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Unsustainable Spending Drives Local School Levies

In a November 2 policy brief, Buckeye Institute reveals the real reason for the Ohio Education Association claim that state-level funding cuts require many school districts to introduce new levies.

The Institute presents historical evidence for school district overspending. Average annual inflation has been around 4.2 percent since 1975 while school spending has increased by 5.5 percent on average during the same time period. In many Ohio school districts, average teacher compensation is 50% higher than the average income of residents in their communities. While the current legislature has increased school funding, median income is declining. Since 2001, median has declined 16 percent.

Because employee compensation consumes 96 percent of most school budgets, Ohio overspending on schooling is simply unsustainable.

How can this problem be fixed? The Buckeye Institute makes the following proposal:

“Simply providing more tax revenue is not going to solve the problem. If taxpayers in this state are ever to get a break from the hamster wheel of local levies, compensation reforms are essential. To accomplish this, collective bargaining reform cannot be swept under the rug indefinitely.” Changing Ohio collective bargaining law, local school boards would have more flexibility to adjust compensation to reflect current fiscal reality.

To read the policy brief, go to http://www.buckeyeinstitute.org/issues/education-k-12-and-higher-ed.

Passing the Xenia Schools 6.5 Mill Emergency Property Tax Levy: The Bottom Line (corrected)

by Daniel Downs

Since the Xenia City School District attempted to pass a 1.5 earned income tax levy in August, not much has changed. The economic situation is still uncertain. Employment is still near 8%, and growth is still very slow. The Congressional Budget Office estimates remain the same as is the outlook of economists like Nouriel Roubini and financial experts like John Mauldin. (see Passing Xenia Schools Income Tax Replacement Levy)

Also unchanged is the claim by Xenia School officials of a huge deficit looming over the election season horizon. On November 6, Xenia Community School officials want voters to agree that there is a dire need for landowners whose property value is $100,000 to pay an additional $200 per year in taxes. That is on top of the bond issue tax, the half-percent income tax, three or more previously renewed property taxes, Greene County Career Center taxes, city taxes, county taxes, state taxes, federal taxes, utility usage taxes including electricity, gas and communication taxes, sales taxes, business taxes, and many other taxes.

Why do school officials need more money? Past budget cuts made by the school district was due to rising costs of health insurance, utilities and diesel fuel costs, according to a recent Xenia Daily Gazette article. A Dayton Daily News article claims passing the emergency property tax levy will alleviate the looming budget deficit. Of course, giving Xenia schools $200 dollars more of your hard earned income each year will meet the most important need of all, benefiting student learning.

Will it not also assure administrators and teachers that they will continue getting union determined pay raises, health insurance that is continuing to rise, retirement, and other benefits?

We can thank our union President Barak Obama and congressional Democrats for rising health costs, and Capitol Hill bureaucrats and oil cartels for rising gas and utility pricing, part of which is funding research and development of new energy technologies.

But, what about the budget deficit? Here I want to make several observations based on the school district’s current 5 year budget forecast. The estimates assume a continual decline of daily attendance, which also means less revenue. The amount of taxes dollars returned to our school district by the state is determined by the number of students enrolled and attending. The forecast estimates that there will be 200 fewer students attending Xenia schools in five years. If we begin with 2012, the estimated decrease in the number of students attending our schools adds up to 430.

In a presentation to the Ohio School Boards Association, Randy Overbeck said, “the district enrollment has been fairly consistent over the past 15 years. ADM (average daily attendance) has remained around 4800-5100.” The school district estimated attendance to be 5,028 in 2012, 4,748 by 2013 and 4,548 by 2017, which figures are historically unprecedented.

The school’s 5 year budget forecast also assumes property and income tax revenue growth without a new levy. Actual property tax revenue was $17,092,007 in 2012. By 2017, property tax revenue is estimated to be $18,687,908. Income tax revenue estimates follows a similar trend. It grows from $3,197,402 to $3,239,094. While personal property taxes are still being phased out, the state was still reimbursing our school district over $2.9 million in 2012. It is estimated that the state will continue compensating our school district with over $1.8 million for the next 5 years. With the amount of personal property taxes still being collected, our school will continue receiving over $3 million, according to the budget forecast.

