Our federal system is aptly called the laboratory of democracy. Rather than learning everything from the school of hard knocks, states can look to the experience of others with initiatives like charter schools, right-to-work laws, and taxation levels. Unfortunately, there are some slow learners out there.
The IRS recently released its annual report of the net migration of people and money between states. Once again, the high tax-and-spend states lost out. California was the biggest income loser ($23.8 billion) in 2022, followed by New York (14.2), Illinois (9.8), New Jersey (5.3), and Massachusetts (3.9).
Florida gained $36 billion in migrating revenues. Texas realized $10.1 billion, followed by South Carolina, Tennessee, and North Carolina. Arizona gained $3.7 billion in gross adjusted income (AGI), mostly from the 57,857 people who migrated from California, compared to 25,677 moving from Arizona to California.
Who knew people prefer to live where housing is affordable, power is reliably available, and crime is taken seriously by authorities? California not only fails on these tests, but its gas taxes are the highest in the nation, which means gasoline costs $1 to $2 a gallon more and electricity bills are 2 to 3 times higher than states without California’s climate mandates. Temperatures don’t seem to be coming down much so far.
California’s median priced home is about double that of most states and the state tax on middle income earners is 9.3%, more than most states assess their millionaires. Governor Gavin Newsom can prattle on about the “California Dream” but Californians aren’t feeling it. They’re leaving if they can.
Moreover, it’s getting worse. California lost nearly 3 times as much income to other states in 2022 as it did in pre-COVID 2019. Even though housing costs discouraged many from moving, New York lost 1.8% of the total state AGI, 3.1% in 2021, and 2.5% in 2020.
Florida and Texas were among the beneficiaries, seeing 150 to 200% more income being transferred from high spending states than before the pandemic.
California, New York, Illinois, and other states have created a “doom loop” by their foolhardy fiscal policies. Fewer workers and less total income result in lower tax revenues. The tax-and-spenders must raise tax rates to maintain their social programs and promises to unions and to finance their rising debt. Rinse and repeat.
Most enterprises, faced with falling revenues and climbing expenses, would update their business model. But the high-tax states aren’t interested in changing their ways. California is moving forward with yet more climate mandates and boondoggles like the infamous “train to nowhere.” Illinois rejected fiscal discipline and instead passed a budget with $1.1 billion in tax increases. New Jersey, hemorrhaging jobs, went ahead anyway with reimposing a 2.5% surtax on corporate incomes.
Rather than pursuing modest reforms or spending cuts, the blue states are instead trying to force other states to help them pay for their high taxes. They love the state and local tax (SALT) deduction, which requires taxpayers from Florida, Arizona, and other frugal states to pay part of the state tax bill for high earners from high-tax states. They are insistent that Congress remove the $10,000 cap on the deduction, which would further incentivize their excessive spending.
The cap raises about $80 billion a year of relief for federal taxpayers. The Brookings Institution found that if the SALT cap were eliminated, 57% of the benefit would go to the top 1% of earners. Still, the tax-and-spenders claim Congress “screwed” them by instituting the cap, thereby supposedly creating much of their fiscal woes.
States have become more careless in managing their pension fund obligations also. Raising benefit levels is popular, while funding can be deferred. Unsurprisingly, the result is chronic underfunding. New York has assets that would fund only 48% of future legal obligations according to standard accounting procedures and New Jersey is at 29%.
Future shortfalls will eventually result in public bankruptcies and destitute pensioners. Still states resist reforms, apparently assuming the feds would not ultimately deny requests for bailouts in such desperate circumstances.
States must be accountable for their own actions. They should not be allowed to exploit each other to cover for their moral and financial shortcomings.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Have you heard the outrageous story of what happened recently in Harrisburg, Pennsylvania’s capital? Gov. Josh Shapiro (D-Pa.), elected in 2022, had campaigned on school choice for tens of thousands of children, mostly minorities, who are forced to attend failing public schools in places like Philadelphia.
“It’s what I believe,” Shapiro, then state attorney general, assured voters as he ran for governor. Last month on a national Fox News broadcast, Shapiro was unequivocal in his support for school choice because “every child of God” deserves “a quality education.”
But there’s a force far more powerful in politics than Shapiro’s convictions, such as they are. And that force is the teachers unions. They put on a full-court press to stop the roughly 10,000 vouchers for the poorest kids in Pennsylvania’s worst school districts even though the state budget bill gave billions more for the public schools. It didn’t matter that this voucher program comprised less than 0.5% of state spending. The union brass commanded Democrats to vote no on even a single penny going to schools that work.
In the end, Shapiro did a full flip-flop. He vetoed his own promise. He might as well have declared that black lives don’t matter.
Shapiro has presidential ambitions — so he figures he needs the teachers unions behind him. But if he can’t face down Randi Weingarten, how is he ever going to stand up to bullies like China’s President Xi Jinping or Russia’s President Vladimir Putin?
This story isn’t just about Josh Shapiro in Pennsylvania. In North Carolina, Democratic Gov. Roy Cooper declared a state of emergency in the Tar Heel State because the legislature wanted to fund vouchers for kids to go to the best schools possible. Egads!
In Arizona, Democratic Gov. Katie Hobbs wants to defund a school choice program that is already serving tens of thousands of kids, most of whom are Hispanic, with proven results of better performance and higher test scores. Why would she kill a program that is working? The teachers unions want the money and the kids under their control.
