The Sapareto Tax is an Embarrassing Abuse of Power

Charlie Arlinghaus

January 18, 2011

As originally published in the New Hampshire Union Leader

Be careful not to get on the wrong side of your legislator or he might pass a law just to get back at you. We are being treated to an example of the temptations of power this year as one legislator has introduced a bill that doesn’t change a set of rules for everyone but rather singles out only one institution that happens to be in his town and has annoyed him. Rep. Frank Sapareto of Derry introduced HB1201 for the sole purpose of creating an exception to state law and taxing Pinkerton Academy. The law doesn’t tax anything else, create a new category of taxation, or change the rules under which the other cities and towns of New Hampshire operate. It merely says that notwithstanding provisions of current law, this one school, singled out by name, has to pay property taxes. Other similar schools are still exempt from property taxes and the bill would affect no other institution. The motivation for this dispute is the annoyance of Rep. Sapareto and a few fellow legislators with decisions of the school. Pinkerton Academy is a privately run school that serves as the public high school for the town of Derry. Under state law, it and similar institutions are known as public academies. Mind you, the Sapareto bill doesn’t change the rules for public academies in general, just for this one school. Like many other public high schools, Pinkerton accepts kids not just from Derry but from neighboring towns as well. Like Derry, the neighboring towns pay tuition to the school. The school is run by a board of trustees with tuition payments set by contract rather than by a school board with recourse to tax revenues. Sapareto is annoyed that Pinkerton accepts students from anywhere else, recently telling the press that “if only Derry kids went to Pinkerton there would be no need for this bill.” I suppose if your town had a ten building multi-acre campus for your school, you might not want to share either. But the legislature is not the private playground of people looking to pass bills that affect only them. Derry is free to enter into a contract with the school, as it has. Rep. Sapareto is free to object to the decisions that are made by the school board or to object to the terms of the contract. But if he loses, he is not free to come to the legislature and use the rest of us to reverse decisions he lost. Let me reiterate: this bill doesn’t change the laws of the state for everyone. It changes the laws of the state for one school in one town. Similar schools are unaffected. Rather than change a law, the Sapareto bill creates an exception for one school because he’s annoyed about the political outcome. This is simply an abuse of power. We all know it would be insane to pass a bill saying “notwithstanding any laws to the contrary, Charlie’s taxes are only $12.” The Sapareto bill is equally abusive. By the way, the bill is worse than I’m making it sound (and I hope I’m making it sound ridiculous). Not only does the bill say this one institution has to pay taxes, it also dictates what Derry must do with those taxes. Normally, property taxes go into the town budget. That would be the case with any other institution taxed. But in this case Sapareto also would stipulate under state law that the revenue from this one special tax (do we call it the Pinkerton Fee or the Sapareto Tax?) must be used to reimburse the school district for higher tuition payments that Pinkerton will have to charge so it can pay the tax. Here’s where Rep. Sapareto is at his sneakiest. For Derry, it’s a zero-sum game. The town receives the tax revenue, then sends it to the school district, which uses it to pay the higher tuition Pinkerton has to charge because of the new tax. But the higher tuition rates will affect all four sending towns. Those towns will pay higher tuition rates, with only Derry receiving offsetting revenue. Derry gets more money. Chester, Hampstead and Auburn get the bill. If we let officials pass legislation to settle their own private frustrations, the law becomes more and more abusive. I hope everyone interested in public policy will talk about this bill and cheer it on its way to the ash heap that ought to be the resting place of this sort of abusive nonsense.

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Three Suggestions to Better Understand What Happened and What Will Happen

Charlie Arlinghaus

January 11, 2011

As originally published in the New Hampshire Union Leader

Understanding the New Hampshire primary is a hobby that occupies most of us who are politically obsessed. Since I’m writing before the results and you are reading this after they’ve come in, I’m going to suggest some of the best political reading for understanding not just the New Hampshire primary but the nature of politics in general.

The single best thing written to date on the New Hampshire primary is Dayton Duncan’s Grass Roots: One Year in the Life of the New Hampshire Primary. The book focuses the grass roots campaign experience of a dozen volunteer activists, Democratic and Republican, each with a different presidential campaign in the 1988 primary. Although written about an election two decades ago, the lessons are timeless.

Duncan is now much better known nationally for PBS documentaries like Lewis and Clark. His skill with documentary and his previous work as a reporter and a political professional come together to make Grass Roots a great antidote to the talking heads on television.

