“A Fair and Thorough Evaluation”

We have now reached the bottom of the barrel from the point of view of equity and eligibility – public services and benefits that are rationed, and have eligibility restricted, not on the basis of need, or age, or means, or tax liability, or tenure, or queue, but by a “fair and through evaluation” of “merit.” In public applications and eligibility criteria, merit is sometimes determined by quantitative measurement, sometimes by qualitative criteria evaluated by a panel of “experts,” and sometimes by the whims – or political deals – of individual legislators. Deciding someone’s “merit” presents all the same liabilities as deciding their “need,” but with an added objection – in the United States of America, what business does the government have in deciding one’s merit at all?

The public programs with eligibility based on “merit” criteria account for a small share of total public spending, but a large share of political controversy and horse-trading. Take the National Endowment for the Arts. Its total aid expenditures in 1999 were just $85 million, a figure that was less than one third of one percent of approximately $32 billion spent on performing arts that year. It was also less than one half of one thousandth of a percent of the federal budget. The National Science Foundation, similarly, distributed just $3.3 billion. Yet research and arts grants, and criticism of the art the grants pay for, repeatedly appear in the statements, positions, and speeches of elected officials of all ideologies and parties, politically active groups, and advocacy groups. Conflicts over such research grants frequently appear in the news. Meanwhile, the quadrillion dollar dilemma of who will care for the nation’s soaring invalid elderly population, using what financial resources, twenty years from now is seldom mentioned by anyone’s Congressional Representative or State Assemblyman.

Getting a grant means filling out a grant application, in which one attempts to demonstrate the merit of oneself or one’s proposal. If the grant criteria are quantitative, it pays to know what they are and how they are weighted, to tailor one’s own case in the best possible way. If the grant criteria are qualitative, it pays to know the preferences and prejudices of the panel that will be making the decision. An entire field – “grantsmanship” – has arisen to provide this expertise. Indeed, grantsmanship is one of the few marketable skills one can obtain with a graduate degree in public policy, and tens of thousands of would-be bureaucrats earn their living demonstrating the merit of their town, city, county, company, or non-profit organization in order to obtain public funds. There are tens of thousands of other bureaucrats working to evaluate these applications, trying to interpret the often complex and obscure criteria that elected officials have drafted to decide who gets what, hopefully without being caught up in a controversy that costs their job. And there are dozens and dozens of books, websites, and training courses designed to produce more of them. Just search the internet under “grantsmanship” for a sample.

Sometimes, legislators create rules by which bureaucrats are to distribute money based on “objective” criteria. Sometimes they designate a panel of experts to distribute money based on subjective criteria. Sometimes, I can tell you from experience in government, they expect panels to twist and turn and come up with the “right” results. Sometimes, they simply dispense with panels, experts, applications and criteria, and just hand out the money themselves.

That is particularly the case here in New York State. In its Fiscal 2008 budget, the legislators of the State of New York included $170 million in “member items,” funds to be distributed by individual legislators to groups and projects that they consider worthy by whatever criteria they choose. The Empire Center found another $101 million in pork that wasn’t called pork. That isn’t much for a state with total revenues of $227 billion in direct state and local government expenditures; in fact it is less than one tenth of one percent. Most of that $227 billion, however, goes to benefits and services the government is obligated to provide, for which legislators can claim little credit, and is allocated almost entirely in closed door deals made by the State of New York’s infamous “three men in a room,” the Governor, Assembly Speaker, and State Senate Majority Leader. The other 150 members of the Assembly and 60 State Senators are focused almost entirely on their share of the pork, and trade their votes on everything else to get it. In their appearances and mailings, it is all they talk about.

What is the money used for? Here is an example. My father-in-law lives in an upstate rural county, where he got to know the president of a local snowmobile club (now deceased). Its members ride snowmobiles and maintain snowmobile trails. They also hold banquets, trips, and parties. At first, all this was financed by the members themselves, in dues and work contributed. Later, however, the club obtained a “member item” grant from a state legislator, who it then supported. Then it received another grant, and then another, and then another. Eventually, the club had such a large endowment that dues were done away with. The State of New York is now funding trips, parties and banquets in restaurants not for everyone, but just for members of this one group, and others like it. Meanwhile, the combined state and local tax burden as a share of personal income in this upstate county, which is quite poor, is one-third higher than the national average.

The State of New York may be worse than average in this regard, but it is by no means unique. “Pork barrel” grants by members of Congress, similarly, may not amount to very much money, but are embarrassing nonetheless. In its 2007 “Pigbook,” Citizens Against Government Waste identifies pork as spending that meets at least two of seven criteria – it is only requested by one branch of Congress, not specifically authorized, not competitively awarded, not requested by the President, greatly exceeds the spending in the President’s budget, was not the subject of hearings, and benefits only a local or special interest. CAGW identifies $29 billion in pork for fiscal year 2007. That is, once again, a small portion of the federal budget. Those tiny grants, not the critical multi-quadrillion dollar decisions on future of Social Security and Medicare, are the focus of the taxpayer-funded promotional brochure we receive periodically from our Congressman. How many people really benefit from these, and how is that determined? No one knows.

