Wednesday, December 24, 2008

Random thoughts on recent news items

* Toledo tops in unemployment - This isn't really news, though everyone seems to think so. The myriad of news articles say that Lucas County has the highest unemployment of all the urban counties in Ohio. The news that everyone is missing is that Lucas County has had the highest unemployment of all the urban counties in Ohio for about the last 20 years! Even when the economy was terrific and the other areas of the state were doing well, we still had the worst numbers.

So rather than bemoan our numbers, what are our elected officials doing? Nothing constructive, that's for sure. They're talking about, or actually voting to, raise taxes and fees, make temporary taxes permanent, starting a government-funded education fund, training people for 'green jobs' even though they have no green jobs to fill, threatening to appeal their arbitration losses, etc... All things they've done, in one form or another, for the last 20 years - and we can expect the same results: Lucas County leading the states urban counties in unemployment. You know what they say about the definition of stupidity...

* In a 'stuck on stupid' move, Toledo Mayor Carty Finkbeiner decided to 'furlough' for a couple of days before and after holidays, some of the city workers. The unions claimed this violated the terms of their contracts and they went to court. The court said to go to arbitration on the issue - so the city and unions requested an expedited arbitration. Turns out, the unions were right and Carty was wrong. The furloughs did violate the terms of the contracts and the city was ordered to compensate the covered employees for that day off.

Now Carty, with his penchant for never admitting he's wrong, is saying he's going to appeal the arbitration ruling - and he'll do more furloughs while waiting for the appeal. Some are saying he doesn't even have the right to appeal (though I couldn't find it in the Toledo Municipal Code which includes the contracts), but that little fact won't stop him from trying. Of course, if he loses the appeal (as many people predict) we'll again be paying city workers for time not worked, not to mention the costs of the arbitrator and the appeal itself.

* The city recently got a $3 million grant to go toward cleaning up the old Fiberglass Tower. A Michigan firm, the Eyde Company, has decided to purchase the building and convert it to condos, office space, a restaurant, etc. Their plan calls for a $35 million investment, once the grant helps pay for removal of asbestos.

At the press conference announcing the grant, WTOL News 11 reporter Rob Wiercinski tried to ask the mayor about the wisdom of state money being the first in with the hope that private money would follow. He used the Marina District as an example of the difficulties private developers are facing with such projects. He didn't mention, though I will, the stalled plans for the Steam Plant and the public statements by those developers that Toledo, with its current market, doesn't need additional housing.

The mayor, in his usual condescending way, didn't answer the question but did manage to insult the reporter saying that people with better pedigrees than him and the mayor couldn't get loans from the banks. Such an answer would appear to support Wiercinski's concern - but the mayor was oblivious.

As a side note, I received an email several days ago about this structure. It was from an individual who had been at a meeting with engineers, architects, developers and Lt. Gov. Lee Fisher. The overwhelming consensus was that the building's layout and design was not conducive to the needs of today's potential tenants and that it would be better to tear it down than to spend a fortune trying to 'make a square peg fit into a round hole.'

* Saying that 'desperate times calls for desperate measures,' The Blade editorial board is calling for a state-wide tax amnesty. Tax amnesty programs, they claim, help the state collect money owed to them - and that's true. But what about all of us who have paid our tax bills on time - or even those who paid late, but paid the late fees because they knew they were in the wrong?

If we continue to reward bad behavior, we will continue to get bad behavior. If money is owed to the state, it should be collected - without an amnesty. If the state wants to work out any payment plan or forgive part of the late fees/fines as part of an agreement with an individual debtor, taking into account the unique circumstances that led to the non-payment, that's okay with me. But to publicly announce that any and all violators will have a period of time where they can suffer no consequences as a result of their willful and flagrant violation of the state laws just doesn't sit right with the majority of taxpayers who've done the right thing all along. Besides, the editorial argues, people don't suddenly decide to not pay their taxes just because they see this happening, so the negative consequences of amnesty programs is minor.

If the state is so desperate for funds, it should step up its collection enforcement - not reward the non-payers - and the editors at The Blade should stop arguing on behalf of lawbreakers and do more to support the lawabiders.