Television too often focuses on a professional political class of reporters and consultants who all know each other. They talk about what they’re hearing at the hotel bar and what the crosstabs of polls are telling them. During the last weeks, they grab a few locals – usually the same locals they’ve been speaking to for 20 years – who have become skilled at explaining what the real people are thinking or at least at a good patter that sounds plausible.

Duncan’s book is the opposite. It’s not based on interviews with insiders telling you the “real” backroom story. It is a detailed and often poignant study of the emotions, day-to-day activities and motivations of activists at a county level removed from the Washingtonian aspects of the campaign by at least three or four levels.

In an age when the political chattering class confuses automated phone calls for grass roots activity, Duncan puts a magnifying glass on each individual blade of grass and helps distinguish the mythology of politics from the realities of individual motivation.

The energy and idealism of dedicated volunteers sometimes founders on the rocks of national trends beyond their control. But Duncan reminds us of the human side of politics and we experience their heartbreak and exhilaration with them. A sign of his strong writing and storytelling is the sympathy and understanding a reader finds himself feeling for volunteers of opposite parties.

The humanity of politics is rarely more visible than in Duncan’s book. That this book is not reprinted every four years is a crime.

Craig Shirley’s excellent Rendezvous With Destiny is a remarkably balanced account of the Reagan 1980 campaign from an old Reaganite. Although his motivation is clear, his sympathies don’t interfere with his history. For studying New Hampshire, the chapters covering the New Hampshire primary are fascinating from a time when the gap between the Iowa caucus and the New Hampshire primary was not seven days but five weeks.

The Reagan comeback after losing the Iowa caucus is one of the great stories in American politics, particularly for conservatives. Shirley’s narrative includes a full chapter on the famous “I am paying for this microphone” moment.

No discussion of political writing would be complete without mention of the single best book ever written about politics and the people in it, The Last Hurrah by Edwin O’Connor. The Last Hurrah is not just the best political novel ever written but one of the best American novels. It is well known as a description of urban politics and for being loosely based on the infamous James Michael Curley.

But more than that, The Last Hurrah is a complex study of the motivations and character of people – in this case people practicing politics. As O’Connor explores the loneliness of popularity, the different natures of corruption, and the simultaneous nobility and shame of politics, many characters from today make an appearance even if in an urban 1940s setting.

Anyone who wishes to practice or observe politics and government in particular is incomplete without having read O’Connor’s brilliant novel. Like most of the best writing, truth often emerges more clearly in works of fiction rather than fact.

As this presidential primary cycle moves on and you seek to understand why things happen, move beyond the yelling on television and the quick current affairs of the internet. Sometimes the news cycle moves too fast. Take a look at the long form. You’ll be glad you did.

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Substance over Soundbites: Newt Gingrich

Charlie Arlinghaus interviews former House Speaker Newt Gingrich in the first installment of the Josiah Bartlett Center’s “Substance Over Soundbites Series”

Part 1- Gingrich says it would be “virtually impossible” to support Ron Paul if he is the Republican Presidential Nominee.

Part 2- Gingrich explains why he’s running for President

Part 3- Gingrich discusses the need to balance the federal budget

Part 4- Gingrich and Arlinghaus address the need to reform entitlements


Part 5-Gingrich says he can win the debate with Barack Obama over turning control of welfare programs back to states.

Part 6- Gingrich argues that America’s health care system has to choose whether to become like WalMart or like Canada.


Part 7- Gingrich has nice things to say about Mitt Romney and Paul Ryan’s Medicare Reform Plans

Part 8- Gingrich on Big Ideas and Hunting Chipmunks

Part 9- Gingrich says he burnt out the House as Speaker and says what he would do differently

Part 10- Gingrich on the addiction to deficit spending, the NH budget process, what he’s learned on the campaign trail, and the strength of the Republican Presidential field.

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Dispelling Some Myths of the New Hampshire Primary

Charlie Arlinghaus

December 28, 2011

As originally published in the New Hampshire Union Leader

As with any major event in America, much of the mythology of the New Hampshire primary either isn’t true or is only half true. Boosters of the primary, like most boosters, tell a tale full of legend and less than critical promotion of the home team.

Like anyone else who lives in New Hampshire, I am naturally fond of the New Hampshire primary. Nonetheless, I think some of the claims about the primary process are exaggerated. Perhaps no claim is quite as misleading as the insult “Iowa picks corn, New Hampshire picks presidents.”

On its face, this claim is false. The last two presidents both won the Iowa caucus and lost the New Hampshire primary. But buried inside this claim is another more general falsehood. New Hampshire boosters will tell you that the New Hampshire primary stands on its own and we don’t generally care what happens in Iowa. It has little or no impact on the New Hampshire primary.

