Jonathan Ingram
Senior Fellow, Health Policy and Pension Reform

Proponents of ObamaCare's Medicaid expansion insist that the expansion is necessary to keep people out of emergency rooms for preventable conditions such as hypertension, asthma and chronic obstructive pulmonary disease.

The only problem? Medicaid patients are more likely than the uninsured to use emergency rooms, especially for preventable conditions.

In 2010, medical researchers at the University of California went through a decade of emergency room visit data provided by the National Center for Health Statistics. They broke up this data by type and seriousness of conditions, wait times, age, sex, race, ethnicity, insurance status and various hospital characteristics.

So, what did they find? They found that Medicaid patients were seven times as likely as privately insured patients to use emergency rooms for preventable conditions. In fact, Medicaid patients were nearly three times as likely as the uninsured to use emergency rooms for preventable conditions. During the study period, the odds of using emergency rooms for preventable conditions went down by 10 to 15 percent for both privately insured and uninsured patients, but went up by more than 25 percent for Medicaid patients.

This should surprise no one, given the fact that more than 35 percent of Illinois doctors won't accept a single new Medicaid patient. Even those who are accepting new Medicaid patients are putting limits on how many they'll take. If that weren't bad enough, Medicaid patients are denied appointments with specialists two-thirds of the time. And even when they can see a doctor, they often have to wait longer for care. Children with juvenile diabetes, for example, must wait an average of 103 days just to see an endocrinologist.

The simple fact is that expanding Medicaid eligibility won't reduce unnecessary emergency room visits. It will simply overload a system already on the brink of collapse. Maybe the General Assembly should spend their time working to improve the current system before they vote to trap hundreds of thousands of new people into a failing program.

Josh Dwyer
Director of Education Reform

According to a 2009 study conducted by Stanford University’s Center for Research on Education Outcomes, 42 percent of Michigan’s charter schools outperformed traditional public schools in math and 35 percent outperformed them in reading. Only 6 percent underperformed relative to their traditional public school counterparts in math and only 2 percent did so in reading.

Results were even more impressive in Detroit. The typical Detroit charter school student made annual gains worth about three additional months of learning in both reading and math compared with their peers in nearby traditional public schools.

A recent op-ed penned by Michael Van Beek – Director of Education Policy at the Mackinac Center for Public Policy – in The Wall Street Journal helps explain why Michigan charter schools are succeeding.

He cites three specific reasons:

1. Michigan allows a variety of public entities to authorize charter schools. By allowing more charter schools than most states, Michigan has developed a fully functioning charter school market.

2. Michigan’s charter schools aren’t subject to teacher tenure laws and have the flexibility to retain or release teachers based on performance.

3. Michigan has several strong networks of education-management companies that run charter schools. These perform better than charter schools run by nonprofit boards.
   

Illinois does have many high-functioning charter schools, as shown in a report we released last year. But it still has a long way to go to create an education atmosphere like Michigan – a place where innovation is encouraged.

Other than school districts – which are notoriously stingy in approving charter school applications because they fear competition – Illinois only has one independent authorizer, the Illinois State Charter Commission. And even that body is under increasing pressure by anti-charter school forces – specifically, those that oppose creating a virtual charter school in the Fox River Valley.

There is a lot to be learned from Michigan. The Illinois General Assembly should follow that state’s lead and institute reforms that increase the number of charter school authorizers, retain charter schools’ flexibility to hire and fire teachers, and allow for-profit companies to directly run charter schools.

QUOTE OF THE DAY

Daily Caller: Big government means permanent scandals

Despite my youthful appearance, I am old enough to remember when Jonathan Alter proclaimed the “Obama miracle” was a White House free of scandal.

President Barack Obama, Alter wrote, “has one asset that hasn’t received much attention: He’s honest.”

Maybe that sterling character assessment will survive the myriad scandals now engulfing the White House. Perhaps none of them will ever reach the president, who may just have the misfortune of an administration and civil service staffed with uncontrollable rogues.

What did the low-level IRS employees in Cincinnati know and when did they know it?

Conservatives are rightly skeptical of this, noting that from the IRS and EPA FOIA scandals to the AP eavesdropping business, every bit of misconduct seems to have cut in the president’s favor. Many attribute this to rough-and-tumble “Chicago-style politics,” where sometimes to make an omelet you have to break a few eggs (or laws).

Despite his goo-goo reputation, Obama’s climb up the political ladder was abetted by associations with machine pols and other unsavory characters from the Windy City. And ultimately, Harry Truman was right: the buck stops with the president, who gave the country such gifts as Attorney General Eric Holder and Secretary of State Hillary Clinton to begin with.

But there is also some truth to David Axelrod’s much-ridiculed observation: “Part of being president is there’s so much beneath you that you can’t know because the government is so vast.”

In other words, the government is too damn big. Not even community organizers can get a handle on it.

ABC News: Report Says Poor Are Moving to Nation's Suburbs

More poor people live in the nation's suburbs than in urban cities because of affordable housing, service-sector jobs and the increased use of housing vouchers, according to a study released Monday.

The number of those in poverty living in suburbs jumped 67 percent between 2000 and 2011, a much larger increase than in cities, researchers for the Brookings Institution said. Suburbs, however, still have a smaller percentage of the poor than cities do.

