Every once in a while, I receive a comment from a post made several months ago, which I suspect to be the result of a google search of a particular topic, rather than a routine check for new content. In any case, I recently received a comment about the Capital Arts and Entertainment District, and I have cleverly designed a way to use the comment to launch into a philosophical rant about the role of government, which of course is my ultimate goal every Saturday. I think the best way to do it is to break the comment into sections, using the tried-and-true method of publishing Patrice D's comments in bold, and my counter-comments in plain font.
(Edit: As I got to writing this post, I perceived that it comes across harsher than I originally intended. Let me announce that I appreciate the comment and the chance to discuss.)
HERE is the original post referenced by the following comments:
There are two obvious themes to your post: One is what seems to be the ineptitude of the city government, and two is the (to use your word) appallingly narrow-minded, dollars-only view that a bill to form an arts district is inane.
Before you go using my words, remember--actual events have been "extremized" for satirical, humorous, and entertainment purposes. But yes, you have the general concept correct.
Thank goodness the bill passed and there is an opportunity to create a more well-rounded community. Who says supporting one profession means excluding another?
Since real property in Annapolis is a finite quantity, and the diversity of professions of residents of Annapolis approaches infinity, I would certainly say that supporting one profession excludes another. I would further say that specifying only one (broad) profession is highly exclusionary. I would even further say that I wish the special district was for weathermen, as I needed more of a warning that 6 thunderstorms would collide with a warm-front from the Gulf and cause the Apocalypse to pass over Annapolis earlier today.
I'm sure you noticed that the tax credits are temporary.
Toll booths were supposed to be temporary too. And welfare.
The idea is to BUILD the district - not support artists forever. I'm glad for you that you are an economic genuis, but generally in towns that are experiencing economic growth it is because there is something to SEE and something to DO that is interesting, different, attractive. It then follows that people go to SEE and DO that interesting, different and attractive experience.
Things to see and do might be reasons why tourism flourishes, perhaps even population growth, but to attribute overall economic growth to it is likely a stretch. I'm going to stick to my guns for the proper economic growth policy:
1. low property taxes
2. streamlined permitting process
3. conspicuous and predictable long-term planning and zoning
With gas prices the way they are, people are looking to explore closer to home - secondary cities are becoming more of a destination than ever before.
That will actually be an interesting experiment to witness. I've always wondered how sensitive gas demand is to gas prices--most of us can only change (or only wish to change) our gas behavior slightly, but you and I both know that if gas was $1000 per gallon, there would be extreme lifestyle changes. For example, I would write this blog inside my house rather than in my car while idling in my unpaved driveway.
I also wonder to what extent Annapolis is a secondary city. Will people living in Hagerstown cancel their trip to Disneyworld and come here instead? Or do most tourists make Annapolis one of their destination cities?
And it will require a unified effort; a spirit embraced by the community - the a&e district alone won't bring in droves of tourists on its own, of course. I won't argue that we will need good oversight to work with the state and ensure the area grows in a way that enhances the entire area and city of Annapolis.
Only problem is, the government should not be trying to bring tourists to the city.
I suppose that sounds counter-productive, and I will admit that I was slightly tormented in ascertaining that conclusion. Let me elaborate. Government has useful and noble purposes--in addition to fundamental responsibilities such as maintaining order, it is appropriate for government to provide public goods. A public good is one that is non-rival and non-excludable, meaning that a good, once provided, is freely available to the public and consumption of the good by one person does not prohibit its consumption by another person.
Promotion of a city, in fact, is a public good. Let's say that I spend a million dollars on a nation-wide publicity tour advertising how nice the houses are in Murray Hill because I want more rich people to move there so I can sell food to them. Even if I am successful, I am not the only one who benefits from this. Gas stations, grocery stores, perhaps interior decorators--indeed any number of businesses benefit from me spending money to attract residents, and there is nothing I can do about it even though I spent the money on the advertising. Knowing this ahead of time, I would not spend said money, nor would any other business. Advertising of the city therefore falls victim to the free rider problem, and must be provided by the government if at all.
So, if the A & E district is a form of promoting the city, why shouldn't the city do it? Two reasons:
Reason #1: I am not convinced the city needs promotion. I am quite sure that the city's population is the highest it's ever been. Longtime Annapolitans recall when travelling Forest Dr. actually involved a drive through a forest. People who work in Baltimore or DC make Annapolis their home, as evidenced by the construction of I-97 and Aris T Allen Blvd, and their perpetual traffic jams. Businesses are attracted here as well--I believe the mall is the biggest in the state, and inner West St along with Parole have seen major investment. Even downtown, where business turnover might be mistaken for a bad business environment, there seems to still be a supply of businesses willing to give it a shot.
Reason #2: Unintended Consequences. For any aspiring free-market folk, this is the go-to reason why government should not be involved in the private market. The economy is the summation of infinite dynamic decisions being made by every person in the world. A government cannot possibly understand or replicate such a process. Government involvement distorts incentives, an eliminates the safeguard whereby every voluntary economic transaction necessarily benefits both parties.
To be specific, let's say that the economic goals of the A & E district are achieved, and the city becomes more desirable to businesses, tourists, and residents. Now what? Rents go up in the city. We already have a rent problem, especially downtown, and literally every business now becomes either a bar or a t-shirt shop. So we have successful artists, but 20 businesses downtown are now out of business and we lose diversity, which was a main goal of the district. The city then decides that it needs to do something about the diversity of the businesses downtown, and tries to plan the market house. Since the city has no expertise at this, the tenants get fed up with nonsense and abandon. This process continues, and soon the city has even more problems.
Bottom line: because of unintended consequences, the level of government intervention will never be static--it will always be increasing or decreasing, depending on the government's attitude towards the effect it may have on market problems. It is my position that the movement should be away from regulation. Let the market sort itself out--it doesn't always produce the perfect result, but over time, it's pretty damn close.
