Tuesday, March 27, 2007

Tax increase or government cuts?

Well, that's the choice and I think most would agree that Toledo's government hasn't done what it needs to do in terms of cost savings or cuts prior to talking about a tax increase in the guise of a 'trash fee' added onto our water bills.

What I find so frustrating in all of this is that Councilman Frank Szollosi (D-at large) is the one leading the charge to cut rather than tax - and no one is joining him. Where are our Republicans on council? Surprisingly silent on the core Republican philosophy of small government and low taxation.

Here's my suggestion. Before you begin to even consider a yes vote on increasing taxes on Toledoans, mandate that all non-union employees incur a payroll deduction to help pay for their insurance coverage...Not just city council members, though they should pay, too - but ALL city employees not covered by a union contract. After doing this, the city will have better standing to go back to the unions and request an agreement on payment as well.

Then, roll back all the PERS pickups that have been granted to all non-union employees. The city is required to contribute a specific percentage toward PERS for every employee. But over the years, as unions bargained for pick-ups (the city 'picking up' part of the mandated employee contribution), those pick-ups were applied to non-bargaining employees as well. Eliminate the PERS pick-ups for all non-union employees, including the Mayor and Council if they currently enjoy such a benefit.

Again, this will give the city better standing for similar discussions with the unions.

Some other things that can be done? Council can pay their own parking, eliminating the $5,000 cost for parking expenses separate from their parking garage costs. They can also eliminate the $13,000 auto allowance...use your own cars and claim a deduction on your income tax instead of charging the public for travel or having us pay for a vehicle for you to use.

The Mayor can eliminate some of the publications he's getting...his budget went from around $700 to over $2,000. He could also use email instead of sending formal letters and reduce his postage costs. And why he needs $18,000 in outside printing when that line item hasn't been over $8,000 in several years is beyond me. I guess that he's using our tax dollars for publicity purposes while saying there's nowhere else to cut the budget.

He can also take a lesson from Gov. Strickland and reduce his 'food' budget which is currently around $6,000. Miscellaneous supplies is the line item where you can hide a bunch of goodies...it's at $6,600 but hasn't been over $2,000 for several years. Or the $10,000 for marketing, $13,000 for travel, $1,000 for parking (not the government center garage), $5,600 for vehicle rental, $18,000 for advertising (separate from the already mentioned marketing), $30,000 for interns (let them earn credit instead of paying them), $18,000 for temps, $21,000 for misc. charges and services ... the list goes on.

And these are just two offices. With these kinds of expenses, don't tell me that you have to cut police and fire or charge for garbage pickup!

One person who spoke during the public hearings said the budget needs to be 'nickeled and dimed.' I agree. While each of these items seems like a small amount when you look at them individually, every city department has these kinds of expenses and they add up.

Cut these things first - then we'll see if we need to talk about tax increases conveniently called a 'garbage fee.'

Link to The Blade which has downloadable pdf's of revenues and expenses...these are large files.

Monday, March 26, 2007

Ala carte government?

A recent post on Progressive Toledo, "How are they your tax dollars," has raised significant questions about tax dollars and our ability to tell elected officials how we want our monies spent. I've commented on the post, but I wanted to go a different direction and speculate about how government services are provided...

Progressive Toledo's premise is that we can't identify where, specifically, our individual dollars have gone, so we lose ability to make the argument "I don't want my tax dollars to be spent on (fill in the blank)." Each year, I get two notices about my property taxes. Including in this bill are 'fees and assessments" for such things as snow removal, leaf pick-up, tree-trimming, etc...

Considering the blog and the services, I wondered if ala carte government might not be a possibilitiy. What if I could go through the various city services and select which ones I wanted to receive and, consequently, pay for? What if I could pick leaf pick-up but not snow removal? I've got a 4-wheel drive Jeep, so I don't really worry about too much snow, at least, not in Toledo. But I do have lots of trees and more leaves in the fall than I can compost...

What if I could select Fire services, but decline trash pickup? If I could find a private company to dispose of my trash for a lesser cost than what the city charged, I'd be better off. What if, instead of funding an economic development department, I'd prefer my tax dollars to go toward computer services/IT to help make various departments more efficient or to expand my ability to access government services on line?

What if ALL city services were usage based - like water and sewer? This would do several things:
1) It would, by participation, show which city services people thought were a priority.
2) It would inject competition into the delivery of services, thereby reducing consumer costs and/or increasing levels of service.
3) It would also inject personal responsibility into the equation - by making you responsible for any services you DIDN'T select.

Now, I realize that this isn't a comprehensive plan - it's more of a 'what if' question. And I can already hear people say - 'what about someone who doesn't pick fire service and then their house burns down?' Well, that was their decision and they are responsible for the consequences.

