My “Ten Questions” series returns with a twist.
Believe it or not, in less than two weeks (January 10) the sausage-grinding begins in Annapolis as the 2007 General Assembly gets underway. With that in mind, I went to a local man who’s quite familiar with many of the issues that will face our state in this and future years. But he’s not an elected official.
Regular readers of monoblogue may recognize the Maryland Public Policy Institute as an organization whose views I amplify from time to time. With a mission to “formulate and promote public policies at all levels of government based on the principles of free enterprise, limited government, and civil society” it’s more often than not that I agree with their stances. So, I’m pleased to have discussed the issues in a recent e-mail interview with Marc Kilmer, who is a local resident and Senior Fellow with the MPPI. Mr. Kilmer is also a Research Associate for the Buckeye Institute for Public Policy Solutions, which was a happy accident since I had a nodding familiarity with that group from my native state.
While Marc did want me to note that his opinions are not necessarily those of MPPI, I’m quite happy with how the interview came out and think local readers will be as well.
monoblogue: I’d like to start out by asking a little bit about your background and how you came to be involved in the Maryland Public Policy Institute.
Kilmer: I was raised in Idaho and when I graduated from Hillsdale College in Michigan I moved to Washington, D.C. While there I worked for Senator Larry Craig (R-ID) for four years and was then the Executive Director/CEO of a trade association representing nonprofit providers of services for people with disabilities (organizations similar to Dove Pointe and Lower Shore Enterprises here in Salisbury). My wife took a job in Salisbury so we moved here a year ago. At the same time, a friend working for the Buckeye Institute for Public Policy Solutions, a free market think tank in Ohio, was looking for someone to take over one of his projects. Since I was looking for work, I began contracting with the Buckeye Institute to write on technology issues. After a few months I looked around for similar think tanks in Maryland and found the Maryland Public Policy Institute. I contacted Christopher Summers, the President, and offered my services, and I’ve been doing health care work with the MPPI since July.
monoblogue: It sounds like you’re a fairly ambitious entrepreneurial type. Having lived in and studied about several different places (including my native state of Ohio), how would you say Maryland’s business climate compares as far as taxation, red tape, etc. to other areas you’re familiar with?
Kilmer: I’ve really only studied the business climate of one other state (Ohio) and Maryland generally comes off better. That may be a little surprising, since Ohio is a Republican state (the recent election of a Democratic governor notwithstanding) and Maryland is quite liberal, but I guess it goes to show that poor economic ideas are not confined to either party.
Ohio, for instance, ranks 47 on the Tax Foundation’s business tax climate index. Maryland ranks 22. Of course, that isn’t all that great when you look at Maryland’s neighbors, which all rank higher (Delaware is at 8, Virginia is at 19, and Pennsylvania is at 16). The state could certainly do better by lowering taxes and easing some economic restrictions.
I am troubled, however, at the increasingly business-unfriendly actions being taken by the General Assembly. From raising the minimum wage to passing the “Wal Mart bill,” it seems that our legislators are increasingly enamored with passing legislation that is completely symbolic in terms of “solving” a problem and yet is quite destructive for certain businesses. While I am not generally in favor of imposing heavy burdens on business, at least if a legislature is going to do this, these burdens should be an effective remedy to some problem. Our General Assembly, however, does not seem to feel the same way.
Although I am disturbed by the actions of the General Assembly, I am more concerned about anti-business action on the county level. The slow growth agenda so popular here in Wicomico County is much more destructive to business than almost anything the General Assembly is contemplating. Although it is packaged in nice rhetoric, the heart of the slow growth movement is the desire by one group of citizens to tell another group how it may use its private property. Meddling in the choices of others through restrictive zoning, impact fees, and the other tools of “smart growth” is much more destructive to the economic life of Wicomico County than a higher minimum wage or the Wal Mart bill.
monoblogue: I tend to agree with you regarding growth in general, but those who favor slower growth or a complete moratorium on it bring up a valid point in claiming that when growth is too fast or poorly planned it creates large problems because infrastructure isn’t necessarily improved at the same time.
With the state looking at huge budgetary mandates outside the realm of capital spending, what steps (if any) would you advocate the state take to assist the local counties, or is this better left on a local level?
Kilmer: To continue the digression on smart growth policies, I agree that infrastructure needs to keep up with growth. I have issues with people who use terms like “make growth pay for itself,” and then try to increase taxes and fees on developers and newcomers. Growth does pay for itself — new residents pay the same taxes as the old residents.
Governments should use this increase in revenue to pay for new or improved infrastructure and not try to increase the tax burden on new arrivals. Furthermore, everyone uses the new infrastructure, so trying to force only newcomers (or people who buy new houses) to pay for it is unfair.