This claim too is just plain wrong. While it has been true that John McCain has been able to skip Iowa and still do well in New Hampshire, the Iowa results have been influential for most other candidates. As early as 1980, George Bush was able to use an upset victory in Iowa to consolidate a position as the chief moderate alternative to Ronald Reagan.

Since then, Iowa has changed our feelings about potential candidates. Phil Gramm’s 1996 candidacy ended after a fifth-place Iowa finish. It was seen as impossible to overcome that low a finish and remain competitive. In the same election, Lamar Alexander used a stronger than expected third place finish to catapult him into contention in New Hampshire.

Of course the publicity of an Iowa finish isn’t everything. Alexander and Gramm both had remarkably strong New Hampshire operations. For one candidate, it wasn’t enough to overcome a poor finish. For the other it allowed him a chance to turn unexpected good news into contention. Four years ago, Mike Huckabee had a much weaker operation in New Hampshire leaving him only able to translate a big Iowa win into a distant third place finish.

Primaries in America are a sequential process. One happens after another and not in a vacuum. The Iowa caucus results will see the equivalent of a few billion dollars worth of publicity and be watched by millions more people than any early debate. The New Hampshire primary adds a few more billions of dollars in publicity dwarfing the amount a campaign can spend itself. Whoever wins Iowa and whoever does better than people expected him to do will receive a boost in New Hampshire. Iowa will narrow the field just as New Hampshire narrows it further.

The transfer isn’t perfect because each state is different. New Hampshire and Iowa have very different Republican electorates. In 2008, 88% of Iowa GOP caucus-goers described themselves as conservative, the most conservative of any primary electorate. In New Hampshire, only 55% self-identified as conservative – among the lowest of any state. In addition, while 60% of Iowa GOP voters described themselves as evangelical, only 23% did in New Hampshire – a state which unfortunately has the lowest church attendance in the nation.

Another myth is the notion that we like to meet the candidate: “I don’t know if I like him, I’ve only met him three times.” In reality, a significant majority of the voters will never go to see a candidate in person and almost none will go see all the candidates. Most voters want to know they could have seen every candidate but on a typical evening or weekend, we’re tired from work or have other family priorities which come ahead of a candidate rally.

That’s not to say that grass roots campaigning doesn’t matter. Voters check the newspapers and television. As an aside, as much as we’re told that newspapers are struggling, there is a significant overlap between newspaper subscription lists and primary voters. Voters checking the coverage in the paper and watching television want a campaign that has the appearance of a grass roots campaign regardless of how many town chairmen and county captains it may have. It’s one reason every candidate calls every appearance it can get away with a “town hall meeting.”

I don’t mean to imply that campaigns are just a Potemkin village eagerly awaiting the results in Iowa. Grass roots can make a difference but they’re like sweeping in curling. It looks impressive with a lot of motion and activity. The sweeping can change things at the margins but only so much. The rock has to be on a good trajectory to begin with.

The New Hampshire primary is an important and valuable process in concert with other states. But the racing form will look very different a week from today after actual voters render judgment on more than just corn.

 

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It is Time to Discipline The Politicians in Washington

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By Charlie Arlinghaus

July 2011

Originally Published in the New Hampshire Union Leader

Politicians are incapable of doing the right thing on their own. Without some sort of artificially imposed rules, they will continue along in their hapless way on the road to destroying the country. The federal budget is a problem that can only be solved by going back to the 1980s.

The broad outlines of the country’s fiscal policy are well known. Federal politicians almost never balance the budget. Instead they borrow money from our children (and, at this point, grandchildren) to pay for the things they want to spend money on today. There is not a realistic hope of ever paying off all the debt they are accumulating.

The federal budget has been balanced in only four of the last 50 years and then only nominally (actually they used the excess of social security contributions over payments to improve cashflow). The last four Clinton budgets achieved a nominal balance but none of the budgets since then have.

Under the president’s proposed budget, debt held by the public would double to 87% of the gross domestic product. Total debt is already about 100% of the size of the economy.

Since World War I, the country has had a statutory limit on the amount of debt allowed. In a debate over raising that limit for the eleventh time in the last ten years, politicians have been able to posture about the need for so-called spending cuts.

Like almost every other debate in Washington, the debate and cuts are fake. No one in Washington on either side of the aisle has actually proposed a spending cut. What they propose is spending a lot more money but not quite as much more as they were planning.