The report notes that poor people were pulled to the suburbs by more affordable homes and followed jobs that were often low paying. But those who moved to the suburbs also saw manufacturing jobs disappear and housing prices plummet following the economic recession.

"The myth of suburban prosperity has been a stubborn one," Christopher Niedt, academic director of the National Center for Suburban Studies at Hofstra University, told the Los Angeles Times ( http://lat.ms/12FKPNm ). Even as suburban poverty emerged, "many poorer communities were so segregated from the wealthy in suburbs that many people were able to ignore it."

Suburban cities have been ill equipped to handle the surge. In Irvine, the nonprofit Families Forward use to hand groceries to about 25 families every week; now it's more than 160. The estimated number of poor people in Irvine rose from more than 12,000 to nearly 21,000 in a decade, Brookings found.

"Everything is nicely maintained. Things look good on the surface," said Margie Wakeham, executive director of Families Forward. "But the need has just skyrocketed."

The newspaper said poverty shifted to the suburbs earlier in Los Angeles than nationwide. About half of the poor in Los Angeles, Long Beach, Santa Ana and their outskirts have lived in suburbia for decades, according to Brookings' analysis. That percentage rose to 53.4 in 2011.

The report also shows a slight increase in New York City suburban poverty.

Miami Herald: Gov. Scott vetoes hundreds of millions from state budget

Florida Gov. Rick Scott vetoed $368 million in spending from the state’s budget on Monday, using his line-item authority to strike out scores of projects ranging from a $50 million coast-to-coast bike trail to tens of millions in college and university tuition.

Scott’s extensive veto list is more than twice as large as his list last year, and his largest since his first year in office. It slashed state spending from $74.5 billion to $74.1 billion.

Even with the vetoes, the 2013-2014 budget is still the largest on record, and includes $480 million for teacher pay raises, $8.5 billion for transportation projects, $151.8 million for Everglades restoration and $273 million for ports.

Scott talked about signing the budget — and the vetoes — during a news conference at the state’s Department of Emergency Management in Tallahassee. He said crafting the budget, and deciding what to veto, largely hinged on two things: jobs and education.

He stood by his decision to veto $368 million in local projects, saying they did not meet his formula for effective state spending.

“My filter was this: One, is it going to help our families get more jobs?” he said. “Two, will it help improve our education system in our state? And three, will it help make government more efficient.”

Scott vetoed more than $25 million in local water projects, millions in spending for education programs and school construction, museums, re-entry programs and other social services. Many lawmakers hoping to include so-called “turkey” in the budget during the first year of a surplus in years will be disappointed as their hometown projects were axed by Scott.

Times Union: Gillibrand proposes student loan refinance plan

U.S. Sen. Kirsten Gillibrand is hoping to relieve the debt burden of millions of students who have borrowed to pay for their education — especially New Yorkers, who average nearly $30,000 in student debt.

The New York Democrat announced Sunday the Federal Student Loan Refinancing Act, a bill that would lower interest rates for many student borrowers currently repaying their federal student loans.

"More city graduates and middle class families are burdened by student loans than ever before and are struggling to repay a higher amount of debt than ever before," Gillibrand said in a statement. "Our young people should be able to refinance in the same way that our businesses and homeowners do."

The refinancing bill would enable students and graduates who have an interest rate above 4 percent to refinance their federal loans at a lower, fixed rate of 4 percent. Gillibrand said she will introduce the bill in the Senate this week.

Most federal student debt is set at an interest rate higher than 6 percent, Gillibrand said. There are 2.7 million borrowers in New York and 37 million nationwide.

Gillibrand said her bill would lower interest rates for nearly nine in 10 federal student loans nationwide.

There is an estimated $1 trillion in student debt nationwide.

Reuters: Taxes on some wealthy French top 100 pct of income

More than 8,000 French households' tax bills topped 100 percent of their income last year, the business newspaper Les Echos reported on Saturday, citing Finance Ministry data.

The newspaper said that the exceptionally high level of taxation was due to a one-off levy last year on 2011 incomes for households with assets of more than 1.3 million euros ($1.67 million).

President Francois Hollande's Socialist government imposed the tax surcharge last year, shortly after taking office, to offset the impact of a rebate scheme created by its conservative predecessor to cap an individual's overall taxation at 50 percent of income.

The government has been forced to redraft a proposed bill to levy a temporary 75 percent tax on earnings over 1 million euros, which had been one of Hollande's campaign pledges.

The Constitutional Council has judged such a high rate of taxation to be unfair, leaving the government to rehash it to hit companies rather than individuals.

Since then, a top administrative court has determined that a marginal tax rate higher than 66.66 percent on a single household risked being considered as confiscatory by the council.

Les Echos reported that nearly 12,000 households paid taxes last year worth more than 75 percent of their 2011 revenues due to the exceptional levy. ($1 = 0.7798 euros)

WSJ: Red Tape Record Breakers

A new study puts the cost of regulation at $14,768 per household.

President Obama is opposing a bill passed by the House last week that would require the Securities and Exchange Commission to better measure the costs and benefits of new regulations. That's no surprise considering that the latest annual index of federal rules shows that Team Obama is now the red tape record holder.