If your accounting of the council process is an accurate representation of how they usually operate, then of course there is cause for concern. But let's not throw out the baby with the bath water. It's in place. Let's embrace it, contribute to it's success, and use to the benefit of the entire city.
To the extent that the council cannot reverse the program, I'm with you here. No sense in beating ourselves up--let's see what we can't make of this.
PS -Thank you for posting the map -it clears up the confusion - slightly.
"If I turn out to be particularly clear, you've probably misunderstood what I've said".
Ultimately, one has to decide the purpose of this A & E district. If the purpose is to attract visitors or spur economic growth, perhaps I have provided adequate reason to doubt its effectiveness. If the purpose is to create a more rounded and/or diverse community, one must be prepared to support the government's prerogative to discriminate and redistribute resources. If you are so inclined, Patrice D, then your support for the district is well placed.
Saturday, May 31, 2008
Thursday, May 29, 2008
Capital Projects 2009-2014
So, as we know, the city actually has 2 budgets: the operating budget and the capital budget. The operating budget covers day-to-day expenses for the next year, but the nature of the capital budget is to fund long-term projects, so that budget is planned for the following 6 years.
And why is this important? Because the city forgets that paying Paul requires robbing Peter. Specifically, capital projects are funded in one of 3 ways: operating funds, non-city funds (i.e. money from other governments, which is still our money), and bonds. Projects funded by bonds are not funded immediately; rather, the city spends the money it has, and issues bonds when it runs out of money in accordance with the approved level of bond funding. BUT, the city has to pay back the bonds! It's the same as a credit card.....if you buy something on credit, you don't pay all at once; rather, you make installments on your card. But when you buy too much stuff, you can't afford your installments. The same thing is happening with the city's bond debt. Let's look at some quick debt facts:
-general fund debt service will be up 117% (!!!!) from year to year
-of an $83 million budget, some $9 million + is devoted to debt service, representing over 11% of the budget. Last year's debt service was about 9% of the budget.
-the ratio of outstanding debt to taxable base was not even posted this year, despite being governed by statute. But given a decrease (?) in total assessments, and an increase in debt obligations, you can bet that we are less financially sound as we go along.
I am about to list every capital project funded in this year's capital budget. There will be 3 numbers: the amount of money already budgeted in prior years*, then the amount of budgeted for this year, then the total budget for the project. Here we go (in order of total expense):
(different from the amount of money actually spent on the project)
Note: the total value of the capital budget is $$205,101,005 !!! And that is a best case scenario! For example, the most expensive capital project is the water plant, coming in shy of $30 million. But, I have heard numbers as high as $100 million! In finance committee meetings, the need to replace the plant was described as "dire", "urgent", and "an emergency".
1. water treatment plant upgrades
$165,000
$2,741,580
$28,256,920
primary funding: bonds
2. hillman garage
$0
$1,200,000
$22,353,170
primary funding: bonds
3. truxtun recreation center
$8,144,810
$8,606,310
$16,751,120
primary funding: bonds
4. renovation of police station
$15,115,950
$0
$15,115,950
primary funding: bonds
undergrounding of power lines (the city describes this as merely an "order of magnitude listing". comment for details)
$0
$0
$14,400,000
primary funding: bonds
5. general roadway improvements
$0
$1,608,610
$11,608,610
primary funding: operating funds
6. outer west st gateway
$0
$1,780,000
$9,600,000
primary funding: bonds with non-city match
7. fleet and cornhill streets repairs
$657,870
$0
$9,407,870
primary funding: bonds
8. truxtun park pool replacement
$0
$0
$7,775,000
primary funding: non-city funds
9. phased renovation of Eastport fire station
$2,352,000
$4,157,180
$6,509,190
primary funding: bonds
10. maryland ave improvements
$0
$480,000
$5,980,000
primary funding: bonds
11. solid waste management program
$510,000
$0
$5,891,000
primary funding: bonds
12. clear well replacement
$2,252,300
$3,158,940
$5,411,240
primary funding: bonds
13. city hall restoration
$0
$1,200,000
$4,546,910
primary funding: bonds
14. sixth st improvements
$0
$0
$4,400,000
primary funding: bonds
15. landfill gas mitigation
$350,000
$1,200,000
$4,250,000
primary funding: bonds
16. sewer rehabilitation
$800,000
$250,000
$4,205,000
primary funding: bonds
17. street lights and flowers on forest dr.
