Slots Referendum Is Not The Answer

Opposition to the slots referendum is beginning to emerge from conservatives, but it hasn't come as easily as you might expect. Red Maryland has come out against slots, despite ample disagreement amongst its contributors.

Here is what the Maryland Taxpayers Association had to say:

The Maryland Taxpayers Association (MTA) announced its strong opposition to a
Constitutional Amendment legalizing slot machine gambling at a press conference
in Annapolis today.

MTA President Herb McMillan reminded fiscal
conservatives that, “Maryland can’t tax and gamble its way to prosperity, or
spend itself out of a deficit. Excessive spending and higher taxes are the root
causes of Maryland’s economic problems. Slots will not solve these problems.
Slots will simply add fuel to the government’s spending fire, while pulling 1.4
billion away from existing Maryland businesses. Slots, like tax increases, hurt
small businesses, kill jobs, and weaken our economy. It’s time for government to
tighten its belt and live within its means, just like we do.”

MTA Chairman Dee Hodges added that, “Taxpayers cannot trust Governor O’Malley with their money. Within one year, Governor O’Malley and his spendthrift friends in
the General Assembly blew a billion dollar surplus, pushed through the largest
tax hike in Maryland history, and then increased state spending by a billion
dollars. Now we have yet another billion dollar deficit. Money burns a hole in
Governor O’Malley’s pocket, and fiscal conservatives shouldn’t enable his
spending addiction.”

Mr. McMillan pointed out that, “Despite his claims
to the contrary, Governor O’Malley hasn’t cut any spending. State spending
increased by one billion last year. Governor O’Malley isn’t using higher taxes
and slots to avoid spending cuts. He’s using them to increase spending and
expand government entitlement programs.”

In closing, Mr. McMillan called on fiscally conservative Republicans, Democrats, and Independents to unite against slots. “For years, fiscal conservatives were divided over slots, but Governor O’Malley has radically changed the terms of the debate. Slots and cuts instead of higher taxes were arguably the lesser of two evils. Slots after a record tax and spending increase are just an additional evil.”

In a little known secret meeting at the Republican National Convention, I was elected spokesperson for all Conservatives living maverick-ly outside of Annapolis city limits. Speaking for them, I can say that anti-gambling fervor is not the main reason of opposition for slots. Neither is the motivation to screw O'Malley like the Dem's screwed Ehrlich's plan. Here are the reasons (some better than others) to oppose this slots package.

1. Such specific language should not be in the Constitution. Since the measure appears as a ballot referendum, if passed it will appear in the Constitution of Maryland. The details of slots should be codified by statute.

2. It makes it very hard for Marylanders to change their mind. Let's say that we adopt slots, then find out slot machines create genetic deficiencies in small children that make them all want to become economists when they grow up. How horrible! With a Constitutional mandate in place, it would be very hard to repeal or even change slots--especially with the people who make money from it lining up in defense.

3. Slots are being used to avoid fiscal responsibility. This is the crux of Mr. McMillan's argument. Let's start with not raising new taxes at a special session, then maybe we can talk slots.

4. Political cowardice. I have heard some people criticize the legislature for passing the buck to the voters and not taking a stand themselves. I tend to think that there are more shrewd tactics at work, but it's an argument nonetheless.

5. The government will have more money to spend/waste. No explanation needed.

For me, there are better ways to do this, and better places to start saving/raising money.

Alderman Shropshire To Face Ethics Inquiry

I have been tipped of that the Honorable Alderman from the Great 7th Ward, Sam Shropshire, will be the subject of a formal ethics complaint that will be filed tomorrow morning with the city law office.


The problem is a political campaign event that is being hosted at City Hall:

I know that this is hard to read, and there is nothing I can do about it. But let me assure you of 2 things: first, that the event is being held in City Hall, and second, that is is organized by Alderman Sam's campaign committee, Friends Of Sam.

The City's ethics edicts are found in section 2.08 of the code. Feel free to pour over it if you like, but I think the most relevant portion is found in the opening policy statement:

The proper operation of representative government requires that public officials
and employees be independent, impartial, and responsive to the general public
whom they represent; that public office not be used to advance personal gain;
and that the public maintain a high degree of trust in their public officials
and employees.

There are no specific guidelines regarding what constitutes a person 'using their public office for personal gain'. Possible ethics violations are subject to interpretation, and one concerned citizen has interpreted Alderman Sam's event as a violation.

