FRARY COLUMN: OPPORTUNITY MAINE

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FLAMMENWERFER
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FRARY COLUMN: OPPORTUNITY MAINE

FEELING GOOD IN A FOG

Last month the Maine House voted 142-0 to pass LD 1856, "An Act to Allow a Tax Credit for College Loan Repayments." The Senate passed it along to the governor by a margin of 27-8. It was signed into law this week with the usual flapdoodlious rhetoric.

This Act provides for reimbursement of education-related costs for Maine residents who obtain an associate degree or a bachelor's degree in this State, and live, work and pay taxes here thereafter. The text of the Act lists the following goals: 1) Promote economic opportunity by ensuring access to training and higher education; 2) Bring in more and higher-paying jobs by increasing the skill level of the workforce; 3) Increase educational opportunity; 4) Keep young people the State. All this is to be accomplished, we are told, with "as little bureaucracy as possible."

Some us will doubtful about the possibility of limiting bureaucracy in Maine's state government, given the lack of interest so far shown to the Brookings Report recommendation for setting up a Government Efficiency Commission. But that is a subject for another column.

The General Fund revenue loss associated with the tax credit is estimated to be $147,676 in fiscal year 2008-09.

There are a number of reasons for this overwhelming bi-partisan vote. The goals are worthy and there is no other proposal for attaining them on the table. Many Republicans welcome any tax reduction in any form. This is a kind of subsidy, and subsidies are hard for many politicians to resist"”which is why they exist in the thousands at every level of government around the world. The initial cost of less than $150,000 is a trifle. No one will remember who to blame when the cost rises to an estimated $9,100,000 in 2011-12 and $62,900,000 in 2017-18. The measure is certain to be popular; the citizen's initiative promoting it gathered over 70,000 signatures.

Why would senators Gooley, Mills, Turner, Nass, Rosen, Savage, Sherman, and Smith vote against LD 1856? There are a number of possible explanations.

The Taxation Committee's supposed objectives of simplifying Maine's bizarre system of taxation can hardly be served by creating yet another tax subsidy..

There is no reliable means of balancing costs against benefits since no one can say how many students plan to stay in Maine regardless of the subsidy.

The subsidy is equally available to the sons of clam diggers and daughters of millionaires. It makes no discrimination between the needy and the affluent"”all cash in who graduate from a Maine institution and work in Maine.

Let's do the math.

On the one hand, It is calculated that the average debt for students who have taken loans for their associate degrees is $10,813. For bachelor's degrees it is $21,625. They can claim a maximum annual tax credits of $2,100 per year. or $8,400 for all four years in a Maine college. OR, depending on who you read, the "cumulative" tax credit per resident is $21,000. Or possibly $22,100.

Whichever figure applies, it should be obvious that the financial inducement is not all that tempting for a graduate with valuable skills to offer in some economically vital state. In some states graduates will find the lower tax burden enough to balance off the $2,100 subsidy anyway.. Much as I like Maine and little as I liked New Jersey, I would have found such a paltry inducement far from adequate to detain me here.

LD 1856 is little more than a feels-good, looks-good law. There is no means of assessing its effectiveness in achieving any of the goals set out in its text. No way to determine whether economic activity has been increased. No way to measure any increase in higher-paying jobs. No way to assess an increase in educational opportunity. No way to determine which graduates stayed in the state because of the tax break and which planned to stay regardless.

All that can be determined is how much money a random group of Maine citizens saved from their taxes. They will be helped by it, but no one can know how much, or whether, the state's economy was helped by it.

Economike
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The money quote -
[quote]There is no means of assessing its effectiveness in achieving any of the goals set out in its text. No way to determine whether economic activity has been increased.[/quote]

Thanks, Flammenwerker.

Melvin Udall
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It's like "revenue neutral" as a commitment. As worthless as the hot air on which it is inscribed.

John:

I must admit that when you first appeared in our midst, I found your literary style pretentious, self-indulgent, boring, sanctimonious, and otherwise thought-provoking. To say nothing of your vocabulary and your gift for displaying it in ever so delightful phraseology. And I spent the first 21 years of my life in New Jersey, the land of Tony Soprano and his band of merry pranksters!

Since that commencement, either your writing has improved, or I have become more tolerant and appreciative of it, or both.

No matter; I now find, except for the occasional grammatic gaffes, that your thoughts are more piercing and compelling than ever.

Perhaps it is a consequence of getting to know me personally and professionally. I know that the influence I have on others is often lost on me, but I am working hard to be more "open and accepting" of it.

If you continue to progress as you have recently, I predict a future of heightened irrelevance here in the political cesspool of Maine.