For two decades, Wayne Crews of the Competitive Enterprise Institute has tracked the growth of new federal regulations. In his 20th anniversary edition this week, he'll report that pages in the Code of Federal Regulations hit an all-time high of 174,545 in 2012, an increase of more than 21% during the last decade.

Relying largely on government data, Mr. Crews estimates that in 2012 the cost of federal rules exceeded $1.8 trillion, roughly equal to the GDP of Canada. These costs are embedded in nearly everything Americans buy. Mr. Crews calculates these costs at $14,768 per household, meaning that red tape is now the second largest item in the typical family budget after housing.

Last year 4,062 regulations were at various stages of implementation inside the Beltway. The government completed work on 1,172, an increase of 16% over the 1,010 that the feds imposed in 2011, which was a 40% increase over 722 in 2010.

Another way to measure the regulatory burden is by pages in the Federal Register, which includes new rules as well as proposed rules and supporting documents. By that measure the Obama Administration did not break the all-time record of 81,405 pages it set in 2010. But the 78,961 pages it churned out in 2012 mean that the President has posted three of the four greatest paperwork years on record.

And to be fair, if Mr. Obama were ever to acknowledge that this is a problem, he could reasonably blame George W. Bush for setting a lousy example. Despite the Obama myth that the Bush years were an era of deregulation, the Bush Administration routinely generated more than 70,000 pages a year in the Federal Register.

When it comes to "economically significant" rules, which are those estimated by the feds to cost at least $100 million each, Mr. Crews notes that the current Administration is "in a class by itself." The bureaucracy finished up 57 such rules in 2012 and another 167 are in the pipeline.

These are largely the progeny of the Affordable Care Act, Dodd-Frank and the EPA's effort to use regulation to impose an anti-carbon-fuels agenda that even a Democratic Senate won't pass. Since Mr. Obama doesn't want to accurately assess the costs of these rules, we'll rely on Mr. Crews.

CARTOON OF THE DAY

QUOTE OF THE DAY

Chicago Tribune: IRS scandal a reminder of how I learned about The Chicago Way

The Internal Revenue Service scandal now devouring the Obama administration — the outrageous use of the federal taxing authority to target tea party and other conservatives — certainly makes for meaty partisan politics.

But this scandal is about more than partisanship. It's bigger than whether the Republicans win or the Democrats lose.

It's even bigger than President Barack Obama. Yes, bigger than Obama.

It is opening American eyes to the fundamental relationship between free people and those who govern them. This one is about the Republic and whether we can keep it.

And it started me thinking of years ago, of my father and my uncle in Chicago and how government muscle really works.

Because if you want to understand The Chicago Way of things in Washington these days, with the guys from Chicago in charge of the White House and the federal leviathan, there's one place you start:

You start in Chicago.

My father and uncle ran a small business, a supermarket on the South Side. Uncle George worked in the front, my father in the butcher shop in the back. My uncle had been a teacher. My father had plowed his fields with a mule.

They were immigrants who came here from Greece with nothing in their pockets but a determination to work, and the belief that here, in America, no other power could roll in with tanks and put their boots on the necks of their children.

My father and uncle, like the rest of the family, valued education and books and free political debate. And so at large extended family Sundays, we'd all sit around the dinner table, many uncles and aunts and cousins, young and old.

There were conservatives and socialists, Roosevelt Democrats and Reagan Republicans and a few bewildered, equivocal moderates in between, everyone squabbling, laughing, telling stories.

No matter whose house we were visiting, the TV was never turned on after dinner. Instead, we'd have coffee and fruit and dessert and argument. We had different views, we loved each other, and even strangers who showed up were expected to join in, to debate education, the presidency, social issues, the war, drugs, bluejeans, long hair, baseball, everything.

Uncle Alex was the uncle who told us young people how best to make our points. He ran a snack shop in the Bridgeport neighborhood — the legendary home of Chicago mayors and Democratic machine bosses.

"Don't wait for a ticket," he'd say, and puff on his cigar, always in a white shirt and tie, on those family Sundays. So we'd just jump in when we could, like the rest.

Sacramento Bee: California's health exchange to serve as voter registration hub

Millions of Californians who contact the state's new health exchange to buy insurance will be given the opportunity to register to vote, too, a move that some Republicans fear could benefit Democrats.

Secretary of State Debra Bowen made California the first state to designate its health exchange as a voter registration agency Wednesday but others are expected to follow suit, said Shannan Velayas, Bowen's spokeswoman.

"This is about making sure that all eligible Californians are offered the chance to register to vote," Velayas said Thursday.

A 1993 federal law requires states to designate their agencies and offices that provide public assistance or disability services as voter registration agencies, Velayas said.

The federal law commonly is known as "motor voter" because it ensured that applicants for drivers' licenses nationwide would be asked if they wanted to register to vote.

Public agencies in California that currently serve as voter registration outlets include the Department of Motor Vehicles and offices overseeing the state's welfare, tax collection, and in-home supportive services.

California's health-care exchange, Covered California, is creating a marketplace for millions of uninsured Californians to compare prices and buy health insurance policies this fall to take effect Jan. 1.

Many of Covered California's clients are expected to be families of low and moderate incomes. Some will be eligible for taxpayer subsidized policies and others will have incomes low enough to qualify for Medi-Cal.
Senate GOP leader Bob Huff said he supports the notion of all Californians registering to vote but that targeting specific populations of people creates the possibility of partisan advantage.

