Today is officially my first day as Vice President and Director of Research for the Mountain States Policy Center (MSPC). I am excited to join the team and help advance thoughtful recommendations promoting free enterprise, individual liberty, and limited government. Non-partisan policy based on facts and not emotion is just what the country needs right now, and MSPC is well-positioned to help advance the debate in a constructive and respectful way. Before I lay out some of the projects we may be working on, let me share a little about myself. I have more than 20 years of experience working with public officials, media, and citizen stakeholders across the nation to improve the fiscal, governance and transparency policies of local and state governments. For the past 16 years, I served as the Director of the Center for Government Reform at Washington Policy Center. During that time, I was appointed by lawmakers and governors to various tax, budget and transparency reform committees. I’m currently a Fellow with the national Better Cities Project and am also a member of the State Tax Advisory Board for the Tax Foundation. With the benefit of remote testimony, I’ve testified numerous times before legislative committees across the country on government reform issues, and I’ve had the privilege of being published in numerous newspapers across the region. When I’m not geeking out on studies and audits, my life revolves around my amazing wife and two daughters and for fun the 49ers’ schedule. I’m grateful that MSPC already has a fantastic research team in place that I’ll have the pleasure of working with. Here are some of the projects we may take a closer look at: The legislative process in the Mountain States. What are the rules for public involvement, bill reports and fiscal notes, remote testimony, live streaming, and the right of referendum and initiative? Fiscal process in the Mountain States. What role do tax and spending limits, balanced budget requirements and protected reserves, tax structure, fiscal transparency resources, and independent accountability (audits) play in the governance structure? Separating fact from fiction on Education Savings Accounts (ESA). There have been a lot of myths nationally about Education Savings Accounts. What do public officials on the ground in those states that offer them say about this student resource in practice? Education funding and property tax reform. Is there an opportunity for a grand bargain to help provide more stability for local school funding while protecting homeowners, providing property tax relief, and expanding school choice options for families? While we explore these and other policy issues, my commitment to you is that MSPC’s recommendations will always be based on facts and not emotion. This was the promise I made at our first annual Spring Dinner earlier this year when I was introduced to MSPC supporters. My decades of involvement in the public policy world have taught me that no one has a monopoly on good ideas and that the best way to help is with an open hand backed up by factual research. MSPC has demonstrated a commitment to engaging in the policy debate the right way, and I’m ready to help build on its dedication to federalism and a regional focus. I look forward to getting to know you and working together to help individuals, families, and businesses in the Mountain States take full advantage of the promises and protections of a limited government – one that is focused on its core functions that respects individual liberty and our free-enterprise economic system.

I was a sophomore in high school, going through the motions of the day-to-day routine. Homeroom, Math, English, maybe weight room. But one day, as I was counting the ceiling tiles, I had a realization: this couldn't be all there was to public education. I felt like I was trapped in a simulation. Like I was Truman Burbank, the star of the movie The Truman Show, and everyone around me was an actor in a play. I was going through the motions, but I wasn't really living, or in this case learning. That day, I decided this couldn't be a reality and it was time to change things. I decided it was time to hop off the factory line of public education and find some solutions. It was the end of the 2017 legislative session when had the privilege of meeting the good Chairman of the Idaho Senate Education Committee, Dean Mortimer. He would later introduce me to someone very special to Idaho Education, Senator Steven Thayn. In 2019, we co-authored a major piece of education legislation, Senate Bill 1060. The bill passed the Senate, the House, and was signed into law by Governor Brad Little. It was a major personal victory for me, but only scratched the surface of what could be done. Since then, I've had the privilege to serve on nearly 3 dozen different campaigns, ranging from school board to Lieutenant Governor. I've graduated from College of Western Idaho with an Associates in Liberal Arts and Boise State with a Bachelors in Political Science and American Government. I'm now married to my high school sweetheart and we welcomed our first beautiful daughter to world in November of 2022. I know that we are lucky to live in one of the most free and prosperous regions in the world. I also know that there is a sense of responsibility that we all hold because of that. A wise man once said "A bad policy in one state will eventually make its way to another." That's why I'm so excited to join the Mountain States Policy team. I believe in the power of free markets to create opportunity for everyone, and I'm committed to working with others to ensure that our government does not become our first line of defense, but rather a funnel for ultimate prosperity! We are at a critical juncture in our country's history. We must stand up for fact-based policy creation that will benefit all of us, not just a few. Together, we can build a better future for Idaho, Washington, Montana, and Wyoming. Mountain States Policy Center is the perfect storm for thoughtful individuals to create fact-based policy that will benefit generations to come. The time is now to seize this opportunity and make a difference. MSPC brings together a diverse group of knowledgable experts from all walks of life, with a shared commitment of educating and informing through non-partisan, quality research to promote free enterprise, individual liberty and limited government. This unique combination of talent and expertise is essential to addressing the complex challenges facing our region. With MSPC's resources and your support, we can create a future where everyone has the opportunity to succeed. Where we put "Free Markets First"!

