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  • 8/14/2019 Exposing TABOR Data Games

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    Exposing TABOR Data Games: A Second Reply to CBPPBy Linda Gorman and Ben DeGrow

    The case against the Taxpayers Bill of Rights (TABOR) is built on a shaky foundation ofmisleading data. The latest example of weak arguments comes from the Center on Budget andPolicy Priorities (CBPP). Its October 2006 reportis a splendid guide to the art of using an ounceof truth to sell a pound of nonsense.1

    The CBPP is a Washington, D.C., group that advocates increased government spending andopposes laws like TABOR because they require government to justify requests for more taxpayerdollars by putting them to a vote of the people. In the fall of 2006, voters in other states weighedthe decision to follow Colorados lead and adopt TABOR-like tax limitation proposals. Duringthe campaign, CBPP produced a video ad implying that TABOR had destroyed Coloradospublic services.2

    Independence Institute Fiscal Policy Center Director Penn Pfiffner responded to the CBPP adwith apapertitled TABOR Benefits Colorado's Citizens: A Response to Misleading Video.3 Itrevealedthat many of the CBPP's criticisms of TABOR were based on discredited statistics andmisleading arguments. CBPP published its response to Mr. Pfiffner in the October 2006 report.

    Since the CBPP continues to rely on misleading and out-of-context data, the IndependenceInstitute again assumes the responsibility of educating the CBPP about the benefits of TABOR inColorado.

    General SpendingMr. Pfiffner used Census data on state spending to show that TABOR did not reduce Coloradostate spending. The CBPP report responded with appropriations data from the ColoradoLegislative Council for 2001-2003 to show that it did. The CBPP also tried to have it both ways,asserting that even if spending rises, there may be program cuts.

    Unfortunately, appropriations data are not particularly accurate measures of actual spending. Forexample, if funds are appropriated for one purpose, and then redirected by appropriating them toanother purpose, they are counted twice. The CBPP claims should also be weighed against a2003 memo from the Colorado Governors office, which supported Mr. Pfiffners finding. Thememo flatly states that TABOR is not the cause of the states present financial situation. Itfurther notes that the FY 2002-2003 budget was 7.3 percent larger than the FY 2001-02budget.4

    Even the CBPPs measure of state funding adequacy is misleading. It uses state spending as afraction of personal income and says that if Colorados fraction doesnt match that of otherstates, TABOR has caused harm. But a number of factors that do not affect state governmentexpenses, like increased company profits or working more hours, can reduce state spending as afraction of personal income simply by increasing personal income while state spending remainsrelatively constant.

    http://www.cbpp.org/10-23-06sfp.htmhttp://www.cbpp.org/10-23-06sfp.htmhttp://www.cbpp.org/taborvideo.htmhttp://www.i2i.org/articles/taborpfiffner.pdfhttp://www.i2i.org/articles/taborpfiffner.pdfhttp://www.state.co.us/gov_dir/govnr_dir/ospb/budget/factsheets/statewide/BALANCING-Jul2003.pdfhttp://www.cbpp.org/taborvideo.htmhttp://www.i2i.org/articles/taborpfiffner.pdfhttp://www.state.co.us/gov_dir/govnr_dir/ospb/budget/factsheets/statewide/BALANCING-Jul2003.pdfhttp://www.cbpp.org/10-23-06sfp.htm
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    State buildings do not cost more to heat simply because private citizens work harder. Neitherdoes educating children. And if working harder reduces poverty, then rising personal incomeshould reduce the amount spent on state poverty programs. In some cases, reducing statespending as a fraction of personal income is a sign of efficient government.In its defense, CBPP asserts that spending as a share of personal income is valid since personalincome measures the wealth of a state and thus, its ability to contribute to public services. WhileColorado citizens may differ in whether or not they think government needs to spend more justbecause it exists and they are working harder, elementary macroeconomics textbooks areunanimous in explaining that personal income is not wealth. Income reflects the amount earnedover a period of time, whereas wealth measures the amount of assets possessed at a given time.

    Health CareAn easily refutable section of the CBPP ad recycled the old claim that Colorado is last inchildhood immunizations, implying that TABOR is to blame. This assertion is a willfulmisinterpretation of the 2002 National Immunization Survey (NIS). Mr. Pfiffner and many othershave explained that that the NIS estimates of coverage in states with small populations are

    estimated from small samples and are subject to error. When the surveys published standarderrors were considered, Colorados likely percentage of immunized children was statisticallyindistinguishable from that of a number of other states.

    In rebuttal, the CBPP reports author proclaimed, To suggest that the NIS is unreliable ispreposterous.Its estimates are subject to error (as with any survey that uses samples toextrapolate data), but it does not publish or estimate data for areas where sample sizes are toosmall.

