-term strategy, we will be back next year simply trying to get through another year.
It is my hope that we consider and develop a long-term strategy to improve DHW services while reducing and controlling costs this legislative session. A long-term strategy would place us in a proactive position allowing the legislature to improve the quality of services. I would offer several suggestions for your consideration.
1. Caps and limits: Medicaid and other social programs were designed to help the neediest of the needy. They were not designed to provide services to a large percentage of the population. We learned during the Clinton years that lifetime limits on programs like Aid to Families to Dependent Families could actually work. In Idaho, AFDF or TANF has a two year limit. This program is not growing and is working as intended. I propose two types of limits; first, lifetime limits, and second, limits to a percent of the population. For example, 13 percent of the population of Idaho is now on Food Stamps. Limiting this program to 10 percent or 8 percent of the population could be achieved by changing eligibility requirements. This could also be done for Medicaid and other programs while still helping the neediest of the needy.
2. Each person should, especially for the working poor, have an Individual Improvement Plan (IIP). The purpose of the IIP would be to help them achieve independence and self-sufficiency through skill development and personal growth. This could be best accomplished through a non-paid mentor.
3. The state of Idaho needs flexibility in order to use the resources we have in more reasonable ways. The regulations of the federal government drive up costs without significant regard to the actual needs of the people or common sense.
The adoption of these three principles (and others) would change the DHW discussion and place Idaho on firm footing for future changes and improvements. Without these changes, I don't see any real change taking place. I recognize that some of these changes are not now possible under current federal rules. Rules can and should change.
#Medicaid #Long-term #solutions #for #Idaho
http://chum.ly/n/5e9b34
Friday, December 10, 2010
Three Choices for the Legislature
The State of Idaho is facing a $400 million budget shortfall. This could mean a further reduction in k-12 funding of up to $200 million and $175 million reduction in the Department of Health and Welfare (DHW). Why are tax revenues down? What can be done?
Tax revenues are down because the private sector of the economy has contracted. Idaho once had a $54 billion economy that generated $3 billion in tax revenues at a 5.5 percent average tax rate. A $45 billion state economy at the same 5.5 percent generates only $2.4 billion in taxes.
It is obviously better to have a bigger economy than a smaller economy. A $60 billion economy would generate more taxes for public education, roads, and social programs than a $40 billion economy.
Fact: higher taxes and more regulations act like a brake and slow the economy while lower taxes and fewer regulations stimulate the economy.
We have one of three choices:
1. Do nothing to reduce taxes and regulations and hope the economy improves by itself. This is called the Titanic Approach; hang on long enough and it will come back up.
2. Raise taxes to protect the state budgets like education and DHW and run the risk of slowing the economy even more. A smaller economy at a higher tax rate will result in less tax revenue than a larger economy at a lower tax rate. ($40 billion x .06% = $2.4 billion: $60 billion x .05% = $3 billion)
3. Reduce taxes and regulations to stimulate the economy.
Which is the wisest policy to adopt?
The Titanic Approach is a passive approach. It is doomed for two important reasons. First, according to Americans for Tax Reform, the cost of government is 48 percent of the GDP (Gross Domestic Product) plus another 15 percent of the GDP to pay the cost of regulations. The cost of taxation and regulations is too high in order for the economy to significantly improve. Second, environment regulations are killing natural resources and manufacturing jobs which form the foundation of any strong, stable economy. The strategy of doing nothing runs the real risk of condemning the average Idahoan to a steadily declining standard of living for years to come.
Raising taxes will guarantee a smaller economy and a prolonged recession. Who would make this choice?
The last choice, our only real choice, is to reduce taxes and/or the cost of regulations to allow the private sector of the economy to expand and regain its strength. I see a real opportunity for the State Legislature to reduce the cost of regulation which has the same effect as a tax cut and getting more money into the private sector without reducing tax rates. While it will not be easy to reduce spending and still maintain services, for far too long the legislature has taken the easy approach of raising taxes when the going got tough. What will happen this year? What will the legislature do? What do the citizens of Idaho support?