$0
$0
$3,147,000
primary funding: bonds with non-city match
18. vehicle replacement program
$0
$500,000
$3,000,000
primary funding: operating funds
19. taylor ave. improvements @ park place
$2,995,705
$0
$2,995,705
primary funding: bonds
20. water storage tank
$295,570
$2,434,080
$2,729,650
primary funding: bonds
21. hanover st reconstruction
$1,697,330
$646,670
$2,344,000
primary funding: bonds
22. water park that is not located in the city
$50,000
$110,000
$2,230,000
primary funding: bonds
23. green st reconstruction
$0
$0
$2,173,000
primary funding: non city funds
24. pump station replacements
$894,000
$1,262,000
$2,156,000
primary funding: bonds
25. slush fund to buy "open space" land
$1,539,000
$250,000
$2,039,000
primary funding: non city
26. gardening at Back Creek Naure Park
$1,619,290
$376,340
$1,995,630
primary funding: non city funds, but city still funds/funded almost $1 million
27. truxtun park improvements
$1,452,900
$65,490
$1,818,390
primary funding for remaining work: non-city funds
28. smithville and russell st improvements
$0
$0
$1,526,000
primary funding: bonds
29. office space renovation
$537,800
$973,000
$1,510,800
primary funding: bonds
30. truxtun park maintenance building
$0
$1,339,300
$1,339,300
primary funding: bonds
31. traffic signal improvements
$193,030
$0
$1,278,280
primary funding: bonds
32. harbormaster building
$25,000
$246,010
$1,252,060
primary funding: bonds
33. non-profit capital funding
$0
$435,000
$1,055,000
primary funding: bonds
34. landscaped median on hilltop ln
$0
$0
$890,000
primary funding: bonds
35. maynard burgess house restoration
$383,530
$488,980
$872,510
primary funding: bonds
36. water tank rehabilitation
$0
$517,200
$855,200
primary funding: bonds
37. watershed restorations
$100,000
$340,000
$710,000
primary funding: non-city funds
38. barbud ln reconstruction
$50,000
$655,000
$705,000
primary funding: bonds
39. connecting city trails to each other
$0
$0
$680,000
primary funding: operating funds
40. greenfield st relocation
$0
$0
$644,000
primary funding: non-city (the developer)
41. roof replacement program
$120,500
$240,000
$600,500
primary funding: bonds
42. restrooms at Germantown fields
$25,000
$500,000
$525,000
primary funding: equal bonds and non-city
43. filter valve controls
$472,000
$0
$472,000
primary funding: operating funds
44. irrigation of atheletic fields
$0
$100,000
$300,000
primary funding: non-city funds
45. multi-modal traffic mitigations
$0
$0
$300,000
primary funding: non-city funds
46. public works garage improvements
$271,000
$0
$271,000
primary funding: bonds
47. new water well
$600,000
$0
$150,000
primary funding: operating funds
48. kingsport park
$0
$0
$139,000
primary funding: non city
49. bulkhead evaluations
$120,000
$0
$120,000
primary funding: non-city funds
50. georgetown rd outfall maintenance
$8,000
$107,000
$115,000
primary funding: operating funds
51. flood control
$100,000
$0
$100,000
primary funding: operating funds
And why is this important? Because the city forgets that paying Paul requires robbing Peter. Specifically, capital projects are funded in one of 3 ways: operating funds, non-city funds (i.e. money from other governments, which is still our money), and bonds. Projects funded by bonds are not funded immediately; rather, the city spends the money it has, and issues bonds when it runs out of money in accordance with the approved level of bond funding. BUT, the city has to pay back the bonds! It's the same as a credit card.....if you buy something on credit, you don't pay all at once; rather, you make installments on your card. But when you buy too much stuff, you can't afford your installments. The same thing is happening with the city's bond debt. Let's look at some quick debt facts:
-general fund debt service will be up 117% (!!!!) from year to year
-of an $83 million budget, some $9 million + is devoted to debt service, representing over 11% of the budget. Last year's debt service was about 9% of the budget.
-the ratio of outstanding debt to taxable base was not even posted this year, despite being governed by statute. But given a decrease (?) in total assessments, and an increase in debt obligations, you can bet that we are less financially sound as we go along.
I am about to list every capital project funded in this year's capital budget. There will be 3 numbers: the amount of money already budgeted in prior years*, then the amount of budgeted for this year, then the total budget for the project. Here we go (in order of total expense):
(different from the amount of money actually spent on the project)
Note: the total value of the capital budget is $$205,101,005 !!! And that is a best case scenario! For example, the most expensive capital project is the water plant, coming in shy of $30 million. But, I have heard numbers as high as $100 million! In finance committee meetings, the need to replace the plant was described as "dire", "urgent", and "an emergency".
1. water treatment plant upgrades
$165,000
$2,741,580
$28,256,920
primary funding: bonds
2. hillman garage
$0
$1,200,000
$22,353,170
primary funding: bonds
3. truxtun recreation center
$8,144,810
$8,606,310
$16,751,120
primary funding: bonds
4. renovation of police station
$15,115,950
$0
$15,115,950
primary funding: bonds
undergrounding of power lines (the city describes this as merely an "order of magnitude listing". comment for details)
$0
$0
$14,400,000
primary funding: bonds
5. general roadway improvements
$0
$1,608,610
$11,608,610
primary funding: operating funds
6. outer west st gateway
$0
$1,780,000
$9,600,000
primary funding: bonds with non-city match
7. fleet and cornhill streets repairs
$657,870
$0
$9,407,870
primary funding: bonds
8. truxtun park pool replacement
$0
$0
$7,775,000
primary funding: non-city funds
9. phased renovation of Eastport fire station
$2,352,000
$4,157,180
$6,509,190
primary funding: bonds
10. maryland ave improvements
$0
$480,000
$5,980,000
primary funding: bonds
11. solid waste management program
$510,000
$0
$5,891,000
primary funding: bonds
12. clear well replacement
$2,252,300
$3,158,940
$5,411,240
primary funding: bonds
13. city hall restoration
$0
$1,200,000
$4,546,910
primary funding: bonds
14. sixth st improvements
$0
$0
$4,400,000
primary funding: bonds
15. landfill gas mitigation
$350,000
$1,200,000
$4,250,000
primary funding: bonds
16. sewer rehabilitation
$800,000
$250,000
$4,205,000
primary funding: bonds
17. street lights and flowers on forest dr.