    Too small is a value judgment, one that Mr. Pfiffner did not make. The CBPP neglected toinform readers that various NIS publications make it crystal clear that state immunizationcoverage rates are estimated with substantial error and should be interpreted with caution.Colorados20 0 2 last-place point estimate of 62.7 percent had an estimated error of 6.6 for thepercentage of children receiving the 4:3:1:3:3 vaccine series. In How to use th e NIS data , theNIS explains confidence intervals, and warns users that differences in point estimates in stateswith overlapping confidence intervals may, in fact, be due to chance. Unsurprisingly, Coloradosconfidence interval overlapped those of a number of other states.5

    In any case, by 200 4, Nevada was in last place and Colorados estimated coverage rate was 77.1 6.2 percent.6 Either NIS state coverage estimates are subject to a fair amount of error orColorados TABOR-deprived health system increased vaccination rates by 15 percent in just twoyears.

    Transportation and InfrastructureThe CBPP presents out-of-context data in its struggle to make the case that TABOR had led toinsufficient investment in Colorados infrastructure system [sic]. The October report informedreaders that In 2003, the American Society of Civil Engineers (ASCE) gave Colorado a D+ forthe condition of the states roads and a C+ for its bridges. A D+ sounds bad, until one realizesthat for roads, D+ was an average grade in the2001 A S CE report, and that the 2003 grades wereno better. For bridges, the average 2001 grade was a C, unchanged in 2003. Nationwide, theaverages were a C on bridges and a D+ on roads. In proper context, the grades mean that the

    http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5231a2.htmhttp://www.cdc.gov/mmwr/preview/mmwrhtml/mm5231a2.htmhttp://www.cdc.gov/nip/coverage/how-to.htmhttp://www.cdc.gov/mmwr/preview/mmwrhtml/mm5429a1.htmhttp://www.asce.org/reportcard/index.cfm?reaction=full&page=6http://www.asce.org/reportcard/index.cfm?reaction=full&page=6http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5231a2.htmhttp://www.cdc.gov/nip/coverage/how-to.htmhttp://www.cdc.gov/mmwr/preview/mmwrhtml/mm5429a1.htmhttp://www.asce.org/reportcard/index.cfm?reaction=full&page=6
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    ASCE felt that Colorad o s roads were average and that its bridges were slightly better thanaverage.7

    Education Spending and National RankingsIn its response to Mr. Pfiffners paper, the CBPP displayed a chart indicating a downward trendin Colorados per-pupil spending during the first eight years of TABOR (1992 2000). Thisresult is accomplished by tilting the chart to make the national average a straight horizontal line.Yet even adjusted for inflation, the national average rose significantly over the eight-year period.Nearly every state (including Colorado) increased per-pupil spending faster than inflationbetween 1992 and 2000, but most states increased spending at a greater rate than Colorado.Education spending has not gone down under TABOR; the CBPP is unsatisfied with just howquickly it has risen.8

    The most recent statistics available from the U.S. Department of Education rank Colorado 28th

    nationally for spending a total $9,073 per student in K-12 education during the 2003-04 schoolyear. In 1992-93, at the time TABOR was enacted, Colorado ranked 29th at $5,389 in totalexpenditures per student. When removing expenses for capital construction and debt financing,

    Colorados ranking slipped from 31st in 1992-93 ($4,766) to 33rd in 2003-04 ($7,478).9

    Colorados slower rate of education spending increases has not translated into reduced academicperformance. The National Assessment of Educational Progress (NAEP) shows that Coloradostudents remained among the nations best achievers, even as the state increased the percentageof English language learners being taughtin part due to an influx of illegal aliens. WhileColorados graduation rate slipped between the Class of 1993 and the Class of 2001, the fall(from 75 percent to 72 percent) was smaller than several other states with more lavish spending:including Delaware, Illinois, New York, and Wyoming.10

    Education Spending and Teaching Personnel CostsThe CBPP defends the measurement of per-pupil education spending as a percentage of personalincome with the assertion that wealthier states need to offer educational employees highersalaries to compete with the private sector. However, the American Federation of Teachersranked Colorado 21st in average annual teacher salaries in 2003-04. Adjusted for cost of living,Colorado teachers rank 33rd nationally but remain regionally competitiveearning more thantheir counterparts in neighboring states like Kansas, Nebraska, New Mexico, Oklahoma, Utah,and Wyoming.11