Tax revenues are down because the private sector of the economy has contracted. Idaho once had a $54 billion economy that generated $3 billion in tax revenues at a 5.5 percent average tax rate. A $45 billion state economy at the same 5.5 percent generates only $2.4 billion in taxes.
It is obviously better to have a bigger economy than a smaller economy. A $60 billion economy would generate more taxes for public education, roads, and social programs than a $40 billion economy.
Fact: higher taxes and more regulations act like a brake and slow the economy while lower taxes and fewer regulations stimulate the economy.
We have one of three choices:
1. Do nothing to reduce taxes and regulations and hope the economy improves by itself. This is called the Titanic Approach; hang on long enough and it will come back up.
2. Raise taxes to protect the state budgets like education and DHW and run the risk of slowing the economy even more. A smaller economy at a higher tax rate will result in less tax revenue than a larger economy at a lower tax rate. ($40 billion x .06% = $2.4 billion: $60 billion x .05% = $3 billion)
3. Reduce taxes and regulations to stimulate the economy.
Which is the wisest policy to adopt?
The Titanic Approach is a passive approach. It is doomed for two important reasons. First, according to Americans for Tax Reform, the cost of government is 48 percent of the GDP (Gross Domestic Product) plus another 15 percent of the GDP to pay the cost of regulations. The cost of taxation and regulations is too high in order for the economy to significantly improve. Second, environment regulations are killing natural resources and manufacturing jobs which form the foundation of any strong, stable economy. The strategy of doing nothing runs the real risk of condemning the average Idahoan to a steadily declining standard of living for years to come.
Raising taxes will guarantee a smaller economy and a prolonged recession. Who would make this choice?
The last choice, our only real choice, is to reduce taxes and/or the cost of regulations to allow the private sector of the economy to expand and regain its strength. I see a real opportunity for the State Legislature to reduce the cost of regulation which has the same effect as a tax cut and getting more money into the private sector without reducing tax rates. While it will not be easy to reduce spending and still maintain services, for far too long the legislature has taken the easy approach of raising taxes when the going got tough. What will happen this year? What will the legislature do? What do the citizens of Idaho support?
Monday, December 6, 2010
Cut Spending or Raise Taxes?
The Prime Issue of the 2011 Legislative session is what to do about a shortfall of $400 million in the general fund. The legislature has two basic choices:
1. Raise taxes rates
2. Cut spending
I would like to explain why I cannot support a sales, corporate or individual tax increase. I fear that too much time will be spent debating if we should raise taxes or not. The answer is unequivocal: no tax increases. The sooner the legislature comes to this conclusion, the sooner real solutions can be found. Here are a few reasons not to raise taxes.
First: current tax rates are too high and should be cut by 30 percent. According to the Americans for Tax Reform Foundation, 63 percent of all wealth created each year in the United States goes to federal, state, local taxes and/or pay for the cost of regulation. The cost of taxation and regulation should never exceed 40 percent of the GDP. In 1900, the percent of the GDP that was needed to fund all levels of government was only 8 percent! Government is getting plenty of money. Government does not need any more taxes. Government needs to use its current funds more efficiently.
Second: The private sector is struggling. Taxes come from private sector economic activity. State tax revenues have fallen from $3 billion two years ago to $2.3 billion this year. An increase in taxes would further reduce private sector activity and stifle the economy.
Third: Unemployment is up because there is not enough work or wealth in the private sector. If the legislature raises tax rates on the private sector, there will be less money left for businesses to hire workers and tax collections will drop even further.
Fourth: The legislature needs to fund public education. Public education cannot be funded with a shrinking private sector which is the source of public school funding. In order to fund public schools, the health of the private sector must be the 2011 legislature’s main focus. A $56 billion Idaho economy will raise $3 billion while a $45 billion economy will raise closer to $2 billion.
Fifth: The economy is stimulated by private sector production; not by government sector spending. The private sector produces wealth. The private sector is a perpetual wealth producing machine. It does not need government to continue producing wealth.
The government, on the other hand, does not produce wealth. It consumes wealth and gets in the way of the privates sector’s efforts to produce wealth by creating regulations. Regulations and taxes are a burden on the private sector. Proof that the government consumes wealth is to answer this simple question. How long would any government worker receive a paycheck if all taxes were suspended for one year? Government cannot survive without taxes paid by the private sector. (Inflation and printing money is a type of taxation.)
