April 4, 2012:
National Popular Vote
Imagine the likely scenario thatRhode Islandvoters will overwhelmingly support the re-election of President Obama, Democrat, this November by the same 63%-35% margin as they did in 2008. Then imagine the possible scenario thatRhode Island’s (4) “Electoral Votes” would instead be assigned to the President’s Republican opponent! In future Presidential elections the reverse scenario could also occur.
Outrageous? Yes, but possible if the National Popular Vote (NPV) initiative is passed inRhode Islandand in a number of other states. This potential sham would clearly not represent the constitutionally guaranteed voice ofRhode Islandvoters.
This Policy Brief summarizes some of the key shortcomings of the NPV compact as well as to list more extensive research and analysis on this subject. Most of the following material was reproduced from a Policy Memorandum previously published by the Center for Competitive Politics[1].
The National Popular Vote (NPV) proposal would represent a fundamental shift in how our nation elects the President. While many well-intentioned individuals and organizations support this cause and compelling arguments can be made in its favor, the NPV plan ultimately represents a scheme that creates more problems than it purports to solve and would largely fail to achieve the outcomes desired by its proponents.
In addition to the scenario presented above, there are six major reasons why the NPV initiative should be of major concern for citizens and policymakers:
1) The Electoral College is a critical part of our constitutional checks and balances
2) The NPV proposal would remove any connection between a state’s voters and its electoral vote
3) The NPV compact would cause chaos if a state attempts to withdraw
4) Differing election standards make the NPV plan impractical and confusing
5) The National Popular Vote plan would not achieve its main goal
6) The National Popular Vote plan may be unconstitutional
The Electoral College is a critical part of our constitutional checks and balances
The NPV plan would jettison a nearly 220-year-old system for electing our nation’s President. In doing so, it would reject one of the many carefully-crafted checks on majority rule designed by the Founding Fathers to safeguard minority rights. The Electoral College ensures that in order to be elected President, a candidate must appeal to not only a majority or even plurality of voters, but also to voters from a geographical cross-section of the country. This system requires that candidates for the highest office in the land are not able to simply rely on highly energized, sympathetic, and homogenous voters concentrated in only a few densely-populated parts of the country.
Instead, candidates must be able to appeal to multiple constituencies, building broad coalitions based on policies that address the needs and interests of Americans across the country. The plan would eliminate the need for candidates to build these coalitions in support of their candidacies, allowing them instead to focus on issues that appeal to and motivate their partisan base. The requirement that candidates appeal to voters across the country and not just in a handful of populous areas is an important check on the power of a narrowly-focused majority to trample the rights of the minority. The NPV scheme would eliminate this important check.
The NPV proposal would remove any connection between a state’s voters and its electoral vote
Another important deficiency with the plan is that is severs the intrinsic link between a state’s citizens and a state’s electoral votes. Instead of each state’s electoral votes being determined based on the interests of its citizens, a state’s electoral votes are allocated based on criteria having little, if anything, to do with the interests and preferences of its own citizens.
Advocates of the NPV plan claim that states have not always relied on citizens’ votes to allocate their electoral votes. For example, early in American history several states gave the power to appoint electors directly to the state legislature. However, even then, the electors were appointed by official that were accountable to the state’s voters, and presumably were required to heed the interests and preferences of their citizens. The NPV compact breaks this vital connection, allowing for a state’s electoral votes to be awarded based on criteria wholly unrelated to the interests and preferences of the state’s citizens.
For example, if the state legislature can award electoral votes based on election results outside of its jurisdiction, could the legislature also simply delegate the power to appoint electors to a special commission? Could they establish a system of choosing electors that sought to “correct” or “balance out” perceived inequities in the demographics of who votes and who does not? Could they substitute for the recorded totals of nationwide votes an estimate based on how the vote would have turned out if only other states had run “fair” elections?
By cutting the link between a state’s voters and a state’s electoral votes, the NPV plan would open a Pandora’s Box of possibilities for alternate methods of awarding electoral votes.
The NPV compact would cause chaos if a state attempts to withdraw
Abandoning the Electoral College as it presently operated would also create significant opportunities for political gamesmanship as states may seek to obtain partisan advantage for one party or another by entering or leaving the compact (or threatening to do so), if it seems advantageous at any given moment.
For example, a state legislature may conclude late in the election cycle that a candidate overwhelmingly favored by its voters is unlikely to win a majority or plurality nationwide, but might win the Presidency if the state were to revert to the traditional Electoral College. As state legislators are only accountable to their own voters, and not any sort of national majority, they may conclude it is in their best interest to abandon the NPV plan.
The temptation to withdraw from the compact under such a scenario would be irresistible to some. One need only recall the partisan maneuvering regarding a Massachusetts U.S. Senate seat in 2004, when a legislature controlled by Democrats stripped a Republican governor of the power to appoint a replacement in the event that John Kerry won the presidency, and again in 2009 when the Democratic legislature restored the power to appoint a replacement to a Democratic governor when it appeared doing so would provide the U.S. Senate with a timely 60th vote for health care reform.
Because the authority to determine how a state’s electors are appointed is given exclusively to the state legislature, it may well be that a state cannot delegate that power to a body not under its jurisdiction, i.e. the other 49 states. It is thus uncertain whether a state could legally withdraw from the compact even though NPV supporters claim that states cannot. Nevertheless, simply the attempt to do so would spur nationwide outrage and chaos, leading to court battles reminiscent of Bush v. Gore in the 2000 election.
Differing election standards make the NPV plan impractical and confusing
Concerns over ballot fraud, controversial election management practices, and different recount processes would also create the potential for chaos and conflict. Under the present system, a specific instance of ballot fraud can only impact the state in which it occurs. Thus, only in a handful of states, where the vote is likely to be very close, can election fraud affect the outcome. While still undesirable, the damage is contained to a single state.
