Why union members should love S.B.5 seniority provision

Yesterday the House passed Senate Bill 5, the collective bargaining bill, and shortly thereafter their version received approval in the Senate. The bill now sits on Gov. John Kasich's desk awaiting his signature.

One of the provisions in the bill deals with layoffs and seniority and contains language (in multiple places) stating:

When a reduction in force is necessary, the (governmental entity) shall not use an employee's length of service as the only factor to determine whether to lay off the employee.

This means that all public sector union employees will first be judged on their performance and value to an organization - not how long they've been employed - and if you're a newer employee who does a good job, you have a better chance of keeping your job now that S.B. 5 has passed.

Quite some time ago, as host of WSPD's Eye On Toledo show, I interviewed Toledo Police Patrolman's Association President Dan Wagner during a time when the city was considering laying off police. The city was asking for cuts and the TPPA was opposing them. I asked him: if it came down to layoffs for some of his members versus an across-the-board cut, which would his members choose? His reply was probably one of the most honest statements ever made by a union president: "Sadly, I think they'd choose the layoffs."

This, to me, goes against the entire 'one-for-all' attitude that I thought unions were supposed to embrace. They certainly tout the 'collective' nature of their organization and relationship, until it comes to certain issues like layoffs versus cuts. In the end, the people in the union who 'have' will sacrifice the newer members in order to keep what they've got. Dan told me later he knew I'd never let him forget that statement, but it's nothing he should be sorry for saying - though he might be sorry his members thought that way.

But with the passage of S.B. 5, that issue goes away. Now, public employees don't have to worry about how long they've been employed; they only have to worry about their performance and their value to the city. This, alone, is reason enough for union members to love S.B. 5.

The consequence of this change in decision-making cannot be overlooked. Without the guarantee of seniority, unions may find their members are more willing to consider across-the-board cuts than they were in the past. If the older members have no assurances that they will keep their jobs, they'll be less confident in risking actual layoffs, making them more amenable to other solutions such as concessions and cuts.

This is good for the taxpayer and it removes the ever-present gamesmanship of politicians who always threaten the most untenable of layoffs (in police and fire) when they face budgetary decisions they don't want to make or when they have tax increases on the ballot they want to pass.

Additionally, S.B. 5 makes the layoff process easier for cities. Since most unions have 'bumping' rights (a data entry person laid off, for example, in the police records bureau, has the right to 'bump' a less-senior person in the data entry section of the tax department), cities will no longer have to worry about the musical chairs and the headaches of such a process.

But this issue isn't final - yet. Democrats and unions are already mobilizing to take the matter to the voters by putting the law on the ballot as a referendum. They've got plenty of time to organize their supporters, but I don't know that they'll find much success on election day.

The state switched from Democrat control to Republican during the last election despite the spending by unions. The people in office now were put there with the expectation that they would address the out-of-control spending and the huge unfunded obligations the states have. A majority spoke last November and they're not likely to change their minds so quickly, especially if the state office holders continue to do what they were elected to do.

And not all union members are Democrats. I know, that's a hard fact to comprehend in light of the perception union leaders and Democrats advance, but it's true. And even some of the union members who are Democrats are not always in favor of the way their unions operate - especially if they're the new member who was at risk of losing their job simply because of a calendar.

While I won't underestimate the ability to get the matter on the ballot - or the mobilization of their supporters - I don't believe the unions have the support of the majority of Ohioans in this regard, otherwise, we wouldn't have the bill in the first place.

Ohio House passes Senate Bill 5

Press Release from Ohio House Republicans:

Ohio House Passes Senate Bill 5 to Benefit the Middle Class, Save Jobs

House Democrats offered no amendments and provided no constructive input during lengthy process

COLUMBUS—After more than 60 hours of testimony and more than 200 witnesses over a period of nearly two months, Senate Bill 5 today passed from the Ohio House of Representatives. This legislation restores fairness for Ohio’s taxpayers and helps prevent mass layoffs of dedicated public employees by giving local governments the flexibility to manage their own finances.

Senate Bill 5 wholly reinvents the relationship between public-sector unions, local governments and the taxpayers. With many local governments threatened by bankruptcy and unable to control their costs, many communities may suffer massive tax increases or widespread layoffs just to keep public services solvent. This legislation—which restores Ohioans’ influence over the government and its employees that they pay for—aims to save these vital jobs while also lowering the tax burden on the middle class.

“Today, this House has taken an unprecedented step toward public policy that respects all Ohioans, especially our taxpayers and our hardworking middle class,” said Speaker of the Ohio House William G. Batchelder (R-Medina). “Senate Bill 5 protects the collective bargaining rights of Ohioans while also giving local governments an additional tool in the toolbox as they balance their budgets. Truly the most important thing we can do is ensure that our public services remain of the highest quality and that we give employers the ability to maintain and reward their employees—rather than resorting to mass layoffs due to ironclad contracts.”

Despite 13 committee hearings on the legislation, the House Democrats offered no amendments to the bill. Furthermore, in Tuesday’s Commerce and Labor Committee, the minority caucus voted unanimously against an amendment that would allow public safety personnel to bargain for safety equipment.

In addition to the Republican amendment to permit bargaining for safety equipment, House modifications to Senate Bill 5 include provisions that permit communications between bargaining parties, clarify that death benefit amounts for spouses are not affected by changes in the bill, and eliminate jail time as a possible penalty for striking.