"It does beg the question about whether it's a systematic attempt to try to empower people more predisposed to vote their way," Huff said of the designation by Bowen, a Democrat. "And that would be concerning to us."

Reuters: Unemployment rates drop in most states, Illinois climbs

Unemployment rates dropped in 43 out of the 50 U.S. states and in the District of Columbia in April from a year before, according to Labor Department data released on Friday.

A handful of states, including Illinois, Delaware, Indiana, Wisconsin, Mississippi and New Hampshire saw their jobless rates rise over the year. Illinois' rate fell in April to 9.3 percent from 9.5 percent in March but rose from 8.8 percent a year before.

"April data reflects the unevenness of this recovery," said the director of the Illinois employment department, Jay Rowell, in a statement. "This uneven path forward likely will continue until consumer and business confidence can be sustained at the national level."

Even though Nevada registered the largest rate drop of all the states over the year, it still had the highest unemployment rate in the country at 9.6 percent in April. The state, which reaped economic fortune during the housing boom, saw its rate spike to 14 percent in September 2010, the highest on records going back to 1976, and then steadily drop.

After Nevada the next higher rates were Illinois, Mississippi and California. In California, where the economy is on the mend, the state unemployment rate continued its decline falling to 9 percent from 9.4 percent in March - a record low since December 2011.

North Dakota's unemployment rate, the lowest in country for half a decade, inched up to 3.3 percent. The state is in the grips of a commodities boom, with North Dakota's 28,600 mining and logging jobs in April 321 percent more than five years before.

Still, it was one of seven states where the jobless rate rose over the year. In April 2012, North Dakota's jobless rate was 3 percent, and in March it was 3.2 percent. The increase may be due to its swelling labor force, which also grew since April 2012.

Seasonal factors could also be in play, according to Michael Ziesch, a manager of labor market information for the state, who noted "April rates have historically always posted a decrease from prior month, this year was no exception."

"Current period rates are slightly higher than a year ago and reflect longer winter type weather in the period that delayed many outside projects," he added.

From March, unemployment rates fell in 40 states and Washington, D.C., and were unchanged in seven. Rates rose in two other states besides North Dakota: Louisiana and Tennessee.

CNBC: Recession Will Haunt Gen-X Into Retirement

The Great Recession hurt a lot of people and this loss of wealth will follow millions into retirement, according to a report released Thursday.

Early baby boomers (those born between 1946 and 1955) may be "the last group on track to retire with enough savings to maintain their financial security through their golden years." the study finds. But the rest of us are in for a world of hurt -- especially Gen-Xers (born between1966 and 1975).

The study by Pew Charitable Trusts, "Retirement Security Across Generations: Are Americans Prepared for Their Golden Years?," shows that early boomers lost 28 percent of their median net worth; late boomers (born between 1956 and 1965) lost 25 percent from 2007 to 2010. However, Gen-Xers lost nearly half (45 percent) of their wealth – about $33,000 on average – during that same time period. And they didn't have that much savings to begin with.

"Gen-X is the first generation that's unlikely to exceed the wealth of the group that came before it and face downward mobility in retirement," said Erin Currier, director of Pew's Economic Mobility Project. "They have lower financial net worth than previous groups had at this same age and they lost nearly half of their wealth in the recession."

Financial planners generally recommend that you save enough to replace 70 to 100 percent of your pre-retirement income when you leave the workforce. Pew's research shows the typical Gen-Xer will only be able to replace half of that income.

When it comes to retirement savings, late boomers (born between 1956 and 1965) are more like Gen-X than early boomers. They're on track to replace only 60 percent of their pre-retirement income.

You may be surprised to learn that some people saw their wealth grow during the recession. Pew found that a sizable minority of households – 39 to 44 percent – had a positive change in wealth between 2007 and 2009.

"As an example, more than a third of households in this age group experienced gains in home equity during that two-year period," Currier noted.

Politico: Debt limit won’t be hit until after Labor Day

The government will be able to avoid breaching its borrowing limit until shortly after Labor Day, but that is no excuse for Congress to dawdle when it comes to raising the debt ceiling, Treasury Secretary Jack Lew informed congressional leaders in a letter Friday.

Congress voted earlier this year to temporarily suspend the debt ceiling through May 18, but Lew said that the Treasury Department will begin using accounting maneuvers, or “extraordinary measures,” to delay hitting the borrowing limit.

Lew reiterated the administration’s position that it will not negotiate over whether to raise the debt ceiling and said Congress should not wait until the last minute to lift the borrowing cap.

“The question of whether the country must pay obligations it has already incurred is not open to debate,” Lew wrote. “Congress has no choice but to protect our creditworthiness and our economy.”

Lew said he is unable to offer a specific estimate of when the country will hit its borrowing limit but said the recent announcement that taxpayer-owned mortgage finance giants Fannie Mae and Freddie Mac will send the government about $60 billion has bought some time.

The Treasury secretary also expressed his opposition to a GOP debt prioritization bill that the House passed last week. The legislation would allow the Treasury to continue paying bondholders even if the government hits the debt ceiling.