However, under this plan, a fraudulently-cast ballot in any state doesn’t simply affect how that one state awards its electoral votes; it affects how a majority of electoral votes are cast. Thus, a fraudulently-cast ballot in Texas or New York, or rather thousands or even tens of thousands of fraudulently-cast ballots in these or other states, would help to determine how 270 Electoral College votes will be cast; not simply the electoral votes of the state in which the fraud occurred.
Similarly, each state has different sets of election laws, determining who may vote and what process they must follow. Practices such as expunging felons from voter rolls, same-day voter registration, voter identification, and countless other procedures differ from state to state, creating significant problems because not all voters will be treated the same way nationally.
ConsiderUtahandWyoming, states which have dramatically different policies on voting by felons.Utahbars currently incarcerated felons from voting, but that ban is lifted once they are released.Wyoming, however, permanently bars felons from voting even after release.
Under the Electoral College system, both states select their electors based on the election rules and standards they have chosen – in Utah, to include citizens with felony convictions in their past and in Wyoming to prohibit such citizens from participating.
But under the NPV plan, both states risk having their electoral votes allocated through processes that they have otherwise rejected:Utahmight see their electoral votes determined without the votes of citizens they believe should be allowed to vote, whileWyomingmight see their electoral votes cast based on the votes of released felons, in contrast to their laws.
This example and countless others demonstrate how each state has determined, through 50 separate political processes responsive to each states’ citizens, who can and cannot vote and under what circumstances. The NPV compact would instead force states to allocate their electors based on an election process that is contrary to the wishes of that state’s residents.
It’s also important to note that the prospect of a recount would create confusion and outrage in the case of a close election. States have different standards and requirements for triggering recounts and it is not at all clear whether recounts would be held in all 50 states in the event of a close national vote, or only in those states in which the vote was close. If only “close” states go through a recount, voters in other states are not treated equally, and if the recount is nationwide, the nation will endure a crisis equivalent to fifty Florida 2000 recounts.
What if no state recount was automatically triggered because of close statewide vote, but the national vote was exceptionally close?
In addition, standards for recounts vary from state to state, and what is counted as a vote in one state may be disqualified in another. This sparked considerable controversy inFloridaduring the 2000 recount, when standards varied by county. The NPV plan would magnify the confusion and controversy over how to determine valid and invalid votes in a nationwide recount.
The National Popular Vote plan would not achieve its main goal
Finally, the belief of NPV advocates that abandoning the Electoral College will ensure candidates reach out to and address the concerns of more voters is simply not accurate.
All elections require candidates to make strategic decisions about which voters to reach out to, in what manner, and how often. Because resources are scarce, especially candidates’ time, a presidential campaign under the NPV system would simply require candidates to allocate their scarce resources differently, perhaps choosing to ignore different voters than they do now but inevitably choosing to devote few if any resources to broad swaths of the public.
In fact, the NPV plan is likely to increase candidates’ time spent on addressing the needs and issues of “base” voters while decreasing outreach to undecided and independent voters. Rather than appealing to a broad cross-section of voters in different states around the country, it would be in a candidate’s self-interest to appeal primarily to well-organized constituencies with large and motivated national memberships.
Candidates are also likely to spend more time in urban and suburban areas, where potential votes are far more plentiful. Whereas, under the current system, doing a Presidential campaign event in smaller, rural communities might make sense in order to garner enough votes to win a specific state’s electoral votes, under the NPV system, there is little reason for candidates to venture outside of densely-populated areas.
NPV May Be Unconstitutional[ii]
Supporters of the NPV claim that because the Constitution gives state legislatures the power to determine how electors are chosen, the NPV is constitutional and requires no approval by Congress. Such claims, however, are specious. The NPV is unconstitutional because it would give a group of states with a majority of electoral votes “the power to overturn the explicit decision of the Framers against direct election. Since that power does not conform to the constitutional means of changing the original decisions of the framers, NPV could not be a legitimate innovation.”[iii]
The Constitution’s Compact Clause provides that “No State shall, without the Consent of Congress…enter into any Agreement or Compact with another State.”[iv] The Founders created the Compact Clause because they feared that compacting states would threaten the supremacy of the federal government in matters of foreign affairs and relations among the states.[v] If states could make agreements among themselves, they could damage the nation’s federalist structure. Populist states, for example, cannot agree to have theirU.S. Senators vote to seat only one Senator from a less populous state.
The very purpose of this clause was to prevent a handful of states from combining to overturn an essential part of the constitutional design. The plain text makes it clear that all such state compacts must be approved by Congress.
By circumventing the checks and balances of Congress, the NPV would risk setting a precedent that states can validate non–congressionally approved compacts as a substitute for a constitutional amendment.
Further Reading:
A Critique of the National Popular Vote Plan for Electing the President, John Samples, Cato Institute, October 2008, available at: http://www.cato.org/pubs/pas/pa-622.pdf.
Enlightened Democracy: the Case for the Electoral College, Tara Ross, Colonial Press, September 2005.
The Importance of the Electoral College, Dr. George Grant, Vision Forum Ministries, August 2004.
Securing Democracy: Why We Have an Electoral College, Professor Gary L. Gregg, Intercollegiate Studies Institute, January 2008.
[iii] Bradley A. Smith, Vanity of Vanities: National Popular Vote and the Electoral College, 7 Election L.J. 3, 217 (2008); Samples, supra note 13, at 9
[iv] U.S. Const. amend. XII; 3 U.S.C. §§ 1–21. Congress meets in joint session to count the electoral votes in January. If no candidate wins a majority of the electoral votes, the House selects the President and the Senate selects the Vice President, with each state delegation in the House having only one vote; art. I, § 10, cl. 3
[v] The Heritage Guide to the Constitution 178 (Edwin Meese III et al. eds., 2005).