The House version also removes the use of ticket quotas to determine performance-based pay for law enforcement officials, eliminates automatic union deductions without written consent, and prohibits “fair share” fee penalties as a requirement to be a non-union member within an organization. Additionally, under certain conditions, labor disputes may be settled by voters at the ballot, with last best offers of each bargaining party considered and resolved by Ohio’s taxpayers.

“In this bill, we have successfully maintained the bargaining rights of our communities’ most important public workers—those who educate our children, protect our families and homes, and keep our neighborhoods clean and thriving,” said State Representative Joe Uecker (R-Loveland), who serves as chairman of the House Commerce and Labor Committee. “At the same time, we’ve updated Ohio’s collective bargaining law, which for nearly three decades has rampantly expanded and put an undue strain on our local governments. We have found a delicate balance that will respect the taxpayers, save state and local jobs, and improve the public services we rely on each day.”

To specifically advance the quality of education in Ohio’s classrooms and reward teachers, S.B. 5 establishes standard state guidelines to determine educators’ compensation and other terms of employment. While 50 percent of educator evaluations must be based on student performance as developed by the Ohio Department of Education, local school boards have the authority to establish objective measures related to quality of instructional practice, communication and professionalism, parent/student satisfaction, and other relevant factors.

As passed, S.B. 5 is expected to save local governments more than $1 billion while ensuring that public employees can still collectively bargain under a better system with negotiations, mediation and fairness.

“The economic reality is that here in Ohio, we are looking down the barrel of an $8 billion budget hole that—without prudent reforms and a commitment to reshaping the way Ohio does business—would simply not have disappeared on its own,” said Speaker Pro Tempore Lou Blessing (R-Cincinnati). “It requires difficult decisions, and we’ve taken a step toward sustainable changes that will benefit us today and our children tomorrow. As local governments fight to stay afloat amid this financial storm, we have protected our communities and the indispensible services that our public employees give us.”

S.B. 5 will now return to the Ohio Senate for a concurrence vote.

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Rep. Michele Bachmann slated for 5th Congressional District Lincoln Day Dinner

Press Release:

BOWLING GREEN - Congressman Bob Latta (R-Bowling Green) welcomes potential presidential contender Congresswoman Michele Bachmann as the featured speaker at his 2011 Lincoln Day Dinner scheduled for Friday, May 20, 2011 at 7:00 p.m. at Sauder Village, Founder's Hall located at 22611 State Route 2 Archbold, Ohio 43502.

Congresswoman Bachmann is a 3rd term Republican from Minnesota's 6th District. She is the first Republican woman to be elected to the U.S. House of Representatives from Minnesota. She currently sits on the House Financial Services Committee and chairs the Tea Party Caucus.

Tickets are $25 per person and are now available on a first-come, first-served basis. To purchase tickets, contact a county Republican Party chairperson.

For more information, please visit www.lattaforcongress.com. To view a welcome message from Congresswoman Bachmann and Congressman Latta, please watch this video.

Update on S.B. 5

The Ohio House is scheduled to vote on Senate Bill 5 today, the collective bargaining law, after amendments and discussion yesterday.

One of the amendments that was passed included this one relating to the automatic payroll deduction for political contributions:

No public employer shall agree to a provision that provides for the payroll deduction for any contributions to a political action committee using any other method than the method prescribed in sections 3517.082, 3517.09, and 3599.031 of the Revised Code.

This is good news for union members, but bad for the unions themselves. Currently, union members do not have to contribute to the political action committees of their unions, but some (not all) include that as part of the dues structure. Members who don't want to participate can request a refund of the amount of their dues not spent directly on their representation but, fortunately for the unions, many individual members do not realize this and don't ask for the refunds.

According to the 1851 Center for Constitutional Law, which supported the amendment:

Ohio previously prohibited such automatic payroll deductions. In 1998, a state court of appeals struck the prohibition on First Amendment grounds. However, in 2009, the U.S. Supreme Court explained that such scrutiny is not appropriate: "while in some contexts the government must accommodate expression, it is not required to assist others in funding the expression of particular ideas, including political ones."

Again, this is good news for union members who won't have to fund political candidates and causes they don't support.

Fallacies surrounding the 'privatization' of Toledo trash service

Let's get this perfectly clear - Toledo is not 'privatizing' its trash service even if it decides to go with a contract with the county which would contract with a private company to do the collection.

True privatization would not have government involved at all.

The local paper's take on the matter, which actually supports the proposal currently before council, is that the city 'subsidizes' the trash service:

"Most Toledo residents who recycle pay the city $8.50 a month to collect their refuse. Senior households that are eligible for homestead-exemption discounts pay $5 a month. These fees do not cover the $16.5 million annual cost of trash collection; the city pays about $7.5 million a year to subsidize the service.

That expense has become harder to bear during the recession. It has required the city to shift money to its general fund from its capital budget, restricting the city's ability to fix streets and make long-term infrastructure improvements."

First, all tax dollars go to support city services and the trash tax referenced goes into the general fund - not a fund dedicated to paying just for the service. This means the trash 'fee' is actually a 'tax' to be used for anything council decides and not just for the collection of garbage.

Second, our 'temporary' (since the 1980s) 3/4% payroll income tax was supposed to be going to provide this service. Now, in addition to our taxes and our fee, the city still needs more money - not just for trash - but overall. If council had eliminated spending in other areas, it would have the money for this 'service' which many believe is a proper function of government.

