Discussion Archive: Page 5

We have a revenue problem and the legislature says we can resolve it in two ways, either cut spending or increase revenues. There is a third alternative but some refuse to consider the genius of the “and,” preferring the tyranny of the “or.”

Here is some perspective for your readers consideration:

Effective Tax Burden of State and Local Taxes, per capita, ranked by burden as a percent of income:

Michigan ranked 16 at 10.8% or $3,965.
Maine ranked 1 at 13.5% or $4,719.
Alaska ranked 50 at 6.6% or $2,598.

Ohio ranked 3 at 12.0% or $4,332.
Indiana ranked 12 at 11% or $3,796.
Illinois ranked 14 at 10.9% or $4,335.
Pennsylvania ranked 24 at 10.4% or $4,057.
Wisconsin ranked 7 at 11.6% or $4,289.

Data from the Tax Foundation and the Bureau of Economic Analysis, US Commerce Department; web address, http://www.retirementliving.com/RLtaxburdens.html

Now, DO WE HAVE ROOM FOR A “THIRD ALTERNATIVE?”

2. We need movement on getting the state in order – direction-wise and also fiscally. Right now, we are getting very little – occasionally ideas are floated up and for the most are shot back down by something. No ideas or actions seem to be gaining momentum on how to make the state better…the budget is the only thing that receives any attention and that movement is slow. Ask your state representative and senator what they are doing, tell them what you want done; tell the govenor what you want; get your neighbors on-board (or go talk with them). Demand answers and solutions for “the center” – demand that polarization stop. Time to get moving.

3. How to improve this state…..ideas – some stolen, some invented.

a. need to make the state good for business and entrepreneurs
i) all intellectual ideas need freedom – make this the easiest state to do medical research and leverage U of M and Wayne State (unlock the stem cell research, etc.); give a break for those businesses that work with univesities; grant tax breaks for patents; etc.
ii) make the multi-billion bond for entrepreneurs do some good – I don’t see anything from it (I may be ignorant), but this “big thing” has done near nothing – the money is there, it needs to go to work. Get a move on the Governor’s plan on where to put our focus – assign a private champion and board to each of the areas and get some action plans in place that support improving those areas
iii) get business to invest in Michigan – give major and long tax breaks, encourage companies here to re-invest….it is the right move and should bring back far more than is given
iv) make the laws in this state “right to work” – no longer can a middle-man take their cut and can workers demand higher wages…it is not working and needs to change
v) protect what is valueable in Michigan and don’t sell it out for short term money – this is water, fishing, hunting…figure out how to get that to work for us
vi) if the nursing shortage is real and training is a weakness – address it, but don’t do it with pubic money ….any kind of growth is paramount to nurture

b. need to cut costs
i) cut state employee’s salaries by 10%, right now – if the people want to get another job – great
ii) cut state employee’s benefits by 20%, right now – sorry, but the trough needs to end
iii) cut state employee’s pension committment for the future by 50%, right now – guarenteed for life is not true
iv) on top of that, cut any “business” of the state that that is not itself productive (so probably leaves lottery, tax collection, hunting/fishing)
v) direct and simple solutions for difficult and impossible-to-please-everyone issues

c. need to increase reveneues
i) enact the beer/wine tax….raise these, ditto with gas – pennies on services/goods (especially somewhat optional services/goods) is an easy way
ii) same with the estate tax – the risk is actual flight of those with some money so needs to be “minor”
iii) raise rates on anthing that is valuable and state provided – like fishing and hunting licenses – put 50% of the money to the general fund and 50% toward improving the valued resource
vi) try again to put a tax on services – 2% and only to the end consumer…need to get that income stream and there is no better idea

d) do something personally to help
i) contact your representatives with ideas
ii) improve your schools with your time, ideas, or money
iii) don’t cheat on your tax obligations
iv) be optimistic
v) buy Michigan where you can
vi) don’t expect someone else to do what is hard, unless you are willing to do something hard, also
vii) think of your own

I hope the Govenor can lead this with the help of the smart and commited people of Michigan….we need some major leaders so people can do something in a coordinated way. Thanks to Phil and John for being two of these people.

We should begin by evaluating the service being provided, who is receiving it, and is it FAIR?