Occupational Licensing Policies Hurt Low Income Workers in RI
/in Blog, Featured, Regulatory Environment/by RI Center for FreedomCosmetologists require 10 times more training than Emergency Medical Technicians
The state of Rhode Island has earned yet another poor grade in a national study of an important business category, illustrating how the state makes it more difficult and costly for low-income earners to embark on new careers. The study, released last week by the Institute for Justice (1) , measures regulatory burdens in the form of licensing requirements and fees for “low-income” occupations.
According to the study, Rhode Island licenses 49 of the 102 “low-income” occupations, which ranks the Ocean State with the 13th most burdensome regulatory system in the nation in this category and the 2nd highest burden in New England.
“This burden is especially harmful to many people who would prefer to start new careers and earn paychecks instead of receiving welfare checks,” said Mike Stenhouse, CEO for the Rhode Island Center for Freedom and Prosperity. “In most cases, landing a job should simply entail proving to the employer that you’re talented and honest. In too many instances, Rhode Island applicants also have to also prove themselves worthy to the state, by conforming to its arbitrary standards. Who’s really in charge of our lives?” inquired Stenhouse.
An “occupational license” is government permission to work in a particular field. To earn the license, the aspiring worker must clear various hurdles: earn a certain degree or type of education, complete specialized training, pass an exam, attain a certain grade level, pay fees, and more.
In the 1950s, only one in 20 U.S. workers needed the government’s permission to pursue his or her chosen occupation. Today, that figure stands at almost one in three.
In Rhode Island, under the guise of public safety, the state government took $732,298 from taxpayers in FY 2011 to fund the Department of Business Regulation’s Commercial Licensing and Racing and Athletics program (2) . The program oversees the licensing and regulation of myriad professions and trades, slapping fees and regulations on thousands of Rhode Island employers and workers. In many cases, the Commercial Licensing program governs the requirements necessary for employment in a profession, inhibiting some Rhode Islanders from pursuing the careers of their choice.
The Commercial Licensing program regulates real estate agents and appraisers, auto body shops, salvage yards, glass installation, upholsterers, auctioneers, liquor wholesalers, breweries, wineries, sewer-line cleaners, mobile-home dealers, trailer park operators, and health club workers as well as other businesses and professions.
Supporters of the Commercial Licensing program may claim that the organization has a role in keeping customers safe. In truth, the program creates a disincentive for competent workers to begin new careers or for employers to hire them, while forcing companies to raise prices for consumers across the state.
On average, prospective workers and employers in Rhode Island pay $164 in fees, lose about 211 days — about seven months — to education and experience, and take one exam. A handful of Rhode Island occupations require excessive training requirements compared with other states. For example:
Some of Rhode Island’s requirements also appear overly burdensome compared to other occupations that the state licenses. For example, it takes only 37 days of training to become an emergency medical technician, but nearly twice that time to earn a manicurist license. Barbers, cosmetologists, skin-care specialists and massage therapists must undergo even more training.
Rhode Island could expand employment prospects for many job-seekers by reducing or removing overly burdensome or needless barriers to low- and moderate-income jobs. Per the Competitiveness Report Card release for Rhode Island earlier this year by the RI Center for Freedom & Prosperity, the Ocean State already grades an “F” for overall Business Climate, with five Fs and one C- in related subcategories. The D- grade in this subcategory would further deepen the problem.
The following table shows the study’s analysis for Rhode Island.
The study also reveals the arbitrary and irrational nature of licensure across the nation:
End Notes:
(1) “License to Work”, Institute for Justice , 2012, http://www.ij.org/images/pdf_folder/economic_liberty/occupational_licensing/licensetowork.pdf
(2) State of Rhode Island and Providence Plantations. “Budget Fiscal Year 2012.” p. 67
The Institute for Justice is a nonprofit, public interest law firm that litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties and to restore constitutional limits on the power of government. Founded in 1991, IJ is the nation’s only libertarian public interest law firm, pursuing cutting edge litigation in the courts of law and in the court of public opinion on behalf of individuals whose most basic rights are denied by the government. The Institute’s strategic research program produces social science and policy research to inform public policy debates on issues central to IJ’s mission.
The Ocean State Current to Hire Investigative Reporter
/in News, Recent Posts/by RI Center for FreedomThe Ocean State Current, an online news bureau and a division of the non-partisan think thank – the Rhode Island Center for Freedom of Prosperity – announced today that it plans to hire an investigative reporter to complement its existing online content. The Current is actively conducting a search and is now accepting applications.
The full-time position will be tasked with developing and publishing investigative and human interest news stories having to do with public policy and should have a demonstrable related background.
“We are pleased to be able to expand our journalism operation to include a dedicated journalist who will track down stories that may be of interest to Rhode Islanders”, said Mike Stenhouse, CEO, for the RI Center for Freedom.
The Ocean State Current, which can be viewed at www.OceanStateCurrent.com, is presently managed by Justin Katz, Managing Editor, who had previously founded AnchorRising.com. Interested journalists are asked to send their resume and an introductory letter to Mr. Katz at jkatz@oceanstatecurrent.com.
Interns
/in Events/by RI Center for FreedomCALL FOR INTERNS!
Free-market think tank seeks student interns
2017-18 INTERNSHIP Opportunities: Virtual positions available (contact the Center for more details)
THE RI CENTER FOR FREEDOM & PROSPERITY, Rhode Island’s premier public policy education and research center, seeks ambitious students who would like to sharpen their writing, debating, researching, media and event-organizing skills and learn more about state and local government. If you have a strong interest in political science, public policy, economics, business, history, English, journalism or communications, we encourage you to apply for a RI CENTER FOR FREEDOM internship today.
The ideal intern has above-average writing and/or editing skills and a basic understanding of current events; knowledge of contemporary RI and American history is helpful. A valued quality is an appreciation for – and understanding of – individual liberty, the free market, property rights, and limited government. Intern responsibilities may include: writing for publication, light public policy research, administrative tasks, editing RI CENTER FOR FREEDOM publications, and event planning.