And this might not work for all government services, but it works for some already (water and sewer) and I think it's worth exploring in other departments as well. What do you think?

Friday, March 23, 2007

Spring has sprung!

The crocuses are in bloom! Can yard work be far behind?

Thursday, March 22, 2007

Quote of the day

From The Patriot Post, their daily Founders' quote which is especially applicable to Toledo as they consider raising fees and taxes to balance their budget...

"An unlimited power to tax involves, necessarily, a power to
destroy; because there is a limit beyond which no institution and no property can bear taxation."

-- John Marshall (McCullough v. Maryland, 1819)

Reference: Mccullough v. Maryland, 17 US 316 (1819)

Wednesday, March 21, 2007

Deleted post on Walter Reed problems

Yesterday, I had a post on Walter Reed. I quoted a portion of an Ann Coulter column which made the point that civil service employees at Walter Reed who are responsible for the maintenance of the facilities have such job protections that firing them for lack of performance is virtually impossible.

Coulter blamed Democrats for making the rules. I stated the following as the main point of my post:

"I won't join her and place blame solely on the Democrats because there have been plenty of Republicans who've supported - or failed to oppose - such civil service rules.

But if the real problem is the maintenance issue, as reported, will there be anyone bold enough or courageous enough to point out the inadequacies in the processes - or will this be just another political opportunity to bash your opponent and get prime media face time, with no real solutions as a result?"

Two people commented about how terrible Coulter was - and I know there are people who do not like her or anything she writes. I've found some of her writings to be sarcastically entertaining - others I don't care for. I'm not a Coulter fan or detractor...but I would like to remind people that even a clock with no battery is correct twice a day. That being said, the point of MY post was not to emphasize Coulter, but her position on civil service rules.

However, the same two people commented that Coulter was wrong about the civil service employees - going to the point that the maintenance at Walter Reed was being done by Halliburton. That point, if correct, would have been a factual issue and not opinion.

I've always tried to make sure that the facts I have on my blog are correct. Opinion about those facts is another issue entirely. Since two individuals called into question the FACTS, I pulled the post until I could verify whether or not the individuals responsible for the maintenance at Walter Reed were government employees.

Of course, one of the individuals (SensorG) took exception to this, accusing me of being wrong and deleting the post as if it'd never happened. I appreciate the people who read and comment here and I hope that you will understand and agree that a post which contains factual errors should be corrected. And, the comments made on the post have been saved, but let's first set the record straight.

In looking for a reference source that could explain the issue, I came across this CNN article which explains a three-year delay in contracting for mainentance at Walter Reed.

The article begins:

"An Army contract to privatize maintenance at Walter Reed Medical Center was delayed more than three years amid bureaucratic bickering and legal squabbles that led to staff shortages and a hospital in disarray just as the number of severely wounded soldiers from Iraq and Afghanistan was rising rapidly.

Documents from the investigative and auditing arm of Congress map a trail of bid, rebid, protests and appeals between 2003, when Walter Reed was first selected for outsourcing, and 2006, when a five-year, $120 million contract was finally awarded.

The disputes involved hospital management, the Pentagon, Congress and IAP Worldwide Services Inc., a company with powerful political connections and the only private bidder to handle maintenance, security, public works and management of military personnel.

While medical care was not directly affected, needed repairs went undone as the non-medical staff shrank from almost 300 to less than 50 in the last year and hospital officials were unable to find enough skilled replacements."

The claim that Halliburton had the contract and was responsible for the lack of maintenace is not correct, according to the article:

"IAP is owned by a New York hedge fund whose board is chaired by former Treasury Secretary John Snow, and it is led by former executives of Kellogg, Brown and Root, the subsidiary spun off by Texas-based Halliburton Inc., the oil services firm once run by Vice President Dick Cheney.

IAP finally got the job in November 2006, but further delays caused by the Army and Congress delayed work until February 4, two weeks before the Post series and two years after the number of patients at the hospital hit a record 900."

So Halliburton doesn't have the contract, although individuals who worked for a former subsidiary of Halliburton lead the hedge fund which owns the company that did get the contract (as poster Rusty correctly stated). But this company didn't start work at Walter Reed until Feb. 4, 2007.

I encourage you to read the whole article as it details the difficult bureaucratic rules and regulations that government has created - and it points out the serious impact of such bureacratic messes and how they can be manipulated.

I don't blame anyone in particular for the atrocious problems at Walter Reed - I blame them all - Congress, the Pentagon, the White House, IAP and the American Federation of Government Employees, a federal workers' trade union.

Which brings me back to the original point I was trying to make: Will there be anyone bold enough or courageous enough to point out the inadequacies in the processes - or will this be just another political opportunity to bash your opponent and get prime media face time, with no real solutions as a result?

