Tuesday, January 30, 2007

Pension Pick-Ups

Anyone who's ever gotten a paycheck from a non-government company has become very familiar with Social Security and Medicare (also known as FICA) taxes. Until you make more than around $97,000, you'll have 6.2% of your earnings taken out and given to the federal government for your Social Security tax. For Medicare, there's no limit and you pay 1.45% of all your earnings. Your employer withholds these amounts and pays them - along with their matching amounts - to the government.

In public employment in Ohio, there is a similar system called PERS (Public Employees Retirement System). Personally, I think PERS is better in that the money is in your own personal account and has better earnings than SS does. But the contributions are done in a similar manner with the employer and employee making contributions. (See ORC Chapter 145 for more information)

Under PERS, the 2007 employer contribution for retirement will be 8.65% for local employers. Employers also pay into the Retiree Medical Acount and a Mitigation Factor bringing their total contribution to 13.85% (see this document for more details). Employees contribute 9.4% under this plan.

EXCEPT...unions have, for years, negotiated a 'PERS pickup' in lieu of wage increases - in addition to wage increases. Under this concept, the employer agrees to pay some of the employee's 9.4% in addition to the 8.65% employer portion that they're required to pay. In Toledo, the amount of the pickup ranges from a portion to all the 9.4%...and such pickups apply to non-bargaining units as well.

(Trying to collect the information about how much of the 9.4% employee contribution is picked up proved to be quite a task, but that's another post soon to come.)

This is a terrific deal for the employees...They're getting that money into their dedicated retirement accounts (pre-tax) but not having to pay it themselves. From an administration standpoint, it sometimes makes political sense to negotiate such a benefit. People often make an issue of the amount of pay increases or vacation amounts, but usually pay little attention to other such negotiated benefits like PERS or uniform allowances, etc.

In Toledo, this PERS pickup costs us significantly each year. An employee making $42,000 would normally pay $3948 into their PERS account. However, if you're in AFSCME Local 7, that $3948 is completely paid by the City of Toledo.

Police and Fire contribute to the Police and Firemen's Disability & Pension Fund instead of PERS. Beginning in 2008, the city will pick up all of their contributions. For 2007, they'll still pay 1.5% of their 9% contribution themselves. So if you're a patrolman with 10 years of seniority, you'll make $53,451.84 in 2007 and the city will pay $4008.89 of your pension contribution and you'll pay $801.78. In 2008, when your salary goes up to $55,055.52, the city will pick up all of your contribution - to the tune of $4955.

(For estimating purposes, I used an average amount of pickup of $4900 and multiplied that by 690, the approximate number of sworn officers, to get a rough cost of this benefit...$3,381,000 for one year just for the police department. When you start adding in all the other unions and employees, you can see the fiscal impact of this benefit.)

I realize that these pick-ups are fairly negotiated...but they're also subject to 'me-too' bargaining...and when one unit manages to get all their contributions "picked up," it's only a matter of time before the rest of the units want the same thing. And once you've said 'yes' to one union, it's really hard to say 'no' to the others.

Now, I know items which are given in negotiations are extremely difficult to recover. But considering the amount of the budget deficit that Toledo is facing, it may be time to re-think this negotiation strategy and begin a return to the mandated amounts. Afterall, the taxpayers who are footing the bill for these pickups rarely have such generous packages themselves..and before the City starts talking about tax hikes, it may be wise to remember this fact.

Health Care Costs Follow-Up

I'm sharing the following article by Jeff Jacoby as a follow-up to the issue of health care/health insurance and their costs...

From the article.

"Why is it," asks David Gratzer, a physician and scholar at the Manhattan Institute, "that in every other field where enormous technological strides have been made, total costs have fallen over time, but in health care they have increased?" The answer, he writes in The Cure, a lively and engrossing new book on the American health care mess, is simple: Health care costs so much because most of us pay so little for it. And we pay so little -- out-of-pocket expenses amount to just 14 cents of every health dollar spent in this country -- because a third party nearly always picks up the tab. For most working Americans, that third party is an insurance company paid by their employers. (For the poor and elderly who rely on programs such as Medicare and Medicaid, it's the government.)

Why does it matter whether Americans pay for medical care directly or let insurers cover their bills? Because thrift and price awareness usually go out the window when we're spending other people's money. Under the present setup, most Americans have little incentive to be economical consumers of health care. As a result, health care expenditures -- and insurance premiums -- have been racing ahead at three and four times the rate of inflation.

He raises a very valid question and points out the perspective identified by Milton Freidman:

There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. – Milton Freidman

As I've said earlier, many people don't know how much their employer pays for their ability to fork over only a small amount of a co-pay at the doctor or pharmacy. If you don't know the true costs, how can you be a good consumer? And when you allow your employer to make decisions about your insurance coverage, you abdicate your ability to decide what coverages you need.

Jacoby goes on to say that, under Pres. Bush's recently announced proposal,:

Millions of others would have an incentive to shop around for a health plan less pricey than the one available through work, since cheaper insurance would end up meaning a bigger tax break. That would put pressure on insurers to develop more high-deductible, low-premium plans -- and on health care consumers to start paying attention to prices.

