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Heath Wins Dry Creek Elementary School Space Aliens Award

This years Dry Creek Elementary School Space Aliens award for the campaign comment exhibiting the most skewed version of reality goes to gubernatorial candidate Rollie Health for asserting that tax cuts during economic downturns are bad because they leave state government vulnerable when the economy sours.[1] Officials at Dry Creek, you may remember, were so detached from reality that in May 2002 they treated a bunch of 4th graders using finger-guns in a playground game of soldiers and space aliens as a threat to student life and limb.[2]

On KBDI-Channel 12s show, Independent Thinking, Mr. Heath said that Colorados current governor had squandered Colorado#39;s prosperity by enacting permanent tax rate cuts. Colorado taxpayers make mortgage payments to keep a roof over their heads, car payments to provide mobility, electric bills to keep the lights on, and tax payments to stay out of jail. If taxpayers are like most other people, they feel more prosperous when their bills go down. Since tax rate cuts reduce tax bills, tax rate cuts make Colorado taxpayers more prosperous.

But as Mr. Heath claims that tax rate cuts have made Colorado less prosperous, perhaps he considers taxpayers an insignificant part of a larger Colorado, one that is made better off when they are made worse off, or maybe he has fallen victim to the helping hand myth of government. Believers in this fiction think government exists to manage the economy and help those in need. Without its wise actions and counsel, the U.S. economy would collapse.

Reality is quite different. According to Clive Crook in The Economist magazine, after spending on an effective legal system that has stable, predictable, rules that are impartially enforced, basic education, and some health services, governments would be doing their economies a favour if they just did less. [3] Unfortunately, people attracted to government service typically profess to believe in the helping hand myth with the result that transfers and subsidies in rich countries rose from 10-15% of GDP in 1960 to 25-35% in 1999.[4]

As the success of U.S. welfare reform has made quite clear, simply increasing the size of the dole can make everyone worse off. In the U.S., the toxic effects of unfettered government growth have turned the tort system into a lottery, made property rights increasingly insecure, and crushed once vibrant health and educational systems.

Bill Emmott of The Economist characterizes believing that public servants can wisely reallocate money and adjust its amount according to need as starry-eyed. In reality, the bias is towards rigidity: recipients put up strong resistance to losing their grants and tax reliefs; public servants tend to protect their own budgets; politicians get clear rewards for spending more, but take risks if they spend less…No doubt there are plenty of well-meaning public servants who harbour no such malevolent motives, but the experience of the past 50 years suggests that things have leaned in this direction. Like man, government is not perfectible.[5]

The increased economic rigidity brought about by bigger and bigger governments makes individuals more, not less, vulnerable. In rigid economies crop failures mean death from starvation. In flexible ones, entrepreneurial farmers from Kansas spend their weekends hawking hay on drought stricken Colorado roadsides. In a rigid economies tax funded planners actively discourage cars, and transit strikes mean that people cannot work. In flexible ones transit strikes mean that former transit customers get to work by catching a deregulated jitney or driving their own cars.

Keeping government in check requires strict controls on its tax intake. From 1990 to 2000, the Tax Foundation ranked Colorados growth rate in average taxes 3rd in the nation at 6.46% per year.

Worse, taxes grew faster than incomes. While Colorado citizens saw their tax bills going up 6.46% per year, their personal incomes increased by 5.27%.[6] In 1971, Colorado had a state and local tax burden of just 9% of income, ranking 43rd in the nation. By 2000, it had jumped to 22, with a combined state and local tax burden of 32.6%. [7]

Mr. Heaths vulnerable state government spends more on K-12 education than on any other item. Instructional staff salaries in Colorado public schools average $40,270, 97.7% of the average salary for all Colorado workers with at least a bachelors degree. Teachers get a summer vacation, normal workers dont.

For FY 2001-2002, public schools will receive $4,202 from the state for every child enrolled. This does not include the amounts that local governments collect in property taxes, or the extra funds the state adds for at risk (poor) students, students with limited English proficiency, transportation funds, building improvements, Comprehensive Health Education, and so on. [8] The average 2001 tuition at the 40 elementary schools run by the Archdiocese of Denver was about $2,600. [9]

Question for Mr. Heath: If 32.6% of income for state and local taxes isnt enough, what is


[1]Kevin Flynn. October 23, 2002. Heath, Owens tussle. Rocky Mountain News, online edition. lt;http://www.rockymountainnews.com/drmn/election/article/0,1299,DRMN_36_1496234,00.htmlgt; as of October 29, 2002.

[2]Valerie Richardson. May 13, 2002. Zero tolerance takes toll on pupils. The Washington Times, online edition as of October 29, 2002.

[3]Clive Crook. September 23, 1989. The Third World, A Survey. The Economist, p. 58.

[4]Bill Emmott. Freedoms Journey, A Survey of the 20th Century. The Economist, p. 20.

[5]Bill Emmott. Freedoms Journey, A Survey of the 20th Century. The Economist, p. 20.

[6]Tax Foundation. State Tax Growth Compared to Personal Income, fiscal Years 1990-2000. Online edition as of Octiber 29, 2002. lt;http://taxfoundation.org/taxgrowth.htmlgt;

[7]Tax Foundation. Comparing the Total Tax Burden in Each State to Just the State/Local Tax Burden, Calendar Year 2000. Online edition as of October 29, 2002. lt;http://taxfoundation.org/statelocal00.htmlgt;

[8]Joint Budget Committee, State of Colorado. Fiscal Year 2001-2002 Appropriations Report. Online edition , p. 62ff.

[9]Roxanne King. January 31, 2001. Educators honored during Catholic Schools Week, Denver Catholic Register, online edition as of Oct0ber 30, 2002. lt;http://www.archden.org/dcr/archive/20010131/2001013112ln.htmgt;


Copyright 2002, Independence Institute

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

JON CALDARA is President of the Institute.

LINDA GORMAN is a Senior Fellow at the Independence Institute .

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