Democrats opposed the bill, saying it would let the government pay off bondholders like China before the military and the poor who depend on government services.

The Freeman: Advice to Young, Unemployed Workers

We are now in the fifth year of very choppy hiring markets for young workers. The latest unemployment numbers once again leave them out from posted gains. Not even the boom in temporary employment included them.

The United States has one of the highest rates of unemployment amongst 20-to-26-year-olds in the world. Nearly half of the U.S. army of unemployed is under the age of 34. As for those who are hired, there is a huge gap between wage expectations and paycheck realities, which is exactly what you would expect in post-boom world. A survey by Accenture finds that more than 41 percent of recent U.S. college graduates are disillusioned, underemployed, and not using their college degrees in their work.

The young generation faces challenges unlike any that most people alive have seen. This situation requires new adaptive strategies.

What follows, then, is my letter of advice to young workers.

Muniland: California launches the best new source of muniland data

Last December I wrote about a project sponsored by California Treasurer Bill Lockyer that is now up and running:

In the past year, three California cities have filed for bankruptcy. This casts a pall on the bonds of other California cities, because investors wonder if they also contain buried fiscal issues. In an effort to create more transparency, a new open source ratings project was recently launched:

Responding to market concerns about municipal credit quality, the California State Treasurer’s Office has commissioned a San Jose State University economist and a government-bond research group, Public Sector Credit Solutions, to develop a default probability model for city bonds.

The “default probability model” (which is what most credit rating agencies use as a model) was created by former Moody’s executive Marc Joffe of Public Sector Credit Solutions.

The project is a great leap forward for presenting public data. Nothing else like it exists in muniland. Here what it contains:

This website provides financial data and credit scores for most cities in California with population over 25,000 – roughly 260 cities in all. The financial data comes from Comprehensive Annual Financial Reports or Audited Financials that each city is required to file. We have also collected data from pension plan actuarial reports. For each city, we provide links to the documents we used as well as links to each city’s bond offering documents stored on the Municipal Securities Rulemaking Board’s EMMA system. Finally, we provide (hopefully) relevant news headlines for each city gathered from Google News and Yahoo News.

There is discussion on Twitter over whether the platform is the best method for rating municipal securities. That is a worthwhile discussion. But of much greater consequence is the ability to see the bones of municipal finances without having to dig through hundreds of pages of documents. I encourage every other state treasurer to follow Lockyer’s lead and have the same thing built for their cities and towns. Congrats to Marc Joffe of Public Sector Credit Solutions. Open up muniland!

CARTOON OF THE DAY

Brian Costin
Director of Government Reform

Residents of Oak Lawn may soon get a much-needed dose of government transparency.

Sandra Bury was recently sworn in as the new Mayor of Oak Lawn, a village in the southwest suburbs of Chicago.

As one of her first priorities in office, Bury intends to implement the Illinois Policy Institute’s 10-Point Transparency Checklist, increasing the amount of information available to Oak Lawn’s citizens.

From the Southtown Star:

In addition to ethics reform, Bury said she wants to bring a new transparency to the village government. She specifically cited a 10-point transparency checklist put together by the Illinois Policy Institute.

Orland Park was the first village to score 100 percent under the institute’s guidelines.

That checklist requires contact information for elected and administrative officials online, information about upcoming village meetings, copies of the minutes of meetings, information packets from previous meetings, publication of financial audits and budgets, salary and benefit information of public employees and access to public records through Illinois’ freedom of information law.

We applaud elected officials like Bury who are working on improving online transparency for their community.

With new elected officials being sworn in across the state of Illinois, it’s a great opportunity for residents and elected officials to start a new push for improving online transparency.

If you are an elected official and want help implementing online transparency measures for your local government agency, please contact me at bcostin@illinoispolicy.org.

photo credit: Flickr: RickDrew

Ted Dabrowski
Vice President of Policy

John Klingner
Policy Research Assistant

Illinois continues to have the nation’s second-worst unemployment rate, according to the Bureau of Labor Statistics’ April labor report. The state’s unemployment rate dropped to 9.3 percent in April, down from 9.5 percent in March, and is still nearly two percentage points above the 7.5 percent national average.

The state’s drop in unemployment was not due to good news – the fall was due to people leaving the work force rather than an increase in employment. Illinois lost more than 2,000 payroll jobs and more than 30,000 Illinoisans left the workforce, according to the Illinois Department of Employment Security.

The state’s employment numbers have fared poorly compared to the rest of the nation. Compared to April of last year, Illinois’ unemployment rate increased half a point while both the national and Illinois’ neighbors’ averages experienced decreases.

In fact, Illinois was one of only seven states that saw its jobless rate rise since last year. States that saw an increase include: Illinois, Delaware, Indiana, Mississippi, New Hampshire, North Dakota and Wisconsin.

Unlike Illinois, the state’s neighbors are in line with most of the nation. If Illinois could reach its neighbors’ average unemployment rate, more than 140,000 Illinoisans would be employed.

Illinois’ stalled recovery is a direct consequence of the failed policies the state has pursued. Illinois stalled on pension reform, increased taxes and spent far beyond its means. Our neighbors have done the opposite and have seen their economies markedly improve.

Springfield’s current policies aren’t working. The fact that Illinois is one of only seven states worse off than it was a year ago is proof.