* There's been a lot of talk lately about government re-training of laid-off workers. Now, I'm all for laid-off workers going out and getting training that will help them get a new job, but I must question when it became the role of government to make sure this happens? When was it that government became the job trainers? We know that most people in local government didn't have 'real' job before entering politics, so do we really expect that they have the skills and ability to help others get jobs? And why are my tax dollars going to train laid-off people instead of staying in my pocket to help me better my education or training so I can move up an employment ladder?

Why is government acting as a middleman for training citizens? All the middleman does is give you information you could have gotten on your own (if you were interested) and then take your money (and everyone else's) for doing so. Think of it - Lucas County gets millions in Workforce Investment Act (WIA) funds to do this - and they spend that money in a building, in equipment like computers and chairs and desks and, especially, in staff salaries - all to provide a location where you can get information you could have gotten in numerous locations. And despite all these tax dollars being used to 'help people get jobs,' we still have the highest unemployment rate of all the urban counties in Ohio.

Government's job is NOT retraining laid-off people or helping out-of-work citizens to find jobs. That's an individual responsibility - or, at least, it used to be.


Timothy W Higgins said...


Here we are on Christmas Eve, once again being negative on government. Who cares if our local government leads us to the highest unemployment numbers in the state? Who cares that the Mayor blunders his way through the budget process, committing one violation of the Charter that he helped write after another? Who cares if a Mayor who doesn't know how bills are paid in Toledo chooses to lecture reporters in banking and finance? Who cares that we are tying up taxpayer dollars in pointless projects that have little hope of succeeding and less of commercial finance? Who cares that the city and state's answers to economic crisis is more taxation without reductions in spending?

Obviously no one, as we send the same faces back to elected office time after time. None of this will change until we the voters do. Perhaps this will be the year.

Change or not however, rest from your labors and enjoy the season. Happy Holidays to you and that stogie-smoking spouse of yours.

DeeDee Liedel said...

As a tax professional, I'm not sure I agree with everything the Blade has said about tax amnesty programs. Yes, they provide a significant influx of revenue and they also identify new taxpayers who will now (hopefully) voluntarily contribute to the tax rolls. But in my experience tax amnesty programs are NEVER offered to those who the taxing agencies have already identified as not paying their taxes. (The Blade: "The amnesties were offered to known tax delinquents"). These group of people are purposefully left out of the equation - most programs specifically state that they are only valid if you have not been contacted regarding the outstanding taxes. (From ODT website, August 2001 press release: "Amnesty is available only for taxpayers whose tax liabilities are unknown to the Ohio Department of Taxation (ODT).")

While I understand your point that collection activities should be stepped up, quite honestly these are people who haven't filed taxes for years, maybe decades for a variety of reasons. Maybe they went from a W-2 job, took a year off and didn't have to file returns, and then started their own business. Maybe they never filed and didn't know what to do so they kept letting it go for years and years. For whatever reason, they are not on the radar screen and the taxing agencies have their hands full following up on those that they know about who aren't paying/filing. Tracking down people who they don't know even exist would be equivalent to searching for a needle in a haystack unless they get clued in on some specific business.

I remember being told about one situation where a bunch of "City" residents worked in a large business that was located outside of the "City" that did not withhold "City" taxes. Once "City" realized it, they sent a revenue agent to get license plate numbers of workers in the parking lot and back-tracked to find out which residents worked at this company and then they went after all of them for past non-payment. This was triggered by one resident/employee who was caught not filing returns, and it snowballed. But this was a city income tax issue; pursuing those who aren't paying state taxes would be much harder I would think.

Reality is that there is always a tax-amnesty program going on with most taxing agencies. If you call them up, acknowledge that you have not paid your taxes and want to straighten out the situation, they will work with you - often forgiving penalties and reducing interest rates. More often than not, first contact is made by an attorney/accountant in order to guard the identity of the taxpayer until basic ground rules are set out - what will be paid, forgiveness of fees, etc. This gets past taxes paid, and a new taxpayer in future years. But announcing a program does encourage those who haven't yet stepped forward on their own that they are coming in under a defined program with rules.

Maggie said...

DeeDee - I appreciate your insight and information. If such 'programs' are designed to catch those the state doesn't know about, I'd be more inclined to support it.

But your last paragraph, "there is always a tax amnesty program going on," is true ... and the point you made better than I did.


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