This article was originally published by the Washington Policy Center. It is reposted with permission. Complaining about public opposition to the construction of new wind and solar projects in Idaho, a lawyer for renewable energy companies recently claimed that those sources of energy were the “best hedge” against inflation. This is misleading – and incorrect – for several reasons. One thing advocates of wind and solar frequently point to is the claim that the fuel is “free.” That claim ignores the extremely high up-front cost of those energy sources. To account for that, energy analysts create a “levelized cost of energy” (LCOE). This allows comparisons between energy that has low costs up-front but has ongoing costs for the fuel, like natural gas, and sources that have high up-front costs but low fuel costs, like wind and solar. The most widely cited source of energy LCOE comparison is Lazard who published a new comparison in April. That analysis finds the unsubsidized cost of new natural gas power is virtually identical to new commercial wind and solar over its lifetime, adjusting for expected future inflation. Taxpayers and ratepayers will pay about the same, on average, using either source of energy. If the cost of natural gas declines in the future or doesn’t increase as quickly as expected, it could end up costing less. This shouldn’t be surprising. A “hedge” is like an insurance policy – something that adds additional cost to avoid potential risk in the future. Intermittent sources of energy, like wind and solar, create their own risks that need to be hedged. They put ratepayers at risk of incurring additional costs and blackouts. The highest-cost electricity is during the evening, when demand is highest. That is almost exactly the moment when solar-generated electricity declines rapidly and is before wind power kicks in during the late evening and overnight. Precisely when more electricity is needed, wind and solar are virtually absent. What takes their place? The most expensive form of electricity – “peaking” generation which only is used for short periods of time. The more reliant a state is on wind and solar, the more it exposes itself to high-cost peaking power. It is possible to store solar power generated in the middle of the day in grid-scale batteries so it can be used in the evening. But the combination of solar and batteries pushes the cost above natural gas according to Lazard. Put another way, adding more intermittent sources of electricity means you pay twice – first for the wind and solar and then for electricity to back it up. This is the experience in California. As they have replaced natural gas with wind and solar, their rates have climbed rapidly. To make up for the energy shortages they have during peak hours, California is buying more electricity from the Northwest, pushing costs up for Idaho, Washington and other states. Becoming more reliant on wind and solar creates more competition for the critical, but limited, amount of electricity generation during the evening hours. California’s energy shortages would increasingly drive Idaho’s electricity prices. The challenges don’t end there. Wind generation will virtually disappear for days in a row across the Pacific Northwest, leaving all other sources to make up the difference. For example, between May 16 and 24 of this year, the BPA system saw wind fall to virtually zero for long stretches of time. This is not unusual, and these periods of low wind often occur when it is very hot or cold and demand for heating or air conditioning increases. It becomes the worst of both worlds – high demand but low (or nonexistent) supply. Because we have so much hydropower, the Pacific Northwest is less susceptible to some of these issues. Hydropower can be dispatched quickly to make up for the loss of power when intermittent sources of energy disappear. As demands for electricity increase, however, the gap between what can be supplied by wind and solar and what must be supplied by hydro or on the very expensive spot market grows. The cost of electricity during a blackout may be zero, but people aren’t likely to see that low price as a hedge against inflation. It is fine to have a mix of electricity generation. Each source of electricity entails trade-offs that must be addressed. Taxpayers and ratepayers in Washington and Idaho should be wary of promises about the cost of wind and solar without considering the expensive backup sources of electricity required to make up for their shortcomings. Todd Myers is the director of the Center for the Environment at the Washington Policy Center, a non-profit think tank that promotes public policy based on free-market solutions. He can be reached at tmyers@washingtonpolicy.org.

One of the Mountain States Policy Center’s top priorities is to protect the ability of small businesses to thrive. This is why we are happy to join with state leaders, trade groups, and the Idaho Department of Commerce on June 9th for the fourth annual #SupportLocalGems. As explained by U.S. Senator Risch: “The Support Local Gems initiative is an all-day celebration of Idaho’s small businesses.” State leaders and MSPC know the critical importance that small businesses play for our economic success: “It’s impossible to measure just how substantially Idaho’s small businesses contribute to our state’s economy, our workforce, our communities, and our way of life in the Gem State,” said Senator Risch. “I am tremendously grateful to these businesses for all they do. On Friday, June 9th, join me and celebrate the local gems that strengthen Idaho communities.” “Small businesses are the backbone of our economy, driving innovation and job creation. The State of Idaho is proud that years of back-to-back tax relief and historic investments into workforce and infrastructure have strengthened our business climate. Idaho’s small businesses are beloved members of our communities and deserve our support,” said Governor Little. Here is how you can participate in Idaho: “On Friday, June 9, dine at your favorite restaurant or order takeout, shop in person or online at a local retailer, purchase a gift card, write a positive review for your favorite local business, or just say ‘thank you’ to a business in your community for all that they do.” Thank you to all the entrepreneurs and their families that make the sacrifices necessary to grow our economy and provide the important services we need. At MSPC we’ll work with you to help remove barriers that may stand in the way of you achieving your American dream.

One of the most important tools that citizens have to maintain control over the government they have created is with strong open government laws. Montana takes the people’s right to know so seriously that it is enshrined in the state constitution under Article 2, Part 2: “Section 8. Right of participation. The public has the right to expect governmental agencies to afford such reasonable opportunity for citizen participation in the operation of the agencies prior to the final decision as may be provided by law. Section 9. Right to know. No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure.” This year the Montana legislature passed a couple of bills to update the state’s public records law. Senate Bill 232 put into law the requirement for state agencies to acknowledge a public records request within five days and for executive branch agencies to provide the information 20 days after the acknowledgment (with exceptions). That bill was signed into law in May. House Bill 693, however, was recently vetoed by Governor Gianforte but the legislature just acted to override the veto. As reported by the Daily Montanan: “House Bill 693, which surrounds agency compliance with public information disclosures, passed a veto override on Friday with 105 votes from both chambers . . . The bill, sponsored by Rep. Bill Mercer, a Billings Republican and former U.S. Attorney for the District of Montana, soared through the legislature, receiving 94 votes in the House and 48 votes in the Senate on third reading. Mercer said there were circumstances where agencies said they may be on the verge of litigation or the middle of litigation and therefore they will not comply with a right-to-know request. ‘I think it’s important that we codify that the right to know is a constitutional right that every member of the public has and that there should not be an agency attempt to fail to comply because they believe there’s going to be litigation,’ Mercer said.” Enhancing and complying with open government laws may not always be easy for public officials, but it is important for a well-functioning and accountable government. More importantly, it is what we expect and deserve from those entrusted with providing taxpayer-funded services.

In a post-COVID world, the federal government is leaning on more red tape for business. According to new data from the Competitive Enterprise Institute, "overall final rules in 2021 jumped 45 percent over those of 2020." The new regulations are impacting both big and small businesses. The federal count is the highest it's been in decades and is a 9% increase over the last year for the Trump Administration. It's a very different story at the local level. In fact, Idaho is the least regulated state in the country. The Mercatus Center calls it "a model." Over the past four years, Idaho has cut or reduced 95% of regulations. Governor Brad Little has signed numerous executive orders reducing the size of the state government. Executive Order 2020-13: Regulatory Relief to Support Economic Recovery Executive Order 2020-10: Enhancing Licensing Freedom: Organization of the Department of Self-Governing Agencies Executive Order 2020-01: Zero-Based Regulation Executive Order 2020-02: Transparency in Agency Guidance Documents Executive Order 2019-01: Licensing Freedom Act of 2019 Executive Order 2019-02: Red Tape Reduction Act Wyoming, too, has seen a reduction in the number of state regulations.