Again, I don't know if this will work, but I'm willing to have the discussion.

Monday, January 29, 2007

John Kasich & the GOP's Lincoln Day Dinner

UPDATE: The event will be at Gladieux Meadows on Heatherdowns. The Chairman's reception with Mr. Kasich is $250 from 5:30 - 6:30. Regular tickets for dinner are $50 with cocktails at 6 p.m. (cash bar) and dinner/program at 7 p.m.

The Lucas County Republican Party has set the date of their annual fundraiser - the Lincoln Day Dinner - and announced that the guest speaker is none other than Ohioan John Kasich, currently host of "The Heartland with John Kasich."

Mr. Kasich's bio is available here.

The dinner will be Friday, March 9th. For more information, you can contact the LCRP at lucascountygop@totalink.net or watch here for details on price, location and reservations.


From The Patriot Post:

[A] Congress with power to do whatever would be for the good of the United States... as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please.” —Thomas Jefferson

Saturday, January 27, 2007

Tidbits found in route to another destination

* Next month begins the Chinese Year of the Pig, but China Central Television, the communist state-run station has banned all images and spoken references to the animals in commercials - to avoid offending Muslims who consider the pigs unclean. Pigs symbolize prosperity and good fortune as well as fertility and virility. Many Chinese think they mean good luck.

According to the Wall Street Journal, "The pig ban is a significant shift for a government that seldom puts the interests of minority groups ahead of those of the broader population. China has more than 20 million Muslims, but they constitute less than 2% of the population."

There's no word if the ban will be extended to other media or marketing in the country.

* GAO has data which shows the percent or households in each income percentile holding credit-card debt. While the numbers are from 2004, they're still interesting:
Top 10 - 38.5%
Next 10 - 57.6%
Next 20 - 56.0%
Middle 20 - 55.1%
Next 20 - 42.9%
Bottom 20 - 28.8%
All - 46.2%
Most people with credit cards (53.7%) don't hold debt...And the Senate will be holding hearings on the issue in their Banking Committee.

* Prizes are now being offered for solutions to problems...Netflix is offering $1 million for an algorithm that does 10% better than its current system for predicting whether a customer will enjoy a movie. Go for it!

* Many people talk about freeing ourselves from dependency on foreign oil...the following list shows the average net exports to the U.S. for the 12 months ending October, 2006 (in thousands of barrels per day):
2,131 from Canada
1,498 from Mexico
1,449 from Saudi Arabia
1,395 from Venezuela
1,154 from Nigeria
628 from Algeria
551 from Iraq
532 from Angola
360 from Russia
322 from Virgin Islands
264 from United Kingdom
258 from Ecuador
197 from Norway
196 from Kuwait
181 from Columbia
157 from Brazil
119 from Aruba
114 from Trinidad/Tobago
112 from Netherlands
94 from Chad
81 from Libya
Surprises, for me, were that we get oil from the Virgin Islands, Aruba and Trinidad/Tobago...

* "There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government." – Milton Freidman

* "The energy agenda in Washington has been long dominated by oil interests, but in a reversal of political fortunes, these days it is Big Oil fighting to preserve its tax incentives and the ethanol industry that is adding new ones," The Washington Post reports. "President Bush may up the ante tonight in his State of the Union address, many analysts think, by setting new targets for ethanol use or encouraging automakers to shift to engines capable of handling E85, a fuel that is 85 percent ethanol."

In "Oil Subsidies in the Dock," Cato senior fellows Jerry Taylor and Peter Van Doren write: "The Democrats' somewhat dodgy anti-subsidy crusade... collapses into ashes with the proposed 'Strategic Energy Efficiency and Renewables Reserve' tacked on to the bill. In short, all fiscal gains to the Treasury associated with the above will be handed back out again to corporations like GE, British Petroleum, and you-name-the-industrial-conglomerate engaged in energy efficiency and renewable energy businesses. But the same arguments against handouts to 'Big Oil' can be as easily marshaled against handouts to Big or Little Fill-In-the-Blank. And with energy prices this high, there are ample incentives for investors to spend money on oil and gas production, renewable energy, energy conservation, or other energy exotic."

In "For Now, Gasoline Is Our Only Cheap Fuel," Taylor dispels the myth of ethanol as the answer to America's energy woes: "Ethanol made out of corn is probably the closest thing we have to a domestic alternative to gasoline. But no matter how nice 'growing our own fuel' might be in theory, it's uneconomically expensive in fact. Even after 30 years of lavish federal subsidy, ethanol (defined as fuel that is nine parts gasoline and one part ethanol) has only managed to capture a bit more than 3 percent of the automotive fuels market, and even industry participants concede if the subsidies and consumption mandates were removed today, the entire industry would collapse."

