The "Other Epidemic" of Opioids Rages On

Last week, the Ohio Department of Mental Health and Addiction Services announced $13 million in new grants awarded to community organizations trying to reduce opioid overdoses in the state. That’s right, another epidemic is still raging while we tap the “refresh” buttons on our browsers hoping for our COVID-19 vaccination appointments.

According to the most recent data from the CDC, about 5,000 Ohioans died from drug overdoses from September 2019 to August 2020. This is nearly 14,000 less than died from COVID-19 in the state so far, but would still put drug overdoses in the top ten causes of death in Ohio in 2017, the year we have the most recent data for.

Also concerning is that drug overdoses are up in Ohio. While the state is still a few hundred annualized deaths below the drug overdose peak in 2016 and 2017, recent overdoes are up from the recent trough of 4,000 annualized deaths in 2018.

The CDC has sounded the alarm on the increase in overdose deaths that has coincided with the COVID-19 pandemic. Whether this is a result of economic uncertainty, widespread social isolation, or a sort of co-occurrence with other health phenomena is yet to be determined, but deaths are certainly up.

Social distancing provides new challenges for people seeking treatment as well. The best practice for treatment of opioid abuse is medication assisted treatment. But due to the addictive nature of medications used to wean people off painkiller and street drug addiction, effective medications like methadone and buprenorphine can only be disbursed daily or weekly. This means people needing treatment must go for in-person meetings every day or once a week in order to get the treatment they need.

The problem with a treatment like this should be obvious even outside of a global pandemic marked by social distancing. But it is made even harder under the circumstances of the past year.

So what solutions are there to this problem? Well, this is a tough question to answer. Medication assisted treatment is the best tool we have for treating opioid addiction and preventing overdoses. Some states, like Vermont, have created effective statewide treatment systems that connect patients with the kind of treatment they need and make the geography meet the patient where her need is, not the other way around.

Ultimately, though, we want to get to the point where we are preventing opioid addiction rather than just treating it after the fact. The limitation we face here is that we still don’t know what it is that is causing opioid addiction. Some of the most cutting-edge research on the opioid epidemic seemed to suggest that prescription prevalence was the biggest driver of opioid deaths. In this case, prescription drug monitoring programs should have made a dent in opioid deaths.

And maybe they have. There is a distinct possibility that we haven’t risen above 2017 overdose death numbers because of prescription drug monitoring and other steps that have been taken to reduce the supply of addiction painkillers. But we’re still seeing persistent death numbers.

It will be interesting to see if the American Recovery Act has any impact on death rates. Maybe the old “deaths of despair” narrative has more to it than we realized. If so, injecting a bunch of money into households could hold back these deaths. Then again, we might have dug ourselves in so deep with this current epidemic that there will be little attention paid to the other one, despite the work community groups continue to do to reduce drug overdoses across this state.

This commentary first appeared in the Ohio Capital Journal.

You can’t solve problems without proper problem definition

Public policy is supposed to solve problems. This means that the first job of a policy analyst is to understand what problem a policy is trying to solve.  

Problem definition can be overlooked at times but is a crucial part of the policy analysis process. This step not only helps an analyst understand what a policymaker is trying to do with a policy, but also helps the policymaker understand what she is trying to accomplish with it. Problem definition can also be the first step toward validating a policy or even opening the discussion for a policy alternative the policymaker wasn’t anticipating at first.

The first step in the policymaking process in Eugene Bardach’s A Practical Guide for Policy Analysis: The Eightfold Path to More Effective Problem Solving is problem definition. Bardach underscores some key elements of the problem definition process and offers guidance for policy analysts trying to improve their problem definition work.

First, Bardach suggests analysts think of deficit and excess when defining a problem. Specifically, he suggests using the word “too.” We do this all the time at Scioto Analysis: “there is too little social welfare as defined by the Genuine Progress Indicator,” or “there is too much poverty in the state of Ohio.” By defining a problem as a deficit or excess, you both make it clear what policy is trying to improve and you lay the groundwork for rigorous analysis of the problem.

Past deficit and excess, Bardach also suggests making the definition evaluative, or defining what makes a problem rise to the level of public concern. A classic way to deal with this is by defining a market failure, but this can also be done by identifying a classic social ill or appealing to the authority of the public body you are doing the evaluation for, usually laid out in law.

