Friday, November 07, 2008

Weekend Read ... Olentangy Levy: Scarcity and Taxes

Paul over at SaveTheHillardSchools claims his moral imperative is "first do no harm," which he used to base his support for the Hillard levy. I want to remind Paul and others that in a world of scarcity, any level of taxation harms someone (you know, the margin and all). The altruistic "first do no harm" is lost in reality as one moves quickly from moral to Machiavelli.

Keep in mind that Edith is a real person living and working in the Olentangy district (only her name was changed). The photo is, of course, not of her. Yet there is a very good chance that Olentangy residents exchange pleasantries with Edith on their shopping days.

Because of our levy, Edith will have to work an additional 140 hours per year, though, physically, she cannot. Somehow, levy supporters easily write-off her life and circumstance in the name of the public good.

Forgotten at the Door

By Jim Fedako
Posted on 7/17/2007
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"There is, in fact, only one solution: the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes. The rearing and instruction of youth must be left entirely to parents and to private associations and institutions." – Ludwig von Mises

I met William Graham Sumner's Forgotten Man — actually forgotten woman in this instance — while shopping at a local supermarket a couple of months ago. With her eighty year-old legs steadily supporting stiff knees and tired feet, this woman is cheerful and ready to share a story or a laugh as she greets shoppers entering the store. This openness endears her to customers who know her by name and smile when they see her. Though her tales and goodhearted fun remain with shoppers for a long time afterwards, she is sadly forgotten by those who live to tax and spend.

There is theory, and then there is reality. To those who adhere to the Austrian School of economics, theory and reality are the same. Yet to many, the separation between theory and reality is the gulf that drowns in anonymity those such as this eighty-year-old woman.

You see, the forgetful ones — the officeholders, bureaucrats, and rent-seekers — have no concern for this woman. Sure, they pay lip service to their beloved concept of community, but they are only concerned with the community of tax recipients; the taxpayers be damned.

The Austrian School, on the other hand, recognizes individuals — not averages, aggregates, or some other convenient statistical or rhetorical tool — just the individual acting at the margin. In the Austrian School, there is no such notion as a typical community member. There are simply individuals going about their own business, utilizing means to satisfy personal ends, all within some arbitrary lines on a map: the collectivist's revered political boundaries.

The Austrians readily recognize our forgotten woman. She is not some faceless automaton, some
Economic Woman. She is real, so real that we will give her a name: Edith.

Now, Edith truly lives at the margin. She buried her husband of forty-some years over a decade ago. Since that time, she has struggled. Money is tight and, despite what the Feds says, inflation is running high. However, the cost of consumer goods is only one of her worries. Edith also has to find the means to pay rising property taxes; taxes that are rising at a local rate of almost three times the reported consumer price index. So, she works.

Edith does not want much. She simply wants to live out her days in the house where she and her husband raised their family. Who could possibly desire to put this woman out of house and home? Well, the forgetful ones of course.

You see, in this instance, the forgetful ones want to spend more money on failed public education. There are the locally elected officials who cheer on the efforts of the bureaucrats — the school administrators who live to conceive of new ways to spend money on programs destined for failure. And then there are the hoards of rent-seekers who want others — such as their neighbors — to share the cost of personal expenses, all in the name of the public good.

The forgetful ones base their means on the theory of aggregates and averages. They note the reported average federal adjusted gross income in the area and claim that the community is wealthy. Therefore, they state, the typical resident can afford another $700 or $800 in property tax.

But the average homeowner is a nonexistent myth: a
chimera. There is no average, or typical, resident. There are the forgetful ones, plus, among others, you, me, and our dear friend Edith. And, she is certainly not average. To those who know her, Edith is something more. Yet, she cannot afford an extra $100 per year, let alone another $700 or so.

The forgetful ones ignore her plight. To most of them, her suffering does not exist. To others, her situation is a problem that has to be rationalized away. Maybe — so the line of thought goes — Edith should move to another home in a more remote area, an area with lower taxes.

Certainly, it is sad that a long-term resident must leave, but the taxes are for the kids. And, with the kids being the next generation, some eggs have to be cracked.

Whether one chooses to ignore Edith outright, or to rationalize her away, the line of reasoning is the same: the collective decides who wins and who loses. Or, more aptly, who receives, and who pays. It's this line of reasoning that is just about the only thing taught in public schools: the hammer of government creates the community that the majority of voters desires.

Students learn that might makes rights. Well, of course, it's never taught in such harsh terms. Students learn that the community (through might) decides issues of property, liberty, and freedom. This, they learn, is the American ideal.

The schools, through their unionized workforce, teach that unrestrained democracy is wonderful. The ideals of our Founding Fathers are from a time and place that no longer exists. Students can, and should, dream of anything, and attempt to have government implement it by force. Whether it’s recycling, carbon offsets, or additional coerced funding for schools, it's the vote of the majority that makes any dream ethical.

So, the schools rally their constituents — their
rent-seekers — in order to influence likely voters to support the new tax. And, the schools, again through their constituents, create the impression that those who do not support the waste that is public education are not true community members — that they do not care about kids.

