CRBC Proud to Sponsor “Free People, Free Markets: Principles of Liberty” Course

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On behalf of the Board of Directors I am proud to announce that CRBC is now sponsoring Penn Pfiffner’s “Free People, Free Markets: Principles of Liberty” course to be held at the Centennial Institute/CCU.

  • If your daughter or son or best friend asked you to articulate why you are proud to be an American, what would you say?
  • How well can you describe the fundamental philosophical, economic and political principles of freedom that our great country was founded on and that we rely upon today?
  • Why are these important questions?

Here are some excerpts from the course syllabus:

This course is designed for business and community leaders, college students and the general public as well. Too few of today’s adults were taught the fundamentals of a free society. This course pulls together the basic principles of liberty and a free market, showing you why these cohesive fundamentals allow our society to work well. The course material springs from the great thinkers and achievers who have shaped America. The course makes the moral and philosophic case for free-market capitalism and develops the relationship between economic liberty and political liberty. You’ll be introduced to the philosophy of the Austrian School of Economics and its connection to the founding ideas of the American experiment. Participants are awakened to their heritage of economic liberty. It will be more than worth your time.

I along with many others have taken Penn’s course. It was truly a meaningful experience for me, which is how others I know have described their participation. I asked myself at the time why didn’t I take a course like this many years ago. I strongly believe that this type of course should be required for every junior high school, high school and college student in America.

We at CRBC encourage you and your associates to take this course. If you have any questions please don’t hesitate to contact me at 303-829-9435 or at principlescourse@smallbizgop.com.

Shown below is the link to the Free People, Free Markets: Principles of Liberty Flyer.
Please share it with others.

Thank you.
Free People, Free Markets: Principles of Liberty Course Flyer

The Cost of Monopolies

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Jon Caldara of the Independence Institute, when asked if teachers are paid too much, said, “How would we know? The reason that I say that is, there is a government monopoly for education…”

We just saw Proposition 103 defeated at the polls. It would have been a major tax increase, supposedly for public education. A major chunk of it would have probably gone to increasing teacher compensation. Proponents say that the defeat is just a minor setback – they are still looking for “the Big Fix”, essentially more tax revenue. It’s reasonable to ask if teachers should be paid more.

I met many teachers while I was on the campaign trail in 2010. Every one impressed me as a caring, devoted, hard worker. They expressed a sincere desire to make a difference for the youth they teach. Teachers, like all of us, want to do good and also better their own lives. That’s a common instinct for all of us, and it’s what led to America’s prosperity.

Wages and benefits, like other valuable resources, are controlled by supply and demand. That’s the essence of a free market. In times of full employment employers often find it difficult to find workers. To entice people to join their companies they offer higher wages than other companies who are competing for those workers. If the strategy is successful the companies that are losing workers have to raise wages. At some point the businesses will either have to become more efficient or pass the increased costs on to customers. Those who can’t will lose customers. If they go out of business, their laid-off workers add to the supply. The fresh supply of new job-seekers
reduces wages. In a free market for workers, wages never quite reach stability, but are always moving toward balance.

In contrast, public education is a monopoly with wages set by union demands and school board acquiescence. Public teacher unions will always push for higher wages and benefits, regardless of sustainability, because public education simply won’t go out of business. Taxpayers are forced to meet the demands of these unions because the consumers (parents) never have to pay directly for the product. In contrast, private sector unions often give up some of their benefits to help in the survival of their industries.

Back to Caldara’s question about how much public school teachers are paid: we can look at schools that compete for the same teachers but aren’t compelled by a union contract. This won’t give us a complete answer, because the supply of teachers is mostly consumed by public schools, but it could give us an indication.

In 2007-08, private school teachers were paid $13,000 less than their public school counterparts, and that doesn’t even include the far superior benefits most public schools offer. So do private schools have trouble finding qualified teachers at a considerably lower price?

Compared to private schools, public schools are free. Private schools must offer enough value to persuade parents to pay for them. If private schools could not get enough teachers, or if they were only able to hire teachers rejected by public schools, they would not be able to compete for customers. Who would pay thousands of dollars every year to put their children in poorly staffed schools? The existence of successful low-paying private schools indicates that they can find good teachers.

Meanwhile, unions are sending good teachers to the unemployment lines. There are about 50,000 public school teachers in Colorado. If unions agreed to accept lower wages and benefits for teachers, every 25 cents per hour in reduced compensation would allow our public schools to retain 3-400 teachers. Would public schools be able to find enough teachers at lower wages?