Fortunately, there are ways Illinois can move forward. The Illinois Policy Institute has laid out a plan to end the fiscal and budgetary crisis in Illinois, a prerequisite to creating more jobs and restoring economic prosperity.

The road to recovery begins with politicians adopting pro-growth policies.

QUOTE OF THE DAY

WSJ: The Modern American Boomtown

Houston

'Redneck white city down in Texas."

That's how Houston Mayor Annise Parker sums up the caricature of her town, and she wants everyone to know it's bunkum. Houston is "a really cool city," she says. "Open and entrepreneurial and welcoming." It's also booming.

The mayor herself is a walking testament to the cosmopolitan contrarian reality of modern Houston. Annise Parker is a Democrat in a deep-red state, the first openly gay mayor of a major American city. She's a social liberal who's also a former oil-industry executive with a pro-business attitude running what may be the nation's least-regulated metropolis.

Houston's recent track record is startling. For the calendar year ending in February, it saw the fastest pace of job growth (4.5%) among the country's 20 largest metropolitan areas. (With a population of 2.1 million, it's the fourth-largest U.S. city.) In 2011, the last year such data are available, Houston had the fastest-growing large metropolitan economy, at 3.7%.

Add to that a cost of living that is 7.8% below the U.S. average—New York is 53.4% above the average—and you can see the attraction for waves of new arrivals. Housing costs run a third less than the average in the 29 largest metro areas. Adjusting for these lower costs, Houston has the highest per-capita income of any city in the nation.

The mayor, who is 56, and I are discussing the city's makeover at one of its hottest new restaurants. Underbelly, Ms. Parker's choice for lunch, is in the Montrose neighborhood where she lives. "This was a huge lesbian bar," she says, before the neighborhood turned "trendy" and places like Underbelly moved in. As diners fill the capacious restaurant, Ms. Parker notes that Houstonians eat out more often than anyone else in America.

Like Texas as a whole, Houston sells itself as "business friendly," and Ms. Parker ticks off the attractions—ease of permitting, unobtrusive regulations and low taxes. She also supports Houston's limited restrictions on land use, which some here call its real secret sauce. Without zoning, Houston can adjust to shifting market demands—whether for townhouse complexes or retail outfits—faster than most any other city. It looks unwieldy to anyone of the urban-planning persuasion, but it also keeps prices down.

Tory Gattis, who writes the Houston Strategies blog, says: "I'd argue we may be the most libertarian city in America. Live and let live; strong property rights; not much corruption; small business culture."

Washington Times: PETA accuses IRS of ‘Nixon’ and ‘totalitarian’ tactics

Add to the list of IRS targets: People for the Ethical Treatment of Animals.

PETA said it’s been targeted, too. Politico reported that Jeffrey Kerr, the general counsel for the animal rights group, sent a letter on Thursday to the Treasury Department alleging that PETA was unfairly audited on three separate occasions: Between 1990 and 1992, from 2003 to 2005 and in 2009.

It’s not just conservative groups, Mr. Kerr wrote in his letter, Politico reported.

“PETA’s harassment by the IRS includes the 20-month audit in 2003 to 2005 and another in 2009, both of which resulted from what the IRS agents admitted — and we have verified from Freedom of Information Act materials — were politically motivated attacks and pressures by members of Congress who were doing the bidding of the meat, dairy, experimentation, tobacco and other industries whose animal-abusing practices PETA opposes,” he wrote, Politico reported.

IRS agents didn’t find anything of concern with PETA following all three audits, Mr. Kerr said, Politico reported. But the group was seriously distracted from its core mission for a period of years.

“[PETA] endured an unconscionable diversion of charity resources to fend off these attacks on its tax-exempt status, which were reminiscent of the Nixon years and tactics more commonly attributed to totalitarian regimes,” Mr. Kerr said, in his letter reported by Politico.

New York Daily News: New York City will double money for training teachers

Officials have set aside about $100 million to help prepare teachers for new Common Core standards, Chancellor Dennis Walcott said.

Starting in June, the city will more than double its funding for teacher training, Schools Chancellor Dennis Walcott said.

Officials have set aside about $100 million to help prepare teachers for more difficult Common Core standards that were introduced on new state math and reading exams this spring.

A portion of the funds will go to help schools prepare for the impending teacher evaluation system that the state will impose on city schools June 1 for the next academic year.

Principals will have access to the money starting next month, Walcott said Wednesday. The one-time budget boost means thousands in additional funds for every school.

The city spent about $50 million on teacher training last year.
“Doubling down like this is a significant step,” said Walcott. “It will build the strength and capacity of our teachers to deliver everything we expect of them.”

Principals at the city’s 1,800 public schools can use the new funds as they see fit, as long as the money goes to prepare students for tougher new academic standards or the implementation of the new teacher evaluation system.

Points and Figures: It’s A Continuous Game: Individual Rights and Freedom Will Win

If you haven’t read Ben Domentech’s article, you should.  He makes a lot of sense if you are a small government conservative.  This IRS scandal that shows how politicized the agency has become is getting broader and deeper.  Republicans need to avoid trying to score political points.  This scandal goes the crux of who we are as a people.   Ben says,

The scandals we are talking about in Washington today are not tied to the individual of Barack Obama. While there’s still more information to be gathered and more investigations to be done, all indications are that these decisions – on the AP, on the IRS, on Benghazi – don’t proceed from him. The talk of impeachment is absurd. The queries of “what did the president know and when did he know it” will probably end up finding out “just about nothing, and right around the time everyone else found out.”