$0
$0
$3,147,000
primary funding: bonds with non-city match
18. vehicle replacement program
$0
$500,000
$3,000,000
primary funding: operating funds
19. taylor ave. improvements @ park place
$2,995,705
$0
$2,995,705
primary funding: bonds
20. water storage tank
$295,570
$2,434,080
$2,729,650
primary funding: bonds
21. hanover st reconstruction
$1,697,330
$646,670
$2,344,000
primary funding: bonds
22. water park that is not located in the city
$50,000
$110,000
$2,230,000
primary funding: bonds
23. green st reconstruction
$0
$0
$2,173,000
primary funding: non city funds
24. pump station replacements
$894,000
$1,262,000
$2,156,000
primary funding: bonds
25. slush fund to buy "open space" land
$1,539,000
$250,000
$2,039,000
primary funding: non city
26. gardening at Back Creek Naure Park
$1,619,290
$376,340
$1,995,630
primary funding: non city funds, but city still funds/funded almost $1 million
27. truxtun park improvements
$1,452,900
$65,490
$1,818,390
primary funding for remaining work: non-city funds
28. smithville and russell st improvements
$0
$0
$1,526,000
primary funding: bonds
29. office space renovation
$537,800
$973,000
$1,510,800
primary funding: bonds
30. truxtun park maintenance building
$0
$1,339,300
$1,339,300
primary funding: bonds
31. traffic signal improvements
$193,030
$0
$1,278,280
primary funding: bonds
32. harbormaster building
$25,000
$246,010
$1,252,060
primary funding: bonds
33. non-profit capital funding
$0
$435,000
$1,055,000
primary funding: bonds
34. landscaped median on hilltop ln
$0
$0
$890,000
primary funding: bonds
35. maynard burgess house restoration
$383,530
$488,980
$872,510
primary funding: bonds
36. water tank rehabilitation
$0
$517,200
$855,200
primary funding: bonds
37. watershed restorations
$100,000
$340,000
$710,000
primary funding: non-city funds
38. barbud ln reconstruction
$50,000
$655,000
$705,000
primary funding: bonds
39. connecting city trails to each other
$0
$0
$680,000
primary funding: operating funds
40. greenfield st relocation
$0
$0
$644,000
primary funding: non-city (the developer)
41. roof replacement program
$120,500
$240,000
$600,500
primary funding: bonds
42. restrooms at Germantown fields
$25,000
$500,000
$525,000
primary funding: equal bonds and non-city
43. filter valve controls
$472,000
$0
$472,000
primary funding: operating funds
44. irrigation of atheletic fields
$0
$100,000
$300,000
primary funding: non-city funds
45. multi-modal traffic mitigations
$0
$0
$300,000
primary funding: non-city funds
46. public works garage improvements
$271,000
$0
$271,000
primary funding: bonds
47. new water well
$600,000
$0
$150,000
primary funding: operating funds
48. kingsport park
$0
$0
$139,000
primary funding: non city
49. bulkhead evaluations
$120,000
$0
$120,000
primary funding: non-city funds
50. georgetown rd outfall maintenance
$8,000
$107,000
$115,000
primary funding: operating funds
51. flood control
$100,000
$0
$100,000
primary funding: operating funds
Tuesday, May 27, 2008
A "Tight" Budget?
Although I could not follow the budget as closely as I would have wanted, I am nonetheless working on a post detailing all of the capital projects for future reference.
While doing so, I noticed something that jumped out at me. Despite the fact that the people behind the sailing hall of fame publicly said that they did not need any public money, the city has pledged $50,000 of taxpayer money for the HOF in each of the next 3 years.
You can see the budget item by clicking HERE and scrolling down to project 521, entitled "Non Profit Capital Funding".
All we hear about this budget is how lean it is...does this sound lean to you?
While doing so, I noticed something that jumped out at me. Despite the fact that the people behind the sailing hall of fame publicly said that they did not need any public money, the city has pledged $50,000 of taxpayer money for the HOF in each of the next 3 years.
You can see the budget item by clicking HERE and scrolling down to project 521, entitled "Non Profit Capital Funding".
All we hear about this budget is how lean it is...does this sound lean to you?
Wednesday, May 21, 2008
Director Of Rec and Parks Blasts Golf Course Idea**
**Rumor Alert.
Admittedly I have not followed the golf course proposal as closely as others, but I know enough to say that it is not a well thought out idea, probably even a bad one. Why? Because the city has no expertise in maintaining golf courses. Surprisingly to yours truly, while monitoring some email chatter that I am cc'ed on, I learned that the city apparently owns Eisenhower Golf Course and leases it to the county. So I guess we are already in the golf business....on property that not even within our city limits! Heck, take my tax money and let's buy a golf course in a sister city!
Anyway, rumor has it that the Director of Rec and Parks, LeeAnn Plumer, was asked to weigh in on whether or not she thought it was a good idea, and she responded via a memo that it would be better to buy 1,000 "Golden Tee" Arcade Golf Games and hand them out, as maintaining an actual golf course with actual grass, sand, and water would stretch the already thin resources of the department. (Note, I added the Golden Tee deal for dramatic effect.) Were such a memo to exist, it would certainly be a nice thing to read.
But let's just forget that for now, and consider that nobody really knows exactly how the city would or could run a golf course. There are certainly costs involved, which means that the city could very well lose (your) money through the operation of something which it has no business operating.
If Mrs. Politics is reading this, hopefully she can buy me a new set of golf clubs so that I have more vested interest in this potential debacle.
Admittedly I have not followed the golf course proposal as closely as others, but I know enough to say that it is not a well thought out idea, probably even a bad one. Why? Because the city has no expertise in maintaining golf courses. Surprisingly to yours truly, while monitoring some email chatter that I am cc'ed on, I learned that the city apparently owns Eisenhower Golf Course and leases it to the county. So I guess we are already in the golf business....on property that not even within our city limits! Heck, take my tax money and let's buy a golf course in a sister city!
Anyway, rumor has it that the Director of Rec and Parks, LeeAnn Plumer, was asked to weigh in on whether or not she thought it was a good idea, and she responded via a memo that it would be better to buy 1,000 "Golden Tee" Arcade Golf Games and hand them out, as maintaining an actual golf course with actual grass, sand, and water would stretch the already thin resources of the department. (Note, I added the Golden Tee deal for dramatic effect.) Were such a memo to exist, it would certainly be a nice thing to read.