Internship hours are flexible; they can be tailored to fit school, athletic and work schedules. Internships are unpaid positions; however, the RI CENTER FOR FREEDOM will, to the best of its ability, work with those students who wish to receive academic credit for their internship. Additionally, the CENTER FOR FREEDOM offers its assistance in obtaining internships with market-oriented organizations in Washington, DC and around the country. Further, the CENTER will provide information about seminars and scholarship opportunities open to students interested in the principles of liberty.
To apply for a ‘virtual office’ internship, please complete the following steps:
For more information about the internship and THE RI CENTER FOR FREEDOM & PROSPERITY, please contact the CENTER at info@rifreedom.org .
Would you tax Big Papi right off the Red Sox?
/in Blog, Recent Posts, Taxes/by Mike StenhouseQuick Links: Ernst & Young report – taxing the rich will cost jobs
Those who support the onerous tax structure that has ruined our state’s economy have wheeled out a new poll that shows public support of increased taxes on the rich … out of fairness, of course. Our Center has already shown how this tax increase would cost even more jobs for RI and further hamper our already struggling economy. So let’s try another angle …
Imagine the Red Sox as a last place team having already lost many of its superstars to free-agency. Now imagine that the Red Sox decide to levy a tax on its superstar players like David Ortiz (Big Papi). After all, it’s not fair that Ortiz should get all those at-bats where he can hit home runs, RBIs, and otherwise produce results for the team. No, instead, Big Papi should give 9.9% of his at-bats to players on the bench, who don’t get to play as much. That would only be fair, right?
But consider if it would help or hurt the Red Sox if one of their top producers didn’t get as many at-bats, and instead, those at-bats went to a lower producing teammate? How would Red Sox Nation feel about that?
Then imagine it’s the end of the year, and Ortiz is a free-agent. Is he more likely to re-sign with the Red Sox, who will tax his at-bats by almost 10%, or might he decide to sign with the Yankees who will not tax him at all? Would the Red Sox, with their “at-bats tax”, be able to attract other free-agents to replace him? Again, how would this help the Red Sox?
The same questions can be asked about our state’s “rich”: How is it good for Rhode Island if we limit the capacity of our top producers to invest in our economy? How is it good for us if we make it less attractive for our top businesses and individuals to remain in or move to our state?
Just like the Red Sox, Rhode Island should embrace and encourage our best performers, not give them reason to reduce productivity … or even leave outright.
In sports, teams actually give bonuses to incentivize performance. In Rhode Island, those who defend the status quo want to to do the opposite. Imagine yourself as a “fan” of Rhode Island … how would you choose to treat our own Big Papis?
Open Letter to RI Municipalities: Tell us the Truth!
/in Blog, Pension Reform, Recent Posts/by RI Center for FreedomALL CITIZENS ARE ENCOURAGED TO CONTACT THEIR LOCAL OFFICIALS
Quick Links: See the OPEN LETTER below, Automated Online Contact Form , Locally-Administered Municipal Pension Plans Evaluations, About the National Pension Task Force
April 19, 2012. Providence, RI – An “open letter” to Rhode Island municipal officials was released today by the national Task Force organized by the Rhode Island Center for Freedom and Prosperity to provide research and analysis on Rhode Island’s underfunded municipal retirement systems. The open letter is in response to the evaluations of locally administered pension plans recently submitted by each city and town.
The letter requests that City officials utilize the same realistic assumptions used in the private sector, when evaluating the true scope of their pension and OPEB liabilities and assets.
“It is obvious that our city’s are using un-realistic methods to determine the true scope of the problem”, said Mike Stenhouse, CEO for the RI Center for Freedom & Prosperity. “We urge every Rhode Islander to contact their city officials and demand that accurate accounting figures be put forward. How can a problem be solved if we don’t accurately quantify the problem?”
“We all remember the public outrage when Enron and other corporations were exposed for conducting fraudulent accounting practices … and rightly so. But why should we be any less concerned about accounting malpractice when it comes to our public pensions”, asked Rich Danker, member of the task force and project director for economics at American Principles Project, which is hosting the online form to contact municipal officials.
Citizens are asked to contact in their city and town officials in one of two ways:
1) Copy and paste the open letter below into a personalized email or letter to your own selected officials
2) Contact multiiple officials in multiple municipalities with a version of the same letter by utilizing an automated online contact form
OPEN LETTER
Dear Mayor / City Official,
“Truth in Numbers” was a key theme for the historic pension reforms that were implemented last fall in Rhode Island, and, as a concerned citizen, I am requesting that the same level of transparency be implemented when it comes to dealing with the pension and other post employment benefit (OPEB) problems facing our city. All public officials and citizens need to be made aware of the full extent of the liability as well as the true condition of our public finances in order to be able to make informed decisions about proposed solutions.
We all remember the public outrage when Enron and other corporations were exposed for conducting fraudulent accounting practices … and rightly so. But why should we be any less concerned about accounting malpractice when it comes to our public pensions?
We are all in this together. How our city handles this significant problem will impact each and every resident: from retirees, to municipal employees, to property and vehicle owners, to business owners, to students and to all those who receive city services.
In order to instill honesty in public finances the city should publish the data associated with its retirement system that is comparable to what is demanded of the private sector. This means:
1) The city’s pension liabilities must be valued according to a discount rate that matches the true market value of the debt. Even if this means conducting a second valuation of the liability based on this more realistic rate assumption.
2) An open accounting of the city’s OPEB liabilities
3) The city’s pension assets must be valued on a true market basis
4) The projected total benefit contributions expected to be borne by taxpayers for the next ten years must be based on these more realistic figures
We know the horror stories of how public pension debt may have been dramatically undervalued by state and municipal governments, by as much as a factor of three-to-one. The assets that are meant to support this debt are also not always reported according to market values. Therefore, taxpayers are in the dark about what they owe in terms of pension payouts to government workers and retirees. This impedes an honest discussion about spending and taxes that needs to take place for cities like ours to achieve good fiscal health.