If you'd like to comment on the point, please do so. But if you're just interested in a political opportunity to bash individuals, don't bother.

The original post:

The real problem at Walter Reed?
Say what you will about Ann Coulter, and many do...but I think she makes a very good point in her March 14th column:

“Democrats have leapt on reports of mold, rats and bureaucratic hurdles at Walter Reed Army Medical Center as further proof of President George Bush’s failed war policies.

To the contrary, the problems at Walter Reed are further proof of the Democrats’ failed domestic policies—to wit, the civil service rules that prevent government employees from ever being fired. (A policy that also may account for Robert Byrd’s longevity as a U.S. senator.)

Thanks to the Democrats, government employees have the world’s most complicated set of job protection rules outside of the old East Germany. Oddly enough, this has not led to a dynamic workforce in the nation’s capital.

Noticeably, the problems at Walter Reed are not with the doctors or medical care. The problems are with basic maintenance at the facility.

Unless U.S. Army generals are supposed to be spraying fungicide on the walls and crawling under beds to set rattraps, the slovenly conditions at Walter Reed are not their fault. The military is nominally in charge of Walter Reed, but—because of civil service rules put into place by Democrats—the maintenance crew can’t be fired.

If the general ‘in charge’ can’t fire the people not doing their jobs, I don’t know why he is being held responsible for them not doing their jobs.

You will find the exact same problems anyplace market forces have been artificially removed by the government and there is a total absence of incentives, competition, effective oversight, cost controls and so on. It’s almost like a cause-and-effect thing.”

I won't join her and place blame solely on the Democrats because there have been plenty of Republicans who've supported - or failed to oppose - such civil service rules.

But if the real problem is the maintenance issue, as reported, will there be anyone bold enough or courageous enough to point out the inadequacies in the processes - or will this be just another political opportunity to bash your opponent and get prime media face time, with no real solutions as a result?

Tuesday, March 20, 2007

Quote of the day

Whether applied to the nation or to Toledo, this quote clearly states the challenge before us...

“Apathy can be overcome by enthusiasm, and enthusiasm can be aroused by two things: first, an idea which takes the imagination by storm; and second, a definite, intelligible plan for carrying that idea into action.”Arnold Toynbee

Saturday, March 17, 2007

The Impact of Strickland's School Funding Plan

According to this Blade article Toledo Public Schools are likely to get another $2.8 million dollars from the state. Why? Because Gov. Ted Strickland's new education plan is targeted toward low property value school districts.

Is there anyone else out there who sees the serious inequity in this plan? Toledo Public Schools - which spends more per student than all but one other district in the county and has the worst test scores to show for it - is going to get more money. But a school system like Anthony Wayne (which has the second highest scores in the county) will see no additional funds from this plan?

The overall problem with the plan is that it focuses on dollars and property values, incorrectly assuming that areas with low property values are not funding schools to the same degree as areas with higher property values. The error in this assumption is readily recognizable in Toledo.

And then there's the whole issue of eliminating the vouchers...let's just force all the kids who've escaped from failing schools back into those failing schools - after all, it's more important to preserve the system than to focus on a good education for the child.

And, of course, we have our own Sen. Theresa Fedor quoted on WSPD 1370 AM saying that elimination of the vouchers is a good thing because so many failing charter schools have not been shut down. But this same philosophy of shutting down failing schools doesn't apply to a PUBLIC school - oh no...we're going to give those failing public schools more money!

Somehow, I think the focus of the new Strickland Education Plan is more about payback for support from the teachers' unions than it is a thoughtful way to address our educational problems... Besides, we all know it's easier to throw money at a problem than it is to actually solve the problem in the first place.

Thursday, March 15, 2007

Why Ohio ad campaign

As I was reading the Wall Street Journal last Friday, an advertisement caught my eye...I'd flipped past the 3/4 page, 5 (of 6) column ad and then came back to it when I realized it was about Ohio. It's titled "Why Ohio - A Series" and it starts with this quote from Nancy Kelly, Executive Vice President of Huntington National Bank:

"Business is great in Ohio. And so is my life."

It continues with her photo and her story, concluding with this:

"For Nancy Kelly, balance is the key to success in the office and at home. Find your balance at OhioMeansBusiness.com or call 1-877-466-4551."

This ad is part of the "Build Your Business. Love Your Life." campaign sponsored by the Ohio Business Development Coalition, a non-profit group charged with developing a sales and marketing strategy for the state.

Why is this important to Northwest Ohio? Because yesterday I received the following press release from the Regional Growth Partnership:

Regional Growth Partnership Joins Forces with OBDC To Promote Northwest Ohio

TOLEDO, Ohio – Promoting a statewide marketing campaign to attract new jobs, business and capital investment to Ohio, the Regional Growth Partnership has received approval for a $54,000 matching grant.