Scott Bowling will submit a formal complaint, the text of which reads as follows:

Rex S. Caldwell III, Esq.
Acting Chair
City of Annapolis Ethics Commission
c/o Office of the City Attorney
145 Gorman Street 3rd Floor
Annapolis, MD 21401

Mr. Caldwell:

I am writing to formally request that the City of
Annapolis Ethics Commission look into the recent actions of Alderman Sam
Shropshire as they specifically pertain to an event he is sponsoring and plans
to hold in the Council Chambers of City Hall on the evening of October 1, 2008,
as well as the e-mail sent by the Alderman to an undetermined number of
recipients inviting them to participate in this event, asking them to share it
with their friends and neighbors, and soliciting campaign
contributions.

I believe that Alderman Shropshire utilized the
prestige of his office to secure a meeting space in City Hall which is otherwise
not offered or available to members of the general public. Upon receiving
this e-mail, I called City Hall and spoke with a staff member in the Mayor’s
Office and inquired about reserving either the Council Chambers or a small
conference room in City Hall for a meeting of our neighborhood association
(Fairfax Road Community Association). I was promptly told that
unfortunately no space in City Hall was available for use or rental by community
groups or individuals, and was referred to the Department of Parks and
Recreation who offered to fax me a list of locations to
contact.

I find it is highly inappropriate for a meeting
which has no relevance to City issues and is political in nature to be held in a
public building which is operated and maintained with taxpayer funds. It
is evident that this event is political in nature by not only the invitation
that Alderman Shropshire sent out, (which requests campaign contributions), but
also by the profile of the guest speaker and his foundation that was included
immediately underneath. This event has no relevance to issues affecting
our City, nor does it provide any constituent services or meet any needs related
to the residents of Ward 7 or the City of Annapolis as a whole. I
have never heard or known of any Alderman utilizing City Hall for meetings that
involved more than a small group of individual constituents. In fact,
Alderman Shropshire has held numerous community meetings prior to this, and they have all been at locations other than City Hall. Why is this one different?

I would like to further note that the above referenced
e-mail was created and authorized by “Friends of Sam”, Alderman Shropshire’s
campaign committee. It not only announces and promotes the event in
question, but also requests and tells you to whom and where to mail
contributions for his campaign. Is it ethically appropriate for the City
of Annapolis to be making In-kind campaign contributions to an Alderman or any
candidate for political office?

In concluding, I would like to
state for the record, that I am writing this letter as an Individual and
concerned taxpayer of the City of Annapolis. It does not reflect the
views, nor have any relevance to groups or committees for which I may sit or am
affiliated with within the City. As some members of your Commission are
aware, I take the ethical standards of our City very seriously, and this is not
the first issue I have brought before you. Whether this event is
ultimately held at City Hall or not, I believe the issues outlined above need to
be looked into and addressed by the Ethics Commission, as there certainly
appears to be some acts here which are not only inappropriate, but more
importantly, are un-ethical.

I thank you and the members of the
Ethics Commission in advance for your time and consideration of this matter, and
look forward to your timely response. I can be reached by phone at (443)
822-3170 or via e-mail at mscottbowling@verizon.net with any
immediate questions you may have of me.

Respectfully,
M. Scott Bowling

First things first. Esquire Caldwell, apparently the acting chair of the Ethics Commission, is my personal lawyer. In a ironic twist, I have attempted to bribe him to rule controversially on this issue, so that I may continue to follow this story and the popularity of this blog will soar.

There are 2 trends at work that make this transgression noteworthy. The first is a familiar theme--lack of oversight. Certainly somebody knew about this event, and certainly that it was inappropriate.

The second trend is specific to Alderman Sam: the arrogance that derives from his continued disregard of the law. You will remember that he was the only candidate to fail to file a financial report on time, only recently filing it--some 2 months late. Now he is using council chambers--and therefore taxpayer money--for what amounts to a campaign event. Without fear of condemnation, Alderman Sam sent this flyer to an untold amount of people through a mass email.

My read is that Alderman Sam has no fear of punishment because he votes with the Mayor on every issue, and therefore has her protection. Consider this: according to research by Mr. Bowling, the guest speaker at this event has apparent ties to communism, and his speech is being advertised as a lecture on "community organizing"--a clear reference to Senator Obama. Imagine how many ethics complaints would be filed if Alderman Cordle invited Sarah Palin to give a lecture in City Hall on how to organize anti-abortion rallies.