We are asking you to enhance your relationship with your constituents and fulfill your fiduciary responsibility to us, the taxpayers, by promptly disclosing the true scope of the pension data requested above. We deserve nothing short of full “truth in numbers” when dealing with this critical matter of public finance.
Thank you for your service to our community,
About RI-STAMP
/in Blog, Taxes/by RI Center for FreedomRI-STAMP (State Tax Analysis and Modeling Program) was developed by the Beacon Hill Institute and was customized for the state of Rhode Island for the exclusive use by the RI Center for Freedom and Prosperity. Various versions of STAMP have been successfully utilized throughout the country as a credible predictor of the effects of tax policy on a state’s (or city’s) economy.
Accuracy
Massachusetts STAMP
In May of 2009, the Beacon Hill Institute used its STAMP model to estimate that the proposed increase in the Massachusetts sales tax from 5.0% to 6.25% would increase sales tax revenue by $1.038 billion annually. The sales tax increase was implemented on August 1, 2009. The state collected $950 million in additional revenue in the first 12 months that the measure was in place. However, during the prior 12 months sales tax revenue was down $220 million from the previous year due to the recession. BHI used a logarithmic trend to estimate that sales tax revenue would have been down by an additional $140 million in the year to July 31, 2010. Thus we estimate that the sales tax increase actually generated $1.09 billion in that period. Thus the STAMP model projection was off by only 5.5% from the actual revenue change.
New York STAMP
STAMP has a strong reputation for accuracy. A quote from a March 14, 2003 article in The New York Sun illustrates the predictive accuracy of STAMP. In discussing the Manhattan Institute’s analysis of a property tax increase, the article states:
A fiscal policy analyst at the Manhattan Institute, E.J. McMahon, estimated that it would cost the city 62,000 jobs. He made his estimate based on the State Tax Analysis Modeling Program, which models interaction between economic and tax variables using historical data. It seems that the mayor’s own Office of Management and Budget may have reached similar conclusions to Mr. McMahon’s: Between the mayor’s November financial plan and the January adjustment – i.e. before and after the property tax increase – the administration has revised downward its estimate of the number of jobs in New York City in 2003 by 63,000.
Thus, as predicted by STAMP, the tax increase did cost the city approximately 62,000 jobs.
Effectiveness
Since 1991, BHI has constructed STAMP® models for 25 states and three local areas, including New York City. Over the past decade, researchers armed with STAMP® models have successfully fought back tax increases and advocated tax cuts. Here is a partial list of those efforts:
• Massachusetts, 2000. Voters rejected a graduated income tax.
• New Hampshire, 2001. The legislature rejected a proposal to introduce a sales tax.
• Florida, 2002. The legislature rejected an expansion of the sales tax.
• Alabama, 2003. Voters turned down a tax increase.
• Texas, 2005. The legislature rejected a payroll tax.
• Iowa, 2006. The legislature passed a bill to exclude the income tax for elderly taxpayers.
• Michigan, 2007. The legislature vote for and then repeal an expansion of the sales tax.
• Oregon, 2009. The legislature rejected a cap-and-trade regime for greenhouse gases.
• Washington, 2010. Voters reject the imposition of a state income tax.
Background: CGE MODELS
A computable general equilibrium (CGE) tax model is a computerized method of accounting for the economic effects of tax policy changes. A CGE model is specified in terms of supply and demand for each economic variable included in the model, where the quantity supplied or demanded of each variable depends on the price of each variable. Tax policy changes are shown to affect economic activity through their effects on the prices of outputs and of the factors of production (principally, labor and capital) that enter into those outputs.
A CGE model is in “equilibrium,” in the sense that supply is assumed to equal demand for the individual markets in the model. For this to be true, prices are allowed to adjust within the model (i.e., they are “endogenous”). For instance, if the demand for labor rises, while the supply remains unchanged, then the wage rate must rise to bring the labor market into equilibrium. A CGE model quantifies this effect.
Finally, a CGE model is numerically specified (“computable”), which is to say it incorporates parameters that are believed to be descriptive of the actual relationships between quantities and prices. It produces estimates of changes in quantities (such as employment, the capital stock, gross state product and personal consumption expenditures) that result from changes in prices (such as the price of labor or the cost of capital) that result from changes in tax policy (such as the substitution of an income tax for a sales tax).
Because it consists of a large number of interrelated equations STAMP requires the development and application of a sophisticated computer program for the solution of its equations.
About The Beacon Hill Institute:
The Beacon Hill Institute (BHI) is an independent, nonpartisan economic research organization located in the Department of Economics at Suffolk University in Boston, Massachusetts. Articles and references to BHI’s work have appeared in leading publications, including the Boston Globe, Wall Street Journal, Los Angeles Times Magazine, U.S. News & World Report, State Tax Notes and the Cato Journal. For the last seven years, BHI has been a leader in the development of econometric models for the analysis of state tax policy changes.
The Beacon Hill Institute has developed and built STAMP (State Tax Assessment Analysis Modeling Program) models for 25 states and LAMP (Local Area Assessment Modeling Program) models for 3 cities, including New York City.
The Institute has created a State and City Competitiveness Model and Index. The institute has conducted a comparative analysis of the competitiveness of the US States and 50 largest metropolitan statistical areas (MSAs) and published the results in the form of an annual ranking for the past three years. BHI produces reports for states and cities included in our ranking analyzing the strengths and weaknesses that contribute to its current competitive profile and the steps that need to be taken to improve the competitive posture.
The Institute has provided state revenue forecasts for the Massachusetts and presented them to the Massachusetts Joint Legislative Committee for Ways and Means for the fiscal years.
National Popular Vote – Right or Wrong for Rhode Island and America?