Lastly, the editorial board seems to think that council had 'no other option' but to steal from the Capital Improvements Fund in order to meet it's annually general fund operational expenses. Nothing could be further than the truth. Council could have made tough choices in the past to STOP SPENDING, but that's not what they did.

My take on such things is that if you can look in the Yellow Pages and find companies who do a function, there is no need for government to do it as well. But if we're going to 'privatize' our trash, why don't we just go all the way instead of contracting with another governmental entity (Lucas County), which will then assign it to a different governmental entity (the Lucas County Solid Waste District) which will then issue a contract for a private company to do the work?

In the suburban communities, the property owner contracts for the services directly and it seems to work just fine. Despite the naysayers who want to claim that *some* Toledo residents aren't responsible enough to do this kind of thing on their own, I believe that it could work as well inside the city limits as it does elsewhere.

After all, if going with a private supplier is *good*, wouldn't eliminating all the middle men be even *better*???

The problem isn't our trash service or even how much it's costing. The problem is the overall costs of government relative to the amount of revenue they receive. Government spends more than it takes in, and Toledo is no exception, as our years of deficits clearly demonstrate.

No matter what plan the Council goes with, we will still be paying - one way or the other. Don't get me wrong - we should, each of us, pay for our garbage service. But if I'm going to pay, why don't I get to choose how I will do so, with the ability to not pay government if I opt for a private supplier who will give me a fee based upon my usage of the service?

Sadly, that's using logic and reason and we don't seem to do that here. Instead, the thinking that got us into this position in the first place will continue to permeate our area - until there's no one left.

Same old, same old on Toledo's budget

Toledo is facing a budget deficit. That's nothing new.

City Council has to pass a balanced budget by the end of March and, counting today, there are only three days left and still no budget. That's nothing new, either.

Council is debating 'privatizing' garbage service and, though the recent incarnation of the idea has some twists to it, even that is nothing new.

They're even considering - again - taking money from the Capital Improvements Fund to balance the General Fund. So we have a 'rob Peter to pay Paul' solution which, as well, is nothing new.

And they are discussing 'raising' the revenue estimates to cover the spending estimates, though our recent record is that we don't reach the increased targets for revenue, though we often exceed the targets for spending. Again, nothing new.

Toledo will pass a balanced budget by the end of the month - of that I am sure, though what form it will take is still any one's guess. I don't agree with all the individual line items, but I do applaud Mayor Mike Bell and members of city council for a more 'amicable and open' discussion than what has existed in the past. So while the tone is 'new' - the issues aren't.

Will we spend up to $60,000 a year in order to hire a lobbyist to represent us in Columbus? Will doing so be an implicit admission that our state reps are failing to do their jobs? Will voters even care - about the expenditure or the implications of the council thinking they *need* a lobbyist?

Will we turn over our garbage collection to the county which will then contract out to a private company who will then charge us roughly the same as what we are currently paying? If we do so, where will all the employees who were doing that job go since the city, by contract, has to find jobs for them within the city??? Will we really *save* any money when we'll be paying for the old garbage collectors as well as the ones employed by the new contractor?

Will we be able to eliminate the garbage tax? Or is it exactly what people claimed all along - just another tax council was able to pass off as a fee to fund their continued overspending?

Strangely, I could substitute any number of minor spending items for the lobbyist and have published this exact post several times in the past.

Perhaps I'm just cynical today, but we seem to be having the same discussions over and over again. Some of the names and the spending items are different, but too many of them are the same - the same old, same old that just demoralizes the taxpayers and voters of this city.

No wonder we're losing population and businesses. Who is 'stuck on stupid' now?

When you start with the wrong premise, you get a wrong conclusion

On my Facebook page, we've had a discussion about who is responsible for the debt and the spending. This is in light of the fact that many people blame the President, failing to recognize that it is Congress that passes a budget and authorizes the spending.

Historical records of the debt show that the U.S. debt increases more when Democrats are in charge of the House and Senate. While the debt has increased, rather than decreased, since Ronald Reagan was president, it increases less when Republicans control both houses or when there is a mixture of control.

This disconnect over who is responsible for the actual spending seems to apply to our current President, Barack Obama, as well. But with him, it's even worse.

In reviewing some other items, I came across this quote of his from the 2011 State of the Union address:

"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries."

Is it true that lobbyists have 'lobbied' for changes in the tax code to benefit the industries they represent? Absolutely - that's what they get paid for.

But the lobbyists have not 'rigged the tax code.' They may ask for changes in the code. They may suggest changes in the code. They may even propose language for changes in the code.

But the people who actually make the code and turn it into law are the members of Congress. They are the only ones who have the authority - which they exercise freely - to create so-called loopholes and 'rig' the code to benefit anyone or anything.

The rest of the quote is:

"Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change."

But even this is a warped and inaccurate view of what is actually happening.

As soon as Congress writes an exception, exemption, special provision, etc...other companies will ask their accountants and lawyers to figure out what it means to them and how they comply. It would be foolish of a company to ignore a deduction or credit they are 'entitled' to take by virtue of a law or provision Congress has created.

Just look at how so many elected officials encourage families to take advantage of the Earned Income Tax Credit. Here in Lucas County, the Democrat Commissioners and several other Democrat elected officials formed task forces to go around and inform people of this tax loophole, saying that families needed to ensure they were getting all the credit due to them. Why is a company getting a credit due to them under the same tax code any different?

Is Pres. Obama correct that it needs to change? Probably. I'm certainly not a fan of the complicated and overly-burdensome tax code as it exists today. I spend a small fortune having an accountant do our taxes so we can make sure we're in compliance for our businesses.