Then we should ask WHO is providing the service, and the COST of providing same, including the administration costs, especially.

Take the State of Michigan for instance; what services do they provide?? With the idea of passing un-funded mandates down to local bodies to provide, it makes me wonder the value of individual states?

In thinking of the new name of my state; OWIMI jumps out! Ohio,Wisconsin,Illinois, Michigan,& Indiana. With one regional governor and staff, possible reduction in legislature members(unicameral) maybe one for every 200,000 people, if just one body?

Nationally this would make for 40 less governors. I haven’t even begun to count the number of public employees would could find interesting occupations, and the lobbyists(the real law writers), savings is too enormous to imagine.

We are teetering on a most dangerous situation, of taxing ourselves beyond the ability to be competitive in the global market. There is a theory that every great society has collapsed from over taxation!

We must also be ever mindful of the truly needy, and take care of them in manner that is provided without wasting one nickel, as there NEVER is ENOUGH $$.

I truly hope some explanations come back that will give us all comfort in knowing we may be doing it correctly now, and avoid painful changes. I do not believe bigger is better, and hope through consolidation at state levels, there will be large reductions in cost!!

Thank you:

Les Atchison

Did you know that Mississippi, the state that just won the rights to a new Toyota plant (so coveted by Michigan) has a sales tax rate of 7% on FOOD. Talk about a recessive tax!

A 2% tax on services will not force me to drive to Toledo for a haircut.

Private insurance would no longer be required and all those currently working for private insurers could work for the state instead.

Eliminate all the different forms and deductibles and co pays, different managements, etc. etc. and institute standardization.

Establish monitoring of medical procedures, prescriptions, and costs through the use of statistical process control (Control Charts to define process capability and variability, show the trend, create opportunities for positive collaboration and, ‘Ohmygosh,’ continual improvement!). Do not establish numerical targets or goals, simply track and report in plain language with simple visuals on medical procedure and drug use. It is truly amazing (and counterintuitive) what you can learn if you stop fiddling and just let a process run.

And if you use process maps, the bottlenecks and waste would become visible!!

And you put all that information on YouTube. I’m certain Google of Ann Arbor would help (an additional profit opportunity; more employees, increased tax base….)

Pay for the transition by requiring all medical providers in the State move to electronic records management by 2010. Of course, this requires that all medical disciplines begin to communicate with one another in a common language, that a set of core data for each customer be established, and that standardized reporting be available to all. Sounds a bit like a ‘reverse’ marketing data base; you know, the data bases currently developed and mined by all companies trying to sell stuff to Michiganders.

In one ’swell foop’ Michigan manufacturers and entrepreneurs would become competitive on a global basis.
Michigan would become a leader in attracting businesses and establishing government that shows the way for the nation.
School district costs would drop by $12,000 per employee; auto manufacturers in Michigan could add about $1700 per unit to the bottom line;
and entrepreneurs and small business owners would no longer sweat the cost of their employee’s health insurance.

Of course this idea will never get any traction since insurance companies contribute too much to political campaigns and the ‘persons’ in the white coats would never give up the strategy of mystery that has maintained their death grip on health care costs for so long. (Didn’t Witch Doctors use the same trick?) The drug companies wouldn’t like it either since the efficacy, or lack thereof, of the drugs they advertise so hard might come under the glaring scrutiny of fact. Advertisers may object too since those lucrative ad contracts to sell all those drugs would no longer be necessary.

Michigan’s economy might even grow and the revenue shortfall disappears!

Sincerely,
Chuck Fellows

My oldest son is one who just left….he is now a freshman at Northwestern University. He left for a number of reasons, especially for the opportunity to attend a great university in the Chicago area and develop skills and relationships in a more urban, growing area…he closely matches the profile in your article.