I could go on, but I should probably get to your question:
As far as mandates, I’m not completely familiar with all the mandates imposed on local governments, so I’ll have to be general. To meet state mandates, I’m not sure what needs to be done at the state level except ensure the state is very careful to impose mandates quite narrowly and give counties the freedom to meet these mandates in different ways. At the local level, however, we need elected officials who are willing to look at innovative ideas that can help local government complete its necessary functions as well as use tax dollars most efficiently. For example, with education our county leaders should consider privatization efforts as well as public-private partnerships. Counties have a lot of authority to experiment, but many county leaders seem to think the only way to do things is how they’ve been done for the past thirty or forty years. That needs to change.
monoblogue: As we speak of change, it has to be noted that with an entirely new leadership at the top of state government (new governor, LG, comptroller, and attorney general) it’s obvious state priorities would change. In the case of MPPI, you’re losing a govenor who I’m assuming was amenable to your interests and getting one who’s likely more hostile. Will this entail a strategy shift for the group, or is it still too early to tell?
Kilmer: I can’t really speak on that, since I wasn’t working with MPPI long enough to get a feel for how it interacted with the Ehrlich administration nor can I speak on its strategy for the future.
monoblogue: Fair enough. Let’s shift gears a little bit here. As I posted a few weeks back, you had an enlightening town hall meeting in Salisbury (one of a series across the state.) The predominant subject of discussion was possible remedies to the problem Maryland has with health care coverage. Last summer Massachusetts passed a measure mandating health insurance coverage for all state residents. Could you share with the readers some of MPPI’s reaction to this idea being translated into Maryland?
Kilmer: While I don’t necessarily speak for MPPI, I do see some troubling aspects of the Massachusetts health plan. I’m even further troubled that in Maryland we have the Chamber of Commerce joining with the liberal advocacy group Health Care for All to push aspects of this plan in the next session of the General Assembly. I’m even more troubled that this plan is being embraced by so many Republicans, who ostensibly hail from the “free market” party.
The key of the Massachusetts plan is that individuals are mandated to purchase health insurance. Individual mandates are flawed on both theoretical and practical levels. On the theoretical level, I do not support the notion that the government should force someone to buy any product as a prerequisite for living in the state. Until Massachusetts enacted such a mandate, no state in the U.S. had done this.
On the practical level, there is no way to enforce this mandate. In Massachusetts the state is doing so by forcing people to report their insurance number on their taxes. The problem is that tax compliance is completely voluntary for most people. Government does not check the accuracy of tax returns for the vast majority of filers. It, on the whole, accepts what taxpayers say as true. In order to ensure that people are not lying about having health insurance, the government would be forced to greatly expand its enforcement efforts. And, of course, what about the low-income residents who do not pay taxes? How will the mandate on them be enforced?
So while using tax returns to enforce such a mandate is deeply flawed, it is unclear what other method would produce the necessary results while avoiding massive government intrusion into the life of average citizens.
Some may be able to justify this expansion of government power because they see the problem of the uninsured as so dire. Well, the facts are that the problem of people not having health insurance isn’t all that huge. Only 16% of Marylanders lack insurance. 61% of them have incomes above the federal poverty level. 40% have incomes twice the federal poverty level. And, if Maryland follows national trends, between half and two-thirds only lack insurance for part of the year. There really is only a small percentage of very poor people who don’t have insurance in the state. The rest either lack insurance for only part of the year (likely due to changing jobs) or have enough money to afford it if they really needed it. There is no need to enact unprecedented government mandates and dramatically expand its power over everyone in the state to address the problem of such a small percentage of Marylanders.
monoblogue: Unfortunately, government expanding mandates seems to be the way of the world. Another area this applies to is the educational arena. I know MPPI has done a huge amount of work in supporting school choice, so what’s the best argument to use against one who contends that the public schools are good enough for our children?
Kilmer: School choice is important because different kids have different needs. Public schools are not set up to meet every child’s needs. Some kids need more discipline, some need a more rigorous academic schedule, some need special help, etc. Giving parents a voucher to send their children to schools that meet those children’s needs just makes sense. There is nothing logical about the government deciding that if you have a certain zip code your kids must go to a certain school. Schools should be freely chosen by the parent, not forced on children by the government.
The one thing we often hear in opposition to school choice is that we should focus on improving public schools instead of taking resources away from “underfunded” public schools via vouchers (it’s a whole other debate about whether public education is “underfunded” or whether more funding increases educational results, so I’ll leave that alone). We have been trying to solve the problem of public schools for decades, and there is scant evidence that these reforms have worked very well. Part of that is due to the opposition of teachers’ unions to any real education reform. While these unions hide behind the rhetoric of helping “the children,” people need to realize that teachers’ unions represent teachers, not children. The interest of teachers comes first to them, and their interests do not always coincide with what is best for kids. So reforms like making it easier to fire bad teachers or instituting merit pay for good teachers — commonsense reforms to help incentivize better education — are strongly opposed by teachers unions.