/in Recent Posts, Studies and Reports/by RI Center for FreedomNational Popular Vote
Imagine the likely scenario thatRhode Islandvoters will overwhelmingly support the re-election of President Obama, Democrat, this November by the same 63%-35% margin as they did in 2008. Then imagine the possible scenario thatRhode Island’s (4) “Electoral Votes” would instead be assigned to the President’s Republican opponent! In future Presidential elections the reverse scenario could also occur.
Outrageous? Yes, but possible if the National Popular Vote (NPV) initiative is passed inRhode Islandand in a number of other states. This potential sham would clearly not represent the constitutionally guaranteed voice ofRhode Islandvoters.
This Policy Brief summarizes some of the key shortcomings of the NPV compact as well as to list more extensive research and analysis on this subject. Most of the following material was reproduced from a Policy Memorandum previously published by the Center for Competitive Politics[1].
The National Popular Vote (NPV) proposal would represent a fundamental shift in how our nation elects the President. While many well-intentioned individuals and organizations support this cause and compelling arguments can be made in its favor, the NPV plan ultimately represents a scheme that creates more problems than it purports to solve and would largely fail to achieve the outcomes desired by its proponents.
In addition to the scenario presented above, there are six major reasons why the NPV initiative should be of major concern for citizens and policymakers:
1) The Electoral College is a critical part of our constitutional checks and balances
2) The NPV proposal would remove any connection between a state’s voters and its electoral vote
3) The NPV compact would cause chaos if a state attempts to withdraw
4) Differing election standards make the NPV plan impractical and confusing
5) The National Popular Vote plan would not achieve its main goal
6) The National Popular Vote plan may be unconstitutional
The Electoral College is a critical part of our constitutional checks and balances
The NPV plan would jettison a nearly 220-year-old system for electing our nation’s President. In doing so, it would reject one of the many carefully-crafted checks on majority rule designed by the Founding Fathers to safeguard minority rights. The Electoral College ensures that in order to be elected President, a candidate must appeal to not only a majority or even plurality of voters, but also to voters from a geographical cross-section of the country. This system requires that candidates for the highest office in the land are not able to simply rely on highly energized, sympathetic, and homogenous voters concentrated in only a few densely-populated parts of the country.
Instead, candidates must be able to appeal to multiple constituencies, building broad coalitions based on policies that address the needs and interests of Americans across the country. The plan would eliminate the need for candidates to build these coalitions in support of their candidacies, allowing them instead to focus on issues that appeal to and motivate their partisan base. The requirement that candidates appeal to voters across the country and not just in a handful of populous areas is an important check on the power of a narrowly-focused majority to trample the rights of the minority. The NPV scheme would eliminate this important check.
The NPV proposal would remove any connection between a state’s voters and its electoral vote
Another important deficiency with the plan is that is severs the intrinsic link between a state’s citizens and a state’s electoral votes. Instead of each state’s electoral votes being determined based on the interests of its citizens, a state’s electoral votes are allocated based on criteria having little, if anything, to do with the interests and preferences of its own citizens.
Advocates of the NPV plan claim that states have not always relied on citizens’ votes to allocate their electoral votes. For example, early in American history several states gave the power to appoint electors directly to the state legislature. However, even then, the electors were appointed by official that were accountable to the state’s voters, and presumably were required to heed the interests and preferences of their citizens. The NPV compact breaks this vital connection, allowing for a state’s electoral votes to be awarded based on criteria wholly unrelated to the interests and preferences of the state’s citizens.
For example, if the state legislature can award electoral votes based on election results outside of its jurisdiction, could the legislature also simply delegate the power to appoint electors to a special commission? Could they establish a system of choosing electors that sought to “correct” or “balance out” perceived inequities in the demographics of who votes and who does not? Could they substitute for the recorded totals of nationwide votes an estimate based on how the vote would have turned out if only other states had run “fair” elections?
By cutting the link between a state’s voters and a state’s electoral votes, the NPV plan would open a Pandora’s Box of possibilities for alternate methods of awarding electoral votes.
The NPV compact would cause chaos if a state attempts to withdraw
Abandoning the Electoral College as it presently operated would also create significant opportunities for political gamesmanship as states may seek to obtain partisan advantage for one party or another by entering or leaving the compact (or threatening to do so), if it seems advantageous at any given moment.
For example, a state legislature may conclude late in the election cycle that a candidate overwhelmingly favored by its voters is unlikely to win a majority or plurality nationwide, but might win the Presidency if the state were to revert to the traditional Electoral College. As state legislators are only accountable to their own voters, and not any sort of national majority, they may conclude it is in their best interest to abandon the NPV plan.
The temptation to withdraw from the compact under such a scenario would be irresistible to some. One need only recall the partisan maneuvering regarding a Massachusetts U.S. Senate seat in 2004, when a legislature controlled by Democrats stripped a Republican governor of the power to appoint a replacement in the event that John Kerry won the presidency, and again in 2009 when the Democratic legislature restored the power to appoint a replacement to a Democratic governor when it appeared doing so would provide the U.S. Senate with a timely 60th vote for health care reform.
Because the authority to determine how a state’s electors are appointed is given exclusively to the state legislature, it may well be that a state cannot delegate that power to a body not under its jurisdiction, i.e. the other 49 states. It is thus uncertain whether a state could legally withdraw from the compact even though NPV supporters claim that states cannot. Nevertheless, simply the attempt to do so would spur nationwide outrage and chaos, leading to court battles reminiscent of Bush v. Gore in the 2000 election.
Differing election standards make the NPV plan impractical and confusing
Concerns over ballot fraud, controversial election management practices, and different recount processes would also create the potential for chaos and conflict. Under the present system, a specific instance of ballot fraud can only impact the state in which it occurs. Thus, only in a handful of states, where the vote is likely to be very close, can election fraud affect the outcome. While still undesirable, the damage is contained to a single state.