During his college search last year, I was surprised to find so many people upset with the University of Michigan and their admission policies. I know all the controversy has been affirmative action- related….however I think most overlook perhaps the greatest discrimination of all….that is the high number of NON-MICHIGAN residents that are admitted over equally qualified Michigan high school students. I couldn’t resist to do a little quick research on other top US Public Universities:

U of M Non Resident students – 43% of the student body… http://www.crlt.umich.edu/gsis/StudentProfileDatafor2006.pdf
Univ. of North Carolina, Chapel Hill – 18%
UC Irvine (my old school) – 3% ….yes, only 3.
UCLA – 10%
UC Berkley – 9%
U of Texas – 5%

DIVERSITY at what cost ??
I personally know parents of talented kids who were wait listed or denied admissions to U of M that fit in the upper half of their freshman demographic profile for ACT and GPA. (real life example: 4.0 student at a top-ranked area high school , 31 ACT score, Captain of Football, lacrosse and Wrestling teams, all league performer in each, involvement in number of community activities, etc…..). This is one of 6-8 examples of kids I personally know from just the last couple years. These students go elsewhere………often private, out of state schools. And as you note, they do not plan to come back.

The 2-3000 non-resident students that graduate each year probably don’t stay in Michigan. Over a period of 10 years, we are looking at 20-30000 very talented michigan grads that go back to NY and California. What did Michigan taxpayers get for our tax money? I recognize these visitors pay non-resident fees, but we all still contribute to their education, as its Michigan residents who built and sustain that university. What do we taxpayers get for our money and what is the non-Michigan resident level of diversity doing for us ??

U of M is a Michigan public university, but their overall contribution to Michigan should be examined. There are many benefits to attracting top talent to U of M, however if the university cannot develop students who will stay in the state, where is the real benefit? An occasional Google or Tech company is nice, but there is no real business segment that has developed from U of M that benefits the residents of Michigan.

I believe this may be a topic for debate and scrutiny for the U of M trustees, along with the State of Michigan and taxpayers! Why does U of M need to be Double, Triple, and Quadruple the percent of Non-Residents that other top 50 public universities allow? Why does U of M need to turn away Michigan students who have academic and social abilities that are higher than their 50% of their admitted freshman scores? This does not serve the state. These sharp kids leave and will not be back as you noted.

Thanks Phil….

Joe O’Connor

Simply because legislators, professional educators and consultants are not capable of defining what needs to be done to “reform” education; education does not need reform, the educators and those within their circle of influence must reform they way they think.

Point by point:

1. Reform pensions/health benefits – what will this do to improve the classroom?

Besides, it’s not the teacher that is the cost problem; it is the service providers of health care that are the root problem. Also, if school managements failed to fund the retiree benefits it is time to fess up and appeal to the public and correct their error.

What is logically indefensible is a posture that insists that the cost of health care, and the inefficiency of the delivery system, is the fault of the customer. That is the height of illogic!

2. An insurance pool is what Lloyds and the Phoenicians had in mind when they created the concept of pooled risk. Sadly, the insurance companies forgot that they were responsible for managing risk, not collecting money from those who share the risk to build an empire.

3. I do agree that a longer school year does have some merit; if the process of education was capable (in the statistical sense of capable) of educating, which it is not. Only one third of those required to attend are suited for the type of educational opportunity presented. A full two thirds of the student population just does not fit the linear/sequential/auditory/verbal system populated by teachers and administrators of the same ilk. Asking those who do not have an intellectual strength in the sequential -verbal left brained arena to live with a longer school year and expect an improvement in educational outcomes is the definition of insanity. Einstein, one of those visual-spatial kind of thinkers (we call them dyslexic or ADHD today), advised us that applying the same old solutions to a problem and expecting a different outcome is, insane!

4. Do you really think spending more money forcing 45,000 children to attend a truly unpleasant experience for another two years is going to improve educational outcomes?

5. Providing preschool opportunities for children is a grand idea and should be supported only if the results of brain scan activities are understood and heeded. If we paid attention to what science is trying to tell us, and over 65,000 years of our hominoid history tells us, we would realize that the same old solutions, try harder, work smarter, more time, etc. etc. do not work. Follow the lead the children give us when it comes to establishing learning strategies. Do not assume because you have the years and an advanced degree that you have any clue what is going on inside a child’s head. And do not assume you know what they should learn, when and how. You don’t. The children do.

6. Tenure reform……. What exactly will making an already unfriendly environment more unfriendly do to create public trust and classrooms that foster learning? Nada.