Principal Pat Gardner of BroomfieldAcademy (a private school) tells me that she quickly gets 40 qualified applicants for every open full time teacher position. After that she quits taking applications. Broomfield  Academy pays less than public schools. Granted, working for a private school has other benefits. Because of the greater freedom to hold students and parents accountable, a teacher can be more effective. Does that added benefit make up for less pay? As Caldara said, how can we know?

 

The Colorado Republican Business Coalition (“CRBC”) Opposes Initiative 300 and Proposition 103

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CRBC opposes Denver’s Initiated Ordinance 300 (“Initiative 300”, “Ordinance”) which would significantly increase the cost of doing business for Denver employers. Not only would it require all employers to provide a minimum amount of “paid sick and safe time” leave (up to 40 or 72 hours annually) to all employees (full-time, part-time and temporary) employed within the geographic boundaries of Denver for at least 40 hours a year, but it would mandate several new administrative and regulatory burdens which will require modifications to the employers’ policies and practices. The net result of these changes will be that Denver employers will find it more difficult to compete successfully. For many employers who are struggling to survive in these difficult economic times (Denver’s unemployment rate is currently 8.5%),they may have to eliminate some jobs, or increase their prices or move out of Denver to more business friendly neighboring communities.

Some of the proposed requirements include: imposing the same burdens on all employers including very small businesses (1 to 9 employees); giving paid leave not only to full-time workers but also to part-time and temporary workers; retaining records documenting hours worked and paid sick and safe time taken by employees, for a period of five years, and allowing the Agency for Human Rights and Community Relations access to such records; preventing employers from requiring disclosure of information relating to domestic abuse, sexual assault or stalking or the details of an employee’s medical condition as a condition to provide paid sick and safe time leave; etc.

Please note that the definition of “Employer” per this proposed Ordinance includes any Colorado employer, thus for example a Broomfield business that has employees making regular deliveries to Denver locations would be subject to this Ordinance. Think about that.

Furthermore the Denver City Attorney’s analysis includes an estimate that Denver would incur an additional annual expense of $690,500 to administer this new Ordinance, which does not include the yet to be determined additional cost to enforce it.

Imposing additional expensive burdens on Denver employers will lead to less sales and tax revenue and fewer jobs, because some Denver businesses will leave, there will be fewer new start-up businesses and fewer existing businesses moving into Denver. If this Initiative 300 passes, why would any business owner prefer to operate in Denver rather than Aurora, Lakewood, Westminster, Arvada, Littleton, Longmont, Castle Rock, Louisville, Golden, Evergreen, Broomfield……..?

For more information regarding Initiative 300, please go to www.keepdenvercompetitive.com and also to CRBC’s website www.smallbizgop.com, where you will find a detailed analysis by the law firm of Hogan Lovells US LLP, along with the Denver City Attorney’s analysis.

CRBC opposes Proposition 103 (“Proposition”) which proposes to amend the Colorado Revised Statutes by increasing the individual and corporate income tax rate from 4.63% to 5.00% (nearly 8%) and the sales and use tax rate from 2.93% to 3.00% (over 3%), for five years, and would require the additional tax revenue be spent on public education. The estimated amount of additional tax revenue would be $2.9 billion. The Proposition not only does not specify how the additional tax revenue would be allocated amongst the many preschool through higher education programs, it doesn’t offer a plan as to how the additional expenditures will improve public education.

Raising taxes during these difficult economic times, with Colorado’s unemployment rate at 8.5%, makes no sense. Consumer spending and business investments will drop, thus weakening the economy further, leading to the elimination of 30,500 jobs by 2017 (per a study by Dr. Eric Fruits, President, Economics International Corp).

Senator Rollie Heath (D-Boulder) is the driver behind Proposition 103 and yet he hasn’t been able to convince Governor Hickenlooper to publicly support it.

Proposition 103 is a bad idea, passing it would not be good for Colorado.

For more information about Proposition 103, please refer to Too Taxing For Colorado’s website www.tootaxing.org, and Save Colorado Jobs’ website http://savecoloradojobs.org along with the Colorado General Assembly’s Legislative Council’s 2011 State Ballot Information Booklet, “Notice Of Election To Increase Taxes On A Citizen Petition”, www.colorado.gov/lcs , Ballot & Blue Book.

Additional Reading and Sources:

Hogan Lovells report on Denver Colorado Paid Sick Leave, Initiative 300
City of Denver Colorado Legal Analysis of Paid Sick Leave, Initiative 300
City of Denver Colorado report on the Fiscal Impacts of Paid Sick Leave, Initiative 300

 

Stuck With a Dishonest Tax Increase

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The Wake-Up Call

By Brian Vande Krol, CRBC Director

There will be no floor debate, no committee hearings, no amendments. Proposition 103 is already written, and if we approve it we are stuck with it.