* “Countless studies have shown that children raised in a two-parent family are less likely to be raised in poverty, less likely to do drugs, less likely to be criminals later in life, and more likely to graduate from and do well in school. Married people tend to take care of themselves better and live longer. They typically eat better, have more settled lives with less stress and fewer risky habits, monitor each other’s health, and are quicker to seek medical attention for problems that arise. Married people, particularly those with children, seem to be motivated to save and invest more for the future and to live longer to enjoy their savings and their children’s future. Out-of-wedlock births increase the national incidence of: lowered health for newborns; retarded cognitive, and especially verbal, development of young children; lowered educational achievement; lowered job attainment as young adults; increased behavioral problems; lowered impulse control (aggression and sexual behavior); and increased anti-social development. It’s been said you need only do three things in this country to avoid poverty: finish high school, marry before having a child and marry after the age of 20. Among those who follow such advice, only 8% are poor, while 79% of those who do not are poor. The consequences of this trend are crime rates higher than they should be, graduation rates lower than they should be and a treasury depleted in the name of trying to solve both problems by throwing more money at them. No culture can remain healthy with illegitimacy rates like these. And it is simply impossible to understate the socially catastrophic consequences of America’s crisis of illegitimacy. The family is still the best department of health, education and welfare ever invented.” —Investor’s Business Daily

* The vision Ronald Reagan shared with the British parliament in 1982: "We must be staunch in our conviction that freedom is not the sole prerogative of a lucky few, but the inalienable right of all human beings. It would be cultural condescension, or worse, to say that any people prefer dictatorship to democracy."

Thursday, January 25, 2007

The President's Health Care Proposal

By now, there's been a lot of discussion about Pres. Bush's proposal to allow a personal tax deduction for health care. But I'd like to ask a few questions:

* How many people with employer-sponsored health insurance actually know how much their employer spends on such coverage?
* How many people with employer-sponsored health insurance have coverage for things they don't need? If you're a young single man, do you really OB/GYN coverage? If you and your spouse are finished having children, do you need maternity, well-baby or child immunization coverage? If you're a healthy individual, do you need prescription coverage?
* If you had to select your coverage and pay for itself, would your employer plan be the one you choose?

In most cases, employers select a plan that meets the needs of most, if not all, their employees. This means that individuals are getting - and paying for - coverage they don't need and probably don't want. And with it being paid for by the employer, few have a good idea of just what such coverage is costing.

The President's proposal is an attempt to put the consumer in charge of selecting and paying for the coverage that fits their needs - with the same tax breaks companies have gotten for the cost. You don't let your employer select your car insurance, homeowners/renters insurance or life insurance, why do you want them to select something much more important like your health insurance?

Most insurance companies offer packages with the biggest difference being amount of deductible, out-of-pocket expenses and networks. A company with a diverse staff likes such packages because it meets their needs. But does it meet your individual needs? If consumers need variety in their packages and they're now in charge of making such choices and paying for them, insurance companies will respond to such demands and the health insurance field will change dramatically - hopefully for the better.

This is point of the proposal - to inject a sense of the free market into the system by allowing the actual consumer of services to select the ones they want and be responsible for paying for them and by allowing the insurance providers to tailor their products to the actual needs of the consumer.

I have no idea if this will work or if the concept will be butchered in Congress or by special interests as the proposal makes its way through the process. But, this is the first time in a long time that anyone has looked at letting the individual be in charge of such decisions - and its certainly worthy of discussion.

UPDATE: I wanted to share a column with you on this subject...Linda Chavez's "How to cure the health insurance crisis."

Wednesday, January 24, 2007

The "me-too" clause

When it comes to union negotiations, government unions have it made. Most contracts with public unions contain what's known as a 'me-too' clause. Meaning that anytime a union within the government's jurisdiction gets a benefit, the other unions get it too.

In some instances, this is politically expedient...if you're able to negotiate a 2% pay increase with one union, you've got better standing for sticking with a 2% pay increase for other unions.

But in other instances, such provisions are extremely costly and negate the value of the concept of 'negotiation.'

For example: If a union decides that it wants a revision to its vacation schedule, they may be willing to give up something in exchange...it's all a matter of what particular item is most important to its members. In the 'negotiation' process, the union requests the vacation revision and the administration says, we'll trade that for a consolidation of job descriptions. After discussion, an agreement is reached...not as much vacation as was originally requested and not as many reductions in job descriptions. Both sign off on the agreement.

However, other unions see only the additional benefit - never the compromise which allowed for the extra benefits. The 'me-too' thinking comes into play when other unions start saying that they now get to have the additional vacation time. And rarely does the administration say...okay - but you also have to give up what the first union gave up. No - they just give in and everyone gets the additional benefit. And the cost is even greater than just for the unions because employees not in or not eligible for union membership often get the additional benefits as well. After all, you can't let your administrative and exempt staff have less of a benefit than those they're responsible for...

What we need in government is more leaders who are willing to take a stand on this issue and require unions and their staffs to look at the whole picture and not just the 'gains' that come from negotiations. We need more unions (there are some) who realize that all negotiated 'takes' are accompanied by negotiated 'gives' and elected officials who are willing to insist upon true negotiation any time that a union wants the same benefits another union has achieved.

