You Get What You Pay For In NGA

Last year, Governor Paul LePage pulled out of the NGA... or so he thought. The Bangor Daily News reported that LePage pulled the state's membership in the National Governor's Association because they weren't receiving enough benefits for their membership dues to warrant remaining in the association. At the time Maine was paying $60k to belong. One would think that a prestigious group like NGA would not like losing members and would do something to convince Maine to stay in. So what did NGA do to try to retain this member? The answer is nothing.

Jodi Omear, director of communications for the NGA, explained that merely being elected governor of a state is all it takes to be a member. She is quoted by BDN from an email stating that " LePage is still considered a member of the organization even if the state has stopped paying dues. All the governors of the 50 states and five territories are members, even if they do not pay dues."

Quite an organizational structure. You get the full credibility of claiming 100% participation by all 50 states which implies that they are all behind your policies and programs, without having to actually get their permission (or money) to belong. Sure does come in handy when you're saying things like, all the governors are behind common core standards.

Why did LePage leave? “I get no value out of those meetings,” he said. “They are too politically correct and everybody is lovey-dovey and no decisions are ever made." Perhaps the meetings are not the point of membership Governor LePage.

Omear said that, "Almost all states pay the full amount of dues every year, and those that do receive additional services, such as technical assistance from NGA staff, grants from the federal government and foundations that are managed by NGA and policy academies that share best practices among states where travel and attendance of state employees are funded by NGA." 

If you pay money to NGA you get federal government grants. Kind of sounds like a pay to play deal. First line of a federal grant application "Does your state pay dues to the NGA?" Check. Then you are eligible to receive money.  

Dane Linn of the Business Roundtable and former  Director of the NGA Education Division seemed to indicate in his report for the American Enterprise institute that the development of Common Core Standards was a way to keep federal intrusion into education at bay. However, if you are paying money into NGA to be eligible for federal dollars, then how exactly are you keeping federal intrusion at bay?

The "you scratch my back, I'll scratch yours" phonmenon becomes even more obvious when you look at the Federal Race To The Top grant applications which required states to adopt a set of common national standards to even be considered for a grant award and the only ones that existed were those developed by NGA (and CCSSO).  Still trying to figure out how common core kept the federal government at bay Mr. Linn.

Omear explained that all states pay different dues ranging from a low of approximately $22,000 to a high of about $176,000 a year.  She would not reveal which states are currently paying, so we decided to do a little digging on Missouri's dues. 

Dues are listed in the Missouri Accountablity Portal. Here is what we have paid for Governor Nixon to belong.

How does that compare to his predecessors? Using the same sources, we find no NGA membership dues paid by Governor Holden in 2001-2004 and none paid by Governor Blunt 2005-2008. 

Are we getting the best bang for our buck? Missouri appears to be in the top pay to play category. We should see a lot of grant money rolling into our state.  Maybe this explains why Commissioner Nicastro told legislators that they expect to get more funding to implement common core.

The State University System Might Become The State's Bank

There's no doubt the Missouri Legislature faces a tough challenge when they come back in session in a couple weeks; a $750 million  budget deficit that must be closed. This is a time for innovative thinking, but also a time for facing reality.

The Post Dispatch reported on an idea floated by Governor Nixon's office to have Missouri universities float interest free loans to the state.  According to the article the largest contributor would be University of Missouri who would kick in $63 million. Missouri State would add another $13 million and an additional $10 million would be shared by three more state schools.  The proposal is reported to be something Nixon is just kicking around.  It is also not the first time the governor has tried to make a deal with higher education. In each year since he took office in 2009, Nixon has attempted to cut a deal with colleges and universities before presenting a budget. In the first year, it was stable funding in exchange for no tuition increases. For the 2011 budget year, the deal was no tuition hikes if budget cuts were limited to 5 percent. (source: Colubmbia Tribune)

Senate Appropriations Committee Chairman Kurt Schaefer (R- Columbia) said such a proposal has many flaws even on its surface. For one, it basically asks MU to subsidize other institutions who have not "taken any steps towards efficiencies" like MU has. This is a typical progressive concept; take money from the responsible and proactive and give it to those who are neither.

The proposal is promoted as a good alternative for the universities because it would provide them a return of this money in seven years, whereas making the cuts necessary (estimated to be 50% of state scholarship funding) would cut into the institution's reserves. But this justification itself demonstrates why this proposal is unrealistic.

The major reasons the state has such a large deficit is because it is losing federal stimulus money and federal Medicaid funds. Does anyone realistically see either of those sources of revenue returning any time soon?  Should a state budget be developed assuming the availability of emergency revenues like stimulus funds?  With the roll out of Obamacare, is Medicaid funding likely to increase? Asking for a large loan to cover the deficit assumes that such shortfalls are temporary and can be overcome by economic gains or the magic appearance of outside revenue, neither of which is a realistic assumption.

The state will spend seven years trying to pay back the universities who will have to find other sources of revenue in the interim or cut back on their own budgets. Realistically, both of these things will have to be done regardless. Between the permanently stalled economy and the growing public resistance to the high cost of higher education (and subsequent debt), colleges and universities can count on dropping student enrollment. This loan process will simply slow the drain of funds. In the mean time, it will push more students towards the Dept of Ed's Federal Direct Loan Program.

The bigger question that should be asked is, "Should our institutions of higher learning be in the business of providing bail out loans to a fiscally unbalanced state?"  When your alma mater called you for a donation, did you think you would be funding the state, or did you assume that your money would actually go towards helping someone else get an education? Are all state reserves fair game when trying to balance a budget?  If they are, what impact will that have on state institutions retaining any reserves in the future? If you knew someone else could raid your savings account any time they wanted to, with no return on their borrowing, would you keep a lot of money in savings?


We will be watching the governor's budget proposal closely when it comes out next month.  Like a credit card junkie who thinks paying down their balance is just something you do for a short period of time before you can resume your previous spending, the state is in need of spending rehab. It must face the reality of what its income limits are and learn to live within them.