U.S. Senators Mike Crapo and Jim Risch of Idaho, joined by Sen. Steve Daines of Montana and Sen. Lisa Murkowski of Alaska, have introduced a new bill to create a long-needed new federal appeals court. Right now, the 9th circuit covers nine states including Idaho, Montana, Washington and two more territories. It has jurisdiction over one in five Americans. That's nearly twice as large as the second-biggest circuit. Because of its size, Ninth Circuit decisions routinely lag. In fact, at times there are more than 10,000 cases filed with the court. The newest proposal to add a 12th Circuit would create two new appellate court judgeships for the Ninth Circuit, as well as authorize 66 new permanent district court judgeships around the country and convert seven temporary district court judgeships to permanent judgeships. The new Twelfth Circuit would cover Alaska, Arizona, Idaho, Montana, Nevada, Oregon and Washington, and be based in Seattle. Ilya Shapiro, the former VP and Director of the Levy Center for Constitutional Studies, has written extensively on this topic. His research concluded that "breaking up the Ninth Circuit is a basic matter of legal administration and preserving the rule of law."

Recently too much of what passes as a public policy debate in our country could instead be confused for an episode of Survivor. While politics, name-calling, and resorting to partisan labels may make for good TV, it rarely results in good policy. While the Mountain States Policy Center doesn’t shy away from our belief in individualism and the power of hard work and innovation and that free markets have allowed us to thrive, we know the importance that fact-based research and thoughtful debate have on the development of good policy. To help tone down some of the rhetoric and refocus the conversation in a constructive way, here is a checklist that can be used to analyze policy: Read source details. To fully understand what a bill, study, or court ruling says it is best to go directly to the source and read the full details. Nuance and important factors can too easily be missed if relying on summaries and talking points. Analyze citations. Footnotes and source links are more than a requirement from our past term papers. Looking up the details relied on in a report can provide additional context and reveal if the base document accurately reflects the information cited. Consider counterpoints. The goal of a policy proposal is to improve things. By considering opposing viewpoints and critiques you can present the best recommendation to accomplish your goals. Switch actors to see if your opinion changes. Focusing on the partisan label of a bill sponsor or the background of an author can often prejudice our opinion before we even consider the details. Pretend that the proposal comes from a different camp to see if that changes your opinion. Formulate a position and make a recommendation. After reading the details, verifying the sources, considering alternative viewpoints, and checking to make sure partisan labels weren’t dictating your opinion you are now in an excellent position to make a policy recommendation. As we discussed in our most recent Peak Policy video update (below), we need to leave the tribal yelling for the sporting events and instead focus our public policy debates in a constructive and thoughtful way. This checklist for analyzing public policy is one way to do that.

The Bureau of Land Management (BLM) and Forest Service struggle to manage their lands efficiently and effectively. It’s an ongoing problem and both sides are frustrated. Resource-users (ranching and mining) are often kept from land that allows them to generate income. Natural resource groups repeatedly express disappointment for the lack of conservation efforts. The Biden Administration’s recently proposed rule change would shift more focus to conservation efforts. In name, the rule proposal has a positive potential but in actual design the proposal undermines the law that designates the purpose of the Bureau of Land Management. Conservation leases are an excellent market-based tool for prioritizing conservation as a ‘use’ of land. Effective projects have occurred on private lands that allow conservation groups to collaborate with resource-users to design and implement beneficial projects. PERC (Property and Environment Research Center) partnered with ranchers and landowners to form an Elk Occupancy Agreement in the Greater Yellowstone Area. This example of a conservation lease, paid the rancher to fence off winter range of migratory elk. If conservation leases work on private lands, why will the proposed rule change not work? #1: The rule stretches the codified law. The Federal Land Management and Policy Act (FLMPA) in 1976 tasked the BLM to “manage the public lands under the principles of multiple use and sustained yield.” The proposed rule change conflicts with the law because the “principal or major uses” were specified as “domestic livestock grazing, fish and wildlife development and utilization, mineral exploration and production, rights-of-way, outdoor recreation, and timber production.” The newly proposed rule strictly defines conservation as “restoration and protective actions.” Conservation as restoration and protective actions is outside the scope of the FLMPA. To progress conservation leases forward it would be best practices to include conservation within the law through Congress’s legislative power. The current proposed rule is likely to be protested through the judicial system because conservation is not specifically included as a use in the language of the law. #2: The rule’s proposed implementation is vague. The proposed rule does not specify how conservation leases will be designated, how long they will last, the pricing structure, and the possibility for future uses. Resource users are concerned about the lack of clarity, arguing it is a pathway to extensively limit them in the future. The BLM’s reputation for changing expectations leaves many resource-users uncomfortable with the extension of power the new rule would create. #3: The rule could have negative economic and educational impacts With this proposed rule, the executive branch is bypassing Congress, and the 535 voices of elected officials who will represent the interests of their constituents. As a result the rule, as written, will pull economic resources away from states, especially western states who have the highest percentages of federal lands. The Congressional Western Caucus issued a strong statement against the proposed rule change. Representative Newhouse said: “We already know the Bureau of Land Management’s proposed rule would be devastating to rural communities across America, not to mention counterproductive for the very goals they’re working to achieve. It is clear that this proposed rule was drafted without the input of stakeholders who will be impacted by this regulation, which is why BLM must extend their comment period and allow all perspectives to be addressed.” Those state budgets that depend heavily on the taxes paid by mining and oil resource users, would struggle to fund important services, like education. Wyoming’s Superintendent of Public Instruction Megan Degenfelder submitted the following testimony regarding the rule change: “Due to the nature of Wyoming’s intermixed state and federal land sections, with 50% of the surface estate and 65% of the mineral estate owned by the federal government, I know from my career in the coal and oil and gas industry that any ‘non-use’ has a direct negative impact on leasing and development of adjacent state lands, which will decrease the attractiveness and associated revenue generated to fund our public school. The proposed rule at hand directly jeopardizes education funding in our state, both from state and federal lands.” From a policy perspective, conservation leases are valuable tools, allowing conservation uses to participate in a market dynamically with other resource users. Conservation leases have the potential of moving the current battle over environmental legislation from the court room to the board room. Using conservation leases, environmental interests can interact with other resource users in a fair open market, through voluntary negotiation. However, this proposed rule is not the answer. Conservation leases need to be proposed legislatively, to keep this valuable policy tool unhindered by judicial proceedings. Allowing all interested parties to fully weigh their opinion and putting the authority of Congress in its proper place as the legislative branch. Photo Credit: BLM Wyoming