In New Hampshire, we use normal math. The state just cut spending by more than 10%. We passed a budget that is 10% lower than the prior two-years.

The federal government develops a “baseline” for official spending. They plan on increasing spending by 4.6% in each of the next ten years and spending a total of $46 trillion over those ten years. If they reduce the rate of increase to 4.1%, they will have, by their definition, cut spending by $2 trillion. By New Hampshire’s definition, what they call draconian cuts are an increase of 50% over ten years.

The problem is cultural. They don’t actually have to balance the budget so they don’t. The four years of quasi-balance in the 1990s came as a result of divided government (I hate your spending and you hate mine) and mild restraint during an economic boom.

The solution championed by our Sen. Kelly Ayotte is a balanced budget amendment to the constitution. I am generally reluctant to amend the constitution but this may be a case where the structure of government has failed us and has to be corrected. Regardless, an amendment will take years to go through the process and be ratified by the states.

More immediate action can and should be taken. The model for this action comes from the 1980s and former Sen. Warren Rudman. In the 1980s the annual budget deficit had grown to what was seen then as an obscene level. The annual budget deficit in 1983 was 6% of gross domestic product (in 2010, it was 9%).

Sen. Rudman along with Phil Gramm and Ernest Hollings recognized that the Congress needed to be prodded. They set up a path of lower deficit targets each year until the budget would be balanced in ten years. If Congress didn’t meet the target, an automatic sequester would cut every area of government by an equal amount to meet the target. The threat forced politicians of the 1980s to act and cut spending themselves.

From 1983-1989, the Gramm-Rudman bill lowered the annual deficit from 6% of GDP to 2.8%. Spending went up each year but grew slower than the economy as a whole. But Congress repealed the restraint in 1990.

A new Gramm-Rudman could be enacted by people who both support a constitutional amendment and those who don’t as part of a debt ceiling compromise. The advantage is it would go into effect immediately and force Congress to act. In addition, enforced deficit targets are policy neutral. The target must be met and the deficit gradually erased. The policy decisions to get there are still a matter for debate. Those who want to raise taxes can make that argument. Those who want to cut spending can make that argument.

An agreement over the debt ceiling issue will only be serious if it includes an enforcement mechanism not just feel good rhetoric. The model for action comes from right here in the Granite State. It worked when Sen. Rudman proposed it and will work again.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free market think tank based in Concord, New Hampshire

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NHOpenGovt Lets You Google Your Government

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Just click the Quarter to get started!

A public database isn’t just a tool for those of us strange enough to want to pore over budget data. It is the sunshine that disinfects the public square. Knowing that every detail is available, accessible, and searchable means there is no chance that any action, any contract, any expenditure, is going to stay hidden from the public.

The Josiah Bartlett Center’s open government project, NHOpenGovt.org has created an online, searchable database accessible to anyone and everyone. It will includes every check the government writes, every agency, every dollar, down to the penny and the person in an easily searchable format.

We currently have records of more than 4.5 Million individual state transactions from fiscal year 2009 to date. We are constantly receiving more data, so this number will only grow! As our database continues to grow, analytic tools such as year over year comparisons will allow you to create visuals that plainly layout trends in government spending. No hype, no spin, just the cold hard facts.

We are currently working on getting the line item expenditure data from the University System as well as all state and university payroll. Click here to start searching!

 

Here is some of our past work on transparency:

Google Government

Borrowing Good Ideas on Transparency and Spending

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February Foreclosure Filings decline in NH, Nationally

Today RealtyTrac released its February foreclosure data, which showed a slow down in filings both here in New Hampshire as well as Nationally.  Foreclosure filings are the number of properties that either receive a default notice, a foreclosure auction notice or are repossessed by the bank.

New Hampshire saw filings drop from 1053 in January to 737 in February, a 30% drop. Nationally filings fell 2%. It should be noted that January was a exceptionally high month due to the end of the moratorium on foreclosure filings by many major banks as a result of the robo-signing scandal. With January excepted, February’s figures are only slightly higher than the monthly average over the last 12 months.

Sales of homes in some state of foreclosure fell as well, from 223 to 80.

In New Hampshire, 1 property in 834 has received a foreclosure filing. This puts us as the highest in New England and on par with Iowa and Minnesota. Nevada, one of the worst hit states in the nation, 1 in 278 properties has received a foreclosure filing.

The national average is 1 in 637.



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352 Executive Order Exceptions cost $6.2 Million so far Government Data shows hiring and purchase freeze not draconian

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