Boat Show Lease May Be Given To Competing Entity**

**Rumor Alert.

In my last post, I lamented the fact that there are 2 bills being introduced to renew the lease for the boat show, one renewing for two additional years (2013 and 2014), and a similar bill to only renew the lease for 2013. I offered little explanation, other than disorganization, as to why this might occur. However, as a matter of course, I have since learned of a more cynical and therefore more probable explanation.

Rumor is that the lease of the dock for the boat show is going to be given to an entity other than that which created the show! And which group of kind folk are so worthy as to receive such a privilege...........

....the Sailing Hall of Fame!


This makes sense to me. Having successfully plowed through opposition to the HOF being located downtown, the organization has a sweet lease for that part of the dock. What would be more natural than for the city, an increasingly anti-profit establishment, to give the rights to operate the show to the non-profit HOF?

Or so goes the logic. The politics are convincing enough. O-35-08 was introduced by the Mayor, and would extend the lease through 2014 with "United States Sailboat Shows, Inc.", and "United Stated Powerboat Shows, Inc", presumably the people who have been operating it so far. O-36-08 was introduced by the Honorable Alderman from Ward 8, Ross Arnett, and would grant the 2013 lease to "City Dock Productions, LLC".

So, our working hypothesis is that City Dock Productions LLC is somehow related to somebody with the Sailing HOF, because we know that Dick Franyo is the Chairman of the HOF and he owns the Boatyard which is in Ward 8. I searched the corporate records or City Dock Productions, and found out that their resident agent is another corporation, Back Creek Services. That company's resident agent is a lawyer named Timothy Dowling, but he may just be a lawyer who represents the actual driving force behind the operation.

Geeze, research is hard.

Well, what we know is this. There is now a competing group that is offering a proposal to run the boat show starting in 2013. Using my VIP connections at the city council meeting and throughout the greater Annapolis area, I am pretty sure that the competing people used to work for Ed Hartman, who apparently is the original guy. The new entity has a financial backer, which may or may not be the Sailing HOF.

City Council Meeting 9/22: Live Blog

I have once again found a partner who has generously, if not knowingly, donated his wireless internet signal to facilitate a live blog!

7:33

The meeting starts, 33 minutes late, as a result of a closed session of the council running late. So far, there have been no efforts to compensate me for the extra hour of parking in the garage.

All Aldermen are present, except for Cordle. The city attorney is absent, and has been replaced by a man who looks like he means business. Check him out on tv!

7:41

The public hearings begin after a brief recognition of a gent whose family spent 1/2 their annual income to sent him to America.

O-22-08: Modifying parking districts around Acton's Landing.
Arguments For: None Made.
Arguments Against: Make sure this doesn't shift parking burden to residential streets in Acton's Landing.
Who Is Right: Who knows.

7:51

Somebody points out that parking is enforced in ward 1 in the daytime, when there are plenty of spaces because ward 1 residents are working! The claim that residents come home to find no parking spots because there is no parking enforcement at night seems to baffle the council, save Alderman Israel who promises that Chief Pristoop is addressing the problem.

7:54

Public hearings for the two bills regarding non-profit financial reporting. Nobody testifies, but the Mayor claims that there is already a provision to receive quarterly reports. If there is, I didn't find it, and it sure isn't in the code in the spot where these new ordinances would be inserted.

7:55

The public hearings portion of the public hearing meeting ends, after 14 minutes.

7:55:05

Legislative action begins.

O-35-08 and O-36-08 are introduced. See the next post for details.

7:58

R-35-08 comes up for a vote, and fails, which is good. This bill would have given the Key School, a private school outside of city limits, the priviledge of using the city's ability to borrow cheaply to finance their operations. The vote ended up 4-4, which means the motion fails.

Voting Yes: Moyer, Hoyle, Finlayson, Shropshire
Voting No: Paone, Israel, Stankivic, Arnett

8:01

R-40-08 is fast-tracked, and passed for good. This commends the awesome city clerk for receiving the "Fannie Lou Hammer Award".

8:02

Meeting adjourns. Shortest meeting ever.

