Archive for September, 2009

The Caesar Rodney Institute announces the release of its investigation into the Sept. 15 death of Daniel R. Kern, an inmate who was being held at the Plummer Community Correction Center in Wilmington.

The special report about Kern’s death, titled “Always and forever your son, Daniel,” reveals how the 41-year-old inmate died from an illness that should have been easy to diagnose and treat.

The Delaware Department of Correction and its medical vendor Correctional Medical Services, however, ignored Kern’s frequent complaints of severe abdominal pain and other symptoms, and denied care.

Kern’s family says he was allowed to die because he was gay. They are calling on lawmakers to act before more inmates die needlessly from preventable and treatable illnesses.

CRI investigative reporter Lee Williams wrote the special report about Kern’s death.

It follows the release of “Rogue Force,” a special report that reveals how guards at the Sussex Correctional Institution are physically abusing inmates in their care.

The 10 stories in “Rogue Force” show how Delaware is breaking an agreement with the U.S. Justice Department, in which the Department of Correction promised to improve its shoddy medical care, which federal investigators determined was violating the civil rights of the 6,900 inmates in state custody.

It also uncovers physical abuse by guards at SCI and its consequences.

The series proposes solutions to the problems within the DOC and includes more than 30 questions that Correction Commissioner Carl Danberg refused to answer.

The Caesar Rodney Institute will continue to publish follow-up stories on the Institute’s Web site. CRI is committed to reporting the problems revealed in “Rogue Force” until the state makes substantive changes to its prison system.

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The U.S. Department of Justice released a report last week detailing their efforts to prevent sexual abuse of inmates in federal prisons by prison staff. Any sexual contact or behavior between prison inmates and prison staff is illegal. The report defines sexual abuse as “a range of behaviors that include inappropriate touching, obtaining sexual relations through intimidation, and sexual assault by coercion, threats, or force.” When dealing with the issue of consent the report likened “consensual” sexual relationships between prison staff and wards to statutory rape because of the unequal positions of staff and inmates in the prison hierarchy. There were allegations of abuse against every position in the prison system except for people working in human resources.

Female guards were reported for sexual abuse at a disproportionately higher rate than their male counterparts. The federal report also showed that female guards are more likely to abuse male inmates than female inmates. This disparity indicates more precautions against sexual abuse are needed.

The report investigated complaints of abuse and whether the allegations led to punishment for the accused prison employee for fiscal years 2001 through 2008. During this time period investigations showed that reports of abuse increased after the implementation of laws designed to prevent sexual abuse in prison. The report blamed this increase on recent efforts to make prisoners more comfortable reporting abuse. If this speculation is correct, it would appear that the laws attempting to curtail abuse are having a positive impact.

The series of articles the Caesar Rodney Institute released about the substandard healthcare and abuse in Delaware prisons, Rogue Force, has shown the Delaware prison system is not immune from allegations of abuse. Because of this, it seems prudent for the Delaware Department of Correction to conduct similar research and try to protect its inmates from sexual abuse.

In June, a Delaware DOC employee was charged with raping a 24-year-old female inmate at the women’s work release center. The victim was scheduled to undergo a disciplinary hearing. The guard told her if she did not have sex with him, he would see that she got sent back to the women’s prison.

Department of Correction spokesman John Painter did not immediately return calls seeking comment.

The full report by the U.S. Department of Justice can be found here:


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David H. Daudt died Friday morning in the prison infirmary of the Delaware Correctional Center (DCC) near Smyrna “following an illness,” according to a written statement.

Daudt, 41, was being held on traffic charges: DUI, driving without a valid license and no insurance.

The Department of Correction appears to have known Mr. Daudt was sick, as he was in the infirmary. However, the DOC appears to have gambled he was not sick enough to merit an ambulance ride to a real hospital.

Mr. Daudt lost the bet.

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Should the state, county or municipalities sell ad space on government-owned property?

Last month, the Caesar Rodney Institute put forth the idea as a suggestion for state government to consider in a paper outlining ideas on how to prepare for the 2010 legislative session. I’m glad to see that New Castle County is considering the idea and hope that other government entities consider it as well.

Selling the ad space is a terrific outside-of-the-box way of raising revenues and presents a viable alternative to other revenue generating measures.

Beyond selling ads, government should consider selling naming rights for publicly-owned property. Indeed, there are many instances where states and cities have sold naming rights to buildings, structures and land.

Most notably, government-subsidized sports stadiums have their initial costs offset by corporate sponsorships. Think of Lincoln Financial Field and Citizens Bank Park in Philadelphia or M & T Bank Stadium in Baltimore.