The state grant will support the RGP’s editorial marketing initiative, which is designed to draw national and international media coverage to northwest Ohio’s strengths, resources and assets.

In putting forth its proposal to the Ohio Business Development Coalition (OBDC), the Regional Growth Partnership became the first regional economic development entity in the state to apply for and receive funding under the matching grant program.(emphasis added)

“We are excited the OBDC saw the value of our editorial marketing program, and through this grant, we can now promote both northwest Ohio and the state as an ideal location for new business,” said Steve Weathers, president and CEO of the RGP. “The Ohio brand is already recognized by investors nationwide, and we’re now building on that same message to convey all of the wonderful opportunities in northwest Ohio.”

In September 2006, OBDC unveiled a new Ohio brand, summed up for the business community in the brandline, “Build Your Business. Love Your Life.” The new brandline communicates that Ohio offers balance without compromise; everything businesses need to thrive and provides ample opportunity for executives and employees to achieve their personal aspirations as well. As part of its editorial marketing program, the RGP will promote how the Toledo region uniquely delivers the Ohio promise.

The RGP already has some successes to point to when it comes to national articles highlighting businesses in our area. Congratulations to them for being the first in the state to qualify for the matching grant!

Wednesday, March 14, 2007

Kudos to 5 Council Members for Ambulance Vote

Kudos and thanks to five Toledo City Council members who voted against having government take over a portion of the private ambulance services in our city!

Republicans Joe Birmingham, Rob Ludeman, George Sarantou, and Betty Shultz along with Democrat Ellen Grachek cast no votes on this ordinance which would allow our Fire Department to lease ambulances and provide basic life support services on 9-1-1 calls.

More information on this vote is available in this Blade story, but lacking in all the stories is the impact of taking these fire fighters out of service for the ambulance runs.

The City estimates that this decision will gain them about $600,000 this year and up to $1.2 million next year...additional revenue they say is needed to help balance our budget deficit of almost $11 million.

The logic some of the other members of council used to justify the vote was 'continuity of care.' Under this process, the same people who provide the emergency service will also be the ones transporting to the hospital. And yes, there is an aspect of 'continuity' for the individual who is injured or ill.

However, by using these fire fighters to transport, they are no longer available for other emergency runs nor for fighting fires and that results in a lack of continuity of service for everyone else.

The ambulance companies said that, based upon the location of the city-owned ambulances (in the more affluent areas of the city), they could lose up to 40% of their business. MedCorp President Richard Bage said he may move his headquarters and 300-employee payroll out of the city. The claims of loss of business ring true considering the impact of the City's decision to take over tow operations from private companies in 2005. That venture was supposed to net the city about a half a million dollars a year, but no one has publicized the financials on this - probably because it didn't measure up to projections.

Before Council voted on this, you'd think they'd want to know of the last government takeover of private business resulted in the projected revenue...but not in Toledo.

Toledo is losing people and businesses. Our mayor and council have said that they want to be a place that people and businesses want to come and grow. But their actions speak louder than their words - and people and businesses are hearing them loud and clear.

Tuesday, March 13, 2007

How words lead to confusion

I've been thinking about this for a while now, but particularly in regard to the City's budget deficit and the proposed "trash fee."

Currently, Toledo has a 3/4% TEMPORARY payroll tax...I say temporary because that's the way it was originally advertised for the first vote in 1981. It's since been renewed at every opportunity. It's supposed to cover police, fire and trash services.

All of us recognize that the money this temporary tax originally generated in 1981 is not enough to cover costs today. However, the reality is that wages are higher today than they were 25 years ago, so the tax should generate more funds. Except in Toledo where it's possible (I don't have specific numbers) that our total employment is not as high as it was then.

But Toledoans take exception to the "temporary" portion of this description, despite the fact that they've had the opportunity to vote on this 'temporary' tax. They keep asking why it continues to appear on the ballot when it was supposed to be 'temporary.' While "confusion" over this phrasing may be a strong way to describe it, the feeling leads to emotions from angst to anger.

Today, the mayor and council are talking about instituting a $6 'trash fee' because we have the "Cadillac of trash services" - unlimited pickup including large items like furniture, etc. However, no one has said if this $6 will be dedicated to the refuse department and be used solely for trash collection.

And this is where I think the words 'trash fee' will lead to confusion. Our city leaders, I predict, will impose some sort of additional fee and call it a "trash fee." This would be easier than making the tough decisions to truly curtail government spending.

But the 'trash fee' won't be dedicated to refuse collection. Nor will they redirect general fund monies from refuse to other line items. This 'trash fee' will go directly into the general fund to be used for multiple purposes - primarily to help eliminate the $11 million deficit. And it will work, maybe...but only for 2007.

