A graduated income tax?

The Board of Education is proposing to impose a graduated increase of the withholding tax for those earning more than $50,000 per annum, with the funds collected to go directly to the Public School System’s yearly budget. There are two things immediately wrong with this concept. 1. A flat tax automatically adjusts for the amount a taxpayer can afford to pay. A guy or gal making a million bucks pays $100,000, 1% of which ($10,000) buys a pretty big stack of erasers for PSS. While a household that makes only $15K/year pays only $1,500, 1% of which is $150 to help fund PSS. What could be fairer? And 2, there is no legal mechanism for PSS to actually collect this tax directly so it would get set up as a “trust account” in a place about as fiscally trustworthy as the fox set to guard the chicken coop. Ask MVA how disbursements from its Public Law 18-1 guaranteed trust account is working out. The money is just not being paid to MVA, nor will it be paid to PSS.

So PSS proposes to have a tiny minority of taxpayers pay all of the proposed increase and actually expects whatever is paid into their trust account to actually be transferred to PSS timely, or at all. You couldn’t fit a better set of blinders at a harness making convention.

Now let’s add an even more unfair, and even less realistic idea on top of that last doozy promulgated by the PSS brain trust. A sales tax on luxury goods. Think about it, this is just a new sales tax that will never end, and taxes only a small fraction of the population. How many poor families will pay $12,000 for a necklace (PSS example)? Why not tax middle class Family A making 50K/year 3% on their $100 necklace ($3) and charge better off Family B the same 3% on their $12,000 necklace ($360)?

Reasonable alternatives might be A. A flat, fixed sales tax on all items except food. B. Institute the same tax that pays for schools all across America, a property tax on both residential and commercial property. Residences are where the kids that go to school live. Businesses would benefit by having a better educated workforce (hopefully) and by driving commercial property values to the highest true market value. Right now, a business owner just closes their concrete structure, does no maintenance on it as it becomes an eyesore, then reopens it during the next boom. A property tax makes that owner use the structure or pay a penalty in the form of a tax.

I know how popular a suggestion to impose a property tax will be. Or a sales tax, or a flat income tax. Maybe the best alternative is for PSS to do just what everybody else who lives without a handout has to do in a down economy. Tighten the belt, cut waste (PSS is full of it) and wait out the bad times waiting for the good ones to roll around again. Remember that while PSS bemoans getting only $37 million out of the $45 million they were promised from the CNMI government, they are forgetting to mention the $60 million in other funding per year that they are getting from the federal government. That is a pretty substantial elephant standing over in the corner of the room. That’s a $97 million Jumbo.

I for one would like to see any monetary exchange between the CNMI government tied directly to a codified set of performance factors. Do I care if the trash is carried six times a day? No. I care if little Johnnie is reading on grade level in the 4th grade, is able to perform well up in the higher percentiles on standardized tests in junior high, can adequately and with skill and precision do math on his level, etc. In short, most students should have a sound fundamental liberal and scientific education by the time they get out of high school. Consequences should follow if they don’t. Don’t hit your performance goals, PSS, and you get a pay cut—sort of like the real world. Right now, all too often we pay millions in, but the kids wind up performing woefully short of their rightful potential.

Vinnie’s dream
Vinnie Sablan (Sen. Vinnie Sablan [Ind Saipan]) has floated an interesting idea to reduce medical referral travel in the long run and simultaneously improve the quality of CHCC, which could use some positive PR.

His idea is simple: provide the Commonwealth Health Care Corp. with some funding, (Sen. Sablan suggests $10 million), with said money to be earmarked solely for use to upgrade specialty personnel and hospital equipment. Once the money is found and the plan implemented, more patients could stay here and few would have to be sent off to uber expensive Hawaii to have life-threatening medical procedures performed there. That is a win-win if the quality of equipment and personnel is the same or better than that to be found off island.

Getting the money to finance such a venture may be difficult, but at least our governor prioritizes health issues very highly. In a direct quote just a couple of days ago, Gov. Ralph DLG Torres said, “Although the steep plummet in the CNMI’s tourism-based economy is worrisome, nothing can compensate for the health of CNMI residents which,” he said,“ is his administration’s top priority.”

So assuming we have the will to take on such a project and we can access the money to make it happen, just what is needed at the Commonwealth Health Center to upgrade it? We could ask an administrator or we could ask the medical professionals who actually perform the work. The former course often winds up with a procurement office $2,000 toilet seat. Sour Grapes has reached out and got the following answers as to what is needed to make the upgrade successful. A number of doctors and other medical professionals provided input. To a man (and woman) they did not want to get dragged into the politics and prefer that this prioritized list are the suggestions from “some of the physicians at the hospital”:

They believe this is exactly the right idea to improve medical referral and the hospital at the same time. “If the island could put forth investment now in developing better local medical resources, they’d save a lot on ongoing medical referral costs. A good example is the cancer program we’ve developed here, which not only provides excellent local care but saves lots of money that would otherwise go to referrals.

“It’s complicated, though. It’s not really so much equipment as services. And some services could never be sustainable here since the population is only 50,000 or so. For example, it would never make sense to have a brain surgeon work here, since he or she would only do maybe five operations a year. But other services/technologies would be sustainable, and the investment would be worth it.” Here is the list from the consensus point of view:

1. Full time cardiologist with catheterization lab
2. MRI scanner
3. On island diagnostic radiologist
4. On island interventional radiologist
6. Dermatologist
7. Urologist
8. Pathologist
9. Gastroenterologist

“It’s easy to buy an MRI machine but hard to find a good specialist. It would be worth investing in a recruiting firm to help find these specialists.”

It is important to note that these suggestions come from the medical staff, none of whom claim to be speaking for the hospital or representing the official views of CHCC. They are the views of those professionals who actually do the medical work, not the administrators who count and sort the beans.

Sen. Vinnie has a big job in front of him finding the $10 million in this economy but he’s a go-getter. I’m hoping he goes and gets it.
Thanks for reading Sour Grapes!

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“First, God created idiots. That was for practice. Then he created school boards.”
—Mark Twain

“The man who does not read is no better off than the man who cannot.”
—Samuel Clemens