Several proposals to dissolve village boundaries were on the ballot last week. Voters in the villages of Malone (Franklin County) and Chaumont (Jefferson County), both rejected the idea. The Village of Lyons (Wayne County) embraced it, although by a very narrow margin (and absentee ballots, when counted, could change the vote).
Most village dissolution votes fail to gain the support of voters, putting Malone and Chaumont with the majority. Should these voters have chosen to dissolve these villages? Not being a resident of either community, we at CGR don’t have a voice in the decision. In fact, having studied the issue in both, we can make a case on either side. Our role is to lay out the facts to the best of our ability—informing the voters and empowering them to make their own decisions.
At issue in these votes is a possible loss of identity, and some loss of local control—the power to enact laws and to provide village residents with the services they alone vote to support. Village residents remain voters and taxpayers in the surrounding town and will look to their town for a continuation of needed public services. In exchange for giving up some autonomy, residents expect a smaller tax bill. Read more »
In 1940, fewer than one in twenty Americans had a college degree. Now it’s better than one in four. Fueled by a flood of American soldiers returning from WWII’s European and Pacific theaters, the GI Bill sparked an explosion in college enrollment that continues to this day.
Higher education boosts productivity and pay. The earnings gap between those with and those without a college degree is dramatic. According to the Census, individuals 25 or older with bachelor’s degrees earned nearly $22,000 per year (80%) more than those with only a high school diploma.
But what does college cost?
College pricing rivals health care in opacity—most students receive some form of “aid.” Just as in buying a car, few pay the “manufacturer’s suggested retail price.” Bloomberg Businessweek reports that 94% of students in NYS private colleges & universities receive some form of financial aid. Even in public colleges, two-thirds receive aid (in addition to the outright state support to the institution).
The College Board conducts an annual survey and reports that published tuition grew 52% from 96-97 to 11-12 while tuition net of aid (including federal tax credits) rose 22% over the period, suggesting that colleges and universities are increasing the “sticker price” at the same time that aid is also rising. Using the College Board’s figures on net tuition and fees, students beginning four year degrees in 2011 will pay an average of $52,000 in tuition over four years in private schools and about $10,000 in public schools. Many pay more and many pay less, of course. Consider, too, the cost of room and board—another $35-40,000—and foregone earnings. Read more »
Health care is different from other goods and services.
- As a wealthy society, we aren’t willing to limit access to care based on ability to pay (at least entirely).
- Caveat emptor—let the buyer beware—fails in the face of complexity: The patient (the “buyer”) is often incapable of understanding what is appropriate or necessary and must rely on the provider (the “seller”) for essential advice.
- The pace of technological change outstrips our capacity to set limits on what constitutes adequate care.
- Public policy, operating through payment schema and regulation, is a blunt instrument, influencing the marketplace in both intended and unintended ways. Read more »
Our nation’s fiscal house is held together with duct tape and Crazy Glue. The porch roof is teetering—left unrepaired, it may collapse onto our economy at the end of the year. And our home’s foundation has a crack in it. While this structural gap between revenue and spending—largely caused by Baby Boom retirements—won’t be dramatically worse next year, the crack will get larger and larger until we make major repairs.
A wide array of tax cuts are due to expire at the end of 2012. As the Bush White House couldn’t muster the 60 votes required for a permanent tax change, the 2001 tax cuts were passed using the Senate’s arcane “reconciliation” procedure, which forced a 10 year “sunset” provision. (The vote was 50-50 with Vice President Dick Cheney casting the tie-breaker.) Unable to reach consensus on much of anything in 2010, the President & Congress kicked the can down the road another 2 years. In February, the 2 percentage point reduction in the payroll tax rate originally passed in 2010 was extended to the end of the year.
So, what happens if Congress & the President don’t do a deal? Read more »
Given a conflict between “good for us” or “good for me,” people generally pick the second. That proposition, obvious as it is, underlies most of economics. Thank goodness, human beings often rise above self-interest in ways that redeem human society.
But politicians shouldn’t push their luck. Consider what the European Union is asking of the Greeks. The austerity imposed as a condition of the bailout goes beyond expecting Greeks to behave like Germans, which would be heroic enough. No, the Greeks are expected to do penance for their past profligacy, the “sackcloth and ashes” Full Monty.