Granted, Delaware doesn’t have a venue that would equate to these heavily frequented venues, however, we do have bridges, highways, parks and other property. And while the potential revenue likely won’t be in the tens of millions, every little bit helps in generating revenue, especially when such practices can replace economically detrimental measures such as tax and fee increases.

During the current recession, the idea of naming rights and selling ad space have become more popular. Recently, New York City’s M.T.A. requested bids for five-year term sponsorships of tunnels, bridges and roadways.

Is selling the naming rights of the Roth Memorial Bridge, the Indian River Bridge, the new rest stop on I-95 or Route 1 a reasonable way to raise funds? Why not? There really isn’t any downside to this as there aren’t negative public outcomes of such a practice.

However, it is recognized that private entities may not want to be a part of a roadway that is often congested or where a traffic accident has occurred, but to what degree…its hard to tell. One can envision the rush hour traffic report stating, “A five mile backup on the WSFS Highway,” or “another accident on the ING Bridge.” Would this be bad advertising and marketing?

Further, would folks buy into calling a landmark such as the Roth Memorial Bridge by a new name?

Again, its hard to say. At the very least selling ads in parks and on other public property is a step in the right direction and may be more palatable to the public.

More evidence on the feasibility of these ideas persist. A recent New York Times article on the renaming of four subway nexuses in Brooklyn includes evidence that advertisers may not get enough bang for their buck, as people need a connection to be effectively advertised to. Allan Adamson of the Landor Advertising firm said, “To be effective, the viewer needs to understand the relevance of the ad, to rename the 59th and Lex stop the McDonald’s stop — it ain’t going to work. I don’t think it will stick.”

This should not discourage any advertisers, though, as advertizing is less than a certain science.

Other precedents include a recent case in Rhode Island where state legislators have proposed the renaming of the Mt. Hope Bridge to stop the re-institution of a heavy toll for bridge use. Rep. Douglas Gablinske of Warren and Bristol counties said, “I don’t care if we call it the Mt. Hope Bridge, the GTech Bridge, the Dunkin’ Donuts Bridge, what’s important is that tolls not be re-instituted. I think that we could raise significant money by naming the bridge after corporate sponsors.”

The city of Wheeling, West Virginia sold the naming rights for its Wheeling Civic Center to Wesbanco, Inc. for $2.3 million for 10 years.

The Norfolk rail system planned to raise up to $29 million dollars to help with operational costs by selling naming rights to stations and rail lines.

San Francisco has talked about selling the naming rights for the famous rail cars. This coming after a nearly $140 million deficit from state and city authorities.

And, the previously mentioned New York City M.T.A. example where Barclays Bank purchased naming rights to subway stations in Brooklyn for $4 million August, 2009.

New Castle County is considering a wonderful idea. While the concept is not going to solve the problems we are currently in, it can be part of a solution for passing budgets and reforming government. It’ll be interesting to see the public’s reaction to the proposal and to see if this practice takes off in Delaware.

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The New York Times reports that the most recent health insurance reform proposal will lead to a tax on average taxpayers as well, not just those with “cadillac” plans.

The article, viewable here, explains when and why middle class Americans will also see a tax increase as a result of the proposal. Under the most recent “compromise” legislation, a tax will be levied on so called “cadillac” plans that top $21,000 for a family. As the article highlights, this cost will soon be exceeded and the tax will therefore impact Americans ranging from firefighters to coal miners and those in between – regardless if the covered are union employees are small business employees.

Anyone exceeding the threshold of $21,000 for a family or $8,000 for an individual would face a 35% tax. According to the Kaiser Family Foundation, the Average Family Premium per Enrolled Employee For Employer-Based Health Insurance in 2008 in Delaware was $13,386. The national average is $13,375.  Following the trends in the graph below from the Times, it is clear that many regular families will be hit with this tax in short order.


And we know that small businesses, those who don’t aren’t able to pool insurance at the same levels to achieve the rates of larger companies and therefore are not able to get as low of costs will face higher premiums – which directly impact even more workers.

Looking further at the small business piece of the puzzle, we can reasonably estimate that with the 8% tax on employers who do not offer health insurance, some, if not many, small businesses will drop coverage altogether because the cost of not providing coverage will be less than providing coverage. One study by Scott Shane, available here, says that such a decrease in employer provided insurance is exactly what will happen.

Shane states,

Here’s what I came up with: In 2006, for businesses with between 15 and 499 employees the cost of healthcare would have averaged 14 percent of payroll if employers paid 70 percent of each employee’s health insurance premium. Of course, employee health insurance is tax deductible, so the effective cost of providing insurance would have been less. Assuming a marginal tax rate of 35 percent, I figure the effective cost of providing employee health insurance would have been 9.1 percent of payrolls. Thus, my first estimate indicates that a typical company would have the choice of paying 9.1 percent of its payroll for healthcare coverage or 8 percent in a penalty.