COMING UP: Last week, after reading an article on Glass City Jungle, I started working on a post about PERS pickups...I'm still waiting for the information from the City, but it looks like the issue will be discussed at the next Toledo City Council meeting according to this Toledo Blade article about the Council's agenda review meeting. I was promised the information by noon Thursday, so look for the post (or an update) after then.

Tuesday, January 23, 2007

Press release on President's speech

I received the following press release from the White House and am sharing it with you prior to the actual State of the Union address.


Office of the Press Secretary

For Immediate Release January 23, 2007


As Prepared for Delivery

The American people expect their elected leaders from both parties to work together on the important issues facing the Nation. Tonight the President will lay out an ambitious agenda, driven by bold and innovative concepts. He will discuss the importance of forging common ground with the new Congress and explain that to keep America safe, we must prevail in the war on terror.

“Some in this Chamber are new to the House and Senate – and I congratulate the Democratic majority. Congress has changed, but our responsibilities have not…We are not the first to come here with government divided and uncertainty in the air. Like many before us, we can work through our differences, and achieve big things for the American people.”

“Our citizens don’t much care which side of the aisle we sit on – as long as we are willing to cross that aisle when there is work to be done. Our job is to make life better for our fellow Americans, and help them to build a future of hope and opportunity – and this is the business before us tonight.”

On our growing economy:

“A future of hope and opportunity begins with a growing economy – and that is what we have…Unemployment is low, inflation is low, and wages are rising. This economy is on the move – and our job is to keep it that way, not with more government but with more enterprise.”

On the importance of strengthening and re-authorizing No Child Left Behind this year:

“Five years ago, we rose above partisan differences to pass the No Child Left Behind Act…And because we acted, students are performing better in reading and math, and minority students are closing the achievement gap.”

“Now the task is to build on this success, without watering down standards ... without taking control from local communities ... and without backsliding and calling it reform…And we can make sure our children are prepared for the jobs of the future, and our country is more competitive, by strengthening math and science skills.”

On the President’s new health care initiatives:

“[I]n all we do, we must remember that the best healthcare decisions are made not by government and insurance companies, but by patients and their doctors.”

On comprehensive immigration reform:

“Extending hope and opportunity in our country requires an immigration system worthy of America – with laws that are fair and borders that are secure. When laws and borders are routinely violated, this harms the interests of our country… Yet…we cannot fully secure the border unless we take pressure off the border – and that requires a temporary worker program.”

On strengthening America’s energy security:

“Extending hope and opportunity depends on a stable supply of energy that keeps America’s economy running and America’s environment clean. For too long our Nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes, and to terrorists – who could cause huge disruptions of oil shipments ... raise the price of oil ... and do great harm to our economy. It is in our vital interest to diversify America’s energy supply – and the way forward is through technology.”

On the war on terror:

“For all of us in this room, there is no higher responsibility than to protect the people of this country from danger…[T]o win the war on terror we must take the fight to the enemy. From the start, America and our allies have protected our people by staying on the offense. The enemy knows that the days of comfortable sanctuary, easy movement, steady financing, and free flowing communications are long over. For the terrorists, life since Nine-Eleven has never been the same.”

“[O]ur military commanders and I have carefully weighed the options. We discussed every possible approach. In the end, I chose this course of action because it provides the best chance of success. Many in this chamber understand that America must not fail in Iraq – because you understand that the consequences of failure would be grievous and far reaching.”

“The war on terror we fight today is a generational struggle that will continue long after you and I have turned our duties over to others. That is why it is important to work together so our Nation can see this great effort through.”

“Both parties and both branches should work in close consultation. And this is why I propose to establish a special advisory council on the war on terror, made up of leaders in Congress from both political parties. We will share ideas for how to position America to meet every challenge that confronts us. And we will show our enemies abroad that we are united in the goal of victory.”

On American foreign policy:

“American foreign policy is more than a matter of war and diplomacy. Our work in the world is also based on a timeless truth: To whom much is given, much is required. We hear the call to take on the challenges of hunger, poverty, and disease – and that is precisely what America is doing. We must continue to fight HIV/AIDS, especially on the continent of Africa.”

# # #

Monday, January 15, 2007

Rev. Dr. Martin Luther King

Most people know of his famous "I Have a Dream" speech and the famous quotes from it. As we honor him today, I share with you my favorite portion of that speech:

"But there is something that I must say to my people, who stand on the warm threshold which leads into the palace of justice: In the process of gaining our rightful place, we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again, we must rise to the majestic heights of meeting physical force with soul force.

The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. And they have come to realize that their freedom is inextricably bound to our freedom.

We cannot walk alone.

And as we walk, we must make the pledge that we shall always march ahead."

Sunday, January 14, 2007

Political Dream Team

The following is from Chuck Muth's DC Confidential newsletter from today...it's more information about Congressman Ron Paul and his potential run for the presidency. If you're a listener of WSPD, you may have heard one of the several interviews Chuck has done.