States across the country have been embracing tax relief for the last few years. This is also true in the Mountain States – with one notable exception. While Idaho and Montana enacted “historic” tax relief and reduced income tax rates (Wyoming reduced property taxes), Washington lawmakers instead decided to move in the opposite direction and imposed the state’s first income tax (starting on capital gains income). Here is how the Tax Foundation describes the tax-cutting efforts across that nation: “Since 2021, 24 states have cut individual income tax rates (including 22 reductions to top marginal rates), 13 states have cut corporate income tax rates, two have cut sales tax rates, and many more have made structural improvements . . . These continued reforms are significant but should not be surprising. Many states continue to experience revenue growth and project further growth in coming years, and nearly all states anticipate revenues remaining well above pre-pandemic levels. And while state coffers are flush with cash, lawmakers are increasingly attuned to the value of tax competitiveness in an ever more mobile economy. With businesses and individuals alike better positioned than ever to take taxes into account in deciding where to live and work, lawmakers across the country are responding with pro-growth, pro-taxpayer reforms.” While we wait to see where the tax reform conversation heads next in the Mountain States, here is a snapshot of the current tax rankings: State Tax Collections Per Capita (Fiscal Year 2021) (Tax Foundation data) State and Local Property Tax Collections Per Capita (Fiscal Year 2020) (Tax Foundation data) Top Individual Income Tax Rate since 2021 (Tax Foundation data) State and Local Sales Tax (Tax Foundation data) Gas Tax (Tax Foundation data) State Death Tax (Estate) (Tax Foundation data) Liquor Tax (Tax Foundation data) State and Local Cell Phone Tax (Tax Foundation data) For the most part, the Mountain States are generally clustered near each other on their tax rankings except for Washington. Thankfully the states aren’t graded on a curve.

Like murky water, it’s hard to see through the current Idaho water fight. As farmers watched the above average snowpack accumulate all winter, Southern Idaho growers are waiting to hear if they will be permitted their full allotment of water. If the answer is no, some 900 farmers will face curtailment after the crops have been planted, because they do not have an active mitigation plan. Even more growers will face curtailment in future years if the new methodology goes forward, despite cooperating with existing agreements and following established mitigation plans. Why would water allotments be cut when the snowpack is above average? The answer is frustratingly opaque. The current water fight stems from the prior appropriation doctrine that governs all western water. “First in time, is first in right,” means senior water right holders will always have priority, a standard practice in the west. In the Eastern Idaho area, the rights of the senior water-users (canal irrigators and fish farms) of the Magic Valley are protected against the more junior water right holders that irrigate from groundwater resources. The Surface Water Coalition (SWC) was formed in 2008 to represent the interests of the senior water right holders in Southern Idaho. The Idaho Ground Water Association (IGWA) represents the interests of more junior water right holders. Over the last two decades multiple agreements have been made to respect seniority and protect the Eastern Snake River Plains Aquifer. To administer agreements between the two irrigation groups and the interests of the aquifer, the Idaho Department of Water Resources (IDWR) issues methodology orders. The previous Fourth Amended Methodology Order was released in 2016. It was praised as a collaborative achievement between the interested parties, and required junior water right holders to establish and follow mitigation plans to avoid curtailment. The newest methodology endangers this security for growers that kept up their end of the bargain. The latest, Fifth Amended Methodology Order, was published on April 21, 2023. The order, estimates a 75,200 acre-foot shortfall in water needs for 2023. The junior water right holders will be expected to meet this need. In such a wet year, the estimated shortfall comes as a shock, though the consequences this year can be eased for most growers in groundwater districts. A previous 2008 agreement allows the junior water holders to find and lease the shortfall amount from reservoirs and other canal companies, if its available. But the fear is building for the future. In years of normal or low snowpack, water will not be available to lease and over 700,000 acres of Idaho farm ground will be threatened by curtailment. The new methodology will mean an increase in shortfall predictions and curtailment, as IDWR tries to hit the moving target of predicting the future weather, months in advance. One expert opinion disagrees with the Fifth Amended Methodology’s assumptions and argues that if even a few of the assumptions are changed within the reasonable error, the junior water right holders would be above their expected mitigation and not owe the senior water right holders any water during this very wet year. A hearing occurred last week (June 6-10) on the Fifth Amended Methodology, in front of the director of the Idaho Water Resource Board. Growers are expected to have a decision sometime this week if the curtailment goes forth. Who is to be held accountable for the shortfall? Is it the groundwater users or more senior canal users? Is it agriculture alone or is the blame to be shared with the exploding population? Is the IDWR’s new methodology even a fair assessment? The issue over Eastern Idaho’s water will be clarified slightly when the Director of the Idaho Department of Water Resources issues a decision. The upcoming decision should only be the start of the water conversation. Idaho policy needs to fairly distribute the costs and responsibility of water conservation, while respecting the rights of all water-right holders. Photo by Steve Harvey on Unsplash