One special type of problem definition Bardach highlights is that “uncertainty” is the problem that evaluation addresses. Bardach says this is of particular interest when evaluating a program that already exists because the data is already there—what the analyst must do is reduce the amount of uncertainty—or certainty!—that a program is “working.”

Building on the idea of deficit and excess, problem definition can lay the groundwork for rigorous analysis if the analyst can quantify the problem. While some analysis can be done qualitatively, quantification can provide guidance to policymakers trying to set budgets or evaluate alternatives with significant economic components, which there are no shortage of in the policy world.

Part of the problem definition process is helping a policymaker take a step back and look at root problems a policy is trying to solve. In this case, diagnosing a condition that causes a problem can be a helpful tool. For instance, a policymaker might be considering capping interest rates at payday lending establishments because “too many people are going into debt due to payday lending interest rates.” If the real problem, though, is that “too many people are going into debt,” alternative policy options such as making EITC payments monthly or providing check cashing services at post offices start to arise that may be more effective at solving the root problem.

When it comes to problem definition, sometimes the problem itself is the risk or odds of an outcome occurring. When it comes to policy around nuclear meltdown, there are certainly not too many nuclear meltdowns in the state of Ohio, but the risk of one may be too high. Low-cost interventions to reduce that risk might be worthwhile even with lack of a live problem.

Similarly, sometimes a policymaker asks an analyst to work on hypothetical problems, like current procedures not being efficient. Inefficiency only exists if a better alternative exists that is more efficient. Thus, sometimes a problem needs to be stated as a hypothetical until the analysis is completed. 

While policy analysis is built for providing information to a policymaker, it should not stop at the imagination of the policymaker. Sometimes the analyst should be in the business of identifying latent opportunities. This means seeing what the policymaker is trying to do and bringing a new perspective on the problem to light. If this speaks to the policymaker, it could lead to innovative new policy. I expect this is what happened with the American Recovery Act’s inclusion of groundbreaking child poverty provisions. Maybe Joe Biden didn’t go into this policymaking process thinking about child poverty, but someone convinced him it was a problem that was intertwined with the larger economic problem presented by COVID-19, and it became a centerpiece of the bill.

Also important is to avoid common pitfalls in problem definition. Don’t write the solution into your problem definition: keep it focused on the real problems people are experiencing. Don’t accept causal claims advocates are making about the problem too quickly. Don’t ignore the context of the problem. The problem definition should be narrow enough to say what the problem is and how we can find out the answer without saying what the answer is: it is a framework, not a conclusion.

Last, understand the problem definition process is iterative. Policy analysis works best with consistent communication between the analyst and the policymaker. During this communication, the question can change. Don’t be so married to a problem a policymaker asked you about two years ago that you don’t pay attention to the one she is asking you about today. She likely has a vote about it coming up and needs your guidance now.

There is a reason A Practical Guide for Policy Analysis is taught in public policy schools across the country: Bardach’s guidance is relevant to policy analysis and problem solving in general. And in order to solve a problem, you need to understand what that problem really is. Problem definition provides a framework for doing just that.

Recreational cannabis could raise hundreds of millions in new revenue

In November of last year, Arizona, Montana, New Jersey, and South Dakota all legalized recreational use of cannabis. While reasoning for legalization of recreational cannabis range from racial justice to economic growth, one benefit that has many state legislators interested is tax revenue.

Last year, each state that had legalized recreational cannabis raised at least $20 million in revenue from state taxes, with California’s haul topping $1 billion. If Ohio’s state revenue as a function of its total population were in line with other states, Ohio would have brought in about $300 million in recreational cannabis revenue in 2020.

There is a range of revenues being raised by states, though. While Illinois’s 13 million people raised about $52 million in revenue, Washington’s 8 million people raised $470 million. Ohio’s revenue could range from $50 million to $600 million depending on the size of the market for cannabis consumption and the size of the tax.

In FY2020, the state raised a little over $100 million in alcohol and liquor gallonage taxes and over $900 million in cigarette taxes. The $50 million to $600 million range seems reasonable given the range of revenues being raised for similar taxes right now.