In New York City’s Harlem neighborhood, charter schools are flourishing. They are alternatives to public schools but are still regulated by the state. They are oversubscribed because parents want to choose the best school for their kids. Now, the Democrats want to put a cap on the charter schools because the teachers unions want to warehouse the kids in public schools where a majority of the kids can’t read or do math at grade-level proficiency. In other words, many of the public schools are worse than mediocre. And it’s not for lack of money. New York spends more than $20,000 per child in public schools.
Did I mention that in nearly every one of these cases across the country, the Democrats blocking private and Catholic school options went to private schools themselves? Or they send their kids to private schools. But poor black kids aren’t allowed that same opportunity? These are hypocrites with a capital H.
There’s a cruel historic irony here. Sixty years ago this summer, Alabama Gov. George Wallace stood before the doors of schools to prevent black children from attending the schools with white children. He was trying to preserve the stain of segregation.
Today, Democrats are employing the same tactic to keep minority kids from attending excellent schools. Why? They say that school choice will hurt public schools or cause more segregation.
Wrong on both counts. Monopolies are always bad for consumers and competition improves service. Education choice requires public schools to compete. Would you get good and friendly service if there were only one restaurant in town?
Instead of draining public schools of money, studies show that per-pupil funding rises when some kids take advantage of vouchers to attend alternative schools. Charter and Catholic schools tend to be, in most cases, more racially diverse than inner-city public schools.
I’m a parent of five boys, so I know that each of my kids has different skills, interests, behavior issues and attention spans. To warehouse them all in the same schoolroom is madness. Schools should be tailored toward the kids and serve their interests — not those of the $1 trillion a year public-school-industrial complex.
More importantly, as an economist, my biggest worry about America’s future is what happens when kids are graduating without being able to read their diplomas and with no useful skills. There are hundreds of schools around the country where not a single child can pass a basic math or reading test.
That’s an economic, civil rights and national security tragedy. Shame on Democratic leaders, and some Republicans, too, for putting their own political ambitions ahead of our nation’s children.
Stephen Moore is a contributor to The Daily Caller News Foundation, senior fellow at the Heritage Foundation, and a co-founder of the Committee to Unleash Prosperity. His latest book is “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy.”
The Arizona legislature failed this year to pass a bill that would have required third grade students to be held back if they failed to learn to read adequately. The unsuccessful bill uncovered some unhappy truths about the state of education.
Third grade is recognized as a critical progression point for reading proficiency. Students through third grade are taught to read, after which they are expected to read to learn. Those unable to do so suffer a lifelong handicap in today’s knowledge economy with enormous economic and social consequences.
In 2019, 60 percent of Arizona’s third graders failed to meet our own reading standards. Unfortunately, nothing really new here.
Yet this ongoing failure is largely ignored by educators. There is little sense of urgency. Almost all of the failing third graders are routinely promoted to fourth grade, as if nothing of consequence had happened.
Here’s the worst of it. These dismal scores were recorded in the year before Covid, during which teachers’ unions refused in-person instruction. There was never the least evidence that school children suffered from Covid nor spread it.
Nevertheless, teachers received full pay and benefits. Ignoring “the science”, the unions insisted their work was far too dangerous.
No matter how much their students and families suffered, they stubbornly persisted. We’ll be years assessing the educational damage caused by their intransigence. Third graders mostly losing a year of reading instruction will be especially hard hit.
Yet even under these circumstances, government educators fiercely resisted the notion of a do-over, as they had before. They claimed that holding students back would cause more to drop out and result in worse outcomes. (Harvard research suggests the opposite).
Admittedly, holding back all non-reading third graders would be logistically difficult, although the long-term benefits to students and heightened accountability for educators would be well worth it. But educators’ real objection is that thousands of students in remediation would shine a bright light on their failure to perform what is arguably their most important duty: teaching basic literary skills to students who need them the most.
American education, with achievement levels lagging behind most other industrialized nations, has badly needed an overhaul for some time. The irony is that we know how to teach children effectively.
The Success Academies in New York, KIPP schools nationwide, Arizona charter schools and others have shown that it is a lie to pretend that disadvantaged students are “ineducable.“
Thomas Sowell found that New York City charter schools achieved proficiency levels several times that of district schools housed in the same building. Tuition scholarship programs in Arizona, DC and elsewhere have provided life-changing opportunity for thousands of children who otherwise would not have been so fortunate.
But in spite of their successes, school choice programs have been met with implacable hostility from an educational status quo that sees only threats, not opportunities to better serve. Some teachers’ unions even demanded further charter school restrictions as a condition for returning from their Covid vacation.
The result has been that critical reforms have been stymied. Tuition scholarship programs and charter schools, though growing, still have waiting lists. The default option for too many students is still the failing school closest to their home.
But the Covid debacle could be the springboard to wide sweeping reforms. Parents noticed the callous disregard for their children’s welfare from those they trusted. Some parents were shocked by the pervasive ideological indoctrination in the zoom lessons they observed.
They became comfortable with homeschooling and other options that put them more in charge of their children’s education. Not coincidently, Education Savings Accounts, funds made available to parents for any educational expenses in lieu of public school attendance, have been introduced in over twenty legislatures this year.
The fallout from our failing schools is enormous. We have produced a generation too many of whom are uneducated, entitled and angry. They are enamored with socialism and disdainful of American culture, including free speech. Moreover, income inequality has been widened by the very education activists so vexed by it.
Covid is our best chance to finally open up and modernize the structure of American education. Viva la Revolución!
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