Attorneys General in 26 states (including Idaho, Montana, and Wyoming) are asking the federal government to respect federalism and not increase the threat of further regulations through rule-making. According to a press release by Idaho Attorney General Raúl Labrador: “The Office of Management and Budget’s proposal to change the way federal agencies conduct cost-benefit analysis will be used by federal bureaucrats to justify unnecessary spending and new regulation. A thorough cost-benefit analysis requirement places an important check on federal administrative powers and protects Americans against bad policy.” The letter from the state Attorneys General says this about the proposed OMB changes (in part): “As a general matter, we are concerned that the Administration is attempting to manipulate the regulatory process by, among other things, adjusting the discount rate and adjusting the time horizon of regulatory analysis so that the putative benefits of regulation always outweigh the costs. . . . First, the States take issue with revisions that downplay the importance of federalism and the role of States in effective and efficient regulation. Second, the proposal improperly shifts the focus from the effect regulations have on Americans to global effects. . . . Cost-benefit analysis should provide an accurate portrayal of the effects that proposed regulations will have on those who are affected by them. The proposed draft Circular A-4 makes several changes that, if implemented, would decrease the utility of cost-benefit analysis while increasing the power and flexibility of federal regulators. The federal government’s chief guidance on cost-benefit analysis should not be reworked to allow this Administration more power to micromanage the lives of Americans. . . . the implication is that agencies should feel free to disregard federalism concerns unless Congress has explicitly ordered the agency to consider them. This turns federalism on its head. The federal government should always consider federalism costs and benefits in ensuring that agency action does not violate the coequal sovereignty of the States, and the draft should be revised to make clear that this analysis is mandatory. . . . OMB’s decision to decrease the emphasis on federalism and the role and importance of States in effective regulation is not the only shift in the proposed revisions. The proposed draft also reverses the current requirement in Circular A-4 that cost-benefit analyses focus primarily on the effect of regulations on Americans. It replaces that longstanding position with a new emphasis on global perspectives for regulatory issues with effects outside U.S. borders. The draft’s revised discussion of the globalist scope of cost-benefit analysis illustrates the federal government’s confusion about its role and responsibilities. But the Constitution could not be clearer on the government’s fundamental purpose: serving the American people. Regulations promulgated by agencies of the United States government should be concerned primarily with United States citizens and residents, not least of which because they will be the ones footing the bill.” The Regulatory Studies Center at George Washington University compared the current OMB rule and proposed changes. According to the RSC: “Compared to the original document, the draft Circular is less deferential to state, local, and territorial governments, and to other ways to address the identified problem. The 2003 Circular states that the analyst ‘should consider other means of dealing with the failure before turning to Federal regulation.’ The revised version merely states that ‘[i]t can be informative to consider other means of addressing the need for regulatory action you have identified in addition to, or instead of, Federal regulation.’ . . . The revised Circular goes further in emphasizing the potential costs of leaving regulation to state, local, territorial, and tribal governments. The revised document suggests that, even if they are able to do so, state and local governments may not effectively address an issue. The document states that ‘analysis may indicate that Federal action is the best approach’ if state and local governments ‘are failing to appropriately address a problem,’ and in order to prevent a ‘race to the bottom’ between jurisdictions.” Here is how the Constitution Annotated, a resource provided by Congress, describes federalism: “Another basic concept embodied in the Constitution is federalism, which refers to the division and sharing of power between the national and state governments. By allocating power among state and federal governments, the Framers sought to establish a unified national government of limited powers while maintaining a distinct sphere of autonomy in which state governments could exercise a general police power.” The promise to the states and citizens that the powers of the federal government would be limited is guaranteed by the Tenth Amendment: “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.” As pointed out by the state Attorneys General, the proposed OMB changes to the federal rule-making process need a rewrite to embrace the constitutional promise of federalism while respecting the authority of state decision-making.

The latest National Assessment of Education Progress (NAEP) data for the 2022-23 school year show continuing impacts of the COVID lockdowns and school closures. Mathematics scores for 13-year-olds have dropped nine points and reading scores have fallen four points. The NAEP's long-term trend (LTT) assessment did not show any "green shoots" of academy recovery post-COVID. The results for math were particularly stark - falling to the lowest levels last seen in the 1970s. NAEP data analysts describe the numbers as "alarming" and "troubling."Scores declined for both boys and girls, across all locations of the country. Among white students, the decline for math averaged six points, while American Indian/Alaska Native students saw the steepest decline of 20 points. (We have requested the data for each state and are awaiting that information.) Interestingly enough, private Catholic schools did not see any learning loss. Harvard research has shown that "districts that spent more time learning remotely also saw lower achievement growth, especially in high-poverty schools." Throughout 2022, the Biden administration urged schools to spend their $122 billion in federal recovery funds on tutoring to help students catch up from pandemic learning losses. Failing to respond to the troubling NAEP news could leave a generation of students at risk. As reported by the Wall Street Journal: "National Center for Education Statistics Commissioner Peggy Carr said the most recent data show academic declines suffered during the pandemic haven’t stabilized, despite efforts by districts and schools to address learning loss. 'There are signs of risk for a generation,' she said. . . . Students who have fallen behind by eighth grade are less likely to succeed in high school and graduate on time, potentially leading to lower college enrollment and earning potential, teachers and researchers said." Research has shown that high-intensity tutoring may be the best way to help students recover. While some states provide some parents access to funds for tutoring, not all do. Washington State, for example, does not allow parents access to any funds. Idaho's Empowering Parents program does allow for funds to be spent on tutoring. And Montana created Education Savings Accounts for special needs students this past legislative session. For the sake of students, state policymakers should concentrate efforts on intensive tutoring.