If raising taxes is not an option, then how will the legislature fund public schools and still provide essential government services? Two budgets (Education and Health and Welfare) must be the focus of the legislature’s deliberations because these two budgets consume 85 percent of state general funds. Two separate efforts need to proceed simultaneously. First reduce the cost of government. The second is to reduce the cost of regulations. I would offer several suggestions in the next post.
1. Raise taxes rates
2. Cut spending
I would like to explain why I cannot support a sales, corporate or individual tax increase. I fear that too much time will be spent debating if we should raise taxes or not. The answer is unequivocal: no tax increases. The sooner the legislature comes to this conclusion, the sooner real solutions can be found. Here are a few reasons not to raise taxes.
First: current tax rates are too high and should be cut by 30 percent. According to the Americans for Tax Reform Foundation, 63 percent of all wealth created each year in the United States goes to federal, state, local taxes and/or pay for the cost of regulation. The cost of taxation and regulation should never exceed 40 percent of the GDP. In 1900, the percent of the GDP that was needed to fund all levels of government was only 8 percent! Government is getting plenty of money. Government does not need any more taxes. Government needs to use its current funds more efficiently.
Second: The private sector is struggling. Taxes come from private sector economic activity. State tax revenues have fallen from $3 billion two years ago to $2.3 billion this year. An increase in taxes would further reduce private sector activity and stifle the economy.
Third: Unemployment is up because there is not enough work or wealth in the private sector. If the legislature raises tax rates on the private sector, there will be less money left for businesses to hire workers and tax collections will drop even further.
Fourth: The legislature needs to fund public education. Public education cannot be funded with a shrinking private sector which is the source of public school funding. In order to fund public schools, the health of the private sector must be the 2011 legislature’s main focus. A $56 billion Idaho economy will raise $3 billion while a $45 billion economy will raise closer to $2 billion.
Fifth: The economy is stimulated by private sector production; not by government sector spending. The private sector produces wealth. The private sector is a perpetual wealth producing machine. It does not need government to continue producing wealth.
The government, on the other hand, does not produce wealth. It consumes wealth and gets in the way of the privates sector’s efforts to produce wealth by creating regulations. Regulations and taxes are a burden on the private sector. Proof that the government consumes wealth is to answer this simple question. How long would any government worker receive a paycheck if all taxes were suspended for one year? Government cannot survive without taxes paid by the private sector. (Inflation and printing money is a type of taxation.)
If raising taxes is not an option, then how will the legislature fund public schools and still provide essential government services? Two budgets (Education and Health and Welfare) must be the focus of the legislature’s deliberations because these two budgets consume 85 percent of state general funds. Two separate efforts need to proceed simultaneously. First reduce the cost of government. The second is to reduce the cost of regulations. I would offer several suggestions in the next post.
Friday, November 12, 2010
EPA's Proposed $1.3 billion plan for Silver Valley in Idaho
EPA Coeur d’Alene Basin Team
1200 6th Avenue
Suite 900
ECL-113
Seattle, WA 98101
RE: Proposed Record of Decision Amendment – Upper Coeur d’Alene River Basin
To Whom It May Concern:
I appreciate the opportunity to comment on the EPA’s proposed Amendment to the Record of Decision for the Upper Coeur d’Alene River Basin.
I have several concerns about the proposed ROD.
1. Past cleanup efforts have significantly reduced the threat to human health. The current plan does little to improve human health while expending financial resources in consumptive activities that will not improve human standard of living.
2. The federal government is experiencing huge budget deficits which threaten the nation’s monetary system unless they are brought under control. The plan being proposed with a price tag of $1.3 billion is not prudent because of its price tag.
3. Opportunity costs. The $1.3 billion proposed budget for this project could be used in other, more effective ways. For example, there are 2,080 students in Shoshone County Idaho schools. If $7,000 were spent per child, the $1.3 billion could fund public schools in Shoshone County for 89 years. I see this as a clear example of growing a bureaucracy without regard to the children and families of the Silver Valley.