    Furthermore, the problem in recruiting and retaining high-quality teachers has less to do withhow much teachers are paid, when compared to the private sector, than how they are paid. A2006 report from the Center for American Progress shows that the lack of greater earningpotential for teachers who have greater aptitude or more technical training turns many talented

    applicants away from the profession.12

    To determine whether enough money is being spent on K-12 education, and on teachingpersonnel costs in particular, one must consider if funds are being used effectively. A 2007Education Sector report conservatively estimates that 19 percent of current school spending istied up by negotiated agreements to implement policies which research has shown have a weakor inconsistent relationship with student learning.13

    http://www.coloradoreportcard.org/http://www.coloradoreportcard.org/
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    1 Karen Lyons, A Response to the Independence Institutes Attack on The Real Story Behind TABOR Video,http://www.cbpp.org/10-23-06sfp.htm2 The Real Story Behind TABOR, http://www.cbpp.org/taborvideo.htm3 http://www.i2i.org/articles/taborpfiffner.pdf4 State of Colorado, Office of State Planning and Budgeting, Balancing Colorados Budget (July 2003),http://www.state.co.us/gov_dir/govnr_dir/ospb/budget/factsheets/statewide/BALANCING-Jul2003.pdf

    5 United States Department of Health and Human Services, Centers for Disease Control and Prevention (CDC), Morbidityand Mortality Weekly Report (MMWR), 8 August 2003, National, State, and Urban Area Vaccination Levels Among

    Children Aged 19--35 Months --- United States, 2002, http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5231a2.htm;CDC, National Immunization Program, How to Use the NIS Data, http://www.cdc.gov/nip/coverage/how-to.htm6 CDC MMWR, 29 July 2005, National, State, and Urban Area Vaccination Levels Among Children Aged 19--35 Months--- United States, 2004, http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5429a1.htm7 American Society of Civil Engineers (ASCE), 2003 Progress Report, http://www.asce.org/reportcard/index.cfm?reaction=full&page=6; ASCE, Colorados 2003 Infrastructure Report Card, http://www.coloradoreportcard.org/8 National Center for Education Statistics (NCES), Common Core of Data (CCD), http://www.nces.ed.gov/ccd; Inflationcalculations made from William D. Berry, Richard C. Fording, Russell L. Hanson, Cost of Living Index for the AmericanStates, 1960-2003, http://ssdc.ucsd.edu/ssdc/icp01275.html9 NCES CCD.10 National Assessment of Educational Progress: The Nations Report Card, http://nationsreportcard.gov; Jay P. Greene andMarcus A. Winters,Public High School Graduation and College-Readiness Rates, 1991-2002, Manhattan InstituteEducation Working Paper 8, February 2005, Table 8, http://www.manhattan-institute.org/html/ewp_08.htm - Coloradosshare of non-English-speaking students grew substantially during the 1990s. Children aged 5 to 17 unable to speak English

    well or at all more than doubled, from 1.2 percent of the population in 1990 to 2.6 percent of the population in 2000. SeeUnited States Census Bureau, 1990 Census of Population, CPHL-96, and Census 2000, Summary File 3, Tables P19,PCT13, and PCT14.11 American Federation of Teachers, Survey and Analysis of Teacher Salary Trends 2004, Table II-1: Average TeacherSalary in 2003-04, State Rankings, http://www.aft.org/salary/2004/download/2004AFTSalarySurvey.pdf; cost-of-livingadjustments made from Berry, Fording, and Hanson, Cost of Living Index.12 Dan Goldhaber, Teacher Pay Reforms: The Political Implications of Recent Research, Center for American Progress,December 2006, http://www.americanprogress.org/issues/2006/12/pdf/teacher_pay_report.pdf13 Marguerite Roza,Frozen Assets: Rethinking Teacher Contracts Could Free Billions for School Reform, Education SectorReport, January 2007,http://www.educationsector.org/research/research_show.htm?doc_id=436576

    Copyright 2007, Independence Institute

    INDEPENDENCE INSTITUTE is a non-profit, non-partisan Colorado think tank. It is governed by a statewideboard of trustees and holds a 501(c)(3) tax exemption from the IRS. Its public policy research focuses oneconomic growth, education reform, local government effectiveness, and Constitutional rights.

    JON CALDARA is President of the Independence Institute.

    DAVID KOPEL is Research Director of the Independence Institute.

    LINDA GORMAN is the Director of the Health Care Policy Center.

    BENJAMIN DEGROW is a Policy Analyst for the Education Policy Center.

    ADDITIONAL RESOURCES on this subject can be found at: http://www.independenceinstitute.org/

    NOTHING WRITTEN here is to be construed as necessarily representing the views of the IndependenceInstitute or as an attempt to influence any election or legislative action.

    PERMISSION TO REPRINT this paper in whole or in part is hereby granted provided full credit is given to theIndependence Institute.

    http://www.educationsector.org/research/research_show.htm?doc_id=436576http://www.educationsector.org/research/research_show.htm?doc_id=436576http://www.educationsector.org/research/research_show.htm?doc_id=436576