Dick Armey's Forces Stop Increased State Funding to Unis.

by PETER SCHMIDT
The Chronicle of Higher Education
November 12, 2004, Friday

Richard K. Armey, the former Republican majority leader in the U.S. House of Representatives, has a message for those who wish to raise state taxes to pay for higher education: Not so fast.

Last week, largely at the urging of Mr. Armey and his followers, Washington State voters overwhelmingly rejected a proposal to increase the state sales tax by one cent to pump $1-billion into various education efforts, including new college scholarships and the expansion of the state's public universities.

It was the third time in 14 months that conservative activists led by Mr. Armey had played a key role in blocking such tax increases. In September 2003 they helped defeat an Alabama ballot measure that would have overhauled the state's tax code to raise an additional $1.2-billion, partly for merit-based scholarships. Last February they led a successful effort to persuade Oregon voters to repeal an $800-million tax increase that lawmakers had adopted to offset a recession-related decline in state tax-revenue collections. The increase was meant to keep the budgets of public colleges and other agencies intact.

Mr. Armey helped lead the antitax fights in Alabama and Oregon as co-chairman of Citizens for a Sound Economy, a Washington, D.C.-based advocacy organization with more than 360,000 members and 26 state chapters. Last summer that group merged with Empower America, a think tank headed by Jack Kemp, the former congressman, to form a new organization called FreedomWorks. Mr. Armey, who had been in charge of grass-roots organizing for Citizens for a Sound Economy, now directs such efforts for the newly merged group. The 13,000-member Washington State chapter of FreedomWorks, which began life as a state affiliate of Citizens for a Sound Economy, led the successful campaign against the tax measure there.

"The organization builds every time we have a good fight like this," Mr. Armey said in an interview last month.

A former professor of economics at several Western colleges, including the University of North Texas, Mr. Armey was unapologetic about the financial impact that his antitax crusade is having on public colleges. He said he had "no doubt" that such institutions waste public money, and he argued that they needed to adopt merit-based pay systems and generally become more efficient before they ask for additional tax-dollar support.

"We think that there is a great deal of room to cut overhead in education," said Mr. Armey, who said politicians try to raise taxes to support education because they see doing so "as an easy way to avoid the difficult job of cleaning up their fiscal household."

Natalie D. Reber, a spokeswoman for the political-action committee established to promote the tax measure, argued that Washington State's public colleges were already stretched so thin that some had no choice but to cap enrollments. After the measure's defeat she reiterated that "the problems are not going to go away."

Along with fighting the Washington State tax initiative in last week's elections, FreedomWorks helped gather signatures to get Ralph Nader on several states' presidential ballots. It also campaigned against several Congressional candidates, including some Republicans, that it regarded as too fiscally liberal. Among them was John J.H. (Joe) Schwarz, a Republican candidate for Michigan's 7th District seat in the House of Representatives, who had established himself as champion of public colleges in his several years as chairman of the Michigan Senate's Appropriations Subcommittee on Higher Education. (He survived a primary challenge by the candidate supported by Mr. Armey's group and easily won election last week.)

FreedomWorks also has mounted efforts to get several states, including New Hampshire, Tennessee, and Wisconsin, to adopt "taxpayer bill of rights" amendments limiting state taxes and spending. Although it failed to get any such provisions on last week's state ballots, it is expected to step up its campaigns for such amendments in advance of the 2006 election cycle. Many college officials fear such amendments as a threat to the long-term health of their institutions' budgets.

When such an amendment was debated in Wisconsin last spring, the University of Wisconsin System's Board of Regents adopted a resolution expressing "grave concerns" that the measure would hurt the system and "limit the state's ability to invest in education which is critical to state economic growth." The Wisconsin Technical College System's governing board adopted a similar statement.

Street Fighters

In last week's elections FreedomWorks triumphed in its fight against the Washington State tax measure, Initiative 884, even though the group's political-action committee, the League of Freedom Voters, was expected to spend only about $40,000, a fraction of the more than $2-million spent by the measure's supporters.

Initiative 884 would have raised the state's sales tax by one percentage point, to 7.5 percent, to generate more than $1-billion annually for a state trust fund dedicated to education. It would have dedicated 40 percent of the money to higher education, to be used to expand public colleges to accommodate 25,000 more students, provide additional scholarships and financial aid, increase the pay of instructors at technical colleges, and support more research.

The campaign for Initiative 884 relied heavily on mass mailings, financed largely by the contributions of executives of large Washington-based companies, including Expedia, Microsoft, and Starbucks. The League of Freedom Voters, by contrast, fought the measure through a street-level campaign in which its members knocked on doors, called potential voters, and spoke at community events.

Initially the campaign against the measure focused its efforts on communities near the state's borders, where it warned that the local economies would be hurt if people began shopping in neighboring states to avoid a higher sales tax. Mr. Armey said the campaign was aided by activists from the Oregon chapter of FreedomWorks, but Jamie W. Daniels, Washington State director of the group, denied receiving any such help from nonresidents.

Other conservative organizations, including the National Taxpayers Union, urged their members to oppose Initiative 884. But many of those involved in the campaign against the measure say the state chapter of FreedomWorks led the opposition to it and played a central role in its rejection by about 60 percent of the state's electorate.

A monthly survey of Washington voters conducted by Elway Research, a Seattle-based polling company, initially found strong support for the measure. As of January, 57 percent of the state's voters backed it. By mid-October, however, the share of voters expressing firm support for the measure had shrunk to 40 percent.

Mr. Armey's followers were similarly effective in Oregon, where their campaign was much better financed -- with a war chest of more than $440,000 -- but still relied heavily on grass-roots activism. "Nobody put people on the street like we did," Mr. Armey said.

M. Dane Waters, chairman of the Initiative and Referendum Institute at the University of Southern California, said the Oregon campaign appeared to leave Mr. Armey's organization convinced "that the popular referendum process was a great tool for them to use to gin up support and membership at the local level." He said he expected to see the organization involved in many more such campaigns in the future.

FreedomWorks' predecessor, Citizens for a Sound Economy, was founded in 1984 by David Koch, an energy-company executive and former Libertarian vice-presidential candidate. It was supported largely through contributions from conservative foundations and from corporations including DaimlerChrysler, Philip Morris, and US West Communications.