10.29.2012 1

Be wary when politicians promise the money’s going to education

Photo Credit: sdcitynewscene/Youtube.com

By Rick Manning — Politicians, public employee unions and other supporters of big government have learned a simple lesson over the past thirty years — people don’t want to pay higher taxes to fund additional government services, except for police, fire or education.

Because of this understanding, every bad idea seems to be wrapped in a blanket that it will increase education funding with the millions of dollars of advertisements behind this claim to trick the people into approving something they ordinarily wouldn’t.

In California, where they have virtually ceded representative government for government by initiative and referendum, Proposition 30 is another of these tax increase schemes that boldly promises to raise money exclusively for education.

This California example is important to taxpayers nationally, because the tactics being used to promote a massive tax increase are the same that voters face whether they live in Arkansas, Maryland or anywhere else in the nation.

Should California voters pass Proposition 30, the sales tax would increase from 7.25 percent to 7.5 percent for four years, and income taxes will increase significantly for golden stater’s who earn more than $250,000 a year.

Using the tried and true formula for tricking voters, Proposition 30 promises that all the increased monies raised will go toward education spending.

Yet, as Jon Coupal, president of the Los Angeles-based Howard Jarvis Taxpayer Association warns, “If you thought Proposition 30 was for schools, think again.”

The actual ballot title of Proposition 30 which reads, “Temporary Taxes to Fund Education, Guaranteed Local Public Safety Funding,” should be enough to tip off any voters who are sentient that perhaps the education funding line is nothing more than a political sales pitch.

If the money is all for education then how does it guarantee local public safety funding?  It cannot.

Here is how the bait and switch works.  The initiative, referenda or constitutional amendment promises to use monies raised exclusively for education funding.  What the proponents don’t tell you is that by designating funds directly for education, it allows the state legislature and governor to move funds that currently go to fund education to meet other “needs.”

This means that in virtually every case, the net spending for the designated good cause, actually does not go up, but is just funded through other means allowing the politicians to fund other pet projects.

Not simply a California phenomenon, Professor Bradley R. Gitz of Lyon College in Arkansas found in a study released earlier this year that dedicated taxes, “drives up overall government spending and tax burdens.”

Dr. Gitz examined the recent history of such “dedicated” tax increases over time in the state of Arkansas, with the goal of providing a basis for assessing their advantages and disadvantages, he finds that once established, dedicated taxes become unusually suspect to manipulation by legislators.    These manipulations include extending the sunsetting date of the study as well “repurposing” the tax and putting the money into other funds rather than keeping the original promise.

The study argues that these dedicated taxes have become “more attractive over time to elected officials because 1) they can be easily sold to the public; 2) they remove the need to make the kinds of difficult ‘trade-offs’ in funding decisions required by the use of general revenue; 3) their costs can be more effectively concealed from taxpayers; and 4) they can be easily increased, extended or ‘re-purposed’ to fund other government programs.”

Gitz cites work by George R. Crowley and Adam Hoffer,  whose research suggests that dedicated revenues are “largely ineffective for increasing expenditures toward which they are tied” but more effective “at increasing total government size,”  by masking increases in total government spending.

Whether voters are considering a “temporary” tax increase to fund education in California or a vote on a constitutional amendment (Measure 7 on the ballot in November) that allows the building of a new casino in Maryland, when the sales pitch is that the proposal will dedicate money to education or any other worthy cause, voters should look three times before approving it.

History shows that the sleight of hand artists in the state capitol have a trick up their sleeves, and it almost never means that those who support smaller government win.

Rick Manning (@rmanning957) is the communications director of Americans for Limited Government.

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