The IRS was deliberately trying to derail the First Amendment; freedom of speech.

Peggy Noonan says to stay shocked.  I agree, but would go further.  Stay or get engaged on this issue.  Just because you are a liberal and the IRS was on “your team” doesn’t make it better.  Reverse the roles and imagine what you would think if George Bush used the IRS to target unions, liberal organizations and liberal think tanks.  If this precedent by the Obama administration is okay, and stands, then when the other side gets power the first salvo will be to use the IRS to attack.

Going after someone’s money when they are in power steps over every line.  That government tyranny should be reserved for socialist, communist, and monarchy states.  Not a republic.

Washington Examiner: Insurers predict 100% to 400% Obamacare rate explosion

Internal cost estimates from 17 of the nation's largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent, crushing the administration's goal of affordability.

New regulations, policies, taxes, fees and mandates are the reason for the unexpected "rate shock," according to the House Energy and Commerce Committee, which released a report Monday based on internal documents provided by the insurance companies. The 17 companies include Aetna, Blue Cross Blue Shield and Kaiser Foundation.

The report found that individuals will face "premium increases of nearly 100 percent on average, with potential highs eclipsing 400 percent. Meanwhile, small businesses can expect average premium increases in the small group market of up to 50 percent, with potential highs over 100 percent."

One company said that new participants in the individual market could see a premium increase of 413 percent when new requirements on age rating and required benefits are taken into account, said the report. "The average yearly cost for a new customer in the individual market grows from $1,896 to $3,708 -- a $1,812 cost increase," it added.

The key reasons for the surge in premiums include providing wider services than people are now paying for and adding less healthy people to the rolls of insured, said the report.

It concluded: "Despite promises that the law will lower costs, [Obamacare] will in fact cause the premiums of many Americans to spike substantially. The broken promises are numerous, and the empirical data reveal that many Americans, from recent college graduates to older adults, will not be able to afford the law's higher costs."

Chicago Reader: Mayor Emanuel's FOIA policy: Don't ask because we won't tell

As we approach the midpoint of Mayor Emanuel's first term, I think I've discovered one of his greatest legacies to Chicago, right up there with dismantling public education and making Mayor Daley's god-awful parking meter deal even worse.

The mayor is also undermining the Freedom of Information Act, so that it's next to impossible for ordinary citizens to secure information showing how the government reaches decisions that affect their lives. The mayor and other officials are then free to do pretty much anything they want without fear of scrutiny.

Getting around the FOIA isn't as easy as it looks. The law requires that public officials share records generated by public bodies. In fact, transparency is one of those good-government principles that almost all elected officials feel compelled to endorse, even if it's the last thing they actually want to do.

In his case, Mayor Emanuel boasts of running "the most open, accountable, and transparent government Chicago has ever seen."

Meanwhile he's invented one of the great FOIA dodges of all time: I'd give you the stuff you want, but we threw it out.

That's what has emerged from the twists and turns of a FOIA request made in February 2012 by a north-side public school parent named Glenn Krell.

As you may recall from the first time I wrote about his case, Krell sought records from the Chicago Public Schools related to Mayor Emanuel's longer-school-day mandate.

As you undoubtedly know, the mayor extended the class time in public schools by about an hour without offering enough resources to help use the time effectively. Many schools were then forced to fill it with study halls, where teachers are supposed to provide one-on-one tutoring to 30-some kids. It works out to a couple minutes of tutoring apiece. Great program, Mr. Mayor.

Krell figured CPS had done research on the longer school day because, like every parent in the system, he'd received a letter from Jean-Claude Brizard, then the CEO, claiming that "our elementary school students are receiving 22 percent less instruction time than their peers across the country." So he sent CPS a FOIA request asking for "the reports, statistics, comprehensive city-by-city analysis and other documents that back up the statement by Mr. Brizard."

CPS responded that "the district does not maintain any documents responsive to your request."

Krell appealed to Attorney General Lisa Madigan's office because that's what the law says you should do if you think you're getting stonewalled on a FOIA request.

The longer-school-day records weren't all he requested from CPS. Krell also sought information regarding "selective enrollment tiers."

This has to do with CPS's effort to rank every neighborhood by socioeconomic factors in order to guarantee diversity in limited-enrollment high schools like North Side and Payton. The purpose is to make sure kids from low-income neighborhoods get a shot at admission to the high-performing schools.

For the last year or so, many parents have complained that the formula seems arbitrary and unfair. So Krell sent a FOIA seeking "reports and analyses used to formulate the selective enrollment tiers."

Fortune: Signs of new housing bubble in several areas

Only a year after the U.S. housing market hit bottom, it may be bubbling up -- again. Odd as it may seem, some economists warn the steady rise in home prices, at least in some markets, are inflated and could eventually pop.

Prices nationwide rose nearly 6% last year -- more than most ever expected. While that has continued so far this year, leading builders to build again, prices in some places have risen faster than incomes. Eventually, they could fall back as homes become less affordable.