Some projections of the deficit for 2008 have been as high as $17 million. Even if the mayor and council present a balanced budget for 2007, they're looking at up to another $6 million they'd have to find for 2008 - either in further cuts or in additional revenue. And, I believe, trash pickup will again be the topic.

And when they start on THAT process, the confusion over the $6 'trash fee' and what it was intended to do will come back to haunt them.

Monday, March 12, 2007

The Laffer Curve and Toledo's Budget

What, you may ask, is the Laffer Curve and why is it relative to Toledo's budget? The answer is that it's a function of taxation and government revenues and everyone in Toledo's leadership needs to understand it.

Arthur B. Laffer, the 'originator' of the curve wrote this article to explain where the idea came from. While there is an interesting story about how the name came into such widespread usage, Laffer explains that the concept dates to the 14th Century.

"The Laffer Curve, by the way, was not invented by me. For example, Ibn Khaldun, a 14th century Muslim philosopher, wrote in his work The Muqaddimah: "It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.""

The basic theory is this, Laffer explains:

"The basic idea behind the relationship between tax rates and tax revenues is that changes in tax rates have two effects on revenues: the arithmetic effect and the economic effect. The arithmetic effect is simply that if tax rates are lowered, tax revenues (per dollar of tax base) will be lowered by the amount of the decrease in the rate. The reverse is true for an increase in tax rates. The economic effect, however, recognizes the positive impact that lower tax rates have on work, output, and employment--and thereby the tax base--by providing incentives to increase these activities. Raising tax rates has the opposite economic effect by penalizing participation in the taxed activities. The arithmetic effect always works in the opposite direction from the economic effect. Therefore, when the economic and the arithmetic effects of tax-rate changes are combined, the consequences of the change in tax rates on total tax revenues are no longer quite so obvious."

At a tax rate of 0 percent, the government would collect no tax revenues, no matter how large the tax base. Likewise, at a tax rate of 100 percent, the government would also collect no tax revenues because no one would willingly work for an after-tax wage of zero (i.e., there would be no tax base). Between these two extremes there are two tax rates that will collect the same amount of revenue: a high tax rate on a small tax base and a low tax rate on a large tax base.

The Laffer Curve itself does not say whether a tax cut will raise or lower revenues. ... If the existing tax rate is too high--in the "prohibitive range" shown above--then a tax-rate cut would result in increased tax revenues. The economic effect of the tax cut would outweigh the arithmetic effect of the tax cut.

Laffer points out that people don't work to pay taxes. They work to be able to do things with the money left over. And we all know that people often don't pay attention to taxes until it has a negative impact on their after-tax income.

That's where Toledo is today. People are beginning to see that the taxes we're paying are growing and our after-tax incomes are decreasing. Everyone, regardless of income, is on a fixed budget. There are extemely few, if any, people who can just decide that their paychecks are going to be larger. Even those who are self-employed and might have discretion over such decisions know that more money to them might be a short-term positive for their take-home pay, but a long-term negative in terms of the viability of their business.

And the result of such decreases in available funds mean that we've lost people and businesses. They've gone where they can get an immediate increase in after-tax income - whether that was across the county or across the country.

The Wall Street Journal's editorial page today (subscription required) included a small piece on Iceland's Laffer Curve. According to WSJ, the benefits of low taxes can be seen very clearly in Iceland.

"From 1991 to 2001, as the corporate-tax rate fell gradually to 18% from 45%, tax revenues tripled to 9.1 billion kronas ($134 million in today's exchange rate) from just above 3 million kronas. Revenues have more than tripled again since 2001 to an estimated 33 billion kronas last year. Personal income-tax rates were cut gradually as well, to a flat rate of 22.75% this year from 33% in 1995. Meanwhile the economy has averaged annual growth of about 4% over the past decade."

But it's not just Iceland, Laffer details the growth in the economy following three historical tax cuts. Nationally, the Bush tax cuts several years ago have resulted in economic and job growth (the economy grew 3.4 percent in 2006, slightly more than in 2005), lower unemployment (4.5% in February) and wage growth (4% in 2006).

The lessons are clear, but the discussions in One Government Center are more focused on tax increases than they are on reducing government spending. The idea of a garbage fee is very much on the table - and will probably have the support of some, if not all, the city's unions.

According to WSPD this morning, Councilman Michael Ashford (Democrat, District 4) has gone through the budget and identified nearly $2 million in questionable spending. Councilman Joe Birmingham (Republican, District 6) said during the same show that he's against any increases in fees or taxes.