But the change needed isn't to cherry-pick provisions and eliminate them because the government wants more money and wants to be sure that only one entity responsible for paying taxes pays the most it possibly can. The solution would be to eliminate the current tax code and go with something more simple and easier for everyone to comply with.

I'm not advocating a specific plan (flat tax, fair tax, national sales tax or VAT), but I know that we won't come up with a viable solution if we're starting from a bad premise - and promoting the idea that lobbyists - rather than politicians catering to special interests and donors - 'rig' the tax code is certainly the wrong premise.

20th anniversary of Toledo - Szeged sister-city relationship

Press release:

International Festival Includes Re-commitment of Relationship with Szeged Hungary

Toledo Mayor Bell, Szeged Mayor Botka to sign agreement commemorating 20th anniversary

During today's International Festival, Toledo Mayor Michael P. Bell and Szeged Mayor Dr. Laszlo Botka will sign a recommitment agreement affirming the sister city relationship shared by Toledo and Szeged for 20 years. The signing will take place at 1:15 p.m. in front of the main stage.

Mayor Botka is leading a delegation in town from Szeged for the weekend to celebrate the milestone anniversary of the sister city relationship. He is joined by his wife and Szeged's Foreign Relations Officer. The visitors are hosted by the Szeged Sister City Committee.

The 2011 International Festival is coordinated by Toledo Sister Cities International. It will be held today, March 26 from Noon to 8 p.m. at the Erie Street Market and features family activities and entertainment from more than 20 area groups. Tickets are $5.

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Government insanity: 'free' CFL light bulb program

Let's start with a summary so everyone can understand where we are on the whole concept of why FirstEnergy Corp. is giving out 'free' CFL light bulbs, as noted in this news article. Here is what I wrote in October 2009 when this first came to my attention:

The insanity of certain government mandated energy-saving programs is on full display here in Ohio with the recent issue of the 'gift' of compact fluorescent light bulbs (CFLs) to homeowners in the state.

The Bullet Points:

* Ohio politicians pass 'bold, new' energy law (aren't they great???)
* Law puts mandate on energy producers to get their customers to reduce consumption (yes, that's what the law does...)
* Electric company develops program to 'give' us all CFL light bulbs - at a cost 67% more than we'd pay for the bulbs in the store
* Government agency 'allows' company to recoup costs of program - including the cost of energy NOT used because of the energy-reducing product
* Public expresses outrage
* Ohio politicians begin backtracking

As one of the comments, said, "If I hadn't seen it...or hadn't heard it...I wouldn't believe the stupidity of all envolved (stet) ...."

But that's not all. Shortly after this original post, the Public Utilities Commission of Ohio (PUCO) granted FirstEnergy an extension because of all the hullabaloo over the issue. Now we find that they've finally approved the plan - with modifications.

So now we have a 'free' (though we're paying for it) light bulb program that FirstEnergy is going to run. We're going to pay for the light bulbs whether we take them or not, and, when we end up using less electricity, FirstEnergy is going to be able to recoup the money we won't be paying as a result.

And just to highlight the ridiculousness of it all, this is a plan that is supposed to cover 2010-2012. How nice that it's finally gotten approval halfway through the term!

Let's take a look at how much this is 'really' going to save us. The company was originally going to give everyone two light bulbs and charge $.60 per month over three years for a total of about $21.60. In 2009, a four-pack of the same bulbs was only $8.

Under the plan just approved, we're going to get six bulbs and be charged $.30 per month over three years for a total of about $10.80 - half what was originally proposed.

However - and this is a BIG however - FirstEnergy isn't going to charge us just the $.30. They've received permission to charge customers $1.50 per month for three years to fund the program (the $.30 per month for the bulbs) and to cover "lost distribution revenue." That's the amount of money we won't be paying FirstEnergy because we've reduced our energy consumption.

So, I'm going to pay $54 for the 'privilege' of using six "free" CLF light bulbs when I could go to Walmart and purchase the same thing for $2.53 each - a total of $15.16 plus sales tax.

My phrase, 'stuck on stupid,' just doesn't seem to cover the insanity of this.

Now, FirstEnergy is stating that I can save money by using these bulbs - $49.25 annually or $147.75 over the three year period. And that, they justify, is actually a savings for us ($147.75 energy savings minus the $54 cost) of $93.75. Woo Hoo!

But think about it - without the program mandated by our elected officials in Columbus, I could purchase six bulbs for $15.16, install them and save $147.75 over three years, for a net savings of $132.59. That's 41% more than I'd save using the government-mandated, PUCO-approved, 'free' giveaway.

But we're supposed to be happy and 'feel good' about our elected officials who've come up with this idiocy.

As I wrote two years ago, and I still believe:

Don't blame FirstEnergy for doing what the law requires. Blame the politicians and Governor who passed the law in the first place.

These elitist statists are trying to force us to conform to their opinion of how to save energy - but they're not telling us directly, because we'd revolt if they mandated what kind of light bulb we had to buy.

Instead, they've created a mandate on a supplier of a product, forcing the supplier to try and find a way to get their customers to use less of their product.

This is more than 'stuck on stupid.' It's insane!

I'll repeat: That's like telling Starbucks that people drink too much coffee and they need to get their customers to drink less. Is this not unrealistic and bordering upon 'insanity'?