"Changing the world, one column at a time."

FLAMMENWERFER
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MELVIN, I remember but I thought I could detect potential for development and waited patiently for you to uncover the core of humility that lies beheath my glittering exterior.

As you seem to have intuited, I regard irrelevance in present context as a laural crown.

Dan Billings
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Great column.

Melvin Udall
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Would that be laurel?

laMaine
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Like other vocal conservatives (Jim and Lucille, for example), Mr Frary appears to have no comprehension of family, and the ties it creates.
I could of left the state and made a lot more money. But, instead I opted to remain closer to family. I don't regret my decision.

While it's not always about the money, this bill would certainly help keep some natives here for the long-haul. Perfect? Nah. But worthwhile. Yes.

Again, I don't expect Mr. Frary to understand. He doesn't understand the importance of families.

FLAMMENWERFER
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Yes, MELVING, yes, yes. yes., laurel, laurel, laurel.

LaMAINE: I did not know that Jim and Lucille had family in Maine. Where did you get that information?

As for myself, a NJ income allowed me to assume the mortgage on my parents' home and send my father to Spain for the winter so convalesce from his first heart attack---the doctor advising a walking regimen which would have been difficult in our winter climate. I doubt I could have afforded this without a NJ income.

In any case, all you have suggested is another vague, feel-good justification which defies evaluation. The petty spite of your remarks, however, provides grounds for evaluating the qualities of your mind.

Economike
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[quote]....appears to have no comprehension of family, and the ties it creates. [/quote]

[quote]Perfect? Nah. But worthwhile. Yes. [/quote]

So, laMaine, does this mean you're in favor of a tax break for me, too? My family's in Maine for the long haul.

Mainelion
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Can I get one too LAMAINE? I have two degrees and my wife has one. Both of us had significant student loans. That should be good for about $4,200 in tax credits per year. I can hardly wait.

gopcollegestudent
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Um, yea it is not retroactive...Not even I am elgiable however I did support this bill in principle that I think funding higher ed should be a government priority...

I would not have been able to attend college with out finical aide my parents would never have been able to afford to send me, I don't look at this as welfare and beleive my degree will come in useful to me...And because of this I decided to endorse this proposal... But there are countless others in my shoes...

Mainelion
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If you decided that it was worth while to borrow money to get your degree then you should have no trouble paying it back. You're already getting money from the government in the form of a subsidized loan. How much do you want from us? Don't answer, I know. As much as you can get. Another measure treating the symptom and not the problem. The problem is poor business climate so there aren't good jobs for the graduates. The solution is NOT for government ot bribe them to stay here. Does anyone in Augusta have a brain???

Melvin Udall
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[b]Mr Frary appears to have no comprehension of family, and the ties it creates.
I could of left the state and made a lot more money. But, instead I opted to remain closer to family.[/b]

So, Flambe', laMein has taken the morally superior pedestal, while forsaking the intellectually superior view, which we will assume he is ceding to you. It's so rare to find both in the same person anyway....why suffer the all-consuming conflict?

By the way, if I were you, I would take a modicum of insult from his condescension.

One must ask, of course, about the specifics of la's circumstances before his choice can be considered worthy. Is he staying because of "family" older than he (as in aging parents, etc); younger than he (his children and their families); or of the same generation (siblings, et al)? Each suggests a different set of criteria in reaching such a decision, and each possibility could have profoundly different consequences. Or is it his extended "government family" to which he refers?

One would also think his employment/retirement status is a major factor. At this point, my "revenue side" has no Maine dependency, but my "appropriations side" does.

Cloaking one's self in the trappings of superiority, simply for staying, offers little insight beyond stubbornness.

There are two terms I hear quite a bit in Maine to defend, rationalize, and even laud our certifiably irresponsible and unsustainable economic circumstances and the leading role our government plays in perpetuating and even worsening it.

The first is "quality of place," as if that somehow justifies over-taxation, socialist thinking, and otherwise destructive policies and outlook. Maine is a very nice place as far as "place" is concerned. We have nice trees, water, rocks, coastlines, etc. That is not to say that we are any different than a number of other states who have very fine "quality of place," but without the cost of self-limiting policies and economics that essentially doom them to ghost-town status in a matter of a few generations. I recently took a driving vacation that encompassed Maryland and PA as primary "destinations," and each showed me gorgeous "place."

The second is "we care more in Maine." That is a shameful and conceited attempt to again put a moral imperative as underpinning for irresponsible and self-extinquishing government policy, and to put a smily face on building a dependency culture (not just "welfare," I might add) that spirals itself into oxygen deprivation year by year. Those who use "we care more" as their answer for misguided and wrong-headed policy have unresolved esteem issues, and are not fit to govern.