However, under this plan, a fraudulently-cast ballot in any state doesn’t simply affect how that one state awards its electoral votes; it affects how a majority of electoral votes are cast. Thus, a fraudulently-cast ballot in Texas or New York, or rather thousands or even tens of thousands of fraudulently-cast ballots in these or other states, would help to determine how 270 Electoral College votes will be cast; not simply the electoral votes of the state in which the fraud occurred.
Similarly, each state has different sets of election laws, determining who may vote and what process they must follow. Practices such as expunging felons from voter rolls, same-day voter registration, voter identification, and countless other procedures differ from state to state, creating significant problems because not all voters will be treated the same way nationally.
ConsiderUtahandWyoming, states which have dramatically different policies on voting by felons.Utahbars currently incarcerated felons from voting, but that ban is lifted once they are released.Wyoming, however, permanently bars felons from voting even after release.
Under the Electoral College system, both states select their electors based on the election rules and standards they have chosen – in Utah, to include citizens with felony convictions in their past and in Wyoming to prohibit such citizens from participating.
But under the NPV plan, both states risk having their electoral votes allocated through processes that they have otherwise rejected:Utahmight see their electoral votes determined without the votes of citizens they believe should be allowed to vote, whileWyomingmight see their electoral votes cast based on the votes of released felons, in contrast to their laws.
This example and countless others demonstrate how each state has determined, through 50 separate political processes responsive to each states’ citizens, who can and cannot vote and under what circumstances. The NPV compact would instead force states to allocate their electors based on an election process that is contrary to the wishes of that state’s residents.
It’s also important to note that the prospect of a recount would create confusion and outrage in the case of a close election. States have different standards and requirements for triggering recounts and it is not at all clear whether recounts would be held in all 50 states in the event of a close national vote, or only in those states in which the vote was close. If only “close” states go through a recount, voters in other states are not treated equally, and if the recount is nationwide, the nation will endure a crisis equivalent to fifty Florida 2000 recounts.
What if no state recount was automatically triggered because of close statewide vote, but the national vote was exceptionally close?
In addition, standards for recounts vary from state to state, and what is counted as a vote in one state may be disqualified in another. This sparked considerable controversy inFloridaduring the 2000 recount, when standards varied by county. The NPV plan would magnify the confusion and controversy over how to determine valid and invalid votes in a nationwide recount.
The National Popular Vote plan would not achieve its main goal
Finally, the belief of NPV advocates that abandoning the Electoral College will ensure candidates reach out to and address the concerns of more voters is simply not accurate.
All elections require candidates to make strategic decisions about which voters to reach out to, in what manner, and how often. Because resources are scarce, especially candidates’ time, a presidential campaign under the NPV system would simply require candidates to allocate their scarce resources differently, perhaps choosing to ignore different voters than they do now but inevitably choosing to devote few if any resources to broad swaths of the public.
In fact, the NPV plan is likely to increase candidates’ time spent on addressing the needs and issues of “base” voters while decreasing outreach to undecided and independent voters. Rather than appealing to a broad cross-section of voters in different states around the country, it would be in a candidate’s self-interest to appeal primarily to well-organized constituencies with large and motivated national memberships.
Candidates are also likely to spend more time in urban and suburban areas, where potential votes are far more plentiful. Whereas, under the current system, doing a Presidential campaign event in smaller, rural communities might make sense in order to garner enough votes to win a specific state’s electoral votes, under the NPV system, there is little reason for candidates to venture outside of densely-populated areas.
NPV May Be Unconstitutional[ii]
Supporters of the NPV claim that because the Constitution gives state legislatures the power to determine how electors are chosen, the NPV is constitutional and requires no approval by Congress. Such claims, however, are specious. The NPV is unconstitutional because it would give a group of states with a majority of electoral votes “the power to overturn the explicit decision of the Framers against direct election. Since that power does not conform to the constitutional means of changing the original decisions of the framers, NPV could not be a legitimate innovation.”[iii]
The Constitution’s Compact Clause provides that “No State shall, without the Consent of Congress…enter into any Agreement or Compact with another State.”[iv] The Founders created the Compact Clause because they feared that compacting states would threaten the supremacy of the federal government in matters of foreign affairs and relations among the states.[v] If states could make agreements among themselves, they could damage the nation’s federalist structure. Populist states, for example, cannot agree to have theirU.S. Senators vote to seat only one Senator from a less populous state.
The very purpose of this clause was to prevent a handful of states from combining to overturn an essential part of the constitutional design. The plain text makes it clear that all such state compacts must be approved by Congress.
By circumventing the checks and balances of Congress, the NPV would risk setting a precedent that states can validate non–congressionally approved compacts as a substitute for a constitutional amendment.
Further Reading:
A Critique of the National Popular Vote Plan for Electing the President, John Samples, Cato Institute, October 2008, available at: http://www.cato.org/pubs/pas/pa-622.pdf.
Enlightened Democracy: the Case for the Electoral College, Tara Ross, Colonial Press, September 2005.
The Importance of the Electoral College, Dr. George Grant, Vision Forum Ministries, August 2004.
Securing Democracy: Why We Have an Electoral College, Professor Gary L. Gregg, Intercollegiate Studies Institute, January 2008.
[1] Center for Competitive Politics, by Sean Parnell, March 1, 2011; http://www.campaignfreedom.org/wp-content/uploads/2011/03/20110819_NPVPolicyMemo.pdf
[ii] The Heritage Foundation: http://www.heritage.org/research/reports/2011/10/destroying-the-electoral-college-the-anti-federalist-national-popular-vote-scheme#_ftn17
[iii] Bradley A. Smith, Vanity of Vanities: National Popular Vote and the Electoral College, 7 Election L.J. 3, 217 (2008); Samples, supra note 13, at 9
[iv] U.S. Const. amend. XII; 3 U.S.C. §§ 1–21. Congress meets in joint session to count the electoral votes in January. If no candidate wins a majority of the electoral votes, the House selects the President and the Senate selects the Vice President, with each state delegation in the House having only one vote; art. I, § 10, cl. 3
[v] The Heritage Guide to the Constitution 178 (Edwin Meese III et al. eds., 2005).