And, now that we've seen what the program will actually look like, we know that government isn't really helping us at all. They are costing us money - while telling us they're giving us something for free - and claiming to help the environment at the same time that they're dictating our consumer choices.

As it stands today, I'm going to end up paying for a product I do not want and, if I return the product to the supplier, I'm going to be charged. In any other situation, I'd have legal recourse in the courts. Ohio has specific laws to prevent me from being billed for items I did not order and do not want. Apparently, though, when lawmakers crafted this law, they missed the irony of the contradiction.

Maybe I will pursue a lawsuit over the matter - wonder what my chances are of winning?

"[I]f the public are bound to yield obedience to laws to which they cannot give their approbation, they are slaves to those who make such laws and enforce them." ~ Candidus in the Boston Gazette, 1772

Quotes of the Day - Michigan

From a Wall Street Journal article on the disaster that is Michigan's finances: "Michigan's War on the Middle Class" by William McGurn (emphasis added).

Michigan today is not a struggling state like California or New Jersey or even Wisconsin. It is a basket case, with worse to come if things do not change quickly—especially in the relation of the public to the private sector.

"Many of the protesters seem to think the war is between rich and poor," says Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Michigan-based Mackinac Center. "But the real class war today is between government and the people who pay for it. And the government's been winning."

and this:

For every dreary statistic, Michigan has a real advantage: a large freshwater coastline, a farm sector that could be an even larger export industry, a rising health-care industry, energy reserves waiting to be tapped, and affordable communities. The point here is not that if you build it they will come. The point is if you get off their backs, they will come build it themselves.

David Littmann, an economist and colleague of Mr. LaFaive at Mackinac, says he's deeply skeptical of whether Mr. Snyder's reforms go far enough. But about Michigan's potential he has no doubts, if government would only let the market decide.

"If we created a climate where the risks and rewards were attractive to capital, we'd find entrepreneurs from all over the world finding their way to Michigan," he says. "They in turn would be a catalyst for other industries we can't even imagine now—and the kind of Michigan that could be even more dynamic than it was when the auto industry was at its peak."

Waterville mayor testifies for repeal of Ohio's estate taxx

Mayor Derek Merrin is scheduled to testify this morning on S.B. 90, the repeal of Ohio's estate tax. These are his prepared remarks:

My name is Derek Merrin; I’m the mayor of the Village of Waterville. Waterville is located in Lucas County and has a population of approximately 5,500 residents. Our general fund budget is about $3,100,000. Historically, we have received $30,000 to $60,000 annually from the estate tax, which represents less than two percent of the general fund budget.

I fully support S.B. 90—the repeal of the estate tax. The tax is morally wrong; it is misguided tax policy and has put Ohio at a competitive disadvantage.

An individual’s estate consists of after-tax dollars. Their earnings have already been taxed multiple times. Even though deceased Ohioans have worked hard, played by the system, saved responsibly, the State of Ohio’s estate tax swoops in and plies their savings from their hands. This is morally unjust and cannot be rationalized.

It’s been said, “The goodness of a nation can be judged by how it cares for its dead.” If the state of Ohio would be judged by this standard, it would fail.

As an Ohio mayor, I felt compelled to testify today. A few short-sighted, local officials have been vocally protesting the repeal of the estate tax. They claim their cities, villages, and townships will lose revenue if the tax is repealed. They have missed the whole point.
The tax is hurting the entire state of Ohio, which includes their communities. As the state of Ohio goes, so goes local communities.

The tax has contributed to Ohio’s population decline. When Ohioans leave to protect their assets, Ohio loses their wealth, spending power, and future capital investments. I might add that those are all taxable. It’s not a zero-sum game. On the contrary, if you repeal the tax, Ohio will ultimately increase collection on other taxes, particularly income and sales taxes. See, taxes only generate revenue if there are people and wealth to tax. This isn’t about political ideology, but common-sense economic principles that have been proven true over time.

Furthermore, when Ohioans leave, we lose human capital that is vital for economic growth. The estate tax motivates successful businessman, entrepreneurs, and older residents to leave Ohio. Not only do we lose their financial resources and seed money, but we lose their experience, business acumen, and talent to continue to invest in Ohio.

Thirty states do not have an estate/inheritance tax and realize its poor public policy. By most economic indicators, those states are outpacing Ohio in job creation. Many local officials have neglected to see this economic phenomenon and failed to see the big picture.

Senators: You were elected—with the hope you would see the big picture and understand the macro-effects of tax policy. It’s clear that Ohio’s estate tax is an impediment to economic growth. To help local communities and the state of Ohio to prosper, I encourage you to repeal the estate tax. It’s time Ohio has a tax structure that moves Ohio forward.

Toledo trash tax going up?

The City of Toledo is looking at another budget deficit for 2011 - this time around the $5 million mark. Which is no surprise considering that Council has not been as serious as they need to be about reducing expenditures.

They're probably thinking that if they can continue to push the costs into future years (as they repeatedly done in the past), the economy will eventually recover enough to address most of the problem. It's hopeful, but certainly not a solution to the continuing budgetary problems the city faces.

As this has been an ongoing problem, an ongoing solution has been the imposition of taxes. Under the guise of a 'fee,' they've passed a trash tax - basically charging homes for the collection of garbage, despite the fact that our 3/4% payroll tax (and just about all other taxes) is supposed to be covering that service along with the basic services of government.

And just like with most government taxes, it was sold as being temporary with a reduction over time to zero, only to find that it's gone up ... and up ... and perhaps, up again.