Reluctant to think ourselves selfish, we have a remarkable capacity to convince ourselves that “good for me” is also “good for us.” That capacity for self-delusion is evident in results from the Pew Global Survey: Respondents in Britain, France, Germany, Greece, Spain, Italy, Poland and the Czech Republic were asked to identify the “hardest working” people of Europe. Seven picked the Germans. The Greeks picked themselves. For the title, “least hardworking,” five picked the Greeks, but the Greeks fingered the Italians.
Is it any wonder that the Greeks’ penance is insincere? Or that support for austerity among voters proved to be so tenuous in Sunday’s election? Read more »
There is nothing like the IRS Form 1040 and NYS Form 201 to get you in the mood for tax reform.
We need a simpler system. Complexity is expensive by itself—we spend money simply keeping records and paying professionals to figure out what we can and can’t claim. The Taxpayer Advocate’s Service (TAS) of the National Taxpayer Advocate (appointed and funded by Congress) estimated in 2010 that taxpayers spend 6.1 billion hours filling out taxes each year (down from an estimated 7.6 billion hours in 2008, probably courtesy of tax software). 60% of Americans pay someone else to complete their tax forms. In 2008, TAS put the total cost of compliance at $163 billion, about 11% of total tax receipts. Read more »
“And which retirement plan do you want?” Retirement?!! As a newly appointed Assistant Professor of Economics at Potsdam College of SUNY, I was 28 and starting my first real professional job. I was being asked to make a decision that would have little impact on my life for 37 years.
I was offered two options: The first was the NYS Employee Retirement System (ERS). If I stayed in state service and retired at age 65, I would be eligible for annual benefits equal to 70.5% of my final average salary (defined as the highest salary earned in three consecutive years). My contribution would have been 3% of salary for the first ten years. The remainder of the cost would be paid by the state. This is what is called a “defined benefit” retirement plan. Regardless of what happens to the invested money, NYS promises to pay out a specified benefit for as long as I live. Read more »
“What (or whom) should we occupy?” has become shorthand for a bit of communal soul searching. We know that our economy fails to measure up. For some the pain is very personal, “Why can’t I find a job?” or “Must I work so hard for so little?” or “Why can’t employers see what I see in my daughter or my son?” Or one step removed, “What do we do about single moms stuck in a continuing cycle of poverty?”
We want answers. We blame globalization or automation or the school system. Or we blame government or regulation or some shadowy conspiracy. And we blame each other. The Occupy Wall Street movement blames the greed of the rich and powerful and their agents in government. The Tea Party movement blames the power of Big Labor—and their agents in government.
What we want changed depends on who we think is guilty. The Tea Party wants less government. The Occupy movement wants more. Read more »
Governor Cuomo set November 14 as the deadline for the state’s ten regions to submit economic development strategies. Led by Wegmans CEO Danny Wegman and University of Rochester President Joel Seligman, many in our community are working furiously to articulate plans, goals and measurable objectives.
While we hope to be one of the winning regions—earning a promised $40 million in state support—the process itself has already been valuable. In my 20 years here, I cannot recall a time when leaders of business and government from the Finger Lakes’ nine counties have gathered to talk about what makes our economy successful and what might make it better. The process would have been even more valuable had it been less of a fire drill—a February deadline would have been better, although still ambitious—but we can be proud of the diligent efforts of the Council members and participants in eleven workgroups. The plans they have developed are a testimony to the vitality of particular economic clusters and the many vital economic institutions in the region.
Read more »
Economists love taxes. At least, we love the right kind of taxes, those that discourage bad actions and encourage good ones. Tobacco taxes, for example, make smoking a habit that hurts your pocketbook as well as your lungs. Evidence suggests that teens smoke less just because it has become so darned expensive. Hear, hear!
A “carbon tax” is one of the good taxes. If you accept any one of the following propositions – a)human activity has precipitated global warming, b)human activity hasn’t done so in the past, but it might in the future and this would be a bad thing, OR c) fossil fuel imports put money in the pockets of unstable nations and the world would be a safer place if we used less – then you should support a carbon tax. (If you don’t accept any of the above conditions, it is time to turn the page.)
Read more »