January 23, 2011

The session begins tomorrow. Please, if you have feedback during the session, let me know!

You may be interested in an opinion piece I just sent to the Park Record. That's Park City's local newspaper. A week and a half ago they published an article about my Sales Tax Distribution bill. The following column is my response. Let's see if they print it.
Whose Sales Taxes are They?

Where should the money you and I pay in sales taxes be spent? The January 14th article, “Redistribution of Tax Wealth Proposed,” in the Park Record about my sales tax distribution bill said that if it passes, “Summit County governments will lose hundreds of thousands of dollars used to maintain roads, hire peace officers and pay for other basic services.” Under this bill Park City would, in fact, see phased-in reductions; many other communities in Summit County, however, would see funding increases. If the only question you ask is whether Park City stands to win or lose under this proposal, the concerns raised are understandable.

But here’s another question we should ask: Does one community deserve better schools and public services than another just because of where taxpayers outside those two communities happen to shop? In other words, is it fair that in Utah a substantial portion of sales tax revenues benefit populations other than those that pay those taxes?

Let’s take a closer look. As things are now, distributing half of sales tax revenues based on where purchases are made (point of sale) provides a financial incentive to favor retail development over other land uses. These incentives can lead communities to modern-day crony capitalism, providing incentives that favor some businesses over others.

Perhaps this hasn’t happened in Park City. However, with current point-of-sale incentives in place, city leaders in search of added tax revenues may one day choose to lure retailers. Enticements used often include publicly underwritten financing and tailor-made land-use ordinances (sometimes referred to as zoning for dollars). When such inducements are proffered, existing retailer establishments that receive no enticements are be at a competitive disadvantage. And some fail.

Public policy should promote equal protection and apply equally across the board. No favorable treatment or special rules for individual circumstances. Reducing cities’ financial incentive to single out winners encourages fair, predictable rules that every business must respect in order to thrive economically in the community.

I should point out that the concept for my proposed legislation came from my experience working on a project in Idaho. They distribute sales tax based on population only, not point-of-sale there. Wyoming takes a similar approach. Reducing reliance on point-of-sale distribution means that a larger local retail sales tax base does not immediately translate into increased local sales tax revenues.

This changes the incentives: decisions about city planning, zoning, and annexation take on a vastly different character absent the lure of an immediate financial payout. Decisions are made on their merits. Plans are made based on community input. Policies are made with an eye to increasing value to the community as a whole rather than optimizing retail sales volumes. In the end, decisions are made in ways that more truly represent the interests of the community as a whole.

So why distribute a portion of sales tax revenues based on the population of school-age children? To begin with, many government services funded by sales tax are largely proportional to the concentrations of this younger cohort in a community. Examples that come to mind include parks and recreational facilities and public safety services.

In addition, communities with larger concentrations of children face local public school funding tax burdens that can crowd out taxpayer capacity to fund other necessary government services adequately. Often, such communities receive far fewer sales tax dollars than their citizens pay. Distributing a share of sales tax revenues to such communities in proportion to their school-age populations will help fund needed government services in these areas where taxpayers are already disproportionately burdened in comparison to the services they receive.

So in the end, you may call it redistribution of tax revenues. Instead, I’d suggest we speak in terms of equal protection; it’s a question of fairness for taxpayers in need of services that receive little benefit from much of the sales tax they currently pay.

January 19, 2011

The district 57 situation continues. It was unfortunate and disconcerting last week. It has become even more so.

As I discussed in my last post, Craig Frank of Cedar Hills discovered less than two weeks ago that he does not actually live within the district he was elected to represent. That issue dominated our Republican caucus again today.

Craig had a chance to address the caucus for about ten minutes at the outset. Craig conveyed to the group his intent to show up next Monday on the first day of session and attempt to be seated as a duly elected representative. He cited among other things the Lieutenant Governor’s certification of his election. He also mentioned input from constituents in the affected area, their concerns about disenfranchisement, and the precedent of a technical boundary adjustment in 2006 involving the Suncrest development. Certainly there is a possibility this could end up in the courts.