But Edith does care about kids. She raised three of her own, and she now enjoys regular additions of grandchildren to her growing family. She simply wants to keep her house, which leaves poor Edith in quite a fix.

Not to worry, the occasional forgetful one will finally admit Edith's existence. He will recognize her by name and take on her cause. His solution: property tax relief for seniors. And, what a solution it is! Now we can have our public school cake and eat it too. And, we can eat it without remorse or regret.

Sounds reasonable, with the exception of that ever-so-annoying Austrian concept: the margin.

Property tax relief for Edith moves the burden of taxation to a smaller pool of homeowners. While Edith is no longer the one at the margin, now it is Henry deciding whether the new tax will drive him from house and home. Theory meets reality, and the margin exposes the lie that is the average.

OK, so what do we do? How do we solve this whole mess? How do we address education within the reality of the margin? The answer is quite simple: privatize education. Remove government from the minds of our youth. Recognize the wisdom of Mises and let parents — as consumers — decide what is best for their children. For some, religious schools, for others secular schools, and for many, such as myself, homeschooling.

In all cases, the market will generate systems of education that solve the wants of individuals. Allow theory and reality to come together so that Edith keeps her home, as does Henry, and we all get to keep more money in our wallets; money that will fund the education of the next generation.


Anonymous said...

Most of us do not subscribe to the Austrian model. We recognize we live in a Society which is as much a grouping as it is individuals. We recognize that as a Society we sometimes need to give up some of our individuality to the group to further our own good. The balance is how much to give up. For most of us, public education is important enough to give up the monies collected as taxes.

Olentangy schools are not failed public education. They are extremely successful by any recognized measure. That of course does not include your measure that all public schools are bad by definition.

The concept of private only education has failed historically. It's failure is the reason we have public schools. It was recognized that not all people could afford private education and the lack of educated and trained individuals was hurting our economy through a lack of a skilled workforce. That is the reason that the rise of the industrial revolution was also the rise of public education.

Finally, labor unions per se are not evil as you continue to suggest. Abusive labor unions like abusive employers, abusive politicians and even abusive bloggers are.

Jim Fedako said...

12:10 --

Where to begin?

First off, I note that you ignored the fate of Edith. It's very magnanimous of you to offer her as a societal offering to your god government. Must make you feel all warm inside -- while she is cold from the lack of heat. Eh, let her eat cake.

Read some history and not just the pamphlets from your fellow travelers. Private education was successful. No public school educated Jefferson and crew. Good thing too.

Try substituting the Federalist/Anti-Federalist papers for the perverse nonsense served at Olentangy and see how successful the schools are at educating.

The genesis of public education occurred when your predecessors ventured to Prussia and fell in love with the socialistic, paternalistic state.

And, you are right, unions as a concept are not evil. But as they have partnered with government in order to gain power over the rest of use, they are indeed evil.

Don't worry, I am still forced to pay the taxes that pay your salary.

Jim Fedako said...

By the way, abusive bloggers do not thieve anything, unlike public unions.

Anonymous said...

As you wrote, Where to begin. When I read anon 12:10 I just lost all energy. Though the truth is right out here for them they just are not able to grasp it. They want to see those government schools as a good thing and they will no matter what. The whole culture is so unbearably dumbed down now (proof is the media) that being witness to it is just overwhelmingly painful. One proof if the television. Most people are subscribing to cable TV and on the occasions when I see what makes that up I am sickened. We had given up going to movies many years ago but recently started getting Netflix to see if there was anything available from them. Nearly everything mailed here is watched for 20 minutes and then stopped and sent back in disgust. But the scary part is the masses eat all this up and we have to live among them. Just as we must live among anon 12:10.

Anonymous said...

I feel sorry for Edith, with all the new Delaware County property taxes that were passed this week; she will have to work more now.

When we move here 4years ago our property taxes were 6,200 and now it is 8,700.

I feel my kids are getting the same education that they received in South Carolina, and we were only paying 1,800 in property taxes. The lottery funded the schools and there schools were free, unlike these Olentangy schools. I received my school fees for my kids, OUTRAGES!!

All I can say is when people lose their homes and jobs maybe then they will get a clue. Maybe they will start to think; I could afford my home when I bought it, what happened? YOU PASS SCHOOL LEVYS. That’s what happened. Your Mortgage went up. Get A Clue People!!!

Anonymous said...

In my community, southeast of Columbus, their enormous levy plus additional income tax failed. The taxers are livid. They wanted to build all new schools. Just trash the 2 elementaries, 1 jr. high, 1 high school and build all new. It is a rather poor community. But those who voted to tax their neighbors for their big plans won't consider taking their own money that they would have paid to the government and using it to build their dream-school. NO! They just plan to put another levy and tax on at the next opportunity. They just need to convince enough people to tax their neighbors to get their job done. These people will not give on anything. They won't give up any of the tax-funded classes, courses, crap that is now part of government education. They take it all as a given. The schools spend years messing around pretending to teach literacy and numeracy, doing a poor job of it, and hire all those bozos to "teach" every other ridiculous thing they can come up with. Just how much time, how much money should it take to teach a kid to read and do figurin'? I can tell you. Not much. Our six-year-old grandchild has reading mastered completely and is moving right along with math. She's practically teaching herself. So all this money and all those parasitic teachers are the biggest joke in the world. The whole population is the butt of a huge, horrid joke that we need government schools to educate America. Just the opposite. Those schools were used to dumb this nation down and destroy us and I am enraged.