But let's just forget that for now, and consider that nobody really knows exactly how the city would or could run a golf course. There are certainly costs involved, which means that the city could very well lose (your) money through the operation of something which it has no business operating.
If Mrs. Politics is reading this, hopefully she can buy me a new set of golf clubs so that I have more vested interest in this potential debacle.
Tuesday, May 20, 2008
O'Malley Math From Herb McMillan
I am friends with former state delegate Herb McMillan, and I have determined that if the "former" is removed from title, that I may be able to take advantage of certain "good old boy" benefits, have no-bid business funnelled my way, etc. For this and other purposes, please read Herb's op-ed below:
***********************************************************************************
The public relations blitz to revive Democrat Governor Martin O’Malley’s 37% approval rating is in full swing. Last week, posturing as fiscal conservatives, Governor O’Malley and liberal legislators claimed to have slashed Maryland’s budget by $1.1 billion since July 2007. It’s undisputed that they’ve raised sales, income, and other taxes by $1.4 billion. But if O’Malley actually made $1.1 billion in real cuts in conjunction with his $1.4 billion tax increase, wouldn’t Maryland have eradicated its $1.7 billion deficit and project an $800 million surplus, even without slots? Yet unless slots pass, Maryland projects a $600 million structural deficit just five months after the biggest tax increase in Maryland history. How is that possible?
It isn’t the economy. That resulted in a $300 million reduction of revenue estimates, so we should still have a $500 million surplus, even without slots. It isn’t that we don’t tax enough. Maryland had the 9th highest total tax burden per person before O’Malley’s tax hike.
It’s O’Malley’s spending. O’Malley hasn’t cut the budget, or used the $1.4 billion tax increase to cover the deficit. Last year’s budget spent $30 billion. This year’s budget spends $31.2 billion. That’s a $1.2 billion (4%) increase. A budget that increases spending by $1.2 billion hasn’t been cut. If state spending increases 4% per year for the remainder of O’Malley’s term, it will grow 13%. How many of us have paychecks that will grow that fast?
When tax and spenders like O’Malley say they’ve “cut the budget” it means “we’re spending more, but not as much as we want.” Maryland’s General Fund budget is driven by formulas that mandate automatic annual spending increases, regardless of need or results. Liberals spin legislation reducing mandated increases into “ budget cuts”, even when they still result in higher spending. This year, state education funding increased by 4%, but not by as much as the Thornton formula required. Using O’Malley Math, the education budget was cut even though education spending increased by $185 million.
That’s just part of the O’Malley Math equation. During the Legislative Special Session called to “fix” O’Malley’s $1.7 billion deficit, spending on new or expanded programs nearly equaled spending reductions. Additionally, 40% of the $1.4 billion tax increase went to increased spending, not deficit reduction. Total spending wasn’t cut, it was redistributed and increased.
When the Special Session ended in November, Maryland still projected a $377 million deficit. This year, despite a record tax increase, the legislature had to raid the Transportation and Chesapeake Bay Trust Funds to balance the budget.
O’Malley Math attempts to put a fiscally conservative face on a liberal agenda that equates more government spending to a better quality of life for everyone. Unfortunately, putting lipstick on a pig doesn’t make it a prom queen. The budget formulas mandating increased spending also require the redistribution of your tax dollars to other counties. The state spends an average of $6,270 in education aid per pupil. Montgomery County receives only $3,789 per pupil, while Baltimore City receives $11,235 per pupil. Anne Arundel County receives $4,356 per pupil, the fourth lowest amount in Maryland.
You are paying more in state taxes, but they aren’t being used to improve your quality of life. Seventy-six cents of every state tax dollar collected in Anne Arundel County is spent in another county. More spending isn’t improving our test results either. Advocates for Children and Youth noted that Maryland’s scores on independent national tests had failed to improve, despite a $2.2 billion increase in education funding since 2002. Students have performed only marginally better on state tests.
George Santayana noted that fanaticism consists of redoubling your efforts when you’ve forgotten your aims. Maryland’s budget has doubled, increasing by $15 billion in the last ten years. Yet test scores have shown little improvement, the Chesapeake Bay is no cleaner, and crime is worse. O’Malley’s solution is to…….spend more.
We cannot spend ourselves out of a deficit or tax and gamble ourselves into a better quality of life. To successfully resolve our problems, including the deficit, we must change the big government mindset that created them, not simply repackage spending increases as budget cuts.
With spending exceeding tax receipts, O’Malley plans to resolve his deficit with slots. That’s a tough sell. To many, Slots and cuts instead of higher taxes are arguably the lesser of two evils. Slots after a record tax and spending increase are just an additional evil.
As Maryland families struggle with higher taxes, rising gas prices, and sky-high BG&E bills, they’re going to feel what the numbers already show: O’Malley math doesn’t add up to a better quality of life.
Herb McMillan is President of the Maryland Taxpayers Association and served in the Maryland House of Delegates from 2003-2007. Data used in this column was obtained from the Maryland Department of Legislative Services.
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O'Malley Math
The public relations blitz to revive Democrat Governor Martin O’Malley’s 37% approval rating is in full swing. Last week, posturing as fiscal conservatives, Governor O’Malley and liberal legislators claimed to have slashed Maryland’s budget by $1.1 billion since July 2007. It’s undisputed that they’ve raised sales, income, and other taxes by $1.4 billion. But if O’Malley actually made $1.1 billion in real cuts in conjunction with his $1.4 billion tax increase, wouldn’t Maryland have eradicated its $1.7 billion deficit and project an $800 million surplus, even without slots? Yet unless slots pass, Maryland projects a $600 million structural deficit just five months after the biggest tax increase in Maryland history. How is that possible?