"If prices keeps going up at this rate for another six months, we will have a bubble, and people will get hurt," Dean Baker, co-director of the Center for Economic and Policy Research recently told Bloomberg.

The housing market may or may not be approaching bubble territory, but a handful of cities have certainly seen home prices soar beyond market value, according to Trulia, a San Francisco-based real estate data company. Of the largest 100 metro areas, Orange County, Calif., appears to be the most overvalued, with prices 9% above Trulia's estimate for fair value. Los Angeles homes are 5% overvalued, San Jose is 3%, and San Francisco real estate is 2% above fair value.

And even though Texas's biggest cities largely avoided the last housing bubble, markets there are also heating up. By Trulia's estimates, prices in Austin are 7% overvalued; they are 5% above fair value in San Antonio and 2% overvalued in Houston.

Indeed, prices across many parts of the country are rising just as rapidly as they did during the bubble years of 2003, 2004, and 2005, but the housing market is still far from bubble territory.

Trulia's economist Jed Kolko says when comparing what traditionally drives home prices, such as rents and incomes, the overall housing market is still undervalued by about 7%. This of course is a big improvement from the bottom of the downturn in late 2011 when prices were undervalued by 15%, but prices are far from the peak of the housing bubble when homes were overvalued by 39% in early 2006.

Some markets are clearly inflated, but there are plenty of big reasons why it's unlikely that buyers will see prices soar that much higher. With the unemployment rate at 7.7%, joblessness has held back many would-be buyers. And while more borrowers are being approved for new mortgages, lending standards at banks remain tight.

And despite big increases last year, home prices in Las Vegas and Detroit are among the most undervalued, according to Trulia. At best, the recovery is choppy. So the bubble that some fear may very well deflate before trouble abounds.

CARTOON OF THE DAY

Brian Costin
Director of Government Reform

The story of the Internal Revenue Service targeting conservative-leaning organizations for special scrutiny in nonprofit status is one of the biggest scandals to hit Washington, D.C., in my lifetime. 

Even U.S. Sen. Dick Durbin – an Illinois Democrat – has weighed in with outrage about the IRS scandal. From the St. Louis Post-Dispatch:

“It is absolutely unacceptable to single out any political group — right, left or center,” Durbin said. “It goes back to the worst days of the Richard Nixon administration.”

But Sen. Durbin had different thoughts on the issue in 2010. Then Durbin singled out Crossroads GPS and other 501(c)(4)s for extra IRS scrutiny just a few weeks before the 2010 election for President Barack Obama’s former Senate seat. 

At the time Crossroads GPS was airing scathing ads against former Illinois Treasurer Alexi Giannoulias. However, Crossroads GPS hasn’t been charged with any wrongdoing.

Durbin wrote a letter to the IRS requesting an investigation into the status of Crossroads GPS and other organizations’ nonprofit status.

"I write to urge the Internal Revenue Service to examine the purpose and primary activities of several 501 (c)(4) organizations that appear to be in violation of the law," he said.

I wonder what the 2013 Dick Durbin thinks about the Dick Durbin from 2010?

image credit: AP Photo/J. Scott Applewhite

Paul Kersey
Director of Labor Policy

In my last post, I called attention to the contract between the Cleveland Teachers Union (an affiliate of the American Federation, just like the union that represents Chicago teachers) and the Cleveland Municipal School District. The union and the district both deserve credit for releasing their contract to the media just two days after reaching a tentative agreement – giving teachers and the public plenty of time to look the thing over before it is ratified and signed.

As for the contract itself, it’s pretty good – given the circumstances. Though it’s the product of collective bargaining, the contract does get rid of the rigid “step and lane” salary schedule in which teacher pay depends entirely on academic degrees and years of service, and replaces it with a “points” system in which teacher evaluations and student growth play major roles. But it turns out that the Ohio Legislature did a lot of the heavy lifting; legislation that took effect last fall calls for all new teacher contracts to provide for a “performance-based salary schedule.” At the end of the day, the district would have had to make similar changes anyway to comply with this law.

Under the points system, a teacher receiving the highest rating (“accomplished”) will be credited with 15 points, which just happens to be the number needed to receive a pay raise every year. Others receiving lower ratings may need to wait an extra year or two.

The problem is the contract leaves a lot to be filled in later by joint committees made up of union and administration members. Among other things, the two committees will determine how many points teachers receive for attendance, or for teaching certain subjects and in certain school buildings. These bonus points might be manipulated to make the regular performance evaluations much less important – and maybe thwart state law.

Still, the Cleveland teacher’s contract gives more respect to education reforms than the recent Chicago teacher contract did. That contract:

• Gave pay increases to teachers with the most seniority – not those who achieve the best results for their students. 
  

• Made the Chicago Public School district’s billion-dollar budget deficit worse.

• Did little to fix the district’s poor student achievement – CPS graduates only 54 percent of its students.

• Watered down teacher evaluation reform efforts.
  

In the end, a lot depends on union and administration working together well. Ohio labor law is similar to that in Illinois. Neither guarantees good relations between teachers unions and school districts. But the situation in Cleveland may work out. Not all teacher unions are like the Chicago Teachers Union. The fact that the union and the district are willing to let the public see their handiwork is a good sign.

image credit: Gus Chan