I was recently talking with a newspaper editor in Washington State about the Snake River dams. Due to a loud vocal minority, the impression was that the state of Idaho is united in wanting to tear down these economically important sources of clean, renewable energy. Based on the statements from numerous Idaho elected officials and industry stakeholders, however, that isn’t the case. This point may come into clearer focus next week when a Congressional Field Hearing on the Snake River dams is held in Richland, WA. Consider some of the recent comments from Idaho elected officials and trade groups on the vital importance of the Snake River dams. The Idaho Farm Bureau Federation said in a statement: “The lower four dams on the Snake River produce a significant amount of cheap and environmentally friendly hydroelectric power to the region and are a critical part of a system on the Columbia and Snake rivers that allows wheat farmers, as well as producers of many other commodities, to export their product to the world.” In 2021, the Idaho Legislature passed Senate Joint Memorial 103 in support of the Snake River dams. From a summary of the resolution: “A Joint Memorial stating findings of the Legislature, opposing the removal or breaching of the dams on the Columbia-Snake River System and its tributaries, and recognizing certain benefits provided by the Port of Lewiston. The Idaho Legislature recognizes and supports the international competitiveness, multi-modal transportation, and economic development benefits provided by the Port of Lewiston and the Columbia-Snake River System. Idaho has sovereignty of its water resources and benefits from the multiuse system that provides transportation of commodities, fish and wildlife habitat, recreation, hydropower, flood control, and irrigation.” Idaho Governor Brad Little said in a July 2022 press release: “I have been clear in my opposition to dam breaching because it is not a silver bullet for salmon recovery. Idaho has shown leadership and commitment to bringing together diverse interests to ensure abundant, sustainable populations of salmon and steelhead for present and future generations.” Also, this is from a March 2023 press release announcing the introduction of the Northwest Energy Security Act to protect the four lower Snake River dams: “’A comprehensive, scientific process made clear dam breaching on the lower Snake River is completely unnecessary and unwarranted,’ said U.S. Senators Jim Risch (Idaho). ‘With the Northwest Energy Security Act, Congress will ensure the Columbia River Power System continues to provide reliable and clean energy and supports the region’s transportation, agriculture, and irrigation needs. I remain adamantly opposed to breaching the dams.’” The Northwest Energy Security Act is sponsored by U.S. Senators Jim Risch (Idaho) and Steve Daines (Mont.) with U.S. Reps. Dan Newhouse (Wash.) and Cathy McMorris Rodgers (Wash.). On June 22, the Congressional Western Caucus held a forum titled, “The Importance of Hydropower for Rural Communities.” U.S. Representative Russ Fulcher (Idaho) said at the forum: “The lower Snake River dams are a critical linchpin to North Idaho and for the Pacific Northwest. And the removal of those or breaching those would be economic devastation.” Scott Simms, CEO of Public Power Council, added at the forum: “The Lower Snake River Dams regularly are the defining line between keeping the power flowing and parts of the West being plunged into rolling blackouts.” This is a point reiterated by Kurt Miller, executive director of Northwest RiverPartners, in his June 22 Seattle Times op-ed: “The NERC warning doesn’t matter much to those who want to tear out the four Lower Snake River Dams, some of the Pacific Northwest’s most reliable, carbon-free generators of electricity. They mistakenly conflate all renewables as being equal in the reliability they provide to the grid, but those responsible for the grid’s reliability know that is simply not the case. Wind and solar power, even when paired with batteries, cannot get you through a heat wave or cold snap. Hydropower can, has, and will continue to do so. The Lower Snake River Dams kept the grid powered during the Northwest’s deadly heat domes of 2021 and 2022 and cold snap of December 2022. We in the West should be concerned. Blackouts are life-or-death situations. Our grid must keep electricity flowing during extreme heat even as wind turbines stop turning and solar panels go dark at night.” A Congressional Field Hearing will be held in Richland, WA on June 26 to discuss the future of the Snake River dams. As reported by the Tri-City Herald: “With partisan politics now driving the narrative in the Snake River dams debate, Monday’s Congressional field hearing in the Tri-Cities is more critical than ever. Only Congress has the authority to breach the dams, so it is imperative that U.S. lawmakers get a chance to see the dams for themselves and talk with the people who manage them directly. Eastern Washington Republican Reps. Dan Newhouse and Cathy McMorris Rodgers will lead members of the House Committee on Natural Resources on a tour of Ice Harbor Dam before the public hearing, which begins at 1 p.m. at Richland High School.” A live stream of the June 26 Congressional Field Hearing will be available here. Removing the Snake River dams would literally require an act of Congress. Such approval is highly unlikely. Instead, a majority of regional congressional officials are correctly working to protect the economic and environmental benefits provided by the Snake River dams.

The Governors of Utah and Colorado are very different. One is a Republican and member of the LDS Church, the other is a Jewish Democrat who became the first U.S. Governor in a same sex marriage. But Spencer Cox and Jared Polis do have one thing in common - they believe we all need to learn how to disagree better. And they are right. This year, Cox and Polis serve as the chair and vice chair of the National Governors Association. Together, they launched this recent advertisement and campaign calling on Americans to disagree passionately without destroying each other. Governors Polis and Cox have hit on something we believe in strongly at Mountain States Policy Center - that is politics doesn't have to be personal. Have you ever been convinced by someone calling you a name? We haven't either. The Governors say we don't necessarily have to be nicer to each other, we just need to learn to disagree in a way that allows us to find solutions. You can read more about the Disagree Better campaign here. And while, from a free market perspective, we might disagree with the policy ideas of both Governors Cox and Polis, we applaud their effort to bring a sense of civility back to the debate.