Let’s say the state could raise $300 million with legalized recreational cannabis. What could we buy with $300 million?

According to the Legislative Service Commission, we could fund 37 state agencies for a year for $300 million. Alternatively, we could spend it all on large agencies, like funding the entire public works commission or both the Development Services Agency and the Department of Natural Resources with one budget line item.

This line item would only amount to a little over 1% of the state budget, so it’s not like the state could build its budget on the back of Mary Jane. But that is not such a bad thing: Excise taxes like those on cannabis can be quite volatile, so planning a state budget around an item like this could be setting a state up for corrections along the way and difficult fiscal planning.

Additionally, adding a new revenue line item can make the entire revenue picture more predictable. This is why we diversify investments: The more sources that function different from one another we have, the more we can stabilize our overall financial picture.

Cannabis revenue could even help during a recession. If cannabis sales are strong during a recession, as some analysts believe they are likely to be, then cannabis revenues could help cushion the blow during a recession, which is a period where state revenues are hit especially hard.

There are reasons to worry about cannabis as a revenue source. Besides volatility, excise taxes tend to be regressive, so they can be counterproductive toward the goal of reducing inequality. This means that a new excise tax might be well paired with an earned income tax credit expansion or some other low-income benefit to offset this regressivity the way the 2019 gasoline tax expansion was offset.

Revenue is only one in many considerations policymakers must weigh when deciding whether to legalize recreational cannabis. While public health and safety considerations must be weighed as well, raising hundreds of millions of dollars is not a bad bonus benefit.

This commentary first appeared in the Ohio Capital Journal.

25 of 29 Ohio Economists Agree Low-Income Stimulus More Cost-Effective than Broad Stimulus

In a survey published by Scioto Analysis this morning, 25 of 29 Ohio economists agreed that targeting checks at households making less than $75,000 per year would be more cost-effective at boosting the economy than providing checks to higher income households as well.

Economists who agreed with the statement said that lower-income households are more likely to spend stimulus payments rather than save them. They also acknowledged the complexity and difficulties that come with targeting funds. Of the four economists who did not agree with the statement, comments focused on priorities of these payments, suggesting relief, savings, and response can be more important than cost-effectiveness of economic stimulus.

Respondents were more split on a question in the survey asking whether stimulus should focus on keeping low-income individuals and families safe rather than on boosting current economic activity. 15 economists agreed with the statement and 12 disagreed, while only two were uncertain. In comments, however, both those who agreed and disagreed with the statement said the two goals can go hand in hand.

The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists.

If you would like to suggest a question for a future Ohio Economic Experts Panel, email your ideas to panel@sciotoanalysis.com.

The "Policy Wheel" Model of the Policy Process

Policy analysis. Policy implementation. Policy evaluation. These are phrases we hear thrown around a lot, sometimes sloppily, and sometimes making us feel like there is no coherent connection between these different concepts.

Policymaking in a democratic society is inherently sloppy. Decision-making processes are distributed and a coherent, “logical” system does not necessarily describe how policy is created and crafted over time. That being said, we can still use a model to make sense of these concepts from a design perspective.

One model I particularly like is the “policy wheel.” This model characterizes policy development as an iterative process that starts with problem definition then moves on to analysis, implementation, evaluation, and then back to the start again with a new iteration of problem definition. The diagram below is a slide I was exposed to in a class during my introduction to policy analysis course in graduate school taught by Mia Bird, an assistant adjunct professor at UC Berkeley’s Goldman School of Public Policy. I still use it today.

In this model, the steps of “problem definition” to “recommendation” all comprise policy analysis as characterized in Eugene Bardach’s A Practical Guide for Policy Analysis: The Eightfold Path to More Effective Problem Solving.

A rational policymaking process starts with problem definition: understanding what problem demands the need for the public sector to act. It then moves through the steps of construction of alternatives, analysis of these alternatives to see what their impacts would be, then recommendation to policymakers informed by this analytical process.

These four steps are the domain of the policy analyst. The step of “political passage,” however, is the domain of the policymaker. While political feasibility is a classic criteria of policy analysis, analysts rarely have a better understanding of political reality than policymakers themselves. It is in this step that policymakers contend with the competing interests of a democracy and craft a policy with at least some information provided by the previous policy analytic steps.