Instead of holding children hostage to continual social experiments to “fix” public schools, it makes sense to let parents who are dissatisfied with these schools to have a voucher to explore an alternative educational situation. That gives parents an opportunity for a better education for their children, but it also gives public schools an incentive to improve. Look at Ohio, which has fairly vigorous school choice in terms of charter schools and vouchers. Public schools are losing students and money, and these schools are responding by improving their programs. The only people who don’t benefit from school choice are bad teachers and bad school administrators.
monoblogue: Given that, would it be a fair statement to continue in that vein and infer that MPPI isn’t too crazy about the Thornton funding mandates in Maryland, or, to use another example I’m familiar with and you might be as well, the huge capital outlay the state of Ohio has undertaken over the last decade to build and rehab all of the state’s K-12 schools?
Kilmer: In MPPI’s Guide to the Issues, Karin Flynn and Tori Gorman did a chapter on Maryland’s budget problems. Part of that was devoted to education spending. In it they noted that since the Thornton Commissions recommendations were codified (more funding that was supposed to be followed by an increase in student achievement), we have seen more funding going to Maryland schools but not similar rise in achievement. There has been some increase in the Maryland School Assessment test scores since 2003, but the National Assessment of Education Progress (NAEP) test has shown no similar trend. As they point out, “. . . by 2005 (the most recent year for which education test scores are available), the state’s education budget had increased 25%, but by all measures [the state] has not seen a concomitant increase in academic achievement.”
monoblogue: I’m pretty familiar with the book and MPPI should be commended for putting it out to contribute to the discussion of issues facing Maryland. But one topic that’s not covered and is going to be a hot-button issue right off the top is expanding the state’s gambling industry by allowing slot machines at the horse racing tracks (and possibly other locations.) Does MPPI have a stance on the issue; or, if they don’t, as an MPPI contributor where do you stand on it?
Kilmer: MPPI doesn’t take stances on issues — it gives scholars a forum to present research and analysis about public policy. However, back in 2003 Tom Firey and Jeffrey Hook did an analysis of this issue for MPPI. Their conclusion: “if the state elects to adopt slot gaming, it should auction off a small number of slot operating licenses via a ‘Reverse Auction’ whereby potential private sector operators (including state horse tracks) vie for the licenses by offering to retain the smallest portion of the win. Under that design, our modeling shows the state would receive $1.6 billion annually from gaming.”
As far as whether the state should allow slot machines, my personal opinion is that it should. The state is obviously not opposed to gambling. It runs a lottery, after all. If the government can run a gambling enterprise, why prevent private businesses from doing the same? And why force people to drive to Delaware or Atlantic City or West Virginia to gamble? People want to gamble. I say let them.
monoblogue: By your answer to that question, you sort of half-answered my next one, so I’ll ask it this way. Because MPPI isn’t a lobbying organization per se, it doesn’t sound like they’re in the business of supporting candidates or advocating the General Assembly directly for pet issues. Would this mean that the business side of MPPI pretty much depends on book sales and contributions with its overhead just being salaries, printing costs, and keeping the lights on?
Kilmer: MPPI isn’t a political advocacy group or lobbying organization. It does not support candidates or bills before the General Assembly. It’s a think tank that is set up to, as its mission statement says, “provide accurate and timely research analysis of Maryland policy issues and market these findings to key primary audiences.” It does so from a free market perspective, but it does not follow any political party line.
As far as its business side, the president of MPPI, Christopher Summers, could answer that better than I can. In most think tanks, there is something of a wall between the analysts and the business side in order to help preserve the independence of analysts. However, I think MPPI’s funding comes from contributions, foundation grants, and book sales. As for overhead, I think you described it pretty well.
monoblogue: Two final questions. I don’t know how successful your pre-session forums were back in October, but will these become an annual event? And are there plans to publish the Guide to the Issues on an annual basis?
Kilmer: The town hall meetings will not be an annual event (although MPPI does hold other forums) and the Guide to the Issues is published every four years.
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I hope readers found this as enlightening as I did. I truly enjoyed doing this format as opposed to my Ten Questions that were aimed at candidates because I got to cover the topics I wanted to hit on but the interchange also suggested additional lines of inquiry that I didn’t think of originally.
For further information on the Maryland Public Policy Institute, their website is www.mdpolicy.org. I highly recommend a visit, and even more highly recommend placing your e-mail address on their mailing list for information on their events and press citations (as mine is.) They’re going to be a busy crew over the next several years as our state faces a number of difficult decisions.
And once again I’d like to thank Marc for taking time out of his work over several days for his participation.