An item that was not discussed in last week's council agenda meeting made an appearance last night during the regular meeting for a first reading:

Amend TMC Sec. 963.03(b) to increase refuse collection fee, $15/$8.50/$5 to $12.50/$7.5

Prior to March 31, 2010, the tax was scheduled to be $8.50 per month for residents but would be only $1.00 per month if you recycled. Facing - yes, you guessed it - budgetary shortfalls last year, council scheduled the tax to be $15.00 per month for everyone. But then they put Issue 5 on the ballot, a measure to move money around between general and capital improvement funds, and Mayor Mike Bell promised a reduced trash tax if the measure passed.

It did pass so the tax went to $15 for people who don't recycle, $8.50 for those who do and $5 if you have a homestead exemption.

This ordinance would actually reduce the tax by $2.50 for people who don't recycle, and by $1.00 for those who do.

***Side note: Why they decide the people paying more should get a larger reduction is beyond me - they certainly don't apply that logic to income taxes!
***

But those with homestead exemptions who are currently paying $5 will have to pay $7.50 - the new recycling rate. According to the latest Census Bureau figures, roughly 13% of Toledo residents are over 65 and eligible for the homestead exemption. Unfortunately, I couldn't easily determine how many households that is - or if that is a larger or smaller number than the number of households that are not recycling.

It appears, though, that seniors will be paying more to counter the decrease non-recyclers are going to get.

Of course, I think the trash tax is wrong and that we shouldn't have one in the first place. But since it appears council is going to do it, it would be preferable for them to not change it every year based upon their ongoing failure to present a budget that has the city living within its means.

Saturday: Mobile Meals Chili Cookoff

This Saturday marks the 18th Annual Great Chili Cookoff fundraiser for Mobile Meals from noon until 4 p.m. at Stranahan Great Hall on Heatherdowns.

While there will be concessions available, the main focus will be on the various chili entries in the amateur, corporate, media, restaurants and salsa categories - all of which will be available for tasting and voting.

Awards will be given for the People's Choice (based upon the voting by attendees), and the Judge's Choice. Awards will be announced at 3 p.m.

Additionally, there will be entertainment, chef demonstrations and the Black Swamp Cruisers' Classic Car Show.

All proceeds go to support the Mobile Meals Home Delivery program which provides over 600 meals each day to "enable the elderly, ill, disabled, homebound, the convalescing and all those who need assistance with diet and meal preparation to remain in their own homes and retain the dignity and independence they treasure."

My husband and I have been involved with Mobile Meals since 1993. It's a fantastic organization and I hope you'll support their efforts by attending this fun - and delicious - event!

Quote of the Day - democracy

A quote of the day while I gather material for tonight's Eye On Toledo show at 6 p.m. on WSPD:

"[D]emocracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security, or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths." --James Madison, Federalist No. 10, 1787

2011 International Festival

Press release:

Mayor, Sister Cities Announce 2011 International Festival

Mayor Michael P. Bell will join representatives of Toledo Sister Cities International to announce the 2011 International Festival at a press conference on Tuesday, March 22 at 10 a.m. in the Mayor’ s office on the 22nd floor of Government Center.

The festival will be held from noon to 8 p.m. on March 26, 2011 at the Erie Street Market. The afternoon event will feature a parade of nations, over 20 performing arts groups, a beer and wine garden, kids activities and local food vendors.

Admission for the festival will be $4 in advance and $5 at the door.

Toledo Sister Cities International has existing relationships with Toledo, Spain; Qinhuangdao, China; Szeged, Hungary; Poznan, Poland; Bekaa Valley, Lebanon; Toyohashi, Japan; Tanga, Tanzania; Delmenhorst, Germany; Coimbatore, India; and Hyderabad, Pakistan.

What: Mayor, Sister Cities announce international festival

When: Tuesday, March 22, 2011
10 a.m.

Where: Mayor's Office

Available: Mayor Michael P. Bell
Toledo Sister Cities International board members

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Filling in on WSPD

Now that we're back from our vacation and I'm getting caught up, I wanted to let you know that I'll be filling in on WSPD Tuesday at 6 p.m. on Eye on Toledo.

I'll also cover the afternoon drive from 3-6 p.m. on April 5th and April 8th - but will also give you a reminder closer to those times.

Hope you'll tune in at AM 1370 or on the internet (www.wspd.com) and join me!

FreedomWorks joins effort to pass S. B. 5

Press Release:

FreedomWorks, Statewide Tea Party Leaders to Support Senate Bill 5 and Governor Kasich

WHAT: FreedomWorks, Ohio Tea Party groups and limited-government activists will host a press conference at the state capitol to defend the taxpayers of Ohio and to offer support for Senate Bill 5 (SB5).

Following the press conference, grassroots leaders from across the state will deliver hundreds of letters of support from the citizens of Ohio, urging their state Representatives to vote YES on SB5. Senate Bill 5 is a piece of legislation that would remove automatic pay raises, introduce merit-based pay and reform the collective bargaining power of state and local employees.

WHEN: Tuesday, March 8, 2011 at 10a.m.

WHERE: Capitol steps on the North Plaza of the Ohio Statehouse, 1 Capitol Square, Columbus, Ohio 43215

WHY: FreedomWorks strongly believes that Senate Bill 5 is the first critical step to alleviating Ohio’s budget crisis and lay the foundation for future job growth. Currently, the state of Ohio has a $10 billion deficit for 2011, and shed over 600,000 private sector jobs in the last ten years.