City Council Meeting 9/22: Preview

While walking downtown today, on my way to get sushi, a man from Guatemala was propositioning people "McCain or Obama?", showing command of the ultimate form of harassment. I knew this man was from Guatemala because he said so, and I knew he was a man as the result of deductive reasoning skills that I have been developing over the past few years.

Anyhow, if that man were Seth Zirkle, the new legislation writer/policy analyst for the city, he would surely be telling us of the city council meeting tomorrow night. It is technically a public hearing, but that distinction is no more significant than that between "Savings and Loan" and "Commercial" banks after 1989.

Now I know there is a faction of you readers that would like me to talk about the recent murder, or other things. (There is also a 1-person faction that demands to know why I have chosen to write this post in lieu of doing the dishes.) Unfortunately for you, I am not prepared to do that at this time. So let's see what tomorrow's meeting is all about.

PUBLIC HEARINGS:

-O-22-08: Modifications to Parking Districts 2 and 3.
-O-23-08: Non-profit financial reporting.
-O-26-08: Non-profit financial reporting.

O-22 appears to be a housekeeping bill that cleans up the parking code based on the recent construction of Acton's Landing. And by "appears to be", I mean the summary of the legislation was too boring for me to conclude anything else.

You may notice that O-23 and O-26 have the same synopsis above. This is a classic case of political goofiness, where 2 Aldermen each introduced their own version of the same bill, differing on one seemingly mundane detail and each hoping that his bill will be the final version, thus granting the winner the right to "claim" that reform. Alderman Shropshire wants non-profits receiving money from the city to provide semi-annual updates as to how that money is being spent, whereas Alderman Cordle wants the updates to be quarterly. Currently there is no requirement for them to report anything--at best, how grantee money is spent is debated by the finance committee when the organization lobbies for money during the next budget process.

LEGISLATIVE ACTION TO RECEIVE A FINAL VOTE:

O-29-06: A piece of legislation apparently specifying how to tell when a traffic study is needed that took 2 years to come up for a vote!

R-35-08: Legislation allowing the Key School, a private institution located outside of city limits, to use the city's financial prowess to enjoy a favorable bond issuance.

NEW BILLS TO BE PASSED ON FIRST READER:

-O-35-08: Renewing the Boat Show Lease for 2013 and 2014
-O-36-08: Renewing the Boat Show Lease for 2013 only*
-R-40-08: Honoring the City Clerk for receiving something called the Fannie Lou Hammer Award**.

(*Damn it people, get yourselves together. Can we please agree on these things before introducing two bills? Now we will have to debate both of those until one is passed and the other has to be withdrawn.)

(**I started writing this post at 7:00, and am now posting it at 12:30 am. It took me 22 minutes to write the post, and the rest of the time to try and figure out if I have ever used the words "Fannie", "Lou", and "Hammer" in the same sentence.)

Let's see what happens tomorrow night.

"Too Important To Fail" Is The New Argument For Socialism

Using strict statistical methods, I have calculated that my productivity has dropped by a record 8% in the last 48 hours while I try and sort through the financial nightmare that is terrorizing some major money moguls as we speak. The latest victim is AIG, which just ceded an 80% stake to The Federal Reserve (yikes) for a barely fathomable $85 billion.

Historically, the government has identified industries that are too big or too important to fail. Amtrak and the airlines both have enjoyed government favoritism to some extent. But the financial industry is in a class by itself. The Federal Reserve came in 1913, and the FDIC came in 1933, creating a foundation for a system that now allows firms to make stupid decisions and people to obtain stupid loans.

In case you didn't realize this by now, with public goods being the notable exception, when the government gets involved in industry it screws everything up, and necessarily produces a result inferior to that of the private market. What incentive do banks have to make responsible loans if the government is going to bail them out?

As an economics student, I learned the virtues of the Fed. After all, countries need central banks. But, the Fed's purposes have evolved. Originally meant to control bank panics, it became a regulatory agency for banks, a monetary policy instrument, and a lender of last resort to banks. There has been some history of the Fed serving as a mediator and broker for emergency rescues of too-big-to-fail financial institutions, with Long Term Capital Management being perhaps the most noteworthy. But in the last 6 months, the Fed has pushed even that boundary and has acted a lender of last resort to investment banks (not regular banks), and now, today, has apparently nationalized the nation's largest insurer! Not only are we taxpayers on the hook for the first $85 billion, but I'm quite sure AIG is about to shell out infinity billion dollars to rebuild Texas from Hurricane Ike--are we going to have to pay for that too?!!!!

