Sunday, April 25, 2010

Important

To our Arizona friends and family, with LOVE, we are voting NO on Prop 100.

Here's a copy of my Dad's email, explaining why to vote NO on Prop 100:

I know there are some strong voices favoring Prop 100. But it is the wrong thing to do and I will be voting no. Here are a few reasons why.

1) Raising taxes ALWAYS has two negative effects. First, it places more of our lives under the control of the government. They take money from us, and then return it to us in the form of goods and services, but only under the conditions and in the situations that they prescribe. We therefore become their servants, when in reality it should be the other way around. It's simply the difference between King Benjamin's government and King Noah's government. This "small" tax increase will increase the average family's taxes by $400 per year. That's $400 more in power-to-control-our-lives turned over to the government.

2) Second, taxes (of any form) dampen economic activity. The more the government takes, the less we are willing to produce and consume. That is why the government uses "sin taxes" (on the sale of cigarettes for example) to reduce an undesirable activity. So in the case of a sales tax (like Prop 100), the government is treating "sales" like "sin", and there will be fewer goods being sold as a result of it. Fewer goods sold means less revenue for business which intern means fewer jobs which then means fewer people spending money (because they don't have a job any more) which feeds the downward spiral of even fewer goods being sold. Do we really want to feed the recessionary spiral that we "seem" to be finally climbing out of? The Goldwater Institute is projecting that as many as 24,000 jobs will be lost if Prop 100 passes. Some people might say, "It's only 1%, that's not such a big deal." But if you have only X discretionary dollars to spend each month, and now you have 1% more in sales taxes, you will (of necessity) be spending $X-1%. And if you are a business owner who now has 1% less revenue coming in, you have to cut 1% out of your budget somewhere.

3) The schools are (to put it bluntly) lying to us. They are threatening to cut school programs if Prop 100 doesn't pass. That part may be true. (It sounds like extortion to me, but it may be true.) The part they are lying about is saying that they "have" to cut programs when in reality it is what they "choose" to cut. The school districts in Arizona spend far too much money "out of the classroom" on administrative overburden. Take Mesa Public Schools for example. Their operating budget last year was $433 Million. That's just the operating budget and doesn't include costs for buildings etc. Of that $433 million, 91% was spent on employee costs (salary and benefits) for its 11,000 employees. But the district only employs 5,000 teachers. That means there are more non-teachers (6,000) than teachers (5,000). In the April 6, 2010 budget meeting, the District announced that if Prop 100 fails, they will be forced to cut an additional $25 Million from their operating budget. Fine, they could easily take it from the administrators and never even touch the classroom. But the really interesting thing is that just two years ago (2008), the District only employed 9,000 people, not 11,000. And they have been reporting a decline in students of about 2,000 per year for a number of years. If the number of students are declining each year, why did the number of employees go up by 22 percent in just two years? And why can't it go back down without impacting the (declining) student body?

4) Government spending (in all forms) is out of control. Did you know the largest employer in the State of Arizona is... the State of Arizona? Total government spending (state and local combined) in Arizona was $26 Billion in 2000. This year, it's estimated to hit $63 Billion. That's nearly two and a half times the spending of just ten years ago. The amount of fraud, corruption and waste is staggering. As an (anecdotal) example, the Scottsdale Unified School District hires me each year to do an actuarial study for them regarding retiree life insurance costs. Without going into too many boring "actuarial" details, each year the study shows that the study itself was unnecessary and therefore does not need to be repeated in subsequent years. But every year they come back and pay me $1,500 for another study... to tell them that they just wasted $1,500. The only way to stop this "big government" monster is to stop feeding it. We need a reduction in sales taxes, not an increase.

Dad