Depending on the spending decisions of Idaho’s local governments, property tax relief could be even higher this year as a result of a $99 million dollar positive state budget balance as Idaho closed the 2023 Fiscal Year. Tax legislation adopted this year by the legislature directs these savings to be earmarked for property tax relief. Although Idaho does not have nor spend property taxes at the state level, enacted HB 292 directs local property tax relief in the following ways: “This legislation provides immediate and long term property tax relief to all property tax payers in Idaho. The first year of the bill will provide up to $355 million dollars in property tax relief. The second and third year, approximately $110 million be used to reduce property taxes for owner occupied tax payers; approximately $100 million will be used to reduce property taxes for all property tax payers; and another approximate $100 million will be distributed to school districts on an average daily attendance basis. School districts are required to use funds in the order of priority as follows: (1) payment of school bonds (2) payment of school levies (3) saved for future school facility construction needs (4) used for new bonds. This legislation also eliminates the March date that school districts can use for elections. Circuit breaker criteria are also relaxed to allow more people to qualify.” As reported by the Idaho Capital Sun: “The $99.1 million surplus will be combined with $205 million in funding already earmarked for property tax reductions through House Bill 292 to total about $300 million in property tax reductions, Little said. Idaho homeowners will see their property tax credit when they receive their property tax bill this November, Little said. The amount of property tax reductions Idahoans will receive will vary based on the county and taxing districts their home is located in and the home’s assessed valuation . . . The new $99.1 million surplus will be broken down in three ways, Adams said. $50 million will go directly to the homeowner’s property tax relief fund. $24.5 million will go to school districts facilities, which are paid for with property tax dollars. $24.5 million will be distributed to counties based on the proportion of property tax each county levies to offset property taxes.” Idaho House Speaker Mike Moyle explained in the Statesman that the actual level of property tax relief received will depend on the fiscal discipline of local governments: “Moyle noted that local governments, not the state, collect property taxes. He encouraged property owners to attend budget-setting hearings with local government leaders in the coming weeks. City and county leaders are preparing budgets before the start of their fiscal year on Oct. 1. ‘If they raise those budgets, some of your relief will go away,’ Moyle said.” The ongoing tax relief in Idaho has been possible due to a combination of the state’s strong fiscal framework and prioritizing the needs of taxpayers. Governor Little’s press release noted: “Idaho leads the nation in delivering historic tax relief for our people. In addition to the property tax relief announced today, the State of Idaho has turned back $2.7 billion in tax cuts to the people of Idaho since Governor Little took office in 2019 – more than any other state per capita. The tax cuts included a new, lower flat income tax, lower payroll taxes for Idaho businesses, and an enhanced grocery tax credit.” Now the focus will shift to local governments and if they allow taxpayers to receive the full amount of property tax relief or instead will eat into it with increased spending. Additional Information Idaho property tax relief going forward after all Idaho’s fiscal process – An interview with the Division of Financial Management

Readers of Mountain States Policy Center’s work will see certain economic and governance terms used frequently. To help provide context for our recommendations and analysis, here is a description of what these terms mean. Capitalism – An economic system driven by individual actors using market factors (supply and demand) to determine the free exchange of goods and services, rather than economic activity dictated by central government control and intervention. A hallmark of capitalism is private ownership of both property and the means of production. Communism – An economic system developed by Karl Marx that focuses on class warfare with the goal of government ownership of all property and centralized planning of economic activity. The theory of communism is that each person will work and be paid based on their abilities and needs instead of the economic value of their actual production. Core functions of government – The core functions of government are those activities not easily replicated in the private sector such as public safety, coordinated infrastructure, general order, and the protection of private property and individual rights. Education choice – Education choice is the principle that parents, no matter their economic status, should have the ability to choose how best to educate their children. Education choice options include the freedom to attend any public school (not be limited by zip code), public charter schools, private schools, homeschooling, Education Savings Accounts, and other tools that empower parents to meet the individual educational needs of their child. Education choice recognizes that families and parents are in the best position to determine the individual educational needs for their child’s success. Federalism – Federalism is the governing process that defines specific limited powers for the federal government with the remaining governing authority reserved for state governments. The U.S. Constitution embraces a balance of power shared by the national and state governments. The strong role provided for local governance is protected by the 10th Amendment. Free market/enterprise – The free market/enterprise is best understood as an economic system that allows individual actors to voluntarily engage in the exchange of goods and services with prices determined by supply and demand instead of government restrictions. A key component of a free market is voluntary economic activity instead of government coercion on the exchange of goods or services. Individual liberty – The concept of individual liberty is the freedom to make decisions for oneself and exercise control over daily activities free from undue government control or manipulation. The role of the government in a system that respects individual liberty is to limit any intrusions only to those activities that protect individuals from the encroachment of actions from others. Limited government – Under a system of limited government, legal restrictions are placed on government bodies and officials to avoid abuses of power and consolidation of influence. Open government – The foundations for an accountable government can be found in strong citizen oversight, and one of the most critical tools for this goal is open government laws. Requirements for access to public records, open meetings, public comment periods, and legislative transparency are critical tools necessary for citizens to maintain control over the government they have created. Republican form of government – Power held by the people and not a select few is the underpinning of a republican form of government. Citizens elect representatives to serve the public interest and the government remains responsive to the people via regular elections to reflect the will of the electorate. Separation of powers – A critical protection to avoid government abuse is the separation of powers. This is commonly referred to as checks and balances and is a division of government power and responsibility between distinct branches of government to prevent the concentration of power in the hands of a few. Socialism – Socialism is a political and economic system that provides the government with the authority to make all economic decisions about the production and distribution of goods and services. Under socialism, some private control and ownership of resources are allowed, whereas under communism everything is owned by the government.

There’s a reason it comes first. Article One, Section One of the U.S. Constitution says, “all legislative powers shall be vested in a Congress of the United States.” State Constitutions follow a similar path, vesting first powers in the people via their elected representatives – before anything or anyone else. Policymaking is the exclusive prerogative of the legislative branch of our government. But over the past few decades, a virus of executive overreach and lawmaking from the bench seems to have sullied the notion of separation of powers. The consistent and appropriate theme from recent U.S. Supreme Court decisions has been a return to a constitutional framework for making laws. The recent court ruling on the Biden Administration’s attempt to forgive $430 billion in student loans serves as an example. Congress never approved such a policy. In fact, former Speaker of the House Nancy Pelosi said, “People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.” Initially, even President Biden acknowledged this fact when he said in a February 2021 town hall when asked if he can cancel student debt, “Because I don’t think I have the authority to do it by signing the pen.” Despite this, the President moved forward unilaterally with the policy. The White House was using an interpretation of a 2003 law to justify the debt forgiveness. Much to the dismay of activists and some politicians, the Supreme Court said the Administration didn’t have authority to do that. Specifically, justices have been relying on something called the “major questions doctrine.” Put simply, it asks whether Congress has clearly delegated authority to resolve major policy questions. If it hasn’t, then Congress must decide the issue. Immediately after the student loan forgiveness case was announced, the President tweeted “student loan relief is good for working and middle-class Americans. It’s good for our economy. It’s good for our country.” That may or may not be true, but the constitutional way to pass such a policy is via the people’s elected representatives. The same can be said for other recent controversial cases. If you want affirmative action, pass a constitutional amendment. If you believe in capping greenhouse gases, convince enough of your fellow citizens and lawmakers to pass a law, and get the president to sign it. If you can’t convince your fellow lawmakers, you have the authority to vote those lawmakers out of office. Throughout the COVID pandemic and even since, state governors have sought to use more executive power. In Washington state, Governor Jay Inslee held on to emergency powers for nearly 1,000 days. Many other states moved to rein in their executives with new laws that required emergency orders over to receive legislative approval after a certain period of time. When Donald Trump ran for president in 2016, he was rightly criticized for proclaiming about the nation’s problems that, “I alone can fix it.” Our constitution does not give any one person the authority to fix anything. The judicial and executive branches are not responsible for implementing a preferred policy simply because going through the normal constitutional process is too cumbersome. Let’s remember there’s a reason the people, via the legislative branch, comes first in our founding documents.