4. The proposed plan does nothing to produce wealth or stabilize the tax base. Taxes are paid by those that produce wealth. Current declines in the state of Idaho and national tax revenues are caused by a contraction in the private sector of the economy. The private sector of the economy cannot grow without access to natural resources and capital. To simulate the economy, we need to focus on five industries: mining, logging, manufacturing, energy production, and agriculture. Current environmental regulations and, specifically, this proposed plan will hamper access to natural resources, drive up costs to businesses, and reduce the standard of living in the Silver Valley and the whole nation.
5. Finally, the proposed plan severely restricts private property rights. As private property rights are restricted, the control by government over its citizens increases. The proposed plan runs the risk of undermining the very principles upon which limited government is based.
Thank you for the opportunity to comment on this very important matter.
Sincerely,
Steven Thayn
State Representative
District 11
1200 6th Avenue
Suite 900
ECL-113
Seattle, WA 98101
RE: Proposed Record of Decision Amendment – Upper Coeur d’Alene River Basin
To Whom It May Concern:
I appreciate the opportunity to comment on the EPA’s proposed Amendment to the Record of Decision for the Upper Coeur d’Alene River Basin.
I have several concerns about the proposed ROD.
1. Past cleanup efforts have significantly reduced the threat to human health. The current plan does little to improve human health while expending financial resources in consumptive activities that will not improve human standard of living.
2. The federal government is experiencing huge budget deficits which threaten the nation’s monetary system unless they are brought under control. The plan being proposed with a price tag of $1.3 billion is not prudent because of its price tag.
3. Opportunity costs. The $1.3 billion proposed budget for this project could be used in other, more effective ways. For example, there are 2,080 students in Shoshone County Idaho schools. If $7,000 were spent per child, the $1.3 billion could fund public schools in Shoshone County for 89 years. I see this as a clear example of growing a bureaucracy without regard to the children and families of the Silver Valley.
4. The proposed plan does nothing to produce wealth or stabilize the tax base. Taxes are paid by those that produce wealth. Current declines in the state of Idaho and national tax revenues are caused by a contraction in the private sector of the economy. The private sector of the economy cannot grow without access to natural resources and capital. To simulate the economy, we need to focus on five industries: mining, logging, manufacturing, energy production, and agriculture. Current environmental regulations and, specifically, this proposed plan will hamper access to natural resources, drive up costs to businesses, and reduce the standard of living in the Silver Valley and the whole nation.
5. Finally, the proposed plan severely restricts private property rights. As private property rights are restricted, the control by government over its citizens increases. The proposed plan runs the risk of undermining the very principles upon which limited government is based.
Thank you for the opportunity to comment on this very important matter.
Sincerely,
Steven Thayn
State Representative
District 11
Monday, November 1, 2010
How to Stimulate the Economy and Environmentalism
Tax revenues to the state government are down in Idaho. Leaving less money for schools and other social programs.
Who pays taxes anyway? People who work pay taxes. Specifically people who work in the private sector and produce things pay taxes. True, government workers pay taxes; but, they are paying taxes on money that was first collected from the private sector worker.
The way to get the economy going is to stimulate the private sector; especially, mining, logging, agriculture, manufacturing, and energy production. All other private sector economic activity services these 5 industries. Limit these 5 industries and the economy cannot recover.
What is stopping these 5 industries from thriving and growing? Environmental regulations that keep them from using natural resources and high taxes. The way to stabilize the tax base is to reform environmental regulations. How? Next time, I'll give a few ideas.
Who pays taxes anyway? People who work pay taxes. Specifically people who work in the private sector and produce things pay taxes. True, government workers pay taxes; but, they are paying taxes on money that was first collected from the private sector worker.
The way to get the economy going is to stimulate the private sector; especially, mining, logging, agriculture, manufacturing, and energy production. All other private sector economic activity services these 5 industries. Limit these 5 industries and the economy cannot recover.
What is stopping these 5 industries from thriving and growing? Environmental regulations that keep them from using natural resources and high taxes. The way to stabilize the tax base is to reform environmental regulations. How? Next time, I'll give a few ideas.
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