Rep. Ron Paul, Texas Republican, is far from a household name to the general population (for now), but to limited-government libertarian/conservatives, he's the patron saint of their philosophy. He is the congressional embodiment of Barry Goldwater's belief that an elected representative's job isn't to determine if something is "needed" before determining if it's constitutional. And for that reason, whenever you see a vote in Congress that goes 434-1...the "1" is usually Congressman Ron Paul.

Which why he is reverently to many, derisively to a few, referred to as "Doctor No."

Many people were thrilled this week to learn that Paul is mulling a second presidential bid in 2008, recently opening an exploratory committee for such a run. His first pursuit of the presidency was in 1988, when he ran as the Libertarian Party candidate.

This time he'll be running a similarly uphill, if not impossible, battle as a Republican. His odds are long, but his grassroots support from around the nation will likely surprise a LOT of people. Many of us are dying for a leader we can vote FOR, someone who actual believes the Constitution means what the Constitution says.

By the way, although Rep. Paul is a committed, self-described, card-carrying libertarian...he's also pro-life and has impeccable credentials on the illegal immigration debate.

Which brings us to a new rumor; that Rep. Paul may ask illegal immigration's fiercest warrior, Rep. Tom Tancredo, Colorado Republican, to be his running mate (or vice-versa). In addition to his illegal immigration bona fides, Tancredo also sports a strong libertarian-leaning streak while remaining a staunch, pro-lifer with impeccable social conservative credentials.

In a GOP field which so far boasts so many flawed candidates who so many libertarian/conservatives are having trouble stomaching, let alone supporting, a Paul/Tancredo or Tancredo/Paul "Dream Team" would be a huge shot in the arm which would force discussion on SO MANY issues which heretofore in recent years have been swept under the carpet, mostly by Republicans (including the current president).

Not only would a lot of ignored issues suddenly get prime-time exposure, a much-needed, long-awaited Goldwateresque public policy debate over the appropriate, constitutional role and nature of the federal government would finally take place.

So let it be written; so let it be done.

Saturday, January 13, 2007

Fantastic Photos

My cousin sent me this link of aerial photos of the Great Lakes shoreline. Hope you enjoy seeing them as much as I did!


Friday, January 12, 2007

Rep. Ron Paul to run for President

If you've read my blog regularly, you've seen reprints of Rep. Ron Paul's (R-TX) columns. He's a devoted follower of conservative/libertarian ideals when it comes to the role of the federal government. In looking at his record, you will find that his votes reflect his philosophy, especially when it comes to him billing himself as the "taxpayer's best friend."

The Houston Chronicle is reporting that Rep. Paul has filed papers to form an exploratory committee for President and is expected to make a formal announcement in the next couple of weeks.

Obviously, I'm a big fan of Rep. Paul. I was honored to have some time with him for a discussion about the competing interests of rejecting pork spending versus advocating for your district for federal funds. His perspective was solid, based upon his limited government, low taxation principles and his advice to me on the issues I faced as county commissioner was invaluable.

Rep. Paul was the Libertarian Party's candidate for President in 1988, but he's been elected to congress 9 times as Republican. Because of his Libertarian past, he's not enjoyed much financial support from the GOP's traditional donors. This may actually help him with some of the grass-roots Republicans who've become disenchanted with some of the GOP leaders.

Recently, Ken Blackwell had a column in Reason Magazine (see full column here) where he stated that: "Conservatism in America is in need of leaders who demonstrate fidelity to principle." Such fidelity is present in Ron Paul.

I've not been excited about any of the names that have been bandied about for the GOP candidate for President, ... until now. I'll be watching closely to see his platform, and if it is consistent with his votes/positions to date (which I do not doubt), I'll look forward to helping elect him President.

For more information on Rep. Paul, go here .

Thursday, January 11, 2007


From The Patriot Post:

The Patriot Post
Founders' Quote Daily

"I suppose, indeed, that in public life, a man whose political principles have any decided character and who has energy enough to give them effect must always expect to encounter political hostility from those of adverse principles."

-- Thomas Jefferson (letter to Richard M. Johnson, 1808)

Reference: The Writings of Thomas Jefferson (Memorial Edition),
Lipscomb and Bergh, eds., 12:9.

Wednesday, January 10, 2007

Hotel-Motel Tax - vote scheduled

Well, the state legislature gave our County Commissioners the ability to raise the hotel-motel tax by 2 percentage points after January 15th...so it should come as no surprise that a meeting is scheduled for January 17th with two items on the draft agenda:

Tina Skeldon Wozniak
Pete Gerken
Ben Konop

January 17, 2007
10:00 AM

Draft Agenda

Call To Order

1. Approving Hotel/Motel Tax Code Regulations as Amended
2. Pursuant to Current Hotel/Motel Tax Code Regulations, Authorizing an Excise Tax Increase on Lodging Furnished by a Hotel/Motel for Transient Guests for the Purpose of Funding a Multi-Purpose Arena

Other Business

Open Discussion

Since this is just the draft agenda, it's unclear whether or not this is going to a vote of the public PRIOR to being implemented...but my guess is no - that they'll pass the additional tax and then hope that no one brings forth a referendum on the increase.

