This was originally posted on Live Oaks on August 7, 2009. Comments have not been migrated.
Barack Obama has repeatedly told us that we are our brother’s keeper. Now the state of Texas is telling us that we are also our brother’s children’s keeper. According to the Chronicle, Texas taxpayers will soon be on the hook for $2.1 billion to pay for the college education of Texas children:
This is not a free education for them. Their parents and grandparents bought state-guaranteed prepaid college education plans between 1996 and 2003 known as the Texas Tomorrow Fund, later renamed the Texas Guaranteed Tuition Plan.
Now the fund is nearly broke, a victim of tuition deregulation at state universities and busts in the financial markets that were supposed to provide the investment returns to keep the fund solvent.
Comptroller Susan Combs, whose office administers the fund, said the plans are guaranteed by the full faith and credit of the state. So, no parent whose child has a college plan has to worry about it being honored.
This means that taxpayers will be asked forced to make up the difference. The fund was created in 1995 at the urging of then-Comptroller John Sharp, who is now a Democratic candidate for the U.S. Senate. While some lawmakers warned that the plan was a train wreck waiting to happen in 1995, Sharp blames Combs for the shortfall, even though her predecessor had cut off new enrollment in the plan in 2003. Combs formally closed the program when she took office in 2007.
Sharp said the original prepaid tuition program has financial problems because Combs closed it to new enrollment. Sharp said pensions and Social Security need new members to remain solvent over long periods.
Combs has correctly responded that this is nothing more than a Ponzi scheme. And as is generally the case in government sponsored Ponzi schemes, the masterminds are off to bigger and better things by the time the scheme falls apart. Putting Texas taxpayers on the hook for billions apparently isn’t enough for Sharp, who is now seeking the power to do the same to taxpayers across the country.
But just to demonstrate that Washington doesn’t hold a monopoly on repeating its mistakes, lawmakers started a new plan–the Texas Tuition Promise Fund–in 2007. Of course, when that plan goes belly up, and it will, its advocates will also point the finger at someone else. Lawmakers love to throw crumbs to voters in exchange for votes, and both ignore the fact that those crumbs will ultimately be supplied by taking a loaf of bread from taxpayers. To the credit of lawmakers the Texas Tuition Promise Fund is not backed by the state’s credit–for now. But what will happen when this boondoggle goes broke?
The entire idea that we are our brother’s keeper is founded on the idea that need supersedes rights, that the need of one person is a claim on the property and life of others. So when the Texas Tuition Promise Fund goes broke, the need of the subscribers will be the prevailing concern. And taxpayers will again be asked forced to make up the difference.
Lawmakers continue to make the same foolish mistakes because they believe that the failures result from poor implementation. They didn’t charge enough, or the money was invested poorly, or some other nonsense is always offered as an excuse for failure. They never stop to consider whether their proposals are wrong in principle. And the Texas Tuition Promise Fund is wrong in principle.
The proper purpose of government is to protect our rights, not create investment programs for parents. Anyone who wants a “tuition promise fund” can set one up without the state being involved. It’s called a savings account, and as far as I know every damn bank in Texas offers them. And if that isn’t good enough there are other investment vehicles, such as mutual funds.
Someday we might have lawmakers who don’t kiss the butt of every voter they can simply to get elected. But until that occurs, we will continue to witness that gross spectacle. And taxpayers will continue to be subjected to a different kind of probing in the same area of the body.