Next comes implementation. This is the step in the hands of the administrators and program staff. Implementation is the “doing” of policy, and is a step in the policy process all on its own. A number of different policy decisions are being made every moment that impact the outcome of the program, but this is the part of the policy process people are most closely exposed to: the people who process your tax forms, serve you at the DMV, pull you over for speeding. Decisions made at the policy analysis and policy passage stages impact the effectiveness of implementation and implementation is an animal in itself, with decisions being made every day that impact the effectiveness of the policy.

The final step in the policy wheel is evaluation. This is the domain of the program evaluator: the professional with the unenviable task of answering the question “does this work?” The evaluator collects data from the implementation process and uses it to determine if the policy is having the desired effects. This information is extremely valuable as the process begins again, this time incorporating these lessons learned.

I find this model an extremely helpful way to understand how policy analysis, politics, implementation, and evaluation work together to make better policy. Yes, it is a model, so it is imperfect, but it gives us an idea of what the policymaking process looks like at its best. I hope you will find this model as helpful as I have.

Ohio’s children will carry the scars of 2020 for decades to come

The conversation about in-person schooling has shifted substantially in the past few months. While experts have been emphasizing the importance of in-person learning for young children for nearly a year now, public worries about COVID-19 have kept many children out of the classroom. Only now, with vaccination becoming available for teachers, are many school districts in Ohio reopening for in-person learning.

What will be the legacy of 2020’s “lost year” of education? My firm conducted an analysis last year that suggested that future earnings losses for students could number in the range of tens of billions of dollars as this year of lost human capital is likely to impact productivity down the road.

Part of the story that can be lost in the shuffle, however, is the disparate impact of lost school time for children. Much of our social safety net depends on services provided by schools, and early on in the pandemic many worried about the impact that loss of free and reduced lunch would have on children’s development.

Uneven distribution of the impact of lost school time doesn’t end at safety net features. Children from different families in 2020 had different levels of access to in-home care. A study conducted by my firm last year suggested that housework and parenting amounts to about $75 billion of unpaid work per year. This is not including the downstream benefits of higher incomes, better health outcomes, and reduced crime from children who receive adequate care at a young age at home.

These benefits do not accrue to rich and poor families equally. Families that had the flexibility to work from home or to spare an adult for part- or full-time parenting will provide children with more of the individualized attention that leads to long-term success than those with “essential workers” who cannot spare as much time for children.

Beyond attention are simple income effects. A growing body of evidence points to the importance of family financial security in long-term prospects for children. While Congress’s aid packages likely blunted the impact, the steep reductions in income for retail workers in 2020 likely will have impacts on inequality for years to come.

Another dimension that matters is geography. When remote learning is being substituted for in-person learning, access to the internet becomes even more crucial than before in ensuring even a shadow of the in-person educational experience. Superintendents in southeast Ohio in particular were wringing their hands last year as a substantial number of children went for months without interacting with any educators at all.

Many children are still learning from home today, though the vaccination of teachers may create some breathing room and some ability for districts to open their doors to in-person learning once again. If education matters, 2020 is going to have a big impact on children and a substantial impact on disparities between children for years to come.

When all is said and done, some restaurants will close and some will open as the economy rights itself. The scars left on the economy and on the potential of children because of the coronavirus pandemic, however, will persist for decades. We can only imagine, though, how much worse things would be without the economic impact payments and expanded unemployment benefits of the federal relief package, or how much better they would be with more attention paid to Ohio’s children.

This commentary first appeared in the Ohio Capital Journal.

Salary history bans can impact wage gap

Last week, Canal Winchester State Senator Tina Maharath introduced a bill to the Ohio State Senate to prohibit employers from asking about applicants’ salary histories.

Applicant salary history has become a flashpoint in conversations about what can be done to close the gender pay gap. The argument is that past salary history can be a distorted view of a job candidate’s potential value if she spent time, for instance, raising a child, a responsibility that we all know falls disproportionately on women in the United States.

Laws that prohibit employers from requesting salary history information from job applicants are common in the United States, with 19 states banning the practice statewide and 21 local governments doing the same, including Cincinnati and Toledo in Ohio.