Both of these banners personify the triumph of feelings over responsibility. They are the "me generation" mentality elevated to official status as a mantra of government.

The following speaks to the heart of the activist government class:

[quote]As T.S. Eliot said, more than fifty years ago: "Half the harm that is done in this world is due to people who want to feel important. They don't mean to do harm -- but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves." [/quote]

Note: the above has not been peer reviewed, or pier reviewed either.

Economike
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[quote]I would not have been able to attend college with out finical aide my parents would never have been able to afford to send me, I don't look at this as welfare and beleive my degree will come in useful to me...[/quote]

gopcollegestudent -

I'm curious. Has it occurred to you that the efforts of "government funding higher ed" have unintended consequences? For example, that they ratchet up the cost of higher ed?

Melvin Udall
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How dare you suggest such a thing?

Melvin Udall
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One more for the master.

FLAMMENWERFER
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All legislation produces unintended consequences, some of which might be beneficial. The problem with this legislation is that there is no way to measure the [i]intended [/i]consequences.

Promotion of family values, incidentally, is not one of the rationales attached to this bill.

LaMAINE's insistence that it will do some good to some people is almost certainly true, but there is no way to weigh the good against the the harm from diverting the funds from more useful activities.

Drop ten millions dollars over Bangor and some of the money is sure to fall into the hands of needy and meritorious citizens. Presumably he would consider this sufficient justifcation for such a program.

Dan Billings
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We should start a pool to predict what year this program becomes too costly and the state scales it back.

Does anyone seriously believe the folks in Augusta will ever actually give up $60 million in revenue?

Economike
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[quote]Drop ten millions dollars over Bangor and some of the money is sure to fall into the hands of needy and meritorious citizens. Presumably he would consider this sufficient justifcation for such a program.[/quote]

:) A brilliant and succinct analogy.

Mainelion
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Dan,

Of course they won't give up $60 million in revenue. They'll just raise taxes to cover it. Thereby driving more mobile, college educated residents out of Maine. Requiring even more subsudies to keep them here. Requiring more tax increases to fund the program. And on into infinity...

Naran
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The more I read from LaMaine, the more I see [i]"LaMean."[/i]
:roll:

FLAMMENWERFER
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MAINELION, as I remember it (I'm too busy. Um. Well. Lazy) to look it up again the bill expressly precludes educational budget cuts elsewhere to cover present or future costs of the subsidy. It's apparent that they will shift, and shift again, to cover the costs of this golden anchor. Takes breaks for the students means tax bites for non-students.

That there will be no means of measuring the bill's success in achieving its stated goals seems obvious. But even if they did it would make no difference. Create a subsidy and you create a constituency to defend it. Politics takes over and all thought of the original policy goals fades to a shadow.

Dan Billings
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[quote="FLAMMENWERFER"]MAINELION, as I remember it (I'm too busy. Um. Well. Lazy) to look it up again the bill expressly precludes educational budget cuts elsewhere to cover present or future costs of the subsidy. [/quote]

Even if that is in the bill, it is not enforceable. A statute does not bind future legislatures.

FLAMMENWERFER
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So, as our ever alert counselor advises us, this language in the bill is a vacuous and futile as all the rest.

The Shifty shift, the Subsidized gorge, the Taxpayers bleed.

And life goes on in the State of Maine.

Melvin Udall
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Perhaps another "tax cut" could help pay for the increased appropriations.

Mainelion
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The next tax cut we get in Maine will be the first, so we can't tell if it would pay for it or not. We only know that increasing taxes won't doing it.

Naran
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[quote]MAINE VOICES
[b]
Budget cuts should trump tax 'shifts'[/b]
[i]The pressures that resulted in Maine's destructive tax system haven't changed.[/i]

John Frary July 9, 2007

— Much that Sen. Peter Mills and Rep. John Piotti say in their
column of July 2 ("Sever tax reform from spending cuts") is
indisputable.
...snip

There are ways to shift part of the tax burden onto non-
residents. The sales tax structure is irrational and antiquated.

However, the assertion that it is illogical to link tax policy to
budget issues is very far from indisputable. [/quote]

[url=http://pressherald.mainetoday.com/story.php?id=119197&ac=PHedi]Excellent, as Always[/url]

FLAMMENWERFER
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The Lewistion paper editorial yesterday mentioned that this law has attraced national attention and praise. Fatuity spreads across the land like a dark cloud.

It occurs to me that I should also have mentioned that LD1856 discriminates against Maine students who leave the state to study some specialized subject and then return. No subsidy to help them cover their out-of-state tuition.

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