We have two representatives who seem to get it...but will the others? Or will it just be easier to raise fees and taxes? Before our Council resorts to that decision, perhaps they ought to study the Laffer Curve.

Is TPS Board hamstrung?

This article in today's Blade has an interesting point to consider.

The article is about the potential salary that the TPS Board can pay a new superintendent. Basically, the story relates that there is an agreement between the Board and the unions saying that the new superintendent cannot be paid more than Dr. Sanders was - at least until the unions get a raise.

Now, I understand the logic of this agreement. If I were a member of the unions, I'd be urging my union leaders to stay strong on this issue. In fact, David McClellan, president of the Toledo Association of Administrative Personnel, said, "They will not be able to pay him more than [Mr.] Sanders, and we are not budging on that." Fran Lawrence, president of the Toledo Federation of Teachers, was more diplomatic in saying she's "willing to have an open mind about it and enter into discussions with board members."

Now, you may ask, what's the interesting point? What I find so interesting is that the unions have ANY negotiating ability regarding the wages, terms and conditions of employment for someone who is not a member of their union.

I don't blame these unions for seeking such authority or negotiating power. I blame the administration and the board for ceding this right. The first time that the union mentioned the superintendent's salary, they should have been told that they don't represent the superintendent and that his wages were a matter for the Board - not for negotiations with them.

I understand having an agreement about increases in general - saying that if one segment of employees gets a raise, then all employees would get their raises. However, hiring a new superintendent is a different matter. The salary for this position was advertised and the Board should be able to offer wages within that range - without interference from the unions.

If this isn't possible because of the memorandums of understanding that have been signed by administrators and not voted on by the board, then the board needs to hold such administrators responsible for tying their hands in such onerous ways.

Sunday, March 11, 2007

Potential difficulty for the downtown arena?

This Blade article about the state's debt limit had the following statement:

"The Office of Budget and Management said the state could reach its constitutional debt limit in four to five years, which would severely limit its ability to build and renovate schools, university buildings, and park facilities, let alone tackle museums, sports arenas, and other projects.

"The reality is we're facing essentially flat [general revenue fund growth] and a large part of that comes from personal income taxes," said J. Pari Sabety, the state's budget chief. "Those are flat by operation of [tax cuts in] House Bill 56 [of 2005]. We've got to start flattening our debt." "

The current arena action plan calls for $12.25 million from the Ohio Cultural Facilities Commission - 15% of the total project costs. (more details about the funding plan and my comments available here)

In light of the news from the state, perhaps we should revise the financial plan for the arena - and decide at what point the financial gaps become too much to overcome...especially when any gaps in funding will end up being paid for by the taxpayers.

Saturday, March 10, 2007

More struggles with Toledo's budget

Want to know why the City of Toledo yearly faces budget deficits? It's because of decisions like these:

"Part of the reason for the increased 2007 budget is to pay for a 2 percent city employee pay raise that took effect Jan. 1, and to pick up an additional 2.25-percentage point share of police officer and firefighter pension contributions.

In 2008, city employees are to get a 3 percent pay raise, and police and firefighters would get an additional 1.5 percent pension pickup."

This is from today's Blade article which relates the latest proposal to deal with our city's budget. And while I realize the economy is booming in just about every place BUT here, I have to question the logic of a 2007 4.25% and a 2008 4.5% pay increase for our police and firefighters. Now don't get me wrong, I don't know if you can really pay such individuals too much for the jobs they do, but in these difficult financial times?

The article's main point is Council President Rob Ludeman's proposal to have employees incur a payroll deduction of $25 each pay period to help pay for their insurance. He says that employees have "the Cadillac of benefits." And with taxpayers who foot the bill rarely enjoying the same level of benefits, especially in today's marketplace, he's right.

But the idea of a medical payroll deduction could be dead on arrival with the unions.

"Don Czerniak, president of the 870-member American Federation of State, County, and Municipal Employees Local 7 union, rejected Mr. Ludeman's suggestion.

"My opinion is a flat-out no. I am not taking that to my members. I have helped in the past. As a thank-you for doing something, my members have suffered layoffs," he said."

I'm certain the Local 7 employees have tried to help in the past by making concessions, but my fear is that they would rather maintain a high level of wages and benefits for SOME of their members than keep ALL of them employed.

Beginning the discussions, however, would be good. But there's a twist. In exchange for the mayor beginning discussions with the unions to make this possible, Ludeman is willing to support a $4 trash fee, down $2 from the mayor's original proposal.

My preference would be that no 'revenue enhancements' (meaning taxes) would be up for discussion until every last unnecessary expense was eliminated. And if the four Republicans on council teamed up with Democrats Frank Szollosi (who's correctly said repeatedly that Toledoans are taxed too much), Michael Ashford (who says the 2007 budget contains 'pork') and Ellen Grachek (who has demonstrated a willingness to fund essential priorities first), perhaps we could actually have a budget in line with our ability to pay.