Of course, Xenia School District payroll expenses will continue to grow by 41.4 percent over 5 years. That is an annual increase of 8.3 percent, 90% of which covers insurance and retirement benefits. When the contracted services are included, payroll expenses increase to 54 percent, an annual increase of 10.8 percent.

Consequently, while the number of students served by Xenia Schools is estimated to significantly decline, Xenia taxpayers are expected to increase their tax burden to cover the presumed loss. If the decline turns out to be real, the school district revenue will certainly decrease because the state funding is based on daily average attendance.

There is a problem with Xenia school officials blaming the state funding formula for declining school attendance. It is even worse when they assume voters are dumb enough to believe that the nearly $4 million going to charter, STEM, and other nearby school districts is a real expense. It is not a real loss because the school district received revenue for those students to give to the school public school of their parents’ choice. How terrible it must be for families to have the freedom to choose how and where their children will be educated. Yet, the same school officials fail to inform the public about how much they receive from students from other districts enrolling and attending Xenia schools.

Xenia school officials are not loosing tax revenues because it was never theirs. Unlike county and state governments redistributing local tax money, it is unfortunate that Ohio law mandates the primary local school district to distribute tax dollars to other public schools like charters, STEM school, and now other nearby school districts.

Whether the estimated decrease of 200-430 students over the next 5 years is the supposed to be the result of families moving out of Xenia or attending other nearby schools is a question that is anyone’s guess.

What is not unknown is the ultimate goal of the proposed emergency property tax levy. That goal is same as identified in my last post about the school’s earned income tax levy. It is to increase cash flow so that school officials have an on-going year-end surplus of $5-6 million. The budget forecast estimates a $2 million surplus at the end of 2013 and $700,000 at the end of 2014. By that time, Romney may have been able to move the economy forward to a growing economy and 6% or less unemployment. Many more taxpayers would be making more money and would be able to afford giving schools $200 or more for five years and thereafter.

In the final analysis, Xenia School officials estimate a steady decline in student population, steady income revenue, and significantly rising costs. Most of the increased costs are due to above inflation employee benefits. Unless taxpayer annual income increases about 10-12 percent, Xenia taxpayers will not be able to afford the emergency property tax levy or any additional taxes. Based on the school’s estimates, the budget forecast is unsustainable. That is the bottom line.

Broadway Hit “A Few Good Men” Continues Playing at Xenia Area Community Theatre

For ticket information, click here.

Presidential Candidates’ Stand on Life Issues

Live Action, known for its investigative journalism,came out with a guide to the position of the candidates running for president and vice-president. Those candidates are Republicans Mitt Romney and Paul Ryan as well as Democrat incumbents Barak Obama and Joe Biden.

After stating each candidate’s stand of the right to life, the guide present historical statements and positions of each candidate to prove the validity of each candidates views.

To read or download a copy of the guide, go to http://liveactionadvocate.org/LAFLYER.pdf.

Humanitarian Hypocrisy

by Raymond Ibrahim
Special to IPT News
October 26, 2012

The world’s double standards concerning which peoples qualify as oppressed and deserving of help are staggering. Two recent stories illustrate this point:

First, a report exposed, in the words of the Turkish Coalition of America, “Turkey’s continued interest in expanding business and cultural ties with the American Indian community” and “Turkey’s interest in building bridges to Native American communities across the U.S.” Rep. Tom Cole, R-Okla., even introduced a bill that would give Turks special rights and privileges in Native American tribal areas, arguing that “[t]his bill is about helping American Indians,” and about “helping the original inhabitants of the new world, which is exactly what this legislation would do.”

The very idea that Turkey’s Islamist government is interested in “helping American Indians” is preposterous, both from a historical and contemporary point of view. In the 15th century, when Christian Europeans were discovering the Americas, Muslim Turks were conquering and killing Christians in Europe (which, of course, is why Europeans starting sailing west in the first place). If early European settlers fought and killed natives, only recently, Turkey committed a mass genocide against Armenian Christians. And while the U.S. has made many reparations to its indigenous natives, Turkey not only denies the Armenian holocaust, but still abuses and persecutes its indigenous Christians.

In short, if Turkey is looking to help the marginalized and oppressed, it should start at home.