Do these bans work? Some evidence seems to say that it does. A 2019 paper by a Yale University economist finds that bans in the United States have reduced the gender wage gap in states that have put them in place by over 4%. Other evidence suggests that these bans have a smaller impact: An NBER working paper last year found state-wide salary history bans only increased the gender earnings ratio by 1%.

While some of this change in the gap does come from lower pay for men, there also seems to be an effect that increases pay for women. A study out of Boston University last year suggested that employers increase pay for job changers by about 5% after a salary history ban is enacted, with increases for women getting up to 8% and increases for African-Americans getting to 13%.

Bans such as these hinge on compliance, though, since many of them still allow workers to voluntarily disclose past salary history. A survey last year found a quarter of applicants always disclose past salary to potential employers. It also found applicants who disclose were more likely to be men than women, which is important since that 2019 paper found that much of the job of salary history bans comes in reduce salaries for men as well as higher salaries for women.

Some experimental evidence even suggests that the signals provided by voluntary compliance can be enough to perpetuate wage gaps. The author does not go as far as to say they would render salary history bans ineffective or that they worsen the problem of wage inequality, only that they may not work as well as intended.

Aside from the gender wage gap, salary history bans could also have other impacts that could be useful toward the goal of leveling the playing field for workers. People who are formerly incarcerated may have their wages suppressed by salary history requests. A recent paper finds some evidence that salary history bans can help reduce wage gaps created by beginning a career during a recession.

Salary history bans are unlikely to lead to the end of the gender wage gap on their own, but this is not what they purport to do. These bans are one tool that seems to be effective according to the evidence we have at moving the ball forward on reducing the gender wage gap. It will be interesting to see if this bill has legs and if other Ohio municipalities follow suit with Cincinnati and Toledo in the near future.

This commentary first appeared in the Ohio Capital Journal.

20 of 23 Ohio Economists Agree More State COVID Relief Would Speed Recovery

In a survey published by Scioto Analysis this morning, 20 of 23 Ohio economists agreed that the state government would optimally invest more than the proposed $1 billion in COVID relief in the form of support for small businesses, bars and restaurants, local infrastructure, and residential broadband.

In comments, economists highlighted the options for financing, with some saying federal support is a key consideration and some pointing to Ohio’s $2.7 billion rainy day fund, which has not been used yet during this recession. Other economists emphasized the importance of education and statewide broadband connectivity. Those who were uncertain or disagreed with the statement noted the insufficiency of state funds alone and the importance of targeting of funds to investments like infrastructure.

The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists.

If you would like to suggest a question for a future Ohio Economic Experts Panel, email your ideas to panel@sciotoanalysis.com.

What does state political culture mean for policy analysis?

Do different states have different “political cultures?”

That’s the argument that is made by Daniel Elazar, a 20th-Century University of Chicago political scientist who was a leading scholar of the politics of the US states. Elazar breaks US states into three different categories: moralistic, individualistic, and traditionalistic.

According to Elazar, moralistic states are states that were settled by puritans and northern Europeans. Moralistic political culture is defined by idealism, the idea that politics can be a vehicle for solving social ills and that we can use the democratic process to find solutions for public problems. Moralistic states are concentrated in New England, Upper Midwest, and West.

Individualistic states are more cosmopolitan and diverse. Politics in individualistic states are defined by barter and negotiation, with politics being defined as a space where various factions and interests split up the pie of public cooperation. While a moralistic political culture will bring people together to the same table in order to get an understanding of a problem, the role of testimony in an individualistic political culture is to see where interests stand and to make sure they all are balanced when policy is created. Much of the mid Atlantic and lower Midwest is described by Elazar as individualistic. 

Lastly, there is traditionalistic political culture. Traditionalistic states are states that are run by elites. These states tend to be defined by one-party rule for decades on end and are run by people in the “aristocracy,” usually wealthy people who come from wealthy families. Elazar describes much of the South, Southwest, and Appalachia as “traditionalistic” in its political culture.