Boulder Senator Rollie Heath’s Proposition 103 increases sales and income taxes to raise over $500 million per year, supposedly for education. I applaud Senator Heath for properly proposing this tax increase. He’s following our constitution’s Taxpayer’s Bill of Rights (TABOR) that requires tax increases be voted on by the people. A whole slew of groups are trying to circumvent and destroy TABOR.

The Colorado Supreme Court ruled that property taxes could be increased without our vote. They also ruled that removing a tax exemption is not a tax increase, leading to the “Dirty Dozen” tax increases in 2010 which killed businesses and jobs. The legislature raised fees instead of taxes to get more money, and we got a huge increase in our vehicle registration fees.

Westminster City Councilman Bob Briggs sued the state to end the Taxpayer’s Bill of Rights. Separately, Lobato v. Colorado would more than double education spending, creating a crisis that would require emergency tax increases. It’s another end-run around our Taxpayer’s Rights. If this assault on TABOR continues, our right to vote on taxes will soon be but a cherished memory.

But Senator Heath got this one right. At least he’s asking us for more tax money. That’s
where my appreciation for Heath’s efforts ends.

Heath and his campaign to raise taxes have been, shall we say, less than honest. Heath used fourth grade students as campaign props without asking permission. Robo-calls say it’s a time-out in cuts to education instead of a tax increase. The website for Prop 103 falsely claims that the new revenue will go to education.

The biggest deception of all is in the proposed law itself. It requires the money raised by the tax increase to be spent on education. This is pure folly. Heath knows it and yet it’s his biggest selling point.

The legislature is under no obligation to spend the money on education. Prop 103 is a law, and it is only valid until it is superseded by another law. That law is the budget. Prop 103 will not automatically move money into education. It must be done through the budget, a law that is passed every year by the legislature. They are not obligated to write the budget in accordance with Prop 103.

Heath could have written this as a constitutional amendment to direct the new taxes to education. He chose not to. He knows that the money is not required to be spent on education, yet he and his campaign continue to sell it that way. Heath is also not telling you if the money is spent on education it will create two huge education budget cuts.

The 2012-13 education budget would have roughly $783 million in extra revenue for education. In 2013-14 there will only be $533 million in extra revenue. That’s a $250 million cut. And when (or if) the temporary tax increase ends in 2017, education funding would lose over $500 million.

As disheartening as all of that is, the second worst part is that there is no plan for this additional spending to improve education. There is no correlation between higher levels of funding and improvements in educational outcomes as many studies have shown. AJTT.org compares spending to outcomes. Washington D.C. spends more per pupil than
47 states and is ranked dead last in outcomes. North Dakota is outspent by 41 states and has the 6th highest quality educational system. Money spent on education funding will not guarantee better education.

Now for the worst part: Prop 103 is a job killer. A study by Economics International Corp. found that the proposal would result in a loss of 30,500 jobs. The average family of 4 will pay $400 per year to lose those jobs.

A dishonest tax increase. Future education cuts. Huge job losses. Is this what we want to be stuck with?

Brian Vande Krol of Westminster, Colorado owns three small businesses. In
2010 Brian was a candidate for State Representative and was narrowly defeated
by the incumbent in a hotly contested election. He writes a column for the MetroNorth Newspapers. You can read his other columns at his blog.

Prop 103 is bad for biz; bad for families

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Proposition 103 is a tax hike on families and small biz and a job killer, with no guarantee that the extra half a billion each year will actually help schools.

Boulder Democrat Sen. Rollie Heath’s tax increase initiative, calls for a “time out from school cuts” but Prop 103 is actually a cash transfer to government at a time when most families are struggling to meet their monthly bills. 

The income tax hike is on families and small businesses as well as higher sales and use tax, including phone and Internet services.  If passed, it’s estimated to cost at least 30,500 jobs in Colorado.

The intent is more spending for education, but depositing tax revenues into the General Fund allows the Legislature to spend the money as it chooses.  Analysis shows that more money spent per pupil has actually done nothing to improve academic performance. 

 Rather, it is likely the higher taxes will simply find their way into union members’ retirement accounts.  See www.tootaxing.org for more info.

Advice to avoid unemployment claims

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“Even though Colorado is an employment at-will state, there several things an employer can do to help reduce unemployment claims.