After Craig Frank’s comments, the caucus then went into closed session. Craig, along with reporters and other visitors were excused.

(On a side note, I should tell you that I voted against closing the caucus. I always do. Some may think that I’m naive, but I see it this way: you elected me to be your representative. By definition that makes me a public official. I think public officials should do their business in public—in the light of day. I suspect most of you agree.)

Back to the story.

One very strong argument compared the issue to a fence. I think most of us have heard of the legal doctrine that after a fence has been in place uncontested for a certain length of time, the fence becomes the property boundary regardless of the lines shown on the original survey. By extension, some argued, the district 57 boundary shown erroneously on county maps for almost a decade should be construed as the actual boundary. That line or reasoning would place Craig within the district he was elected to represent.

The legislature’s general counsel, however, provided convincing maps and legislative intent language that made it clear that the original boundary set by the state governed. As a result, last evening the house majority and minority leadership—after hearing extensive evidence and testimony—found that Craig Frank does, in fact and as a matter of law, reside outside of district 57. The group accepted that conclusion with an 8-0 vote.

So once again, today House Republicans held extensive debate on the issue. We discussed whether to vote to seat Craig, whether to seek to redraw the boundaries, and whether to pursue that measure in expedited fashion in order to pass the bill quickly and set an immediate effective date so that Craig could be considered by party delegates along with any other candidates to fill the vacancy. In the front of all minds was the fact that moving the bill through the process in the first few days of the session would be challenging. Even if the house could muster the will to do it, we have no guarantee that the senate would share the same sense of urgency. And to have an immediate effective date, the bill would require a two-thirds majority in both houses before being signed by the governor.

And, some asked, would we go to great lengths to do all these things if this did not involve a colleague?

In the end, the caucus voted by a very large majority not to seat Craig Frank if a motion is made to do so. I voted with the majority. The caucus then held a vote as to whether we should pursue a redistricting bill with an immediate effective date. By this point, I don’t think there were 50 of us left in the room. That’s how many we would have needed to be confident of a two-thirds majority to make it effective immediately. (We didn’t think we could count on any Democrat votes, so we’d have to get 50 of the 58 Republican votes.) We took a roll call vote and fell short, not only of 50 (two-thirds) but also of 38 (simple majority).

I voted against the call for a redistricting bill. My reasons have not changed from the caucus discussion last week. I believe legislation should address general principles for broad application. The question of disenfranchisement will be addressed in the general redistricting/reapportionment process this year. In response to statements that residents have been disenfranchised, I would say: It is highly unlikely that any election results would have changed, if those that live in the disputed areas had voted in the districts to which the actually belong. And I have no doubt that the officials that (we have now discovered) actually do represent these citizens as a matter of law will also represent them effectively as a matter or fact.

I do not wish to predict the unintended consequences that might result if we take a step toward making public policy based on individual, specific cases and if in doing it we insist on using timelines that do not allow for the deliberation that is a distinguishing characteristic of our republic.

All that being said, with the session starting on Monday, this terribly unfortunate situation should make for an eventful first few days.

January 11, 2011

I'll try not to be too long-winded about this, but today we dealt with something you don't see every day. There was a lot to think about. In a quickly-arranged Republican caucus today, we grappled with the challenging question of how to respond to:

The unexpected discovery late last week by Craig Frank that he did not, in fact, reside in his district (District 57) and

The resulting vacancy.

This was not an easy call; there are few precedents to rely on for guidance. It is clear that Craig did not knowingly misrepresent where he resided. He moved sometime ago and believed he relocated to an area within his district. He and those that certified his most recent election were simply relying on an incorrectly-drawn map provided by the county.