Things have changed since Elazar pioneered this typology in the 20th Century. We can argue, for example, that much of the West skews more individualistic these days. But I find it surprising how accurate this typology still seems to be. Republican governors in Vermont and New Hampshire sound a lot different from their counterparts in Southern states. There is certainly a story about partisanship here, but I think the fact that these governors have continued to win in these states against Democrats speaks to a certain moralistic pragmatism from voters.

I certainly saw this difference moving back to Ohio a few years ago from the west coast. Even local government in the Bay Area had a deep commitment to policy analysis and problem solving that seemed markedly different from the way politics is handled in Ohio. Even compared to Nebraska, which was classified as “individualistic” by Elazar, the politics in Ohio seemed nakedly transactional.

How does this impact public policy? Well, public policy is treated differently if it is seen as a problem solving exercise, a negotiating table, or a fiat of the deserved rulers. Moralistic political culture comports much more with public policy as it is taught in graduate schools, with problem definition and then construction of alternatives and analysis of these alternatives leading to policy prescriptions.

Individualistic and traditionalistic political culture can use policy analysis as well, though. How can we understand how to split the pie of public policy if we don’t know what that pie looks like? How can we have good discussions about who gets what if we don’t know what we have to divide? These are questions that are important in an individualistic political culture. In a traditionalistic political culture, rulers need to understand what they’re doing if they’re trying to advance their own interest. Policy analysis even has a place there.

Ultimately, it seems that moralistic political culture is best suited for policy analysis as we tend to define it. This could mean that policy analysts have a reason to advocate for political reforms that push politics in a more moralistic direction. It also could mean that policy analysts need to adapt to cultures that are more individualistic or traditionalistic. I’d wager that better public policy requires both modifications, deployed at different times, with a mind for the appetite that people have for change and the particular leaders in power at a particular time.

When will Ohio spend its “Rainy Day” savings?

In May of 2020, when Ohio had been plunged into recession by the COVID-19 pandemic, state budget analysts were wringing their hands trying to make ends meet in the wake of the worst fiscal crisis since the Great Recession.

Gov. Mike DeWine released a budget plan that month that cut state spending by $775 million dollars, with much of that money coming from state education spending, a sector already reeling from the COVID recession. This all happened while the state budget stabilization fund (often called the “rainy day fund”) sat untapped, $2.7 billion sitting in a state account waiting to be used.

The justification for not using budget stabilization funds, funds saved during strong economic periods to keep the budget going during economic downturns, was that “The ‘rain’ is not a passing spring shower — it could be a long, cold, lingering storm, and we should not use the fund until it is necessary.” Presumably we would need these funds down the road, so we should cut education and health spending now so we can pay for it in the future.

When DeWine released his 2021-2023 budget on Monday, though, plans for the use of the budget stabilization fund over the next two years were made public. The goal for the end of fiscal year 2022? $2.7 billion in the fund. The goal for the end of fiscal year 2023? $2.7 billion in the fund. The same as it was in May of 2020.

2020 hasn’t been as bad for state revenues as projected. It turns out that a recession that impacts high-income people less than low-income people isn’t all that bad for states that collect significant income tax. So best case scenario is that we were conservative, we pinned our ears back in 2020, and now we’re going to have this budget stabilization fund ready for the next recession when it comes along.

But tightening our belt when the economy is still down could backfire. Economists cite state and local spending as a top priority of softening the recession, yet stimulus bills have been held up because of resistance to supporting state governments. 

Funding state government is in some ways the most straightforward stimulus there is. We don’t need a complicated system of bank loans like the Paycheck Protection Program or the infrastructure to send a check to every household: The federal government already funds state governments every year, and states already have budget items ready to fund.

And as both children and adults return to school this year, our K-12 and higher education institutions are going to need all the resources they can get to reestablish some sense of normalcy. A majority of Ohio economists think in-person schooling will be a boon to Ohio’s economy, meaning this investment could help the economy as a whole recover.

I hope that we were just being conservative and I hope our leaders are making the right decision when it comes to the budget stabilization fund. But looking at these numbers, understanding the recession and fiscal crisis we just went through, and seeing that we spent absolutely none of the money we saved for this moment are hard truths to reconcile. If we don’t use this fund in a year like 2020, when exactly are we supposed to use it?

This commentary first appeared in the Ohio Capital Journal.