Governor John Kasich will be the latest recipient of the FreedomWorks "Legislative Entrepreneur Award," for his dedication to restore economic competition in Ohio, rein in spending and shrink a bloated state budget.

As the debate picks up steam in the Ohio House, FreedomWorks will continue to mobilize members, along with conservative, limited-government activists in Ohio on FreedomConnector- a revolutionary, new online mobilization tool designed to quickly apply concerted pressure on elected officials- to call and email targeted Ohio House Members in support of SB5.

In addition, FreedomWorks will be organizing numerous events on the ground throughout Ohio in the weeks ahead to advocate the passage of SB5.

“Ohio is in a vicious cycle where the private sector shrinks and the public sector liabilities grow, forcing businesses, jobs, and citizens to become economic refugees to the Sunbelt states. We applaud Governor Kasich’s bold efforts to reverse nearly 50 years of economic stagnation and to build a foundation of growth and recovery in Ohio. It’s our mission to unite and mobilize a grassroots constituency in support of legislative entrepreneurs like Governor Kasich who look for long-term solutions instead of nearsighted gimmicky fixes.” – Matt Kibbe, President of FreedomWorks

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America's fiscal crisis - a non-political perspective

There are a lot of perspectives on America's financial status these days - mostly political ones. So how is an average person supposed to make heads or tails of the truth considering the claims on both ... well, on ALL ... sides?

TechCrunch had this article which highlights a new study:

So how can we be so apathetic when we see true abysmal fiscal neglect, especially when it’s that of a pseudo-company in which we all essentially own shares?

That pseudo-company is the United States government and in a thorough report issued today, Kleiner Perkins partner Mary Meeker has taken all emotions, politics, spin and manipulation out of the issues, to present a steely-eyed view of just how hosed our financial situation is. Spoiler alert: It’s not pretty. America is gripped by a new red menace and this time, it’s not the commies– it’s a sea of red ink. If politicians reported to voters the way management reports to shareholders, no one would finish out their terms.

If you’re a tax-paying American, you should read the report (embedded below) to see how your money is being spent. If you’re not an American, you should read it too. Far too often blogs like ours trumpet the advantages of living and starting a business in this country, of which there are many. But here’s a sober view of the downside of our wishfully innate belief that we deserve to have it all: We are in a deep financial hole, and there’s not an easy, pain-free or politically palatable way out.

They further explain - and this is the point I like - "the interesting thing is why she wrote it: Because for all the hand-wringing over the cost of health care and the state of our deficit, she had a hard time finding the simplest data for what America’s financial situation was."

Here is the report. Please read it and understand the financial picture minus the spin.

TPS projects $97.6 million deficit by 2015

I posted the press release from the Buckeye Institute when they announced their "Six Principles for Fixing Ohio." As a follow-up to that report, today I received this blurb:

School District Financial Projection Charts

As a supplement to the "Six Principles for Fixing Ohio," school district charts from the fiscal projections have been developed for Ohio's 613 school districts. Roughly 91 percent of the school districts project deficits in their ending cash balances by 2015. The aggregate deficit for all schools exceeds $7.6 billion. By 2015, compensation package costs will swallow 96 percent of projected revenues. With only 4 percent of revenues remaining, no amount of cost-savings outside of compensation package cuts will ease the expected deficits. Thus, school districts will either have to dramatically increase revenue via higher tax levies or make cuts to compensation packages or a combination of both actions.

Click here to view the charts.

For Lucas County, you can begin on page 46 of this report. What I read in the report alarmed me.

Toledo Public Schools reported that their personnel costs in 2010 are 71.4% of their total revenues. For 2011, they're projecting a $3 million increase in revenue and the personnel costs drop to 64% of income. But they're projecting that their revenues will drop steadily from 2011 to 2015 - by $59.9 million (a 17.5% decrease). Interestingly, they're projecting increases in expenses of $38.8 million by 2015 - 11.3%.

This means that, by 2015, personnel costs at TPS will eat up 91.4% of their income resulting in a $97.6 million deficit. Remember - these are TPS's own figures.

Buckeye estimates that "by reducing compensation package costs by 10
percent and limiting future growth to 3.2 percent," their budget deficit could be reduced to $86.6 million.

So a 10% reduction in compensation costs coupled with limiting growth in spending to only 3.2% will save us $11 million by 2015.

Now, public agencies routinely estimate decreasing revenues and increasing costs, so without going through each of the line items, I cannot say if these numbers are realistic or not. But these are the numbers directly from TPS and they show that in four years, they'll be spending only 8.6% of their revenue to spend on items other than their personnel (buildings, utilities, books, supplies, transportation) and their budget deficit will be gigantic.

No amount of spending cuts - on school buses, after school programs, sports, etc... will address the huge hole they're heading into. And voters rejected their last levy request because, well, we're tapped out too. That was a 7.8 mill levy estimated to produce $22 million per year. To get to their projected deficit of $97.6 million, they'd probably need around a 34 mill levy. I just don't see that happening.

The 'transformational change' TPS has been talking about can save some money over time, but at an estimated savings of $25 million, it won't be enough to address their projected deficit of $97.6 million.

As personnel costs will be the largest component, only a restructuring of those costs can address the issue. But is there the will on the TPS Board to take the necessary steps? Only time will tell.