There is precedent for calling a special session ahead of January 22nd when those delegates living within the boundaries for district 57 (as established, one way or another) will be meeting to nominate a replacement. In the special session the legislature could redraw the boundaries for the area in question to match what is shown on the county map, and then Craig Frank would be able to stand for election in that meeting of delegates. There was strong sentiment to go this direction. All of us have tremendous respect for Craig and hate to see this happen over what was clearly an honest mistake.

One of the strongest arguments in favor of this approach was that the small sliver of voters (including Craig Frank) that thought they were in District 57 would effectively be disenfranchised by not having any voice in choosing who actually represents them.

In considering the principle that would govern my vote in the caucus, I asked this question: If we had just discovered this error that resulted in a sort of disenfranchisement of a group of voters making up a portion of a legislative district, what would our remedy be, knowing that all such district boundaries are scheduled to be redrawn during the reapportionment/redistricting process later this year? In seeking the answer to that question, we might also consider that the residents in the area in question would not be voting in an election affected by any changed boundaries until November 2012.

To me the answer to the question is that we would not take immediate action in such a case but would allow the reapportionment process to take care of it this summer and fall. So to make a special case and to seek a special session for this instance would be to tailer legislation for a special case rather than for general application. I believe I can rely on the principle that legislation should be drafted for broad, general application and should not single out specific instances.

So this is where the Caucus ended up:

The motion to ask the governor for a special session to redistrict did not have enough votes to assure the measure would pass in that session. It would have required a very high threshold (50 out of 58 Republicans), because for the session to have had its intended effect, a redistricting measure would have needed an immediate effective date. That means it would have required a two-thirds supermajority of both houses. And we did not have any sense as to how the senate would vote.

After this extended discussion, those of us with afternoon committee meetings were sworn in. There's a ceremonial swearing in on the 24th, but we had committee work to do today.

Holding my arm to the square this afternoon and swearing to uphold the constitution of the United States and of this state was humbling, awe-inspiring, and thrilling. I am grateful for the trust you have given me; I won't let you down.

January 5, 2011

This is my first blog entry. You might be interested to know that I am preparing three pieces of legislation this session: one about school funding, one about school board elections, and one about the distribution of local option sales tax. These bills have not yet been finalized or numbered, so you won't see them online yet, but here's a preview:

School District Funding Incentives for Front-Line Teachers

Summary:

This bill proposes a small financial incentive for school districts if they have proportionally more teachers in the classroom and spend more of their budget on compensation for classroom teachers than the state average. In order to avoid putting school districts at an unfair disadvantaged based on demographics or geography, the bill excludes from the calculations all costs and personnel associated with school construction as well as costs and personnel associated with transportation for distances exceeding five miles. The Weighted Pupil Unit (WPU) for school districts putting more of their personnel and resources into the classroom than the state average would be increased slightly. For districts falling below the average, the WPU would be decreased slightly. The bill will include definitions, reporting and measuring requirements, and auditing requirements to ensure the metrics are being applied consistently across the state. We would phase the program in over two years, with the first year being used to implement the necessary reporting and measurement requirements and the first funding adjustment to happen the following year based on the metrics developed the first year.

Commentary:

This bill will give school districts incentives to become more lean and put more of their limited resources into the classroom. To the extent they do better than the state average, they will receive a bit more state funding. The philosophy behind this proposal is that resources are very scarce, and in today’s economy we are not in a position to do everything we would like to do in public education or in any arena of government. To simplify the challenge we face, if we could only afford to focus on one thing in education, the most important undertaking would be instruction in the classroom by the primary teacher.

There is often a tendency among legislators to mandate how districts and individual schools do their business. Effectively, we have often proposed or passed state laws that cross the constitutional line into control and supervision of the state school system, which is the responsibility of school boards rather then legislators. This bill takes a hands-off approach to control and supervision; how districts go about focusing more of their expenditures on front-line teachers is up to them. Among other things, for example, they could:

• Raise teacher salaries and/or benefits in an effort to encourage the highest possible caliber of teachers to enter and remain in the profession;
• Hire more teachers to reduce class sizes;
• Explore performance-based compensation increases;
• Increase benefits for classroom teachers; or
• Reduce administrative costs.