It isn’t the economy. That resulted in a $300 million reduction of revenue estimates, so we should still have a $500 million surplus, even without slots. It isn’t that we don’t tax enough. Maryland had the 9th highest total tax burden per person before O’Malley’s tax hike.
It’s O’Malley’s spending. O’Malley hasn’t cut the budget, or used the $1.4 billion tax increase to cover the deficit. Last year’s budget spent $30 billion. This year’s budget spends $31.2 billion. That’s a $1.2 billion (4%) increase. A budget that increases spending by $1.2 billion hasn’t been cut. If state spending increases 4% per year for the remainder of O’Malley’s term, it will grow 13%. How many of us have paychecks that will grow that fast?
When tax and spenders like O’Malley say they’ve “cut the budget” it means “we’re spending more, but not as much as we want.” Maryland’s General Fund budget is driven by formulas that mandate automatic annual spending increases, regardless of need or results. Liberals spin legislation reducing mandated increases into “ budget cuts”, even when they still result in higher spending. This year, state education funding increased by 4%, but not by as much as the Thornton formula required. Using O’Malley Math, the education budget was cut even though education spending increased by $185 million.
That’s just part of the O’Malley Math equation. During the Legislative Special Session called to “fix” O’Malley’s $1.7 billion deficit, spending on new or expanded programs nearly equaled spending reductions. Additionally, 40% of the $1.4 billion tax increase went to increased spending, not deficit reduction. Total spending wasn’t cut, it was redistributed and increased.
When the Special Session ended in November, Maryland still projected a $377 million deficit. This year, despite a record tax increase, the legislature had to raid the Transportation and Chesapeake Bay Trust Funds to balance the budget.
O’Malley Math attempts to put a fiscally conservative face on a liberal agenda that equates more government spending to a better quality of life for everyone. Unfortunately, putting lipstick on a pig doesn’t make it a prom queen. The budget formulas mandating increased spending also require the redistribution of your tax dollars to other counties. The state spends an average of $6,270 in education aid per pupil. Montgomery County receives only $3,789 per pupil, while Baltimore City receives $11,235 per pupil. Anne Arundel County receives $4,356 per pupil, the fourth lowest amount in Maryland.
You are paying more in state taxes, but they aren’t being used to improve your quality of life. Seventy-six cents of every state tax dollar collected in Anne Arundel County is spent in another county. More spending isn’t improving our test results either. Advocates for Children and Youth noted that Maryland’s scores on independent national tests had failed to improve, despite a $2.2 billion increase in education funding since 2002. Students have performed only marginally better on state tests.
George Santayana noted that fanaticism consists of redoubling your efforts when you’ve forgotten your aims. Maryland’s budget has doubled, increasing by $15 billion in the last ten years. Yet test scores have shown little improvement, the Chesapeake Bay is no cleaner, and crime is worse. O’Malley’s solution is to…….spend more.
We cannot spend ourselves out of a deficit or tax and gamble ourselves into a better quality of life. To successfully resolve our problems, including the deficit, we must change the big government mindset that created them, not simply repackage spending increases as budget cuts.
With spending exceeding tax receipts, O’Malley plans to resolve his deficit with slots. That’s a tough sell. To many, Slots and cuts instead of higher taxes are arguably the lesser of two evils. Slots after a record tax and spending increase are just an additional evil.
As Maryland families struggle with higher taxes, rising gas prices, and sky-high BG&E bills, they’re going to feel what the numbers already show: O’Malley math doesn’t add up to a better quality of life.
Herb McMillan is President of the Maryland Taxpayers Association and served in the Maryland House of Delegates from 2003-2007. Data used in this column was obtained from the Maryland Department of Legislative Services.
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Sunday, May 18, 2008
City Council Meeting Preview: 5/19
The city council's "we don't work on holidays or in August" policy still carries full weight, and the public hearing that would normally be held on the 4th Monday has been moved up to tomorrow for Memorial-Day-related reasons. Hopefully I can make the meeting late, but I probably won't be on time--you may know that this is Commissioning Week, and the 3 million people who come to Annapolis need food, which I am happy to sell to them.
The full agenda can be seen HERE. For those of you who, like myself, enjoy the fiber optic entertainment package that is Verizon Fios, you can watch the meeting on channel 34! If you do so, here is what to watch for:
PUBLIC HEARINGS:
O-59-07- changing a the boundaries of a harbor line.
O-10-08- prohibiting the sale of lawn fertilizer that contains phosphorus. Here's what I know about phosphorus: it was crucial to the plot in the Sherlock Holmes mystery The Hound of the Baskervilles. I'll tell you what--it's good enough for my yard. Predictably, this was sponsored by Mayor Moyer, who I'm convinced recently read the book "Second Term Mayors Sponsor Environmental Legislation", written by George Bush.
The city's justification for this is "whereas the city finds that regulating the amount of nutrients and contaminants, including phosphorus contained in fertilizer entering the bay will improve water quality as envisioned under the Clean Water Act and the Chesapeake 2000 agreement". Here's the thing--who knows if this is appropriate? (Answer: not me. Maybe someone.) But, in many cases the city is too quick to regulate when they "find" that a certain action should be taken. If the city did an effects of fertilizer phosphorus on Bay water study, I will give you a million dollars. Yet, they are about to place the burden on consumers and businesses. If this is really the solution, prove it before you mandate it.
The proposed per incident fines are $100 for a violating resident, $500 for a violating commercial entity, and $500 for a business that sells the phosphorus fertilizer improperly or without signage!
O-12-08- requiring fiscal impact notes for all ordinances, resolutions, and charter amendments (i.e. everything). This sounds great to me...the way it works now is that any alderman can request a fiscal impact note, but a lot of times they all think that someone else has already requested it, and by the time they realize they don't know how the proposed bill affects the budget, everyone is cranky and nobody wants to postpone the vote so they just vote on the bill without knowing how it affects the money!
