Grassroot Perspective – Feb. 4, 2003-Will Small Business Regulatory Costs Bottom Out in 2003?; New Law Cripples California School District; What is Seen and Not Seen in the Federal Budget Deficits

article top

“Dick Rowland Image”

”Shoots (News, Views and Quotes)”


– Will Small Business Regulatory Costs Bottom Out in 2003?

Small Business Survival Committee Chairman Karen Kerrigan, in an article for the American City Business Journals, wonders if new initiatives being pursued at the federal level might relieve small businesses of some of their regulatory burdens.

Regulatory costs for small business have dramatically increased over the past decade. In fact, studies show that small firms pay a
disproportionately higher share of the federal regulatory burden. The per-employee cost of regulation for small firms is $6,975 – that’s 60 percent higher than costs for businesses with more than 500 employees.

“While rules impacting small businesses are down five percent over the past year, they are up 36 percent over the past five years,” reports Wayne Crews, author of “10,000 Commandments: A Policymaker’s Annual snapshot of the Federal Regulatory State” and CATO Institute scholar.

Above article is quoted from 1/14/03

– New Law Cripples California School District

All those cynics, who argue that focusing on noninstructional
programs cannot cut school budgets, should heed this week’s lesson from Philadelphia city schools. The cash-strapped Philadelphia system, which faced budget deficits the last four years, projects that it will have a surplus by the end of this academic year. In May 2002, the district passed a $1.7 billion budget that projected a $28 million deficit by the end of this fiscal year. Now, the district expects a $2 million surplus. Officials credit administrative cuts, better facilities management, and across the board cuts in programs not tied to the classroom. Philadelphia’s school district has saved over $29 million in just two years by relying on privatized transportation, food service, custodial, and other support functions. Philadelphia made these financial cutbacks without a teacher hiring freeze or firing any teachers. In fact, Philadelphia is still running a robust teacher recruitment program.

One of the most clear-cut ways school districts can save money
or improve services is to outsource noninstructional services.

Above article is quoted from Lisa Snell’s daily education commentary.

– “We need to honor the contract. It’s not a money issue, it’s a principle issue.” – Candia (New Hempshire) Education Association President Judith Lindsey, explaining her union’s refusal to allow volunteers to coach a baseball and softball program at Moore School. (Jan. 7 Manchester Union Leader) See 1/6/03

”Roots (Food for Thought)”

What is Seen and Not Seen in the Federal Budget Deficits

By Richard M. Ebeling

See Jan. 17, 2003

President Bush’s budget director, Mitchell E. Daniels Jr., has now
admitted what most people have been expecting — that the era of federal budget deficits has returned for the foreseeable future. In the current fiscal year, the deficit will most probably be greater than $200 billion and will very likely be more than $300 billion in the next fiscal year. Daniels also forecast that there would be no end to federal budget deficits for the next 10 years.

But Daniels added that there should be little concern about how much the amount of federal spending exceeds the tax revenues taken in by the U.S. government. After all, the deficits will represent “only” about 2 – 3 percent of a U.S. Gross Domestic Product (GDP) of around $10 trillion. Nor should anyone worry that government borrowing will push up interest rates in the financial markets because, according to Daniels, in an increasingly global market lenders from around the world will easily supply the lendable funds needed to cover these deficits, resulting in a relatively negligible rise in U.S. interest rates.

The impression that the Bush administration is trying to create is
clearly that these deficits will not matter. The planned increases in
spending on domestic and defense programs impose no necessary noticeable burden upon the American public. The deficits will be a drop in the bucket in terms of the overall size of the national economy, and they will have minimal impact on the costs of private-sector borrowing for either investment or consumer purchases.

In spite of the administration’s rhetoric and rationales, however,
everything has its cost, and this is as true for budget deficits as for
anything else. More than 150 years ago, the French economist Fr