In the final analysis, school districts that become more lean and focused on classroom instruction than the state average by whatever means will receive a financial reward for doing so. So local control is preserved. The role of control and supervision remains with school boards where it belongs, and districts have a financial incentive to focus resources on the priority set by the legislature: instruction by front-line teachers in the classroom.

School Board Election Provisions

Summary:

This bill eliminates the nominating committee and the governor’s involvement in selecting state school board candidates and changes the process to a direct election with a primary and a general election. Elections will remain non-partisan, be moved to odd-numbered years, and be combined with municipal elections in those years.

Commentary:

This change brings the process of selecting school board members into harmony with the Utah constitution as I understand it. Our state constitution requires that state school board members be elected as provided by statute. In spite of an initial court ruling allowing the current approach, I do not consider a nominating commission part of an election process. Even if the courts were to tolerate the commission on appeal, it is still up to the legislature to set the parameters of the election (“as provided by statute”), and I believe the current system gives the governor and the appointed commission more power that was foreseen by the framers of our state constitution.

I understand there will likely be a proposal to make these public offices partisan. Doing so would be another way to eliminate the current nominating commission and involvement by the governor. The reasoning behind party involvement, as explained to me by a proponent of this approach, is that voters typically don’t know much about school board candidates when they vote, and the party nomination process could help vet candidates more thoroughly by delegates and primary voters that tend to become more informed during the election cycle.

By moving these elections to odd-numbered years, however, my bill will raise the profile of these campaigns, putting State School Board contests, for example, at the top of the ticket. That should help make voters more informed both in the primary and in the general elections on the odd-numbered years. While I applaud the move away from the current system to direct elections under either approach, I believe doing so and maintaining the non-partisan nature of school board races will have broader support and will stand a better chance of passage and public acceptance. And I believe the move to off-year elections should raise the profile of these races and help create the opportunity for more informed choices by voters.

Local Sales Tax Distribution Changes

Summary:

This bill will modify the distribution of the 1% local-option sales tax. Currently, half goes to the community where the sale takes place (point of sale). The other half goes to communities throughout the state based on population. My bill reduces the point-of-sale amount to 25% of the tax collected. The 50% distribution based on general population stays the same, and the remaining 25% will be distributed based on population of school-age children. This bill includes a hold-harmless provision that will gradually sunset over a period of five years.

Commentary:

The idea behind this bill is to base a greater portion of sales taxes distribution on where the populations are that need services and less on where purchases are made. School-age population is added to the mix in consideration of the fact that many of the government services funded by sales tax tend to be proportional to the concentrations of this younger cohort in a community. Examples that come to mind include parks and recreational facilities and public safety services, to name a few.

Finally, the inclusion of school-age children in the distribution formula acknowledges that communities with larger concentration of K-12 school-age children likely face local tax burdens associated with public school funding that can tend to crowd out local taxpayer capacity to fund other necessary government services adequately. Distributing a somewhat larger share of sales tax revenues to such communities will help address needs for government services related to the school-age populations where relatively heavy tax burdens might otherwise tend to leave such services underfunded.

Note that the hold-harmless section phases this change in gradually over five years. If you are interested, it works like this: The provision will function as follows: Beginning the first full fiscal year after enactment and in each of the subsequent four fiscal years, sales tax receipts for a given political subdivision will be calculated for the prior year based on the 50:50 formula and then for the current year based on the new 50:25:25 formula. In the first year, each political subdivision will receive additional tax revenues equal to the difference between the amount calculated in this manner for the prior year and the amount due in the current year using the new formula. In year number two, the subdivision will receive additional tax revenues equal to 80% of the difference between the amount calculated for the prior year using the 50:50 formula and the amount due in the current year using the new formula. In years three, four, and five, the 80% factor for additional hold-harmless revenues will be decreased by 20 percentage points each year to 60%, 40%, and 20%. After the fifth year, no further adjustments will be made.