With property tax assessments increasing rapidly in Wyoming, some have begun to discuss whether there should be changes to the Cowboy State’s tax structure. It is important to first remember that assessed property values do not necessarily drive the actual property tax bill. Instead, that tax obligation is primarily set through the budget process by the amount to be spent (whether approved by government officials or voters through levies). Concerning Wyoming’s current tax structure, as one of just a handful of states without a personal income tax, extreme caution should be taken to avoid losing this economic competitive advantage. This is especially true with any discussion of imposing a highly volatile and unpredictable income tax on capital gains. Taking effect for the first time this year, Washington is now the only state in the country to impose a standalone income tax on capital gains (other income tax states tax it as ordinary income as part of their income tax codes). The policy choice has resulted in national tax rankings removing Washington’s prior standing of not having a personal income tax. The federal Internal Revenue Service (IRS) has made it very clear that a capital gains tax is an income tax. Our friends at the Washington Policy Center posted this letter from the IRS clearly explaining this fact. IRS: “This is in response to your inquiry regarding the tax treatment of capital gains. You ask whether tax on capital gains is considered an excise tax or an income tax? It is an income tax. More specifically, capital gains are treated as income under the tax code and taxed as such." Imposing taxes on capital gains income is not a recipe for predictable state revenue. As explained by the California Legislative Analyst’s Office (LAO): "California's tax revenues have numerous volatile elements, but among the more significant sources of revenue volatility are the state's tax levies on net capital gains through the personal income tax." The CA LAO further cautions: “Capital gains depend heavily on movements in financial markets. As such, capital gains revenue is extremely volatile and difficult to predict. In any given year, there is significant risk that capital gains revenue could fall below budgetary expectations.” If the goal of structural state tax reform is to improve budget stability and avoid boom-and-bust tax collections, an income tax on capital gains is the worst possible choice Wyoming policymakers can make.

A standoff in the American west is occurring between two iconic symbols - ranchers and the Greater sage grouse. The sage grouse is a threatened species and ranchers and other resource users are struggling to balance changing conservation science with economic feasibility. This stand-off is repeated history, as states made great strides to protect the bird without federal oversight in 2015. Now once again, some states are restricting private property rights to discourage federal overreach. The sage grouse is the largest grouse in North America, a chicken-like bird. The remarkable mating ritual is its most known characteristic, but with low intelligence and survival traits the bird struggles to adapt to changing climates. The unique bird finds its protection and food sources in the sage brush habitat, spread across public and private lands in 11 western states and 2 Canadian provinces. The bird’s extreme dislike for habitat disruption is costly. Private landowners, resource developers, and taxpayers designate millions of dollars annually to improve conditions for the sage grouse, but with only marginal success. Eight years ago, Wyoming led out on sage grouse conservation but those previous efforts seem to have generated little goodwill. In 2015, Wyoming’s state mandated sage grouse Intervention Team designated core habitat across public and private lands. Many ranchers and other resource holders awoke to find that their lands were core habitat and certain future uses were no longer possibilities or were surrounded with excessive red tape. Despite stepping on many private landowners rights, the sage grouse population has continued to decline. In 2020, Wyoming created mitigation credits for sage grouse conservation, hoping to offset the challenges for landowners. This year, the federal government has once again proposed increasing oversight and conservation efforts for the Greater sage grouse. Increased federal oversight through agency management and/or listing as an Endangered Species are both unfavored options. States argue that localized management is more successful for population growth and balancing local priorities, versus generic federal control. To hopefully prevent federal oversight of the Greater sage grouse, Wyoming is currently designating more core areas and restricting more private property rights to prevent onerous federal oversight. Ranchers and other resource users are discouraged and frustrated, as their previous efforts and sacrifices go unappreciated, and they are still blamed for the bird’s continued decreasing population. The state has listened to the frustrations, and recently extended the comment period on the current proposal for core habitat. The comment period on the proposed core area map is extended to July 28th. Governor Mark Gordon said, “While I understand their agency's desire to move forward efficiently, folks affected by the potential addition of sage-grouse core areas need additional time and the opportunity to discuss the state's process. These are not insignificant matters. I know – I ranch in a sage-grouse core area." But Wyoming’s method of widespread designations of Core Areas across public and private lands is not the only path. Other states, like Idaho, work collaboratively with landowners, encouraging voluntary projects to promote habitat, while carefully applying a tiered designation approach. Idaho weighs critical habitat against the results to grouse populations and the cost to livelihoods. Both plans were approved, so maybe Wyoming might want to take a more particular stance, and carefully designate habitat while still respecting property rights. Or look at Washington’s Voluntary Stewardship Program that is gaining momentum as landowners and counties work with state agencies to foster good conservation practices, without onerous regulations that cause animosity and are difficult to implement. The concern of increased federal oversight is valid, but unduly restricting private property rights is self-sabotage. Wyoming needs to collaborate with landowners, beyond their compensatory attempt through mitigation credits, and selectively designate land, leaving plenty of room for a successful and voluntary partnership between landowners and conservation efforts. Actions like this will end the stand-off between sage grouse and ranchers, as both sides are able to appreciate the efforts being taken on their behalf. Picture Source: https://www.blm.gov/programs/fish-and-wildlife/sagegrouse/blm-sagegrouse-plans