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Taxpayer's Tab Issue #12

April 6, 2013

 

 

 

Vol. 4 Issue 12, April 6, 2013

Welcome to The Taxpayer's Tab -- the weekly newsletter for up-to-the-minute research from the National Taxpayers Union Foundation's BillTally Project. For more information, check out NTUF's BillTally Project and our partner, WashingtonWatch.com!


The Most Expensive Bill of the Week

The Bill: S. 578, the School Turnaround and Rewards (STAR) Act of 2013

Annualized Cost: $900 million (first-year cost)

Since 1982, the Department of Education's Blue Ribbon Schools program has recognized 7,000 schools that either obtained a high rank in standardized tests or that showed significant improvement in student's academic achievement. The program honors public and non-public elementary, middle, and high schools in every state, territory, or Tribe that meet either of the two performance categories. Such schools get to fly a flag overhead as a "mark of excellence in education." The list of the 2012 blue ribbon schools is available here. Costs for the administration of the program (including the flags and some receptions) are not detailed in the federal budget but are assumed to be minimal.

Senator Kay Hagan (D-NC) introduced legislation that would establish two new grant programs with the goal of boosting the number of Blue Ribbon-designated schools and to reward Blue Ribbon Schools. Title I of S. 578 authorizes $300 million in FY 2014 to assist states and local educational agencies in identifying blue ribbon schools. The funding could also be used to reward those schools with some budgetary autonomy.

Title II of the bill would authorize $600 million in FY 2014 for a new School Turnaround grant. This program would assist schools that either make further gains on high academic success or that narrow the achievement gaps in high disadvantaged student populations. Metrics to determine the success of already well-performing schools would be expanded. Currently, success is measured based solely on results from standardized tests. Expanded criteria would include graduation rates, student growth, and overall school gains. These new factors would be established and judged by the Department of Education.

For the lowest five percent of underachieving schools with at least 40 percent of their student population identified as disadvantaged (those who are either eligible for free and reduced-price meals, are disabled, or are limited in English proficiency), the STAR Act would award new grants to implement improvement plans, such as replacing school staff or providing more instructional programs.

In total, the text of bill would authorize $900 million in FY 2014 and "such sums as may be necessary" for the succeeding years. There are no offsets included in the proposal.

To learn more or discuss this bill visit WashingtonWatch.com.


The Least Expensive Bill of the Week

The Bill: H.R. 686, Protect our Prairies Act

Annualized Savings: $16 million ($82 million over five years)

When farmers convert virgin land for crop production, it can take several years for the soil to reach its maximum crop yield potential. Despite this, federal crop insurance programs based on acreage assume that covered farm lands that are new or seasoned would produce the maximum amount of food, or other agricultural products, from the start.

Congresswoman Kristi Noem (R-SD) and Congressman Tim Walz (D-MN) believe that the government should insure farmland at a more realistic level of productivity. They have re-introduced the Protect our Prairies Act to "reduce crop insurance assistance for the first four years for crops grown on native sod and certain grassland converted to cropland." The sponsors hope that by decreasing the financial payouts, farmers would use the land that they have already developed. In theory, the land would remain undeveloped, providing for increased environmental conservation and, perhaps, allow for more space for hunting and fishing.

In March, the Congressional Budget Office (CBO) released an updated cost estimate of an agricultural reform package from the previous Congress that included this native sod proposal. CBO has determined that H.R. 686 would reduce federal crop insurance spending by $82 million in the first five years. The measure could save up to $178 million over ten years. Supporters of the proposal have stated that it would save $200 million; NTUF assumes they are rounding up the 10-year figure in CBO's cost estimate.

To learn more or discuss this bill visit WashingtonWatch.com.


