The Maryland Public Policy Institute
OP-EDS
JULY 7, 2010
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Oklahoma Republican Sen. Tom Coburn recently told the hosts of MSNBC's "Morning Joe" that he did not know who the 23 percent of Americans were who trusted Congress, referring to a poll.
I wonder what the numbers are for the Maryland General Assembly, whose members are incredibly adept at pushing tough decisions to future years and blaming others for their own poor choices.
One of the funniest attempts--by members to deflect attention from themselves was a task force created in 2008 to recommend steps to improve "financial literacy" among the state's school children to prevent a repeat of the housing collapse and ensuing financial crisis.
As a result of the report, Maryland school children will be required to take financial literacy courses starting in 2011, according to a recent announcement of the State Board of Education. While the curriculum may benefit students and their families, they are not the ones who have been underfunding pensions for state workers for almost a decade and issuing debt to pay for road and other projects that were supposed to be paid for in cash.
Leadership is so in denial about the pension issue that House Speaker Michael Busch has not yet chosen people to sit on yet another task force created by the General Assembly in the most recent session to analyze ways to improve the system.
Worse, as one retiring legislator, Del. Murray Levy, D-28, told The Gazette, "I don't know what this group is going to come up with that we haven't already discussed."
Students were also not the ones who passed a massive boost to state spending on public education in 2002 known as Thornton with no way to fund it and hikes to teacher pensions in 2006 with no way to pay for those either. And students did not promise that huge across the board tax hikes passed in 2007 would solve the "structural deficit" permanently and then say more taxes will be necessary to balance the budget two years later. (The structural deficit is the difference between what the state spends each year and what it collects in revenue.)
To remedy the situation, legislators should require of themselves the same things they recommended to students. Economists from the University of Maryland should develop a curriculum for legislators that can be studied online when they are not in session to give them a basic understanding of budgets, accounting, taxes, supply and demand, statistics and incentives, with regular tests they must pass. The curriculum could also include a reading list, updated yearly.
Carmen Reinhart and Kenneth Rogoff's "This Time is Different: Eight Centuries of Financial Folly," a road map for understanding how debt and financial crises develop, would be a great summer pick. Legislators would also have the benefit of being able to ask Reinhart, a professor at the University of Maryland, to speak to them.
While a better understanding of economics may not prevent poor decisions, it will make legislators more aware of how their laws will impact residents and more accountable for their mistakes. If it is so important for students to know how to balance a checkbook, how much more essential is it for those charged with stewarding taxpayers' scarce resources to understand state finances?
Marta Mossburg is a senior fellow at the Maryland Public Policy Institute. mmossburg@mdpolicy.org.
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