That it for the public hearings. However, what they will do after that is the most important thing they will do all year! They will vote on the final version of the budget, along with capital projects and fees. They will also ratify a union contract that determines salaries and wages, which drive 85% of the budget! I don't know if there's anything that can be done at this point if there were objections to the budget, but that's what they'll be doing.
The full agenda can be seen HERE. For those of you who, like myself, enjoy the fiber optic entertainment package that is Verizon Fios, you can watch the meeting on channel 34! If you do so, here is what to watch for:
PUBLIC HEARINGS:
O-59-07- changing a the boundaries of a harbor line.
O-10-08- prohibiting the sale of lawn fertilizer that contains phosphorus. Here's what I know about phosphorus: it was crucial to the plot in the Sherlock Holmes mystery The Hound of the Baskervilles. I'll tell you what--it's good enough for my yard. Predictably, this was sponsored by Mayor Moyer, who I'm convinced recently read the book "Second Term Mayors Sponsor Environmental Legislation", written by George Bush.
The city's justification for this is "whereas the city finds that regulating the amount of nutrients and contaminants, including phosphorus contained in fertilizer entering the bay will improve water quality as envisioned under the Clean Water Act and the Chesapeake 2000 agreement". Here's the thing--who knows if this is appropriate? (Answer: not me. Maybe someone.) But, in many cases the city is too quick to regulate when they "find" that a certain action should be taken. If the city did an effects of fertilizer phosphorus on Bay water study, I will give you a million dollars. Yet, they are about to place the burden on consumers and businesses. If this is really the solution, prove it before you mandate it.
The proposed per incident fines are $100 for a violating resident, $500 for a violating commercial entity, and $500 for a business that sells the phosphorus fertilizer improperly or without signage!
O-12-08- requiring fiscal impact notes for all ordinances, resolutions, and charter amendments (i.e. everything). This sounds great to me...the way it works now is that any alderman can request a fiscal impact note, but a lot of times they all think that someone else has already requested it, and by the time they realize they don't know how the proposed bill affects the budget, everyone is cranky and nobody wants to postpone the vote so they just vote on the bill without knowing how it affects the money!
That it for the public hearings. However, what they will do after that is the most important thing they will do all year! They will vote on the final version of the budget, along with capital projects and fees. They will also ratify a union contract that determines salaries and wages, which drive 85% of the budget! I don't know if there's anything that can be done at this point if there were objections to the budget, but that's what they'll be doing.
Thursday, May 15, 2008
News Update
For those of you who would like an update on the issues of the day:
1. The budget is up almost 7%, again. This is because salaries and benefits are determined by union contracts, and this is what the city has negotiated. Also, the mayor keeps creating new departments and staffing them with expensive help. The property tax rate actually had to be increased to accommodate this, a somewhat rare occurrence as usually rising home values allow more money to be collected with the same or lower rate. Construction overruns and frivolous capital projects have caused our debt service costs to double, to like 8% of the operating budget. This is not good. Plus our water plant was built in the Mesozoic Era and we don't have money to fix it.
2. The market house is a total embarrassment.
3. Homicides are on a record pace for the 3rd year in a row.
4. The city is involved in at least 4 lawsuits that I know of.
5. I am running a mayoral campaign for Chris Fox, and he will win.
1. The budget is up almost 7%, again. This is because salaries and benefits are determined by union contracts, and this is what the city has negotiated. Also, the mayor keeps creating new departments and staffing them with expensive help. The property tax rate actually had to be increased to accommodate this, a somewhat rare occurrence as usually rising home values allow more money to be collected with the same or lower rate. Construction overruns and frivolous capital projects have caused our debt service costs to double, to like 8% of the operating budget. This is not good. Plus our water plant was built in the Mesozoic Era and we don't have money to fix it.
2. The market house is a total embarrassment.
3. Homicides are on a record pace for the 3rd year in a row.
4. The city is involved in at least 4 lawsuits that I know of.
5. I am running a mayoral campaign for Chris Fox, and he will win.
I Am Not Gone
Since Paul Foer continues to designate himself as the king of local politics, I have found it necessary to announce that I am not gone, and as my work* cycle begins to slow for the summer, I indeed plan to return to frequent posts shortly.
(*For those unfamiliar with work, it is a conglomeration of value-creating activities that people have to undertake when the government doesn't give them money, or when they have ambition. Since blogging only creates monetary value at the highest levels, occasionally blogs like this one have to take a back seat, so blog writers like me can earn enough money to pay the internet bill.)
Anyway, I am mainly writing this post to advise Paul that there are other people in the city with opinions that are well-thought-out, and just because you are the only person who currently has time to blog about city politics and get 30,000 yokels to view the site, does not mean that you are now being considered for the Pulitzer Prize.
(Post Intermission: This is quickly becoming a blogwar type post! Normally I would not bother with such endeavours, as I typically prefer to provide analysis of bills, something that (incredibly) you will not find on the 30,000-hit blog. However, I suffered a cheeky grease burn at work today, and I am feeling feisty. Plus, since I'm not going to post anything for another month, I might as well say whatever I want!)
(If anyone still thinks blogs aren't silly.....congratulations--I'll meet you at the Mayor's next inaugural ball.)
Paul loves to label all conservative bloggers as nasty, mean-spirited, etc., and I'm sure what I am about to say will convince him that he is correct, but I am about to state fact, not theory. I know many of the people who are politically active here in this city, and 90% of those people are so annoyed by Paul that they won't even speak with him. Why would this be the case? Because Paul does things like THIS, and THIS, and THIS.
And don't think for a minute that Paul is not nasty himself. For proof, read this post, where he shows no class when responding to someone who voiced opposition to a post, even going so far as to mock the commenter in the title of the post and make fun of a misspelling of a word.