Friday, March 09, 2007

Hypocrisy with union elections?

From the Wall Street Journal editorial pages March 8, 2007:

"In a largely party-line vote last week, Democrats in the House passed the Employee Free Choice Act, a measure that rewrites the rules for union organizing by eliminating secret-ballot elections. The Senate is up next. And if you suspect this has everything to do with expanding union membership and nada to do with 'employee free choice,' we'd direct you to a missive sent to Mexico in 2001 and signed by 16 Democrats in Congress.

"The letter is addressed to government officials and concerns 'democracy in the Mexican workplace.' It reads, 'we are writing to encourage you to use the secret ballot in all union recognition elections.' It continues: 'We understand that the secret ballot is allowed for, but not required, by Mexican labor law. However, we feel that the secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose.'

"Five of the signers have since left Congress; the other 11 voted last week for the Employee Free Choice Act. And by the way, the letter's lead signatory is Representative George Miller of California, who also happens to be the lead sponsor of the House bill. Which means the same person lecturing Mexican officials on the primacy of secret ballot elections has been heading up the effort to end them for 140 million U.S. workers."

CPAC of the West - for bloggers, too

I'm a big fan of Chuck Muth of Citizen Outreach and a while back he sent out a teaser about a conservative leadership conference in Nevada...

Here's an update - though dates are not yet included.

UPDATED: Here is the official website of the event which will be Oct. 11-13, 2007.

From the article:

While social issues often loom large at the annual Washington event, the Reno conference will have a distinctive Western flavor, said Nevada activist Chuck Muth, whose Citizen Outreach group is the event's primary sponsor.

"We're not going to be talking about abortion or gay marriage," said Muth, a former executive director of the American Conservative Union, the group that hosts the CPAC conference. "We're trying to promote the Barry Goldwater side of the movement rather than the Jerry Falwell side ."

The Reno conference is in keeping with Nevada's libertarian spirit and signals another step in the evolution of the state's political culture.

Among the expected topics are: illegal immigration, education, government spending, Internet regulation and labor unions.

Grover Norquist, the conservative Washington activist and head of Americans for Tax Reform, headlines the guest speakers.

Muth said he also hopes to attract nationally syndicated conservative commentators, including Michelle Malkin and Hugh Hewitt, and wants to snag former House Speaker Newt Gingrich as the keynote speaker.

Stay tuned!

Thursday, March 08, 2007

Those who flee TPS are sending a very loud message - is anyone listening?

This article in today's Blade has raised many questions for me.

It's about parents deciding to enroll their children in TPS schools that are in academic emergency just so they can qualify for vouchers. And there are several things very concerning about this.

One - what does it say about parents' perception of the Toledo Public School system that they're willing to risk the education of their children by putting them - even temporarily - in a failing school so that they can, in the long run, permanently leave the school system? And this is an issue that's more than just 'perception' that needs to be changed by some advertising campaign.

Two - what does it say about our school leaders that they refuse to acknowledge the problem and instead see this as some conspiracy against urban school systems? Interim Superintendent Foley said this was "...just another way for the state to harm urban schools..." As if the entire goal of the voucher program was to decimate urban schools rather than to give students an opportunity to choose something other than a failure in their education.

Three - when a business begins to lose its customers, it starts to look internally at what's going wrong - are my prices too high? is my quality not what it should be? does my competition have better customer service?

Our school system, on the other hand, starts trying to place blame anywhere BUT internally.

Then there is this paragraph in the story:

"The teachers’ union reported two Bowsher High School students transferred recently to Woodward High School because they want free public cash toward tuition at St. Francis de Sales High School in the fall." (emphasis added)

Which leads me to point four - why is that these school leaders fail to understand that it isn't 'free public cash' as if the educational funds belong to some nebulous group or entity. These 'public' funds are OUR tax dollars which we expended to purchase a product - that being a quality education. There is no ENTITLEMENT of public schools to these monies - the only entity ENTITLED to such funds is the CHILD. And if such a child cannot get the quality education to which they're entitled, they should have every right to take their own monies and go to where they can.

If the TPS school system wants to stop the students from leaving, it needs to realize that criticizing its competitors - and insisting upon the usage of a failed monopoly - is not the way to do so. The test scores at these failing schools are already speaking loudly and clearly as is the decision of parents to send their children elsewhere - but is anyone really listening?

UPDATE: I wanted to add a link to this column by Debra Saunders, "Higher Grades, Lower Scores," which discusses the decline in proficiency despite an increase in grade point averages.