Center for Freedom presents at RI Hospitality Board Meeting
/in Blog, News, Recent Posts, Taxes/by RI Center for FreedomMike Stenhouse, CEO for the RI Center for Freedom & Prosperity, presented the findings from the Center’s Policy Brief on the Governor’s proposed “sales tax hike” to the Board of Directors of the RI Hospitality Association this morning. Also discussed was the upcoming “Eliminate the Sales Tax” report that the Center hopes to release before the end of April.
The presentation was well-received by the 25 or so Board members on hand. Following Stenhouse’s presentation and a brief Q & A session, the two organizations agreed to seek to work more closely together on issues of common interest.
The Board presentation was requested following Stenhouse’s popular speech at the Anti-Meals Tax Rally held in March., which was organized by the RI Hospitality Association. See the entire speech, photos, and a post-event interview on the Dan Yorke show … by clicking here.
Special thanks to Executive Director, Dale Venturini, and Chairman, Ken Cusson, for inviting our Center to make its presentation.
Task Force OpEd in ProJo: All RI Communities in Deep Trouble
/in Blog, Pension Reform, Recent Posts/by Mike Stenhouseby MIKE STENHOUSE and RICK DANKER
Rhode Island has become ground zero for the public-employee pension crisis owing to the size of the unfunded pension liabilities the state and its cities face along with the sad story of the Central Falls bankruptcy.
But, unlike other states stuck in similar situations, the Ocean State has been proactive in making solid reforms to reduce this debt load. This month, Governor Chafee introduced a municipal pension reform plan that will enable localities to make cuts similar to what the state made with its reform late last year.
The centerpiece of the governor’s proposal is legislation to let the state’s independent pension plans suspend annual cost-of-living adjustments (COLAs). Eileen Norcross, senior research fellow with the Mercatus Center at George Mason University, and a member of the Rhode Island Center for Freedom and Prosperity’s national pension task force, finds that a 1 percent reduction in the COLA reduces the overall pension plan liability by 10 percent.
The magnitude of this cost savings is clear in the data on the task force’s transparency website, RIOpenGov.org? , which shows the difference in a 3 percent COLA and no COLA on projected future pension payouts to the top-earning retirees to be around $1.5 million. Cranston, for one, would cut its total projected future pension costs associated with its 421 public police and fire retirees from $579 million to $410 million with this change.
To qualify for the COLA suspension — which the state already enacted with its own reform legislation — local pension plans must be in a “critical status” of a funded level below 60 percent. As the governor’s plan notes, the most recent average reported funded level for the plans is just 40 percent.
But this reporting doesn’t tell the whole story of local pension debt. When these liabilities are calculated using private-sector valuation rather than assumed investment returns, the picture gets even worse.
Norcross and her Mercatus Center colleague Benjamin VanMetre in November 2011 calculated the average funded level to be 29 percent using Treasury bond yields. The unfunded liabilities belonging to the 36 Rhode Island cities with their own pension plans was therefore $6 billion rather than the reported $2.4 billion.
Utilizing private-sector valuation, every locality in Rhode Island would be funded below 60 percent, according to this same Mercatus report. We question, then, why there should even be a “critical status” test in the legislation.
This truth about local pension debt means that many of these municipalities will ultimately need to do more than suspend COLAs. They will need to consider adjusting benefit formulas, capping pension payments, or offering buyouts to pare down this debt. The alternative is to let the burden remain on taxpayers, either in the form of higher taxes, cuts in public services, or both. Those are particularly bad options in Rhode Island, where emigration to other states and towns is just a short trip away.
Governor Chafee should be commended for acting decisively on the public-pension crisis and introducing a plan to give the municipalities a head start on reform. It is now up to the legislature to quickly pass this into law. But the hard work will remain for those cities and towns deemed to be in “critical status.”
They should now calculate and disclosure their pension debt using market valuation so their citizens know full extent of the unfunded liabilities. Then they should come up with reform plans that use every legal option available to spare those citizens from having to prop up uncontrollable pension plans. Rhode Island will benefit when the state’s enablement of the COLA suspension is combined with the opportunity for its fiscally-distressed cities and town to design their own reform plans.
When adding the often-overlooked burden of other post employment benefits (OPEB), the public retirement crisis — decades in the making as benefits outstripped contributions through government overpromising — is the state and local finance issue of our time. It threatens foundations crucial to making government work, such as truthfulness about finances and fairness in allocating public services and benefits. When they get the state’s go-ahead to start reducing their pension obligations, Rhode Island’s cities and towns will have no excuse not to take it on.
Mike Stenhouse is CEO of the conservative Rhode Island Center for Freedom and Prosperity. Rich Danker is director of economics at American Principles in Action, a conservative Washington policy organization. Bot individuals are part of the RI Center for Freedom’s national task force on Pension Reform in the Ocean State.
Click here for image of the actual ProJo OpEd page …
Center for Freedom research at anti Meals-Tax Rally
/in Blog, Recent Posts, Taxes/by RI Center for FreedomOn March 22, CEO Mike Stenhouse presented research detailing the negative consequences Rhode Island might expect if the Governor’s proposed Sales Tax increase were to be implemented.
See the full Policy Brief here …
Listen to the Mike Stenhouse Radio Interview w/ Dan Yorke
Watch Mike Stenhouse’s speech here on YouTube …
See the entire anti-meals tax speaking program here …
MEDIA COVERAGE:
RhodyBeat: http://rhodybeat.com/stories/Protesters-didnt-cry-over-spilled-tea,69209
Woonsocket Call: http://www.woonsocketcall.com/node/4887