| November 5, 2012
A Federalist Look across America
We conservatives like to talk about the importance of federalism in our constitutional system, but we rarely spend enough time looking at what is actually happening in other states to drive reforms.
It is our esteemed view that every governor and every state legislature should aim to be one that other governors and state legislatures look to for public policy solutions. Though it isn’t the case yet, Oklahoma—given the vast number of conservatives in positions of power—has an opportunity to emerge as America’s trendsetter.
On the biggest issues facing states, many of America’s governors and legislatures are enacting bold reforms.
Kansas: Cutting Taxes to Spur Economic Growth
Gov. Sam Brownback and the Kansas legislature put in place tax reforms that many, including the Cato Institute, consider to be the “most impressive tax reforms of any state in recent years.” These reforms reduced the number of tax brackets from three to two and lowered the top rate from 6.45 percent to 4.9 percent.
As Cato noted, the tax reforms also “increased the standard deduction, reduced the taxation of small business income, and repealed numerous special-interest tax breaks.” The yearly tax savings from the reforms are estimated to be nearly $800 million, and will allow Kansas businesses to keep more of their hard-earned money so they can grow their companies.
The Wall Street Journal lauded Gov. Brownback for using his political capital to advance “a reform agenda worth the effort.”
In a globally competitive environment and an increasingly mobile world, lower taxes will make Kansas a place that businesses look to for future growth. Gov. Brownback’s aggressive reforms will force other states to enact tax reforms as well, or risk losing future business growth.
Louisiana: Moving Education Reform to the Next Level
In Louisiana, Gov. Bobby Jindal and the legislature put in place the most innovative education reforms in America. The reforms blow open the doors of education funding, making roughly 400,000 Louisiana kids eligible for a voucher to a private or parochial school. That number represents nearly half of Louisiana’s K-12 student population.
In a move typically ignored, but critical to the charter school movement, Gov. Jindal’s education reforms place tough accountability measures on charter schools. Often the conservative movement has been quick to point out a failing public school but reluctant to publicize a failing charter school. Gov. Jindal believes that kids deserve a school that gets results, no matter who runs it.
Finally, Gov. Jindal’s education reforms contain important changes to how teachers are evaluated and rewarded. Gone are the salary grid and teacher tenure requirements that only drive public school spending higher. In place of the grid is a “merit and accountability-based system” that will ensure that teachers in the classroom perform, get a chance to improve, or go find a job for which they’re better suited.
On teacher tenure, instead of tenure after just three years, teachers will have to earn strong ratings in five out of six years in order to be granted tenure.
Louisiana’s K-12 reforms will pay dividends as its kids get better educations and provide businesses with a more educated workforce upon which to grow.
Nevada: Tackling Bad Spending Habits to Get Government Right-Sized
When the global economy tanked, few states felt the impact more than Nevada. With the world’s top gambling facilities, Nevada suffered enormous losses from a steep drop in tourism. In addition, the housing market in Nevada collapsed, resulting in large job losses and declines in home values.
In response to this economic crisis, Governor Brian Sandoval and the Nevada legislature cut state government spending by roughly 5 percent. The state spending cuts have resulted in a decrease in state government workers of 4 percent.
As government leaders at all levels face fiscal crises, maintaining the status quo on spending just won’t cut it. It is time to reduce government spending at all levels and pare back the administrative state that is burdening businesses and citizens.
Rhode Island: Saying “Enough is Enough!” to Government Unions
Rhode Island Democrats, led by Treasurer Gina Raimondi, bucked the labor unions and passed government-pension reform legislation that adopted a hybrid pension system. The hybrid system provides government employees with a small defined-benefit annuity—one that won’t require a taxpayer bailout—and a defined-contribution component that provides them the portability and inheritability of a 401(k) account.
The reforms also increased the retirement age of government workers from 62 years old to 67 years old. This change is similar to the retirement age used to determine eligibility for Social Security. The reform is estimated to save Rhode Island taxpayers roughly $3 billion.
One of the key reasons why Treasurer Raimondi was able to reform the government pension system in Rhode Island is that she took the time to educate citizens across the state. She spent a considerable amount of time traveling around Rhode Island and meeting with citizens to explain the pension crisis. Treasurer Raimondi knew she had to make the case directly to citizens in order to defeat the labor unions, who would spend enormous amounts of money and apply pressure to their legislative allies. By doing the work she did, Treasurer Raimondi made it hard for legislators to oppose the changes.
Texas: Taking on the Higher Education Elite to Bring Down Costs
There is no more powerful entrenched interest outside of Big Labor than the higher education lobby. While government spending has exceeded inflation in most states in most years, tuition increases in public colleges and universities have exploded since the nationalization of the student loan programs. For most middle- and lower-class families, the cost of college is becoming a bridge too far.
In Texas, third-term Governor Rick Perry has drawn a bright line in the sand. He has made a commitment to drive down the cost of tuition in Texas so that Texans can get a college degree for $10,000. Not $10,000 per year, mind you, $10,000 per degree! Several colleges and universities are already answering Governor Perry’s challenge, but the big public schools are unsurprisingly fighting back.
Governor Perry knows that for Texas to continue to be a place where businesses launch, move to, and grow, those businesses need access to an educated workforce. The path to that educated workforce goes through Texas’s public colleges and universities. If access to those vital educational opportunities is limited due to high costs, Texas, its economy, its businesses, and its people lose. The $10,000 college degree plan is key to unlocking the door to the future.
Oklahoma is behind the curve on the five reforms noted above. It’s time for Oklahoma’s political leaders to throw out the old playbook and aggressively push forward with these reforms. It is time to make Oklahoma the locus of innovative public policy.
Some politicians are content to “play it safe by adjusting the rudder slightly to the right and enjoying the ride” until term limits send them home, OCPA president Michael Carnuccio recently wrote. But that won’t suffice, he says.
“We live in a day and age when we need leadership—the kind that is strong, bold, and transformational.”
OCPA research fellow Matt Mayer (J.D., The Ohio State University) is a former senior official at the U.S. Department of Homeland Security. Mayer also serves as a Visiting Fellow with The Heritage Foundation, where he heads the federalism project. Mayer’s newest book is Taxpayers Don’t Stand a Chance: Why Battleground Ohio Loses No Matter Who Wins (and What to Do About It).