How some states helped blunt the shutdown pain

Karen Lugo | Founder, Libertas-West Project

The recently concluded sixteen-day shutdown of the federal government, combined with the disastrous Obamacare rollout, have exposed some truths about governance in our country.

The bottom line: Washington, D.C. doesn’t work — but the states do.

The archetype of D.C.’s inability to deliver is the chronic Obamacare website message that says “The system is down at the moment.” Weeks into the much-anticipated rollout, the website that cost $634 million and took three years to build cannot respond to even basic inquiries.

Contrast that with the resourcefulness of the states that responded to the federal shutdown with solutions rather than gridlock. Several of the states followed the lead of Gov. Scott Walker in Wisconsin and re-opened national parks with their own resources. Utah, South Dakota, New York, and Arizona stepped up to pay the operating expenses of sites or entire parks so that iconic monuments like the Statue of Liberty and national treasures like Grand Canyon and Zion would remain open to the people.

In fact, Utah — where the federal government owns about 70 percent of the land — is now crunching numbers to see if a bid to take over some permanent management responsibilities of parks and resources makes sense.

The states that safeguard their constitutionally defined responsibilities from entanglement with federal strings will stand in increasing contrast to those that fall into the D.C. honey trap. These states will serve as models of sobriety and vibrancy for Americans seeking safe harbors where they can best innovate, produce, and prosper.

The record of Indiana’s government employee Health Savings Account (HSA) plans is an impressive case in point. In contrast to the expansive entitlement of Obamacare, Governor Mitch Daniels reports great satisfaction with Indiana’s state employee medical Health Savings Account Plan (HSA). The state saved more than $20 million in 2010 and most employees had money left in their accounts at the end of the year. The program incentivizes informed decision-making and demonstrates that employees will responsibly research options when the result is about $2,000 in annual savings. Employee satisfaction with the plan has proven to be high with only 3 percent opting to switch back to a preferred provider option (PPO). By 2012, more than 90 percent of state workers had signed up for HSAs.

For thriving job markets, it does not get better than the Texas business climate. Texas is credited with creating half of the new jobs since the end of the recession and just added another 22,330 private sector jobs in September. The Lone Star state continued to create more jobs than any other for the twelve-month period through August. Keeping taxes low and regulation in balance with development interests has provided a climate in which entrepreneurialism and opportunity thrive.

States that are harvesting energy resources are celebrating exciting job growth with Pennsylvania, North Dakota, and Texas leading the way. Pennsylvania alone has experienced a 40 percent surge in oil and gas jobs in the last six years. Overall, energy-linked positions have added 2.1 million jobs to the economy and aided consumers by lowering average household expenses to the tune of $1,200 per year.

Wisconsin and Indiana have led the way in reforming public sector union relationships with state government. Rather than tweak at the edges of the problem both states have implemented structural reform. When Wisconsin gave government employees the choice of whether to join the union, many declined, tipping the balance of power to individual workers and away from union leaders. By curtailing collective bargaining, both states restored a measure of taxpayer bargaining power.

When it comes to education reform Indiana and Louisiana are out front with wildly popular voucher choice programs for low-income students. While studies show that students who participate in voucher alternatives show positive test score results as well as greater likelihood to attend college, the even better news is that studies also show that competitive pressure on surrounding public schools raises those outcomes as well. The Obama Administration’s Department of Justice is, of course, challenging the program — one suspects not despite its virtues, but because of them.

DC is formally back to work now, but the reality is that DC never works well. As the true engines of policy innovation, the individual states have an opportunity to shine as never before. The record is clear, and the only question is whether the federal government will heed their success — or try to quash it.

Karen Lugo is Director of the Center for Tenth Amendment Action at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.

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