Of course a system of education based on high expectations developed by teachers and assessed by their peers would first improve learning in the classroom and then, slowly, earn the publics trust. That would require teachers be allowed to communicate with one another, move their disciplines into integrated curriculums (not the state mandated “you must cover the content contained within – not really what it says but exactly how it is driven by local school boards and administrators), include students in their deliberations and basically tell the administrators to do their job, a job that supports (not attempts to control) the teachers efforts in the classroom. See how Toyota’s Administrators ’support’ the line worker to assure low cost, high quality and customer delight!

7. You do not want administrators to focus their efforts on educational issues. They have had one hundred and thirty years of focus and still propose the same old solutions to the same old problems.

They are administrators, not educators or teachers. Administrators are there to support the process as defined by teachers, students and parents, not define the process and dictate the targeted outcomes. Get some profound knowledge by studying Ed Deming’s fourteen points and seven deadly sins of management. You can best do that by reading “The Deming Dimension” written by Henry Neave. Profound knowledge is absolutely necessary, for without it you are attempting to drive the car by looking at the rear view mirror.

8. Do not adjust the timing of payments, especially if your purpose is to eliminate fund balances. By now you should know that a discipline of saving is a good discipline for all public entities to practice. Moving money around according to an artificial timeline is another tactic that contributes nothing to the improvement of the learning opportunity.

9. The best way to hold people accountable is to encourage them to clarify and confirm their communications to the people that pay the bills. Moving school elections to November is a good start. Requiring visual representations of receipts and disbursements (pie charts work really well, as do simple two axis trend lines…) and putting these reports on the web with an honest commitment to answer the public’s questions until you are sure they understand, will boost accountability a lot. No hiding behind GAAP allowed.

10. Not until profound knowledge is demonstrated. There is an enormous amount of waste produced by the isolation of intellectual disciplines, excluding the student from the process, large population buildings, age grading and forced homogeneity not to mention a rigid adherence to very old views of what schools and education should be.

Visit www.lean.org and understand what a real process map is and apply it to any administrative process, State, District or local school. Ask why administrative offices in school buildings are separated from the students. Ask why one third of our students fail to graduate within four years, or drop out completely.

Or just ask the question “Why?” seven times for anything we do in schools. And when someone proposes something radical ask “Why not?” instead of simply saying no.

To paraphrase Covey, there are thousands hacking away at the leaves of evil but very few hacking at the roots. See “The Power of Their Ideas” by Deborah Meier; “Horace’s Compromise,” Horace’s Hope” and “Horace’s School” by Ted Sizer; “Understanding Variation” by Donald Wheeler; “The Deming Dimension” by Henry Neave: “Mindful Learning” By Ellen Langer; and my favorite, “Totto Chan: The Little Girl at the Window” by Kuroyanagi, Tetsuko. Try “Widening the Circle” by Mara Sapon-Shevin or work to really understand what goes on inside kids’ hearts and minds by reading “The Freedom Writers Diaries” by Erin Gruwell.

Then you can really begin hacking away at the roots.

Sincerely,
Chuck Fellows
9770 N. Rushton
South Lyon, MI 48178
(248) 437-1128
cgflef@aol.com

There is one item that nobody mentioned, back when they were clamoring to eliminate the SBT. During the Engler years, I never heard him (or anyone else) railing about the SBT and how unfair it was, etc. I am not a tax expert and confess to not knowing much about the SBT. But you have to remember that John Engler had 12 years to get rid of the SBT, and he didn’t do it. Clearly he could have done so, since he had the benefit of a GOP controlled Legislature – - heck, he got anything and everything that he wanted. And if not, he did a great many things by Executive Order. So lets be clear, it is obvious that if indeed the SBT were all that onerous, Engler would have eliminated it. Kinda makes one wonder why in 2006 that tax suddenly became unbearable, doesn’t it?

As an aside, I still think Michigan should be switched to a unicameral legislature, or a part time one, or maybe both. Only 4 or 5 states out of 50 see the need for full time or for bi-cameral. And regardless of what our esteemed legislators like to claim, I believe the savings would be significant. They have been most happy to make State employees work 80 hours for 76 hours pay – - those 4 hours seem like a relative spit in the ocean. So why not squeeze some savings out of our heavy legislative costs? Makes lots of sense to me. There was a move on last year to get such a proposal on the ballot, but I don’t think they ever got enough signatures on their petitions. Maybe they ought to try again.

Tom Lowell

Come on!