This will give Lucas County one of the highest lodging taxes in the country - with Monclova Township having the distinction of the HIGHEST lodging tax in the country. I read an interesting quote the other day - that government taxes what it wants to discourage. Wonder if our current board of commissioners understands this concept...

(For background on this issue and the questions about the overall financing of the arena, you can search this blog for various posts and view my archived post of Monday, August 21, 2006, "Questions on the arena financing plan.")

UPDATE: In checking the law, it appears that individuals interested in a referendum would have 30 days following the vote in which to gather 14,289 signatures (10% of the voters who voted in the last governor's race).

And so it continues...Carty vs. WSPD

So another press conference where WSPD on-air talent gets physically barred from a public press conference...except that this time, the Mayor cancels the public press conference and opts, instead, for individual interviews.

(Toledo Blade story here. WSPD is covering this latest incident as a news item, but doesn't have a story listed on their website, yet. 13ABC has story and video here.)

I guess the question some would have is this: does the fact that you're an on-air talent versus an individual specifically assigned to gather news (reporter) make a difference when it comes to first-amendment rights of a free press?

My initial reaction is that the news agency gets to decide who collects their information - not the elected official. And it would be a bad precedent to allow any elected official to determine who can or cannot attend a public press conference, especially when such determination is based upon the elected official's opinion of objectivity.

Further, I have no problem with not acknowledging questions from specific individuals in the audience, regardless of who they represent. If Carty doesn't want to answer questions from Kevin Milliken, he doesn't have to. But that doesn't give him the authority to restrict access to a public event in a public building.

My fear is that the only way this will be resolved is with a lawsuit...and no matter who wins such a contest, the public loses.

Is your vote secret?

Weapons of Mass Discussion has an interesting post about a little known phrase in election law...requiring court witnesses to divulge their votes when there is a challenge to an election. Not suprisingly, both local Republican and Democrat parties agree this shouldn't be allowed. Read all about it here.

Shipwrecks in Lake Erie

I serve as Vice-Chair of the Coastal Resource Advisory Council, a group of individuals who advise the director of the Ohio Department of Natural Resources on coastal issues. As such, I often receive various press releases and I'm passing along this one which I thought was very interesting.

I don't think most people realize how much interest divers have in our Lake Erie Shipwrecks - or in the great preservative qualities of our cold, fresh water lakes. This is a growing tourist industry and it will be enhanced by this new data.


ODNR pilot study report now available

SANDUSKY, OH - The report of a pilot study using high-frequency sound waves to locate shipwrecks in the vicinity of Kelleys Island in Lake Erie is now available, according to the Ohio Department of Natural Resources (ODNR).

Using side-scan sonar and Global Positioning System technologies, the Lake Erie Geology Group of ODNR’s Division of Geological Survey was able to more accurately locate and map known shipwrecks. The one-year study was undertaken to test whether side-scan sonar can help fulfill ODNR’s obligation to inventory, evaluate and protect shipwrecks. It also allowed scientists to develop methods of searching for previously unidentified shipwrecks in areas known to be treacherous for sailors.

Side-scan sonar produces an image like an aerial photograph, but at an oblique angle. Shipwrecks located and mapped during the study include the George Dunbar, Amaretta Mosher, and F.H. Prince. Four wrecks were located on the west and southwest side of Kelleys Island; the ships are assumed to be the Oak Valley, L.B. Crocker, C.H. Plummer, and the tugboat Relief, but it is unclear which ship corresponds to each location without a subsequent study.

Scientists also used the side-scan sonar to study the Gull Island Shoal, known to be the most treacherous reef in Lake Erie. Although as many as five wrecks are believed to have occurred in the vicinity of this reef, no shipwrecks were positively identified there.

“Locating and identifying Lake Erie’s cultural resources helps us preserve our maritime heritage,” said Constance Livchak, supervisor of the Lake Erie Geology Group. “We’d like

Tuesday, January 09, 2007

A "right" to gather the news

In the continuing bizarre conflict between WSPD and Mayor Carty Finkbeiner, the Mayor barred a WSPD reporter from a public press conference (details here). While I think it was a ridiculous decision on behalf of the Mayor that will only lead to more difficulties for him and our city, it raises some interesting questions about a 'right' to gather news.

Courts have long maintained that a freedom of the press leads to freedom to gather the data. While there are some restrictions which have arisen over time (national security, social security numbers, identification of juveniles who commit crimes), these are usually identified in public records laws created in the wake of court rulings. Further, the courts have ruled that the media is not entitled to special access, where members of the general public would be prohibited (like crime scenes). The Supreme Court has further ruled that as long as restrictions treat the media and public equally, they raise no constitutional questions.