“Before terminating an employee, an employer should take these basic steps: give the employee a verbal warning, letting her know she needs to correct a behavior, then follow with a written warning giving an employee a chance to change her behavior in order to address concerns expressed by the employer. Document disconcerting actions by employees and retain the notes in an employee file. Managing employees through coaching and mentoring can be a way to avoid problems at the outset of employment.

“If the proper steps are followed, an employer should appeal any unemployment claims in a timely manner. Make note of any erroneous charges on the part of the former employee.”

http://thebusinesstimes.com/businesses-pay-up-for-federal-loan-to-colorado-to-pay-unemployment-benefits/

Reality over Hope – Three Jobs Saved

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The Wake Up Call

By Brian Vande Krol, CRBC Director

We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

President Obama has explained his new stimulus program. Let’s see how the old one did. Obama’s Council of Economic Advisors (CEA) reports that the American Recovery and Reinvestment Act (ARRA) has been a success, creating or saving 2.4 million jobs through the first quarter of 2011 at a cost of $666 billion. As pointed out by The Weekly Standard, this comes to approximately $278,000 per job. We’d have saved $427 billion by just writing $100,000 checks to each person who has a job because of the stimulus.

The CEA is a group of three economists appointed by the President to…advise the President on economics. Being economic advisor to the man that spent $278,000 per job only to see unemployment stuck at over 9% would be a tough job. How do you tell the President that he wasted oodles of money and prolonged the recession –without losing your job? The report relies on Obama’s old campaign slogan. Heavily invested in HOPE, the president might see only what he wants to see in the report, and believe the skewed conclusions.

The report mentions twice that nobody can observe what would have happened in the absence of the stimulus. We can observe that the economy reversed its downward trend one quarter before the stimulus, and that the biggest positive jump was in the first quarter before 98% of ARRA funds had been spent. And we can see that as stimulus spending
increased, the economic growth trend reversed again, going down. The report says that it can’t determine the cause of what happened, but in a triumph of hope over reality, it misconstrues facts, confuses correlation with causation, and lays the groundwork for more stimulus.

It gets worse. The first company that got a government guaranteed loan under ARRA was Solyndra, a California solar panel manufacturer. Government guaranteed loans, by the way, are actually guaranteed by you and me. Solyndra got $535 million. Assuming all of its 1100 workers were hired because of the stimulus money, that’s over $486,000 per job. Now Solyndra is bankrupt. Solyndra’s 1100 jobs were lost because Obama was mistaken in his choice of handout recipients. How many more failures will we see? If a company requires a subsidy, it probably doesn’t deserve it.

We’re not done with that CEA report yet. It relies on “independent approaches and supplements those estimates with those of numerous outside analysts”. The data was cherry-picked to create the desired outcome: Impress the President and save the jobs of three economists. If outside data is included, where is data from other countries
that demonstrate whether their stimulus programs worked?

Our nearest “rich country” neighbor is the closest thing to that which the CEA said could not be observed – the effect of doing nothing. Canada did next to nothing. According to David Lee, writing for the Mises Daily, Canada’s stimulus package “was little more than a clever display of political gamesmanship whereby the appearance of action was maximized, while the action itself was minimized…It is precisely in this abstinence that we find Canada’s source of relative success”. Canada’s economy grew 3.3% in 2010. Job losses have been recouped. Their unemployment rate is 7.2%, compared with ours at 9.1%. A recent business survey indicates record hiring expectations and optimism about future demand.

Canada is perceived as the hope-over-reality bastion of socialism in North America. But the truth is that in 1993 “Canada underwent one of the most fiscally responsible periods in
its history…[Finance Minister] Martin made it clear from the start that the priorities of the government would be fixed squarely on eliminating the deficit and the record of the following decade leaves little doubt that this was a commitment that was delivered upon powerfully”.

While the CEA shows us that they can save their own jobs, Canada shows us that government non-interference is how job creation really works.

Brian Vande Krol of Westminster, Colorado owns three small businesses. In
2010 Brian was a candidate for State Representative and was narrowly defeated
by the incumbent in a hotly contested election. He writes a column for the MetroNorth Newspapers. You can read his other columns at his blog.

The Spending Crisis

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By Brian Vande Krol, CRBC Director

Breathe a sigh of relief – it looks like the debt ceiling will be raised.

By and large, it’s pointless. Both parties have raised the debt ceiling time after time.  Its purpose is to limit the national debt, but since it always gets raised, it limits nothing. Often it has been merely a procedural vote – little debate, no Pomp and Circumstance, just a couple of votes, a quick signature, and more debt.