Anonymous said...

Edith labors at WalMart so our administrators can have taxpayer funded smartphones, canoe trips and dinner at Bravo.

C.C. said...

Don't forget the MacBook Pros and Red iPod Shuffles!!!

Anonymous said...

Ah, yes the red iPod Shuffles!

My employer--one of the largest in the area--just announced (confirmed the rumors, that is) that there will be no salary increase in 2009. That means there will also be no bonuses for 2009, either (paid out in Feb 2010), though that won't be announced until the end of 2009.

Where is the district's belt tightening?

Where is the board's concern about managing expenses?

I have a sneaky feeling that revenues will be far, far below expectations. The district is loathe to acknowledge that, however, because then there would be the expectation that they should watch their expenses.

Jim Fedako said...

4:14 --

A couple of interesting points regarding the district ...

Despite his claim earlier in the year, Hanks actually reappraised properties this year (it appears that political pressure forced him to do so). Mine was reduced 3 percent (but it is still at least 3 percent too high). If my reduction is the same district wide, two outcomes will occur ...

1. The district will receive approximately $500,000 less (equal to the 5 inside mills X district valuation X .97).

2. The tax rate from the new levy will be greater than advertised. That will put pressure on the district to keep its no new mills pledge on the bond side. Watch them try to weasel out of that.

Anonymous said...

A very large utility in the area told employees they needn't expect raises or bonuses any time soon. (though the really high-ups are doing very well). The evidence is everywhere that the economy is in awful shape but the schools just keep on demanding more. Teachers automatically get raises.

Anonymous said...

4:14... You must not get it.

"I have a sneaky feeling that revenues will be far, far below expectations. The district is loathe to acknowledge that, however, because then there would be the expectation that they should watch their expenses."

The district will LOVE it becuase that simply justifies a new levy sooner. They won't, as you imply, be forced to tighten their belt.


C.C. said...

And with less revenue, lets put the 15th elementary school (see this weeks agenda)back into the 5 year forecast that was removed two weeks ago due to dwindling student count.

Time for the development director to live within his means and not count preschool kids for building purposes.

Anonymous said...

Data suggests that enrollment will be lower than planned, which is to be expected given the current economic climate.

So, the district articulated a reason to put 15 back on the schedule?

Did they do this by including preschoolers in the count, or by changing their formula?

Either way it's dishonest.

To get on any of these committees does one have to take a Lie Detector Test, with only those who fail getting on?

Anonymous said...

Harvard University, despite having a $37B endowment, is reducing costs--including it's plans for expansion.

Funny thing is, a friend of mine received his Master's degree from Harvard (Kennedy School of Government) and I spent a lot of time up there, visiting--including a lot of time on the Kennedy and law school campuses (where he also took classes). I don't recall seeing SmartBoards there. They were all white erase boards. No gap in student achievement there...

What also stands out from the article is that students who come from households with less than $60K in income pay NOTHING to go to Harvard College, including fees.

Why is it that we pay so much in taxes, and STILL have to pay student fees--some families pay hundreds per year!? My family never paid a dime in fees for me or my siblings when we went to school.

Anonymous said...

I don't remember fees either back in the day. But then there weren't a hundred different sports/extra-curriculars as part of government schools. Each with at least one parasite employee. There weren't drug counselors, shrinks, cops, assistants to assistants and who can list all the groups and activities that are now considered legitimate government schooling? But why should others have to fund all those non-academic, non-essential activities for all those little groups engaging in them in a government school?

Anonymous said...

Good point. Neither were there any $115K+ per year (sal+ben's) Attendance Trackers gussied up as "Dean of Students" at my school. LOL--love that one.

We had a principal and an assistant principal--and they shared an admin. And it was a larger high school than any of our three. Contrast that with any of our high schools: one principal, two assistant principals, "Dean of Students" (shouldn't that be the principal?). I'm sure there's a bunch of other do-nothing positions in the district...

Anonymous said...

It costs so much because the people are willing to pay so much. The people never question. They react in knee-jerk fashion whenever someone sticks out a hand for money. Just like when your neighbor sends out those requests for donations to The March of Dimes...nobody questions it a bit. They just write their check and mail it in. They don't have a clue that The March of Dimes is a pro-abort bunch. They don't know who heads those organizations or what their salaries are or how the money is spent. They just automatically contribute. I have personal knowledge about a local person who is on two central Ohio boards that promote fund-raising for "health" causes. I know that person is a fraud. Frauds are discovered all the time. It doesn't affect the business of begging. Because the real business is the getting of the money.

Anonymous said...

There's a new charity in town that heaps all sorts of tax payer-funded swag on school district employees, including iPod shuffles and iMac laptops, canoe trips and "retreats", and other gratuities having nothing to do with student achievement.

It's called the March of Dimons.

Anonymous said...

anon 6:31
Good one.