None of this is good, but it wouldn’t be so bad, as long as the amount of money allocated based on “merit” remained small. Let the politicians and ideologues “fire up their base” and raise money by debating the rightness of providing a public grant to a homosexual artist who produces a photograph of a crucifix in a beaker of urine. Let the liberals defend free expression, the conservatives defend public decency, and everyone get their picture in the newspaper. So they hand out a few dollars here and there to those that know how to work the system and show appropriate gratitude. The rest of us, who are busy working and taking care of our families, are free to ignore them. Unfortunately, there are some public services and benefits allocated based on determinations of “merit” that do cost real money, and do have real consequences – higher education and economic development projects.

State universities and colleges provide almost 80 percent of all the higher education in the country, and from the moment states went into the university business they became caught up in difficult process of deciding which students deserve to go to which schools. In some cases the decisions are made in the same messy, inaccurate way as in private colleges. In some cases just about anyone is allowed to go just about everywhere, with the unmerited flunking out in freshman year. Today, however, public university admissions have become politicized, with judgments about whether those whose ancestors suffered discrimination, those who have suffered disadvantages themselves, or those who have the highest test scores have greater “merit.”

Judging the academic ability of a high school student who has taken a standardized test, written an essay, had an interview, and has a record of grades in high school is one thing. Judging the academic potential of a four year old is another. For the past two decades, “gifted” and “magnet” programs have been, in many parts of New York City, the only venues in which an actual public education could be obtained. We observed the process of applying for those programs first hand. The process, recently reformed by Mayor Bloomberg, involves desperate parents, arcane formulae, and various tests administered by various psychologists, all of whom have to be paid. In the end, however, it is unlikely that any such test could succeed in measuring innate abilities, rather than the advantage of being cared for by attentive, educated, native-born parents.

Bureaucrats and politicians judging the merit of art. Bureaucrats and politicians judging the academic potential of four year olds. Politicians handing out grants to who-knows-know after judging who-knows-what.

My final example of “a fair and thorough evaluation” is publicly financed sports stadiums and economic development projects. If Mayors and Governors promoted these based on the idea that they liked sports, other people like sports, so everyone should have to pay to make sports more profitable, then stadium proposals would at least be honest. Mayors and Governors, however, typically claim that public subsidies for sports stadiums are justified based on “merit” – based on the economic activity they create. And that economic activity is measured and evaluated based on extensive criteria, with the jobs and taxes to be gained specified in detail and compared with costs. I’m not going to bother debunking such studies in general. Books such as Field of Schemes; The Stadium Game; Sports, Jobs and Taxes; Major League Losers, and Home Team: Professional Sports and the American Metropolis, all written by experts in the field, have done so already. I can tell you of my experiences at New York City Planning in the Giuliani Administration, when the former Mayor was hell bent on giving the New York Yankees a new stadium.

Faced with such demands, honest bureaucrats tell the truth and nothing but the truth, but not the whole truth. The City’s Department of City Planning, Department of Finance, and Economic Development Corporation collaborated on a “study” that found that if the city up-zoned the far West Side of Manhattan for high density development, extended a subway into the area, and built a stadium for the New York Yankees, it would receive a net fiscal benefit of several hundred million dollars. That is true, and Giuliani Administration trumpeted this result. What the study didn’t say directly is that most of the additional tax revenues would be paid by the commercial development enabled by the up-zoning, not by the stadium or its occupants. And that commercial development would be built – if permitted and if infrastructure was provided – with or without the stadium. Without the stadium, in fact, the city would not only save money by not paying for it, it would also have more jobs and taxes – those from additional buildings on the site where the stadium would otherwise be.

No matter. Politically, the tax revenues and jobs were associated with the stadium. And when it was clear that the Manhattan stadium would not fly, the Giuliani Administration used the same study to justify a claim that having the public pay for a new Yankee Stadium in the Bronx – where Class A office space and luxury housing and hotels are unlikely and the existing stadium has spun off one short row of souvenir shops and bars – would also generate hundreds of millions of dollars in fiscal benefits.

In an era when the majority political party believes that society, through its government, has no obligation to meet people’s needs, what business does it have judging their merit? Doesn’t the free market, with its trillions of daily decisions by hundreds of millions of people making up their own minds, do that? Those on the right who see a class bias in the allocation of, for example, arts funding have a point. America’s public sector has never financed the development of growing, vital art forms such as jazz, rhythm and blues, rock and roll, hip-hop, and comics, particularly when these art forms appeal to the masses. The marketplace has. When public money was finally allocated to build a jazz concert hall at New York’s Lincoln Center, one knew that the decline of jazz was irreversible. Not that Republicans and conservatives are above raiding “merit” based funding themselves – think of stadiums and housing and economic development grants. The latter programs are so prone to abuse that dispirited bureaucrats at the federal Department of Housing and Urban Development have adopted a cynical motto “HUD is for the needy, and the greedy.”

Theoretically questionable, programs, grants and benefits with merit-based eligibility criteria are popular with politicians. They present an opportunity, like the publicly-financed turkeys that ward bosses handed out at Christmas in a past century, to hand out benefits personally, and to be personally associated with them. Programs, grants, and benefits with merit-based criteria, or no criteria, allow politicians to be philanthropists with other people’s money. And they prefer to be generous to the better off rather than the poor: they are more grateful, and have more to offer in return.

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