But of course, Turkey is only looking to help itself; the American Indians are mere tools of infiltration. One need not elaborate on the dangers involved in thousands of Muslim Turks settling in semi-autonomous areas in America and working closely with a minority group that holds a grudge against the United States.

Yet if one can understand Turkey’s machinations, what does one make of another recent report? Fifteen leaders from U.S. Christian denominations—mostly Protestant, including the Lutheran, Methodist, and UCC Churches—are asking Congress to reevaluate U.S. military aid to Israel, since “military aid will only serve to sustain the status quo and Israel’s military occupation of the Palestinian territories.”

These are the same church leaders who utter nary a word concerning the rampant persecution of millions of Christians from one end of the Muslim world to the other—a persecution that makes the Palestinians’ situation insignificant in comparison.

If Muslims are subjugated on Israeli land, at least one can argue that, historically, the Jews were there first—millennia before Muslims conquered Jerusalem in the 7th century. On the other hand, millions of Christians—at least 10 million in Egypt alone, the indigenous Copts—have been suffering in their own homelands for 14 centuries, since Islam burst in with the sword.

Nor is this limited to history: from Nigeria in the west, to Pakistan in the east, Christians at this very moment are being imprisoned for apostasy and blasphemy; their churches are being bombed and burned down; their women and children are being kidnapped, enslaved, and raped. For an idea, see my monthly Muslim Persecution of Christians series, where I collate dozens of anecdotes of persecution every month—any of which, if Palestinians experienced, would make headlines around the world; but as it is only “unfashionable” Christians who are experiencing these atrocities, they are regularly overlooked.

Nor are Palestinian Christians immune from this phenomenon: a pastor recently noted that “animosity towards the Christian minority in areas controlled by the PA continues to get increasingly worse. People are always telling [Christians], Convert to Islam. Convert to Islam.”

Indeed, the American Jewish Committee, which was “outraged by the Christian leaders’ call,” got it right by saying: “When religious liberty and safety of Christians across the Middle East are threatened by the repercussions of the Arab Spring, these Christian leaders have chosen to initiate a polemic against Israel, a country that protects religious freedom and expression for Christians, Muslims and others.”

By any objective measure, the atrocities currently being committed against Christians around the Muslim world are far more outrageous and deserving of attention and remedy than the so-called “Palestinian Question.” Incidentally, Israeli treatment of the Palestinians—some of whom, like Hamas, openly declare their intent to eradicate the Jewish state—is largely predicated on the aforementioned: Israel knows Islam’s innate animus for non-Muslims and does not wish to be on its receiving end, hence the measures it takes to exist.

There is a final important point of irony concerning the differences between Turkey’s Muslims and America’s liberal Christians: the former engage in hypocrisy to empower Islam; the latter engage in hypocrisy to disempower Christianity, even if unwittingly. Just like secular/liberal Americans who strive to disassociate themselves from their European heritage—seeing it as the root of all evil and championing the rights of non-whites like American Indians—liberal American Christians strive to disassociate themselves from their Christian heritage and champion the rights of non-Christians, hence their keen interest for Muslim Palestinians.

And all the while, the one religious group truly persecuted from one end of the Islamic world to the other—Christians—are devoutly ignored by the humanitarian hypocrites.

Raymond Ibrahim is a Shillman Fellow at the David Horowitz Freedom Center and an Associate Fellow at the Middle East Forum.

Mandel’s Debt Management Office Director: An Answer to Cronyism Allegations

by Daniel Downs

U.S. Senate candidate Josh Mandel is being accused of cronyism by incumbent Sherrod Brown. Mandel is guilty but with some qualification. Obviously, before becoming Ohio’s Treasurer, Mandel had his sights on Congress. When he became Treasurer he hired his friend and campaign manager Joe Aquilino. Keeping Joe’s valuable services for his present and future work was important for Mandel’s future success.

Yes, Mandel deserves criticism for hiring an inexperienced investment bonds manager. If you read how Aquilino’s job is described you will glimpse Mandel’s reasonable strategy. First, he is referred to as the Director of the Debt Management Office and not of the Office of Debt Management. Second, the following is an excerpt from an April 4, 2012 Huffington Post article in which is disclosed Mandel’s view of Aquilino’s position:

“Joe is a licensed attorney. He managed staff in the Debt Management Department, and worked under Seth Metcalf’s direction on debt issuances,” Unger said. “Mr. Metcalf has extensive experience with debt issues, and continues to be the key person overseeing debt issuances in the treasurer’s office.”