Both sides of SB 5 - Ohio's collective bargaining bill

I wanted to share with you this link that features Matt Mayer, president of the conservative think-tank The Buckeye Institute (who testified in favor of Senate Bill 5) and Brian Rothenberg, executive director of Progress Ohio (a coalition of progressive groups) debating the issue.

To view the half-hour program, go here.

Quote of the Day - public sector unions

Today's Quote of the Day from Jonah Goldberg goes along with my post from last June: Public unions' symbiotic relationship with government:

"Private sector unions fight with management over an equitable distribution of profits. Government unions negotiate with politicians over taxpayer money, putting the public interest at odds with union interests and, as we've seen in states such as California and Wisconsin, exploding the cost of government. The labor-politician negotiations can't be fair when the unions can put so much money into campaign spending. Victor Gotbaum, a leader in the New York City chapter of AFSCME, summed up the problem in 1975 when he boasted, "We have the ability, in a sense, to elect our own boss.""

Buckeye Institute responds to Innovation Ohio report

There's a new left-leaning think tank in Ohio called Innovation Ohio. It was started by Janetta King, who was chief of staff for policy for former Ohio Gov. Ted Strickland. Yesterday, they issued a report critical of S.B. 5, the collective bargaining bill, which concludes:

There is no evidence that ending or eviscerating collective bargaining would have a salutary effect on student success in the future, or that ending it is necessary to institute still-needed reforms. In fact, ending collective bargaining could and likely would have unintended negative effects.

Nevertheless, there is no denying the severity of Ohio’s budget crisis, the difficult financial straits of many local school districts, or the likelihood that further sacrifice will be required, not just from teachers, but from all Ohio citizens. While Innovation Ohio deeply believes that future sacrifice should be shared fairly and not limited to those at the middle and lower income levels, that is a subject that goes beyond the scope of this analysis.

What can be concluded from this analysis, however, is that past experience clearly shows that necessary sacrifices and reforms can be achieved through the collective bargaining framework that has existed in Ohio since the Reagan Administration.

Today, the conservative-leaning Buckeye Institute issued the following statement in response:

A Short Response to the Innovation Ohio Report

"Ohio Teachers and Collective Bargaining: An Analysis"
Matt A. Mayer, President February 28, 2011

First, we welcome Innovation Ohio to the public policy debate. Innovation Ohio joins the existing pack of progressive think tanks-Policy Matters Ohio, ProgressOhio, the Center for Community Solutions, Economic Policy Institute, and the Center for Working Class Studies-advocating for the same set of policies for Ohio. We will continue to do our best to keep up with these groups.

Next, we are perplexed that Innovation Ohio (and the Ohio Education Association), given the reportʼs findings that teachers make more outside of collective bargaining, does not support Senate Bill 5. Specifically, the report found that "the BLS data reveal that the more states erode teachersʼ rights to collectively bargain, the more it likely will lead, on average, to higher salary increases." Perhaps they believe teachers would rather have more process than higher pay.

Finally, the report found that "Ohioʼs kindergarten, elementary, middle school and high school teachers saw their salaries, on average, drop 3.8% between 2008 and 2009." This finding, based upon a limited national survey, conflicts with the more comprehensive school district data from the Ohio Department of Education.1 The ODE data shows that, instead of pay cuts, teachers across Ohio saw their median pay increase from 2008 ($49,951.40) to 2009 ($50,557.50) by $606.00, or 1.2 percent. Ohio teachersʼ median pay rose even higher from 2009 to 2010 ($52,001.00), as the median pay jumped by $1,443.50, or 2.9 percent.

As the financial projections of the 613 school districts show, by 2015, 91 percent of Ohioʼs school districts will reach severe deficits. Compensation packages will swallow 96 percent of projected revenues. With local taxes already high, homeowners across Ohio likely will not support increased operational tax levies. We look forward to seeing our friends on the left and the OEA provide solutions to this mounting crisis. For a district-by-district financial review, please see the easy-to-read charts at http://buckeyeinstitute.org/reports/school-districts.

1 Ohio Department of Education, District Data - Teacher Information 2008-2010, Interactive Local Report Card Home (accessed on February 28, 2011) available at http://ilrc.ode.state.oh.us/Downloads.asp.

Buckeye Institute: 6 principles for fixing Ohio

Press Release from Buckeye Institute:

BUCKEYE INSTITUTE RELEASES PRINCIPLES FOR FIXING OHIO

February 28, 2011-Columbus, Oh - The Buckeye Institute for Public Policy Solutions today released "Six Principles for Fixing Ohio." The report outlines six key principles that Ohio's political leaders should adhere to as the process of transforming our state begins. "While painful, these reforms can put Ohio on the path to a strong recovery" Matt A. Mayer, President of the Buckeye Institute stated. "Without these reforms our best and brightest young citizens will continue to migrate South and West to states where they see more opportunities."

The six principles include: The Past is No Guide for Today's Budgets, Break Labor's Stronghold, Put Taxpayers and Vulnerable Populations Ahead of Government Pay Scales and Public-Sector Unions, Government Retirements Should Mirror What the Rest of Us Have, Make Thinking Outside the Box More Than a Slogan, and Demand the Federal Government Respect Our Ability to Get Thing Done.

These principles arrive at a time where the State of Ohio is facing the loss of over 600,000 private-sector jobs since 2000, Governor John Kasich's state budget is set to be released, and the state legislature is discussing reforms on collective bargaining for public-sector workers.

The full report can be viewed at www.buckeyeinstitute.org/uploads/files/BUCKEYE-six-principles-fixing-ohio-1(1).pdf

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