Most Friended

The Bill: H.R. 1010/S. 460, the Fair Minimum Wage Act of 2013

Annualized Cost: Unknown

Number of Cosponsors: 134 Congressmen and 26 Senators

In his State of the Union address earlier this year, President Obama urged Congress to increase the federal minimum wage, which was last increased to $7.25 per hour in July of 2009. Congressman George Miller (D-CA) and Senator Tom Harkin (D-IA) answered the call by introducing the Fair Minimum Wage Act of 2013 in their respective chambers of Congress.

The Act would gradually increase the Federal minimum wage in three stages. Three months after the bill is enacted, the minimum wage would rise to $8.20 per hour. One year later, it would be increased to $9.15 per hour, and again to $10.10 per hour after the next year. In each subsequent year, the federal minimum wage would increase according to changes in the Consumer Price Index (CPI). The law would also mandate that the wage paid to tipped employees -- such as restaurant waiters -- be at least 70% of the minimum wage.

On the bill’s introduction, Senator Harkin said "The Fair Minimum Wage Act will restore the value of the minimum wage, bringing families back above the poverty line ... With its provision to index the minimum wage to the cost of living in the future, the minimum wage will no longer lose value. It will rise as the economy grows, which will allow working families to keep up with rising costs."

In the past, the Congressional Budget Office (CBO) has released several reports on the budgetary impact of raising the minimum wage. Generally, CBO has concluded that because so few federal employees receive the minimum wage, raising it would not significantly affect agencies' budgets. The effect it could have on welfare programs and refundable tax credits is uncertain. Some families and individuals could claim fewer benefits as their incomes rise, while others may see employers cutting their hours or laying off workers, leading to more claims. CBO expects these effects to either offset each other or have little net impact.

Economic scholars are divided when it comes to the merits of raising the minimum wage. Many argue that doing so creates unnecessary barriers to entering the workforce, which disproportionately affect the young and the poor. Others contend that it has very little effect, if any, on employment figures, and often point to its declining purchasing power.

One effect is clear: it will impose a cost on private-sector employers. In 2006, CBO estimated that raising the minimum wage to $7.25 per hour would impose a direct cost of $16.5 billion over 5 years.

H.R. 1010 has 134 cosponsors; all are Democrats. S. 460 has 26 cosponsors; all caucus with the Democrats.

To learn more or discuss this bill visit WashingtonWatch.com.


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The Wildcard

The Bill: H.R. 1272, the Maple Tapping Access Program (TAP) Act

Annualized Cost: $20 million ($100 million over five years)









Maple syrup is a signature component of Vermont's economic and cultural identity: 35% of syrup produced in the U.S. comes from the Green Mountain State, representing 7% of the world's total supply. Congressman Peter Welch (D-VT) has introduced a bill to promote maple syrup products with help from the federal government.

The TAP Act would authorize the Secretary of Agriculture to give state governments or research institutions financial assistance to promote domestic maple sugar industries. Grants would be offered to advance sustainable maple-tapping practices, market maple syrup products, and encourage private land-owners to make their land available for tapping.

Representative Welch said "[m]aple syrup and those who produce it are part of the fabric of Vermont ... These investments in the maple industry will ensure it remains a strong part of Vermont's economy and identity for generations to come."

At least one other state would also like to "tap" into this proposed program. Senator Chuck Schumer (D-NY) says that only about one percent of New York's maple trees are being used to produce syrup. According to the report, Senator Schumer pushed for the inclusion of the TAP Act in one of the Senate farm bills, S. 10, the Agriculture Reform, Food, and Jobs Act of 2013, which was introduced by Senate Majority Leader Harry Reid (D-NV) and has 19 cosponsors.

The TAP act would increase federal outlays by $20 million per year, for a total of $100 million over five years.

To learn more or discuss this bill visit WashingtonWatch.com.


NTUF's Recent Blog Posts

The Foundation's staff have been busy on NTU's Government Bytes blog detailing how proposed spending could affect taxpayers.

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Made It in America, Government Gives You Millions


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About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

NTUF is a 501(c)(3) research and education organization. Donations are deductible for personal income tax purposes. Please make a donation today to help further NTUF's mission of research and education!

This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve.

 

 



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