But the courts have also ruled that "an arbitrary interference with access to important information is an abridgement of the press freedom protected by the First Amendment. . . . The First Amendment protects the public and the press from abridgement of their right of access to information about the operation of their government." (Richmond Newspapers Inc. v. Virginia)

So Carty 'arbitrarily' decides that a local reporter is "not objective" and thus not allowed access to his public press conference. He further exacerbates the situation by refusing to account for the decision to restrict access to a member of the media.

It seems the Mayor needs a lesson in basic First Amendment rights - and he should probably rethink his criticism of Ottawa County Sheriff Robert Bratton's "arrogance in government."

Monday, January 08, 2007

Totalization Agreements

You're probably wondering - what in the world is this? Congressman Ron Paul (R-TX) is one of my favorite legislators, specifically because of his limited government/constitutional perspectives that are supported by his votes. He does a weekly column and this week's is reprinted below. Love to know your thoughts on this!

Totalization is a Bad Idea
January 8, 2007

Through a Freedom of Information Act Request, a private group recently obtained a copy of a 2004 agreement between the United States and Mexico that will allow hundreds of thousands of noncitizens to receive Social Security benefits.

The agreement creates a so-called “totalization” plan between the two nations. Totalization is nothing new. The first such agreements were made in the late 1970s between the United States and several foreign governments simply to make sure American citizens living abroad did not suffer from double taxation with respect to Social Security taxes. From there, however, totalization agreements have become vehicles for noncitizens to become eligible for U.S. Social Security benefits. The new agreement with Mexico would make an estimated 160,000 Mexican citizens eligible in the next five years.

Ultimately, the bill for Mexicans working legally in the U.S. could reach one billion dollars by 2050, when the estimated Mexican beneficiaries could reach 300,000. Worse still, an estimated five million Mexicans working illegally in the United States could be eligible for the program. According to press reports, a provision in the Social Security Act allows illegal immigrants to receive Social Security benefits if the United States and another country have a totalization agreement.

It’s important to note that Congress, like the American people, heretofore had not seen this totalization agreement. This decision to expand our single largest entitlement program was made with no input from the legislative branch of government. If the president signs it, Congress will have to affirmatively act to override him and in essence veto the agreement. This is the opposite of how it’s supposed to work.

There are obvious reasons to oppose a Social Security totalization agreement with Mexico. First, our Social Security system already faces trillions of dollars in future shortages as the Baby Boomer generation retires and fewer young workers pay into the system. Adding hundreds of thousand of noncitizens to the Social Security rolls can only hasten the day of reckoning.
Second, Social Security never was intended to serve as an individual foreign aid program for noncitizens abroad. Remember, there is no real Social Security trust fund, and the distinction between income taxes and payroll taxes is entirely artificial. The Social Security contributions made by noncitizens are spent immediately as general revenues. So while it’s unfortunate that some are forced to pay into a system from which they might never receive a penny, the same can be said of younger American citizens. If noncitizens wish to obtain Social Security benefits, or any other U.S. government entitlements, they should seek to become U.S. citizens.

Also, totalization agreements allow noncitizens to quality for Social Security benefits by working in the U.S. as little as 18 months. A Mexican citizen could work here for only a year and a half, return to Mexico, and retire with full U.S. benefits. This is grossly unfair to Americans who must work more quarters even to qualify for benefits-- especially younger people who face the possibility that there may be nothing left when it is their turn to retire.

Those in favor of sending U.S. Social Security benefits to Mexican citizens argue that crushing poverty in Mexico demands some form of U.S. assistance to that country's aged. While poverty in Mexico truly is deplorable and saddening, the fact remains that Congress has no constitutional authority to enact what is essentially another foreign aid program.

Thursday, January 04, 2007

Harry Kessler, 1927-2007

I didn't know Mr. Kessler very well - I'd only talked with him a couple of times. But those times were impressive.

After he served as Mayor, he was the Clerk of Toledo Municipal Court. He retired from that position in 1992 and his replacement had to run for election in 1993 for the balance of the term. That's the year I ran and won the seat. Shortly after the election, I got a phone call - it seemed that Mr. Kessler wanted to know if I'd be interested in meeting with him to talk about the Clerk's office. I accepted the invitation, but was extremely apprehensive as to why one of my predecessors - and a Democrat, too - would want to talk to me.

He invited me to his house on a sunny, but cold, day. He was warm and welcoming and said he just wanted to share some information with me.

First, he said, the job of Clerk was the best in the County. And, after having served there 9 years, I agree. Second, he said that there were deputy clerks in the office more interested in politics than in being clerks and they needed to go - but there were deputy clerks more interested in being clerks than in politics and they needed to stay. No, he didn't tell me which were which, but said if I was astute enough to win the election, I'd figure it out soon enough.

Third, he said that he'd hired a man (Pat O'Connell, who is still with the office) to help with the computerization of the office and that 'Integrated Criminal Justice' (tying all the law enforcement, prosecution, courts, jails together electronically) was the way to go. He hoped I'd embrace the idea as well and work toward that as a goal. He said it was my decision as the Clerk, but I'd be dumb not to. (I did - and today our NORIS computer system is the example people look to when they want to develop a completely integrated system.)