Let’s talk about the real crisis – spending. The runaway federal spending is cause for concern from both parties. It’s a concern for everyone except President Obama, who wants to raise the debt ceiling so he can continue buying votes with our money, and the money of generations that have yet to exist. Obama wants to raise the limit by $2.7 trillion dollars.  He’s calculating that $2.7 trillion in new debt will last until after the 2012 elections. He doesn’t want to have this debate again before asking for your vote.

Think about that. It’s 15 months until the election. From 1776 until now, our nation has accumulated $14.3 trillion in debt.  Obama wants authority to borrow and spend 1/5 of that in 15 months. Despite his rhetoric, he has offered no plan to reduce the debt or deficit. Republicans insist that the additional debt limit be matched by spending cuts over the next 10 years. The federal government will be borrowing something like $180 billion each month, and reducing spending only $22.5 billion per month. The spending cuts may not happen at all or may be reversed by future congresses.

The debt ceiling will be raised. Even so, we still face the very real possibility that our debt will be downgraded. It was threatened before the debt limit debate, not because of a possibility of immediate default, but because of a potential future default. If our economy collapses under the extraordinary spending and debt, America will not be able to pay its
obligations. That is the real crisis.

The Strawman Cometh

I always cheer up immensely if an attack is particularly wounding because I think, well, if they attack one personally, it means they have not a single political argument left. Margaret Thatcher

I am honored that Senator Lois Tochtrop responded to my columns about unemployment insurance (UI) (go here and here for my articles). Although she called my writings inaccurate, she never actually refuted anything I wrote. She prefers to mislead us with strawman arguments.

She tells us that employers would not forego hiring to avoid paying a payroll tax of $3.29 per week. But that’s per employee. $3.29 times 95 employees is enough to provide a job that’s substantially more than the average $125 per week unemployment benefit. One in five youths (who might like to work for minimum wage) is unemployed. They are sitting by idly while others accrue unemployment benefits.

Tochtrop states that the Federal Reserve Board says “unemployment benefits are not important factors in the increase of unemployment or the length of unemployment.” I never argued that it does. Quite the contrary, UI is a disincentive to layoffs. If there are additional costs for layoffs, an employer thinks twice before hiring.

She tells us that unemployment benefits creates more economic stimulus than tax credits for corporations. I’m not certain where tax credits came in to this discussion. I fear that Tochtrop believes that money is something government allows individuals and businesses to keep. She also seems unaware of what truly drives economic expansion and creates jobs – capital investment. An entrepreneur nearly always has to invest money to start or expand a business. This comes from some sort of savings.

Tochtrop and her colleagues passed a law last year (HB 1128) that “will guarantee the long-term solvency of the Unemployment Insurance program.” Tochtrop is at best misleading. 1128 merely alters the manner in which higher unemployment taxes will be confiscated. Government programs will always be solvent as long as government is willing to extract money from citizens by force.

The Western Conservative Summit Report

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I spoke with dozens of small business owners that stopped by the CRBC table last weekend at the WCS. Several of them knew about CRBC and a few had attended meetings…but had not joined. Those that didn’t recognize CRBC were impressed with its mission.

What does that mean? It means that many new members would join CRBC if only they were aware of what CRBC does and if a CRBC member asked them to join, invited them to a meeting, and made certain they felt welcomed when they attended. Here are a few suggestions that don’t cost money or need board approval…

~ Every regular member can make it a point to identify non-members at the meetings and make sure they feel welcomed

~ Those at the front desk–maybe members of the membership committee– can make certain that non-members receive enrollment materials and have a special color or other identifier on the name badge

~ If you identify a non-member guest at a monthly meeting or any other time, be sure to get their contact information to a member of the membership committee.

~ Officially join the membership committee–contact me – Jeffrey Reeves

The Future of US Debt…

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William Pentland

William Pentland

The Future of U.S. Debt in Three Terrifying Line Charts

Jul. 24 2011 – 12:10 pm | 7,281 views | 0 recommendations | 12 comments

Regardless of what happens with the ongoing battle over the federal budget inside the Beltway this weekend, the United States is confronting a grim fiscal future.

Based on simulations by the U.S. Government Accountability Office in January, the following three charts depict the scale of the financial albatross America has wrapped around its neck.  How did my country become such a train wreck so rapidly?  And how can we prevent this dismal destiny from materializing? Ideas?

Budgets Projections - GAO

And a second chart to keep you up at night . . .

GAO - Debt Projections

If you still have a stomach, here is one more  . . .

GAO Debt Projections

And for good measure . . .

Revenues v. Spending