Dan McLaughlin

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To Home Page Latest Newsletter Column Archives Click to get these columns for your local paper	© 2006 Daniel J. McLaughlin The New Math For Taxpayers One billion plus one billion equals two billion. That’s a lesson that school districts and the Department of Education have forgotten. State funding of school building projects has sent taxpayers back to kindergarten when it comes to math. Massive building projects are occurring all over the state. The local taxpayers and school boards rationalize that, since the state will pay 90% of the cost of a building project, why not go all out and get the best, with all the goodies they can think of. After all, they are not the ones paying for the bulk of it. If you accept the assumption that every school district is going to insist on getting their fair share of the loot, then it is a sure thing that every school district will soon be, or already is embarking on an incredibly expensive overbuilding project. The amount of the projects will be vastly beyond the resources of the individual districts to support. Since each local district only pays 10% of their own project, 90% of thousands of multi-million dollar projects will be paid for by someone else. That someone else is you and me and every other citizen of the state, who, incidentally, are also residents of some school district that is paying 10%. 100% of the cost is paid for by school district taxpayers in some form or another. All of the billions spent on building projects will come from taxpayers through income taxes, sales taxes, property taxes, excise taxes or one of the many other creative ways the government uses to extract cash from it’s captive audience. Business taxes are not paid by businesses. They have to be passed on to consumers if the company is to stay afloat. To say that we are only paying 10% of a project is to ignore the fact that we are also paying our share of the 90% of everyone else’s project. While New York ranks near the top in cost of education per student in the country, at least it has arguably one of the more effective education systems. This was the case well before the building binge began. In spite of that, the state has been losing productive citizens for many years. People cannot find jobs when companies are being driven out of state or out of business. Excessive taxation and regulation force industry to look elsewhere. The only way to get a major company to invest in New York is to bribe them with major tax exemptions and incentives, which are paid for, again, by you and me. More taxes, less competitiveness. We will invest, on average, approximately $16,000 per year per student (2006 estimate), which would be $192,000 for 12 years. Then, students can move out of state to be productive for North Carolina or some other state that welcomes employers and entrepreneurs to do business there. That’s not a very good return on the investment for our residents who pay the tax. With government schools, the billions of dollars to pay for the projects will come from taxing the citizens. Since the quality of education is not the problem, multiplying the cost and making it more of a burden will not solve the problems in the state, but rather intensify them. The analogy of a chain works well in this situation. If you strengthen anything but the weakest link, you don’t strengthen the chain, you just add weight. Education is not the weakest link by a long shot. Most of the money spent to improve it will bring little return for the citizens of New York. The only way to make New York State competitive again is to drastically decrease the oppressive tax and regulatory burden on the citizens and make the state business friendly. Business is the foundation of the economy for every city, state and nation. Education is definitely a great investment. It makes sense to have an educated workforce. But with any investment, there are forgone alternatives. Every additional dollar that the state spends comes from the pocket of an entrepreneur who can no longer invest it or from a consumer who can no longer support the local economy with it. With the level of education spending and the economic environment in New York State, the forgone opportunities from increased education spending are proving to be very costly. We need to spend our energies and dollars making this a welcome and prosperous state so that our already expensive investment in education will start to pay off.
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Daniel Mclaughlin Copyright © 2006 [Daniel McLaughlin]. All rights reserved. Revised: 03/18/08

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The New Math For Taxpayers

One billion plus one billion equals two billion. That’s a lesson that school districts and the Department of Education have forgotten.

State funding of school building projects has sent taxpayers back to kindergarten when it comes to math. Massive building projects are occurring all over the state. The local taxpayers and school boards rationalize that, since the state will pay 90% of the cost of a building project, why not go all out and get the best, with all the goodies they can think of. After all, they are not the ones paying for the bulk of it.

If you accept the assumption that every school district is going to insist on getting their fair share of the loot, then it is a sure thing that every school district will soon be, or already is embarking on an incredibly expensive overbuilding project. The amount of the projects will be vastly beyond the resources of the individual districts to support. Since each local district only pays 10% of their own project, 90% of thousands of multi-million dollar projects will be paid for by someone else. That someone else is you and me and every other citizen of the state, who, incidentally, are also residents of some school district that is paying 10%. 100% of the cost is paid for by school district taxpayers in some form or another.

All of the billions spent on building projects will come from taxpayers through income taxes, sales taxes, property taxes, excise taxes or one of the many other creative ways the government uses to extract cash from it’s captive audience. Business taxes are not paid by businesses. They have to be passed on to consumers if the company is to stay afloat. To say that we are only paying 10% of a project is to ignore the fact that we are also paying our share of the 90% of everyone else’s project.

While New York ranks near the top in cost of education per student in the country, at least it has arguably one of the more effective education systems. This was the case well before the building binge began. In spite of that, the state has been losing productive citizens for many years. People cannot find jobs when companies are being driven out of state or out of business. Excessive taxation and regulation force industry to look elsewhere. The only way to get a major company to invest in New York is to bribe them with major tax exemptions and incentives, which are paid for, again, by you and me. More taxes, less competitiveness.

We will invest, on average, approximately $16,000 per year per student (2006 estimate), which would be $192,000 for 12 years. Then, students can move out of state to be productive for North Carolina or some other state that welcomes employers and entrepreneurs to do business there. That’s not a very good return on the investment for our residents who pay the tax.

With government schools, the billions of dollars to pay for the projects will come from taxing the citizens. Since the quality of education is not the problem, multiplying the cost and making it more of a burden will not solve the problems in the state, but rather intensify them. The analogy of a chain works well in this situation. If you strengthen anything but the weakest link, you don’t strengthen the chain, you just add weight. Education is not the weakest link by a long shot. Most of the money spent to improve it will bring little return for the citizens of New York.

The only way to make New York State competitive again is to drastically decrease the oppressive tax and regulatory burden on the citizens and make the state business friendly. Business is the foundation of the economy for every city, state and nation.

Education is definitely a great investment. It makes sense to have an educated workforce. But with any investment, there are forgone alternatives. Every additional dollar that the state spends comes from the pocket of an entrepreneur who can no longer invest it or from a consumer who can no longer support the local economy with it. With the level of education spending and the economic environment in New York State, the forgone opportunities from increased education spending are proving to be very costly.

We need to spend our energies and dollars making this a welcome and prosperous state so that our already expensive investment in education will start to pay off.

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