But that’s based on pre-reform numbers. It’s possible that the cost of providing the full coverage required by the House plan will be even higher. The Lewin Group, a policy research and consulting firm focused on healthcare, conducted an analysis that estimated the employer share of premiums for an acceptable insurance option for an individual under the proposed law. Adjusting that estimate by the Department of Health and Human Services Survey’s data, I estimate that, under the proposed House plan, to avoid the tax penalty, the average company with between 15 and 499 employees would need to spend 17.5 percent of its payroll on health insurance premiums. Factoring in a 35 percent marginal tax rate and the proposed tax credits for smaller businesses to purchase insurance, the effective cost to employers would be 11.3 percent of payroll—a significant leap above the 8 percent penalty.

We are seeing the unintended consequences of the proposals garnering the most attention in Washington. First, the proposals do not address costs. Indeed, they will actually increase the costs on many Americans through various taxes and reduced competition. Second, the proposals could very well decrease the opportunity for many to buy insurance through their employers and send even more people to the government exchange option.

Granted, moving from a system of employer-sponsored insurance should be a goal of health insurance reform, though it should occur by applying the tax break offered for purchasing insurance through employers to individuals and leveling the playing field in this regard.

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Daniel R. Kern died Tuesday at the Plummer Community Corrections Center in Wilmington.

Plummer, 41, was serving a one-year sentence for DUI, fourth offense.

In what has become the state’s usual practice, no cause of death information was provided.

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John Steele Gordon has a very thorough commentary on the nation’s national debt at the American.com.

The question he asks and answers is:

How did the richest country in the history of the world—and one with great international financial responsibilities—get into a position where its debt might easily spiral out of control? A little history explains a lot.

Gordon comes to this question after a brief foray into how our debt as a percent of GDP currently stacks up against other economies. Our debt is similar to that of France and Canada, less than that of Japan and not surprisingly well above the debt as a percent of GDP for both China and India.

The entire piece is worth reading though there are a couple of excerpts that help explain how we arrived at our current predicament.

When Franklin Roosevelt first ran for president he still echoed Smith. “Let us have the courage to stop borrowing to meet continuing deficits,” he said in a radio address in July 1932. “Revenues must cover expenditures by one means or another. Any government, like any family, can, for a year, spend a little more than it earns. But you know and I know that a continuation of that habit means the poorhouse.”

Roosevelt, in office, quickly accepted the need for “passive deficits,” those resulting from the poor economy. Then in 1936 John Maynard Keynes published The General Theory of Employment, Interest, and Money. Keynes argued that while supply and demand must balance in the long run, in the long run, as he famously quipped, “we are all dead.” In the short run, Keynes thought aggregate supply can outstrip demand (producing depression) or vice versa (producing inflation).

Keynes argued for “active deficits”—deliberate spending in deficit to increase demand and bring the economy into balance in times of depression. Keynes also argued, of course, that when the economy overheated, the government should be in surplus to soak up excess demand.

Economists took to Keynesianism immediately. It is not hard to see why. First, it gave economists a powerful new analytical tool. Second, it greatly increased the power and influence of economists. Before Keynes, presidents had not needed economists any more than they had needed astronomers. But if government was now to be the engineer of the national economic locomotive, revving and braking through Keynesian means as needed, then government needed experts to guide it.

Gordon proceeds to mention the practice of impoundment – something I was not aware of. Noting that the President doesn’t have the line item veto power that many governors have, impoundment became the method by which the President could withhold funding for projects.

Instead, presidents from Thomas Jefferson forward have used “impoundment,” simply refusing to spend moneys the Congress appropriated. In 1966, Lyndon Johnson impounded no less than $5.3 billion out of a total budget of $134 billion, including such politically popular items as highway funds, agriculture, housing, and education. As a Democratic president with a Democratic Congress, he was able to get away with it.

But when Richard Nixon vetoed a $6 billion water pollution bill and impounded the money after Congress overrode his veto, Congress reacted angrily. As Nixon’s power slipped away in the Watergate scandal, Congress passed the Budget Control Act of 1974, which outlawed impoundment and created the Congressional Budget Office.

In addition to reinstating the ability to “impound” funds, Gordon nails it when stating what reform must be undertaken.

As he states, “Taking away the power of Congress and the president to decide how to keep the government’s books would also be a big step in the right direction and require only congressional action. Wall Street recognized more than 100 years ago that corporate managements could not be trusted to keep honest and transparent books and neither can the managers of governments because, like corporate managers, they are human and therefore self-interested.”

What does Gordon call for?