Wednesday, March 07, 2007

Timeless Quote

“The difference between a welfare state and a totalitarian state is a matter of time.” —Ayn Rand

Is anyone paying attention?

As I was catching up on my reading, I came across this article in the Wall Street Journal. "So Long to the Suite Life" is all about how major sports stadiums are ripping out their suites and replacing them with either party rooms, press boxes, or other uses. Why? Because they're having trouble selling the boxes.

Some of the reasons for the declining use of such suites, according to the article, include changes in tax laws, scandal-driven changes in corporate accounting rules and a lack of clients to fill the seats. As one company said, "...taking clients on fishing trips is a better -- and more cost-effective -- way to get face time."

Additionally, the article says, "There are other reasons for declining interest in suites. Now that a greater number of companies have them, the perk has become less glamorous and is thus less of a draw. At the same time, more executives believe they can schmooze clients more easily and more effectively -- and at less of a cost -- in other ways."

And with declining use comes issues of what to do with the suites. While some are converting the unused suites to other uses, the Detroit Pistons decided to 'bribe' some suite holders by offering a $50,000 food credit and a $20,000 credit to buy tickets to concerts and other events held at their arena. The Seattle Mariners decided to offer suites for only part of the games - instead of for the full season.

The articles states: "Prior to the 1990s, sports stadiums and arenas were built mostly with public money and bonds. But in the 1990s, the formula changed, as public money dried up, along with taxpayers' appetite for subsidizing sports teams whose contributions to the local economy were being increasingly questioned. The new model called for sports-team owners to pay some of the cost upfront or back the bonds with specific revenue sources like parking, concessions and tickets." Those up-front costs were also covered by suite sales.

So the impact of unleased suites can be significant. As the article explains:

"In the late '90s, almost all of the more than 120 luxury suites at the Cleveland Indians' Jacobs Field were sold. The team says it has fewer than 90 suites leased for this season. The Seattle Supersonics used to lease more than enough of the 48 suites at KeyArena to cover the team and city's debt on the facility. Now only half of the suites are full and the team is deep in the hole and asking for $300 million in public funds to build a new arena."

While some of the major sports team are coming up with creative ways to continue the appeal of their suites, I can't help but wonder if Lucas County will learn any lessons from this article...or if anyone even bothered to read it.

Items of interest

First, with a tip to Steve Fritsch at The Cincinnatus Standard, comes the news of an organization focused on limiting the growth of government spending. COAST, the Coalition Opposed to Additional Spending and Taxes, started in Cincinnati to address spending and tax issues in that city, but has expanded to focus on state and federal spending as well. I hope you'll make it a regular stop...perhaps some in this area would like to form a local chapter???

Second, from The Cato Institue, a libertarian think tank, comes this announcement:

This Friday, March 9, at 4:00pm, Vaclav Klaus, the president of the Czech Republic, will address the topic of contemporary environmental issues facing Europe and the world, such as global warming at the Cato forum "Facing a Challenge of the Current Era: Environmentalism." Recently, Klaus asserted that "Global warming is a false myth and every serious person and scientist says so. It is not fair to refer to the U.N. panel. IPCC is not a scientific institution: it's a political body, a sort of non-government organization of green flavor. It's neither a forum of neutral scientists nor a balanced group of scientists. These people are politicized scientists who arrive there with a one-sided opinion and a one-sided assignment." Klaus also said, "other top-level politicians" do not express their global warming doubts because "a whip of political correctness strangles [their] voice."

Information on how to watch this address on line is available here.

Finally, there's a lot that happened over the last two weeks when I was on vacation, but I think the strangest of all was the announcement of Mayor Carty Finkbeiner's business advisory council - individuals who are to offer advice and suggestions about how to make Toledo a business-friendly community - at the same time that City Council was hearing about the Mayor's suggestion to transfer ambulance service FROM private ambulance companies to the Fire Department. Did the irony of the situation strike anyone else?

Monday, March 05, 2007

New Link - Eye on the Statehouse

The Buckeye Institute has started a new blog, Eye on the Statehouse, which will keep an eye on state spending.

Interestingly, each week they'll identify a 'porker of the week' to call attention to a particularly big spender. But they balance that with a 'pistol of the week' who demonstrated prudence in spending the public's money.

Of the new posts, I found the one on seat belts most interesting. In "Buckle up - it pays," they note that the transportation bill contains $770,000 for programs to tell Ohioans to buckle up. They ask, "With seat belt laws on the books for years and a highway system dominated by “Click It or Ticket” signs, does the state really need to spend $770,700 to tell people to wear their seat belts?"

I hope you'll add this site to your regular stops around the blogosphere...better yet - I hope you'll call your legislators when you read something here - whether it's to praise them for wise spending or to tell them NOT to spend your monies on unnecessary programs.
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