Dan Brown

Private Industry must continuously act this way to stay alive. Gov’t could learn a thing or two.

Read on

The following is taken from this website: National Conference on state Legislatures (NCSL). Updated 1/2007

http://www.ncsl.org/programs/press/2004/backgrounder_fullandpart.htm

Full- and Part-Time Legislatures
Updated January 2007

It seems like an easy question: which legislatures are full-time and which ones are part-time? But with 50 different formulas for designing a state legislature, it’s difficult to paint this issue in black and white. So we’ve done it in Red, White and Blue.

Being a legislator doesn’t just mean attending legislative sessions and voting on proposed laws. State legislators also spend large amounts of time assisting constituents, studying state issues during the interim and campaigning for election. These activities go on throughout the year. Any assessment of the time requirements of the job should include all of these elements of legislative life.

Beyond that point, NCSL prefers to look more broadly at the capacity of legislatures to function as independent branches of government, capable of balancing the power of the executive branch and having the information necessary to make independent, informed policy decisions. To measure the capacity of legislatures, it’s important to consider the amount of time legislators spend on the job, the amount they are compensated and the size of the legislature’s staff.

NCSL has grouped the 50 state legislatures into three major categories: Red, White and Blue-and for those who want to know more, NCSL has provided some shading within those categories.

Red Legislatures
Red legislatures require the most time of legislators, usually 80 percent or more of a full-time job. They have large staffs. In most Red states, legislators are paid enough to make a living without requiring outside income. These legislatures are most like Congress. Most of the nation’s largest population states fall in this category. Because there are marked differences within the category, we have subdivided the Red states. Those in Red generally spend more time on the job because their sessions are longer and their districts larger than those in Red Lite. As a result, they tend to have more staff and are compensated at a higher rate. Within subcategories, states are listed alphabetically.

White Legislatures
Legislatures in the White category are hybrids. Legislatures in these states typically say that they spend more than two-thirds of a full time job being legislators. Although their income from legislative work is greater than that in the Blue states, it’s usually not enough to allow them to make a living without having other sources of income. Legislatures in the White category have intermediate sized staff. States in the middle of the population range tend to have White legislatures.

Blue Legislatures
In the Blue states, average lawmakers spends the equivalent of half of a full-time job doing legislative work. The compensation they receive for this work is quite low and requires them to have other sources of income in order to make a living. The blue states have relatively small staffs. They are often called traditional or citizen legislatures and they are most often found in the smallest population, more rural states. Again, NCSL has divided these states into two groups. The legislatures in Blue are the most traditional or citizen legislatures. The legislatures in Blue Lite are slightly less traditional. States are listed alphabetically within subcategories.

Table 1 shows the breakdown of states by category. Table 2 shows the average scores for the Red, White and Blue states for time on the job, compensation and staff size. For 2005 legislator compensation figures, go to http://www.ncsl.org/programs/legismgt/about/05salary.htm.

Table 1. Red, White and Blue Legislatures

Red
California
Michigan
New York
Pennsylvania

Red Light

Alaska
Illinois
Florida
Ohio
Massachusetts
New Jersey
Wisconsin

White
Alabama
Arizona
Arkansas
Colorado
Connecticut
Delaware
Hawaii
Iowa
Kentucky
Louisiana
Maryland
Minnesota
Missouri
Nebraska
North Carolina
Oklahoma
Oregon
South Carolina
Tennessee
Texas
Virginia
Washington

Blue Light

Georgia
Idaho
Indiana
Kansas
Maine
Mississippi
Nevada
New Mexico
Rhode Island
Vermont
West Virginia

Blue
Montana
New Hampshire
North Dakota
South Dakota
Utah
Wyoming

Source: NCSL 2004

Table 2. Average Job Time, Compensation and Staff Size by Category of Legislature

Category of Legislature
Time on the Job (1)
Compensation (2)
Staff per Member (3)

Red
80%
$68,599
8.9

White
70%
$35,326
3.1

Blue
54%
$15,984
1.2

Notes:
1. Estimated proportion of a full-time job spent on legislative work including time in session, constituent service, interim committee work, and election campaigns.
2. Estimated annual compensation of an average legislator including salary, per diem, and any other unvouchered expense payments.
3. Ratio of total legislative staff to number of legislators.