An independent accounting board, modeled on the Federal Reserve (which keeps the power to print money out of the hands of Congress) would accomplish that. It should have the power to set the rules of accounting for the federal government, “score” the costs of new programs (which the Congressional Budget Office does now), and monitor all federal programs for cost-effectiveness (something Congress often forbids government agencies to do, obviously fearing what it might learn).

Finally, the adoption by Congress of a limit on total spending, so that it could only increase to reflect population growth and inflation, unless a two-thirds majority agreed to suspend the limit, would force Congress to make the hard choices it now works so hard to avoid. Several states have similar provisions in place, and these are the states suffering the least from the downturn in revenues due to the current recession. California’s budget began to go out of control in the early 1990s precisely because it effectively repealed such a law.

Gordon isn’t foolish. He realizes that Congress’ job is to send money back to members’ home distritcs. Rightly or wrongly, this is the case in America. And, they aren’t about to change that which helps them continue political careers.

Sadly, even with the increased attention paid to the spending problem in this country and the states, I’m not sure such reforms are possible; the political pressure simply isn’t there.

Hopefully folks will increase their awareness of the problem and others will keep beating the drum explaining this critical issue in an understandable way.

A great start is watching I.O.U.S.A. which can be seen at the link below.


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A quick time out from policy for a moment…

The Caesar Rodney Institute has submitted numerous freedom of information act requests to the state and the Markell administration. They have provided the information in a very timely fashion and responded with comprehensive documents per the various requests. The administration is living up to its promises of transparency…and for that the Governor and his administration should be commended.

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Race to the Top

Tom Donohue, President and CEO of  U.S. Chamber of Commerce recently penned an op-ed entitled, States Race to the Top for Education Dollars.

He states,
We’ve all heard the alarming statistics: Nearly a third of all high school students–and half of minority students–do not graduate in four years. Those who do go to college are often in need of remedial courses. American students ranked 22nd out of 26 in math, 19th out of 26 in science, and 15th out of 29 in reading literacy in recent international assessments. This is a prescription for national decline.
However, the administration is applying some tried-and-true business practices and free enterprise principles to education that are so obviously lacking in most of their other proposals. And they are backing it up with some real money from the stimulus bill.
Specifically, Education Secretary Arne Duncan is using a $4.35 billion Race to the Top (RTTT) fund to bring greater accountability, higher standards, and innovation to American schools. RTTT grants will be awarded competitively to states based on progress in four areas: (1) adopting internationally recognized K–12 standards that will prepare students for higher education or the workforce, (2) measuring student achievement through better data collection, (3) developing and retaining first-class teachers and principals, and (4) enacting sweeping reforms in our lowest-performing schools.

Everything I’ve heard about Delaware’s efforts to obtain some of the RTTT funding is positive. Secretary of Education Lillian Lowery are optimistic about the state’s odds of taking part in this program. We’ve scrapped the DSTP, passed HB 119 which accomplishes some of the other requirements and have an administrations in Dover that appear to be on the right track with this program. I hope Secretary Lowery is successful in her efforts.

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Let’s forget Washington, DC for a moment. As far as the health insurance reform goes, there is plenty that policymakers in Delaware can do to improve the system. While much of the substantive reform requires changes at the federal level, there are certain changes that occur at the state level.

Our legislature should allow insurers to offer mandate free health insurance plans. Delaware currently has 28 mandates. Allowing individuals who don’t want and/or don’t need various mandates to purchase such “skinny” plans will lower costs and increase the number of individuals who are young and normally not too concerned with obtaining coverage to obtain care. If the goal of reform is to lower the number of insured, then this would be a step in the right direction. A recent study found that each mandate increases the number of uninsured by 0.25%.

Another step that can be taken is to allow individuals to purchase insurance plans approved in any state. A study by at the University of Minnesota finds that opening insurance competition beyond state lines would reduce the number of uninsured by at least 25%. The study notes that with just one state doing this, the effect will be minimal. However, regional and national competition will enable more folks to obtain insurance while also lowering costs. Critics of this type of reform like to point out that this reform would be ineffective because doctors in one state (such as Delaware) would not be in the network of an insurer in another state (whether it be Pennsylvania, right next door; or Washington, on the other side of the country). This rebuttal is false. Once the market is expanded, the networks will grow to include coverage in the states that allow for such competition. It is a no-brainer that as long as laws do not allow purchasing insurance over state lines, the market won’t exist. The laws need to be changed first.

One of the most important changes that can be made is to overhaul Delaware’s Medicaid system. Florida has initiated Medicaid reform and Louisiana is in the early stages of its own reform. Many of the ideas in the reforms from these states could occur in Delaware. And, we can learn from the mistakes of reform in these states. One idea is to convert Medicaid into a voucher system for low-income individuals. Removing the middle man reduces cost shifting and allows Medicaid beneficaries to have more skin in the game, thus reducing abuse of the system.

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