If that weren't scary enough, consider this: at some point, the Democrat Congress is going to realize that they now have an 80% stake in an insurance company. Democrats want national health insurance. Get the picture?

I hope to research a mega-post on this, but in case I don't, here's what I'm thinking. Most of this is the fault of Democrats, not of the free market or capitalism. Democrats created Fannie Mae and Freddy Mac, and Democrats ran those agencies into the ground while cooking the books and pocketing tens of millions of dollars. When President Bush tried to reform those agencies in 2003 (I think), Democrats blocked it. Fannie and Freddie gave millions of lobbying dollars to Democrats (Obama, Hillary, and Biden were all in the top 5 I think...McCain was #342)--which essentially means the government was lobbying the Democrat part of itself--and we can now see why.

Even so, I am not happy with the Bush administration. That itwould allow such an overt breach of free-market principles is horrible. If the Fed did this unilaterally using its independence, then we need to find limits to the Fed's powers outside of monetary policy. To borrow terminology from Warren Buffet, we the taxpayers are throwing good money after bad money, and we didn't have an ounce of say about it. Earlier in the post I announced that the latest victim was AIG, but the true victim is us.

Mayoral Candidates Compete To Lower Homestead Credit

When I first got in on this blogging game, I made a promise to myself: if ever I got 48 comments on a post before making another post, I would retire. The last post has 47 comments, so here we are.

Economic theory suggests that countries, or other sovereignties, may engage in a "race to the bottom", a phrase describing a phenomenon of continuous reduction in taxes and regulatory burden that is supposed to attract capital investment to the country that 'finishes first' and has the least burdensome business environment. Think Cayman Island and Swiss bank accounts.

Limitations of the race-to-the-bottom theory usually involve logistical costs. For example, a business or person wouldn't relocate from Annapolis to Annapolis Royal (Canada) for a tenth of a percent off of property taxes. However, a person has great financial incentive to move outside of the Annapolis city limits. I took advantage of this incentive, and I now write the leading "outsider" and the #7 "maverick" blog involving city of Annapolis politics from a non-resident.

The incentive is lower property taxes.

(Post intermission: Property taxes are asinine. So are income taxes, and many more. Consumption (sales) taxes are the most efficient and the most free-market/free-will way to go. I've always felt this way, but then I read the Fair Tax book by Neal Boortz, and now I really feel this way.)

As we know, there are 2 things that determine how much property tax you pay each year: the property tax rate (PTR) and the tax-assessed value (TAV) of your house. For you math lovers:

PTR x TAV = $$$$$$$ out of your pocket

The rate is the more straight-forward of the 2. The council sets the rate in their infinite wisdom and goes on their merry way. But, even if the rate doesn't change, we could still get screwed. Houses are assessed every 3 years. During real estate bubbles, some house values double over that time. Luckily, the government recognizes that people's incomes will almost never double in 3 years, and they offer protection in the form of the Homestead Credit. The state mandates that the assessed value of a property cannot increase by more than 10% each year. Local jurisdictions are free to lower that percentage, but they cannot raise it.

Anne Arundel County has further lowered the Credit to 2%. Race-to-the-bottom theory would suggest that the City of Annapolis might do the same; yet, true to form, the city has left its rate at 10%.

Three aldermen, in the form of 2 separate bills, have sought out to remedy this. Alderman Israel, a mayoral candidate, introduced O-31-08 which would drop the number to 5%. As required by the Republican National Committee, Alderman Cordle (another mayoral candidate) and Alderman Paone (a crafty and rather tall Ward 2 rep with a fan club on this blog) have sponsored O-34-08, which is the same thing except the number is 2%.

I have a hard time believing this is anything other than election strategy (but that doesn't make it bad). All of these people have had plenty of time to officer this ordinance in the past--they didn't, and it's not because they didn't know it was important. In the last mayoral election, Independent Gilbert Renault got like 2,700 votes and finished second to Moyer by only a few hundred--running a campaign that's only issue was lowering the Homestead Credit from 10% to 4%*.

(*"only issue" is a reach, but that was the main thing)

I don't care who passes it, but the lower, the better.