Finally, he told me to keep an eye on the money - which is always good advice - and to remember that just because I have money in the budget doesn't mean that I have to spend it. This, especially, struck me because it was the same thing my parents would say.

He was kind in the way he offered this advice to a political newbie, and it didn't matter to him whether I was a Republican or Democrat. As he explained, the campaign was over and now I was a Clerk. But then, he was one of the "old time Democrats" who understood that campaigns are campaigns and afterward, there's the business of running the government. I was grateful and honored that he shared this advice with me - and that he cared enough about the office he held to do so.

Over the years, I'd invite him to come by the office (retirements, Christmas potluck) but he always declined. He said he didn't want to be a distraction for everyone. I think it was more than that...as in the unspoken rule that past presidents didn't criticize the current one, I think he was trying to be respectful of the change in office holders. While I accepted his response, I still wish he would have stopped by on occasion.

Mr. Kessler certainly served his community with honor - as Mayor, Clerk of Court, School Board Member, president of the Toledo-Lucas County Convention & Visitors Bureau, and president of the board of trustees of the Toledo-Lucas County Public Library for five of his 26 years on that board. While this great but humble man will missed, his legacy continues in the advice and words of wisdom he imparted.

Rest in peace, Mr. Kessler.

Wednesday, January 03, 2007

Government loans to businesses

With the recent news that the City of Toledo is suing various companies that defaulted on their government loans, I thought I'd share some information about the County's situation with the former Socrates Cafe.

This Warehouse District company approached the County for a low-interest loan. The owner is a well-respected businessman but was having some difficulty with his business in this area of the city. As I always do, I asked for the analysis of the financials that should have accompanied the loan request. However, the analysis hadn't been done yet, despite this loan being slated for the agenda.

The item was held so that financial data could be gathered, to give us - i.e. me - an idea as to whether or not the loan was a good investment of public dollars.

(Now I know that there are many out there who have a basic philosophical objection to such loans in the first place - and I agree with you...But when the issue is not SHOULD we, but TO WHOM, I saw it as my duty to make sure that, if we were going to give public dollars for such purposes, we would do so in a fiscally responsible manner.)

Once the financials came in, I immediately saw that this loan had very little chance of being repaid. The business owner's own data showed the necessary sales for a break even point and the very high likelihood that such sales would not be achieved. I also asked for a valuation of the inventory to be sure that any inventory would be sufficient to cover the loan should the owner default. The only valuation received was the owner's estimate based upon purchase price - which was not enough of a guarantee for me.

When I asked why the County was considering giving money to a company which such poor prospects, a staff person told me that they were "instructed by a commissioner to help this man and his business." When I asked staff if they thought this was a good investment, they said 'no' but that it appeared the equipment was valued high enough to ensure that we'd get our money back and that they'd write into the contract that all other obligations would be subordinated to the County.

Based upon the owner's own financial analysis, I voted against the loan, but the vote was 2 to 1. Unfortunately, the owner defaulted on the loan. Just before I left, I inquired about the status of recouping the money. The loan is over 90 days late and, I believe, the business is closed. The equipment is still on site, but has not yet been liquidated. The staff sent a formal letter in September and had a conversation in December. I don't know who is following up on this issue or how long it will take for the taxpayer money to be repaid.

Moral of the story: there are institutions who are in the business of loaning money - and they aren't governments gambling with tax dollars. If a business can't get a traditional loan, perhaps there's a very good reason - and politicians ought to pay heed. Finally, if governments find themselves in the position of making such loans, the decisions ought to be based upon sound financials and good data - not on emotions and the misguided notion of "helping." Sometimes the best 'help' is to let someone fail.

What about sunshine laws?

In today's paper, there's an article on the failure of the 8 democrats (note - a MAJORITY) to muster enough votes to change the president of Toledo City Council.

Of special note is this quote from Frank Szollosi:

Mr. Szollosi said the Democrats should have met privately to agree on a candidate before calling for a vote publicly. He said it appeared that he and Ms. Brown each had only four votes. "The eight of us don't have our act together. Until we get our act together we have no business leading council," Mr. Szollosi said.

The last time I checked, a majority of any public body could not get together to decide action that they would take as a public body. To me, this would seem to include any decision about who they are going to vote for as president of the council.

While Councilman Szollosi refers to it as a caucus, I don't think it's quite the same. They are not getting together to decide their caucus leadership - they would be getting together to decide the leadership of Toledo City Council which is, by law, a non-partisan office.

If the Democrats on council do decide to get together to discuss such public business, I hope they make sure it's a public meeting with proper notice. Toledoans deserve to know how any decision about who will be the president of council is reached.

However, my personal hope is that they allow Rob Ludeman to continue. He appears to be doing a good job of handling the agenda and allowing all council members to have input and follow their individual initiatives. But this being Toledo, my expectations is that politics will win out over good government...
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