Now, let's address some things that Paul says about me in the post linked at the top of this post. He says this:
Paul, NOBODY IS TRYING TO IMITATE YOU...YOU ARE NOT THAT IMPORTANT. For those of you who have to work and therefore cannot write a blog, allow me to inform you that Blogger.com offers about 11 different templates--8 of which are prohibitively obnoxious, so the chances that 2 blogs would have the same template, colors, and fonts is 100%.
Paul doesn't like that I allow negative comments, nor does he like anonymous comments. Frankly, why would you censor blog comments? IT'S A BLOG--NOT ABC WORLD NEWS TONIGHT--PEOPLE ARE SUPPOSED TO SAY WHAT COMES TO THEIR MIND REGARDLESS OF POLITICAL CORRECTNESS. And the anonymous thing is a joke. I invite all of you to leave a comment on this post. There is an option to write any name you want to identify your comment. ANY NAME! You could simply put a fake name and your anonymity would not be compromised. So, you can get into a guessing game trying to verify if people are really who they say they are, or you can just let people say whatever they want.
For any of you who happen to still be reading this post, here is what I don't like about Capital Punishment:
1. Self-Promotion. When the blog comes up, you are pitched for something called "Fast Foerwords", something called "Adventures Afloat", and even for a business called "Annapolis Assistance", which is apparently run by Paul's son. Blogs like ours are to supplement the local media, not to make money. You need to sell your business on its merits, not on your ability to publish inflammatory posts.
2. Lack of analysis of legislation details.
3. Desire for notoriety above content.
4. Combative attitude towards opponents despite professions of loathing towards that behavior when it comes from conservatives.
5. Failure to properly format certain posts, resulting in a painful read.
So, as I was saying, I am going to start posting soon.
Paul, feel free to respond in any way you deem necessary. I promise not to censor your comments as you have demanded I do of others.
(*For those unfamiliar with work, it is a conglomeration of value-creating activities that people have to undertake when the government doesn't give them money, or when they have ambition. Since blogging only creates monetary value at the highest levels, occasionally blogs like this one have to take a back seat, so blog writers like me can earn enough money to pay the internet bill.)
Anyway, I am mainly writing this post to advise Paul that there are other people in the city with opinions that are well-thought-out, and just because you are the only person who currently has time to blog about city politics and get 30,000 yokels to view the site, does not mean that you are now being considered for the Pulitzer Prize.
(Post Intermission: This is quickly becoming a blogwar type post! Normally I would not bother with such endeavours, as I typically prefer to provide analysis of bills, something that (incredibly) you will not find on the 30,000-hit blog. However, I suffered a cheeky grease burn at work today, and I am feeling feisty. Plus, since I'm not going to post anything for another month, I might as well say whatever I want!)
(If anyone still thinks blogs aren't silly.....congratulations--I'll meet you at the Mayor's next inaugural ball.)
Paul loves to label all conservative bloggers as nasty, mean-spirited, etc., and I'm sure what I am about to say will convince him that he is correct, but I am about to state fact, not theory. I know many of the people who are politically active here in this city, and 90% of those people are so annoyed by Paul that they won't even speak with him. Why would this be the case? Because Paul does things like THIS, and THIS, and THIS.
And don't think for a minute that Paul is not nasty himself. For proof, read this post, where he shows no class when responding to someone who voiced opposition to a post, even going so far as to mock the commenter in the title of the post and make fun of a misspelling of a word.
Now, let's address some things that Paul says about me in the post linked at the top of this post. He says this:
The other came on strong and seemed both valuable and relevant until its
publisher started allowing all kinds of nasty and obnoxious comments and letters
to appear--and I might add anonymously.
And one of the above blogs posted that it was helping form yet another
blog, this one with an unabashedly and eponymously negative take on our city. It
made a few tiny and brief posts which basically asked for negative comments. A
few negative comments trickled in and then....it seems to have died. Curiously,
that blog had a most remarkable similarity to CP in terms of its template,
colors and fonts. How interesting. Well, I guess that imitation is the best form
of flattery.
Paul, NOBODY IS TRYING TO IMITATE YOU...YOU ARE NOT THAT IMPORTANT. For those of you who have to work and therefore cannot write a blog, allow me to inform you that Blogger.com offers about 11 different templates--8 of which are prohibitively obnoxious, so the chances that 2 blogs would have the same template, colors, and fonts is 100%.
Paul doesn't like that I allow negative comments, nor does he like anonymous comments. Frankly, why would you censor blog comments? IT'S A BLOG--NOT ABC WORLD NEWS TONIGHT--PEOPLE ARE SUPPOSED TO SAY WHAT COMES TO THEIR MIND REGARDLESS OF POLITICAL CORRECTNESS. And the anonymous thing is a joke. I invite all of you to leave a comment on this post. There is an option to write any name you want to identify your comment. ANY NAME! You could simply put a fake name and your anonymity would not be compromised. So, you can get into a guessing game trying to verify if people are really who they say they are, or you can just let people say whatever they want.
For any of you who happen to still be reading this post, here is what I don't like about Capital Punishment:
1. Self-Promotion. When the blog comes up, you are pitched for something called "Fast Foerwords", something called "Adventures Afloat", and even for a business called "Annapolis Assistance", which is apparently run by Paul's son. Blogs like ours are to supplement the local media, not to make money. You need to sell your business on its merits, not on your ability to publish inflammatory posts.
2. Lack of analysis of legislation details.
3. Desire for notoriety above content.
4. Combative attitude towards opponents despite professions of loathing towards that behavior when it comes from conservatives.
5. Failure to properly format certain posts, resulting in a painful read.
So, as I was saying, I am going to start posting soon.
Paul, feel free to respond in any way you deem necessary. I promise not to censor your comments as you have demanded I do of others.
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