In other words, Mandel hired experienced bonds manager Seth Metcalf to handle debt management. He kept attorney Joe Aquilino employed because he is an excellent manager of people and organizations. That is also why Aquilino is now employed as Mandel campaign manager.

Mandel was not rewarding his buddies with big jobs as campaign booty. Rather, it was a wise business decision: keeping a valuable employee.

Sherrod Brown & Josh Mandel Debate

The Biden and Ryan Debate: Energy and Taxes

by Raymond J. Keating

The vice presidential debate between Congressman Paul Ryan and Vice President Joe Biden was a lively affair. Though it often was difficult getting by the many interruptions served up by Biden, and Martha Raddatz’s bias as a moderator, in order to get at the substance.

But some clear themes did emerge that warrant the attention of entrepreneurs and small businesses.

First, this was a debate overwhelmingly about foreign policy, in particular about the Middle East and North Africa. Of course, Afghanistan, Iran, Libya and the rest of the general region rank as the immediate hotspots in terms of U.S. national security. And given the role played in oil markets, it’s a huge economic factor.

In the end, given the Obama administration’s mixed messages and general pulling back from the region, Congressman Ryan was justified in hitting the White House hard on their strategy, or lack thereof. There is no doubt that tumult and uncertainty in the region, including the role of the U.S., has been one of the key reasons for oil prices remaining high.

It also should be pointed out that Ryan mentioned greater North American energy independence. To the degree that is achieved will depend on U.S. policymaking, such as the extent of U.S. domestic exploration and production, as well as moving ahead with projects such as the Keystone XL pipeline. Unfortunately, the Obama administration has been hostile to carbon-based energy in general, raised barriers to domestic production, and blocked the Keystone XL pipeline.

Second, a big difference emerged on the tax front.

Vice President Biden was unrelenting in pushing a class warfare agenda. He spoke of a fictional tax cut for the “middle class.” In fact, the Obama agenda offers no tax relief for middle-income earners. Rather, it proposes leaving today’s tax policies in effect for middle and low-income earners, while jacking up taxes on everyone else.

Meanwhile, Congressman Ryan pointed out that the Obama tax plan rests on a major tax hike on “successful small businesses.” He contrasted the Obama plan with the Romney plan by noting that the top income tax rate on small businesses would be nearly 45 percent under Obama, while it would be 28 percent under Romney. That’s a profound and economically substantive difference on tax rates.

Ryan also pointed out that 53 percent of small business income would be hit by the Obama tax increases.

For good measure, Ryan noted that this top Obama tax rate would make U.S. businesses far less competitive internationally. That’s very important. While President Obama, to his credit, has called for reducing the corporate income tax rate, he has pushed and pushed to increase the personal income tax rate, without mentioning that some 93 percent of businesses pay personal, rather than corporate, income taxes.

In the end, it needs to be understood that any kind of tax increase, especially in a tough economy, makes no sense whatsoever. No economists – no matter what school of economic thought they belong to – would advocate tax increases in this environment. Their reasoning surely would differ, but not their bottom line conclusion. And any economist pushing for a tax increase right now is playing politics, and not thinking as an economist.

And make no mistake, economics makes clear that tax increases on upper incomes – as included in ObamaCare and in terms of the additional hikes advocated by Obama – will hurt everyone, not just higher income earners. Biden asserted that the, as he put it, “super wealthy” can afford to pay more in taxes. What Biden misses in his class warfare hysteria is that the Obama-Biden tax increases mean reduced incentives and resources for entrepreneurship and investment. That means bad news throughout the economy – for everyone.

If we want to get economic growth back on track, experience rising incomes, and create more jobs, then taxes cannot be increased on the entrepreneurs and investors that are critical to making this happen.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His article was first published by the SBE Council, 12 October, 2012, http://www.sbecouncil.org/2012/10/12/the-biden-and-ryan-debate-energy-and-taxes.

Paul Ryan on the Economy

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A Voter’s Guide to Republicans

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