Follow the Money: Regional Equity [IV]

by Martin Harris

Even for those of us who made it through the 13 grades of public education back when History and Civics were still seriously taught at the high school level, there was a lot left untaught. One of those subjects is now gaining visibility, supposedly because of the suddenly broadened Federal-power scope of the new Patient Protection and Affordable Care Act, but more likely because we’re just in another of those historical periods where people in Federal government once again want even more power and people in State government (and not in government at all, except to vote) still don’t see it as a good idea. It’s the “principle of federalism” concept embodied in the Tenth Amendment in the Bill of Rights. It limits Federal power in 28 words, by requiring that “The powers not delegated to the United States by the Constitution nor prohibited by it to the States are reserved to the States respectively or to the People.” Typically, over the last two-plus centuries, it has been frequently ignored, which explains why a 26-State Tenth-Amendment-based resistance to PPACA has just failed. Folks who didn’t learn much about the Tenth Amendment in public school are now studying it on their (our) own, which explains why there’s now a national Center for Tenth Amendment Studies, a handful of State-level study groups, and growing voter interest in the subject. This series of grass-roots events may explain why the Regional Equity campaign (whereby central cities would re-gain their early 19-century powers to annex their suburbs at will, no votes needed) has been kept at low profile by Federal sponsors. If it weren’t for the First Amendment –“freedom of the press…” such revelatory books as Stanley Kurtz’s “Spreading the Wealth” wouldn’t be in circulation.

As the title suggests, RE is all about the money: people Beyond the Urban Boundary have more wealth and income than those inside; it isn’t “fair”; and therefore, to accomplish wealth re-distribution, which BUB-residents would selfishly resist, urban powers-to-annex must be increased. As recent history illustrates, key parts of the Court system have previously approved just such erasures of Urban Boundaries, in the school de-segregation events of the 70’s and 80’s. Example: the 1976 Third District Court ruling for inter-district busing (Wilmington, DE, and suburbs) so that city and suburban districts would be “…reorganized into a new or other such new districts as would comply with the Court’s [earlier] ruling…” In contrast, the Supreme Court has mostly rejected such boundary erasure, requiring, instead, that various “magnet school” designs be used to attract a mix of students. As the notorious Kansas City example then showed, the magnets proved to be remarkably expensive and remarkably ineffective. But it was a first in the sense of the Federal Courts ordering spending at the State and local levels, a seeming violation of the Tenth Amendment principle: after all, public education isn’t a Constitutional subject at the national level but is at the State level. And just so for Federal guarantee of State debt, at first “only” for employee pensions.

First in line is Illinois, where Guv Quinn “…has already floated the idea of a Federal guarantee of its pension debt…” to quote from a recent Wall Street Journal op-ed on the subject. Next in line are such poor-credit States as California and Michigan, as “taxpayers in places like Tennessee, Texas, Virginia, and Utah will be asked to subsidize the undisciplined likes of Illinois and California.” (WSJ, again). States like Vermont, which might consider themselves far enough from NYC that geographical Regional Equity might never arrive, might also consider that, in “follow-the-money” mode, financial National Equity (e.g. wealth re-distribution, RE-style) very well might.

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There is, of course, a lot of wealth re-distribution presently built into the city-to-BUB interface –think State income and sales taxes, paid on a higher per-capita basis by BUB-residents than center-city residents, and re-distributed by State governments out to local school districts, for example on a per-student basis. Presently, most city schools spend more per student than BUB districts (case-by-case evidence, no overall statistics) and they do so partially via transfer payments from State and Federal treasuries; and similarly, cities spend more on a range of free public services not (or less) needed in BUB jurisdictions. Similarly, there’s a lot of wealth re-distribution presently built into the State-to-Federal interface –think Federal income taxes, for example, paid predominantly by middle- and upper-income BUB residents. We have no statistics on the none-income-tax-paying residencies of the 46% of adults who either pay nothing or receive an Earned Income Tax Credit, but it’s a safe statistical guess that they are predominantly center-city residents. Therefore, the question of wealth re-distribution built into the Regional Equity campaign isn’t one of principle, but one of degree. RE advocates, in the famous single word quote supposedly voiced by union boss George Meany, simply want “more” BUB-wealth than they now receive via existing re-distribution templates; and State governments (think CA) now advocating for Federal debt guarantee also want “more” prudent-State wealth than they now receive via existing templates, ranging from the Highway Trust Fund to Food Stamps, from the EITC to public housing. The much-decried-by-urbanites Farm Bill, for example, devotes only about 20% of its budget to crop insurance (labeled as a benefit to farmers but more accurately an insurance against higher food prices for non-farmers should too many producers quit producing) and the other 80% goes largely to urbanites via such programs as Food Stamps. You could possibly foresee worse: both Argentina and Hungary have confiscated retirement savings by the prudent for re-distribution to the imprudent, who out-number and therefore out-vote them.

And there is, of course, a lot of Nullification thinking already in the mindsets of citizens resident not in the 26 States which have joined the Tenth Amendment ranks via the PPACA event, but in the 24 others: in Vermont, proposals for Secession (historically, the S-word follows unsuccessful pursuit of the N-word) have come from individual towns (think Killington) and from advocates for State-level action (think Second Vermont Republic) and in a number of States (think New York) the BUB folks periodically argue for divorce from the center-city folks in Gotham or their nearby equivalent.