Dull Old Saw

The old saw is that it is very easy to start a war, but not so easy to end one. ‘Nuff said given the longest war America has ever been engaged in still is not over. And children wonder how the “Hundred Years War” could have gone on, for 100 years! Analysis finds that underlying the old saw is the propensity to continue with an institution well after the best if used by date. How many “antiquated” laws are still on the books, which folks chuckle over when some media author bothers to point out their inanity in today’s times? How many political policies are pursued for the same reasons of habit, custom or just plain old conformist sloth (It’s always been done that way)? In addition to the inertia, there’s also obsession. “Texas Cities Are Worried Republicans Pushed Tax Cuts Too Far” by Lauren Etter, for the online Bloomberg Business (March 3, 2015) critically exemplifies this “life of it’s own” obsession that ignores the whys and wherefores of the original intentions. “Energized by an expanded majority in the Texas legislature, Republicans want to slash billions from homeowners’ taxes. That may squeeze funding for local governments that have borrowed $205 billion for roads, schools and infrastructure as Texas added more residents than any other state.” “Localities have borrowed to fill the gap. Of the 10 most-populous states, only New York has more local debt per resident, according to figures from the Texas Bond Review Board. The debt of Texas local governments swelled by 75 percent over the past decade, according to the state’s figures, as officials poured more money into public works.” “While Williamson County’s property-tax increases last year wouldn’t have exceeded the 4 percent limit lawmakers may impose, its officials are wary of how the proposal would tie their hands in the future. “It’s extremely difficult to keep up with the growth in the demand for services when we have a capped rollback rate,” said Larry Gaddes, the county’s chief deputy tax assessor. The property taxes of about one-third of 1,000 Texas cities would have exceeded that limit in 2013, according to the Texas Municipal League in Austin, which lobbies on behalf of local governments. If the cap were in place, it would cost McKinney, a Dallas suburb, $1.4 million, enough to pay salaries and benefits for 11 police officers and firefighters, according to the league. Midland, in the western oil fields, would lose $300,000. Dallas Mayor Mike Rawlings said the tax-cut plans circulating in Austin would limit cities’ growth. About 61 percent of the city’s budget is for public safety, so efforts to limit revenue growth would “be on the backs of our police and firefighters,” he said. “But it would also affect quality-of-life issues like parks and libraries.”” The state of Texas has no individual income tax. Dialectic infers that for every tax cut there is a tax increase somewhere. Writing for Pew’s Stateline, Elaine S. Povich provides exactly that in a piece entitled “GOP Governor’s Tax Plan Drawing Attention Of Cash-Strapped States And Cities” (3-5-15). “An exemption from paying local property taxes, which applies to all Maine nonprofits, helps Freeport Community Services serve more people. But that exemption would end under Republican Gov. Paul LePage’s new budget proposal. The governor’s plan, which would hit groups ranging from nature preserves and summer camps to charity hospitals and private colleges, is drawing the attention of other cash-strapped states and cities where the idea of taxing nonprofits is no longer off limits. LePage wants to lower the income tax from 7.95 percent to 5.75 percent and increase the sales tax from 5 percent to 6.5 percent while extending it to new goods and services. The state would no longer share about $60 million in revenue with local governments, but it would make up for at least some of that lost revenue by requiring cities and towns to levy property taxes on 50 percent of the value of nonprofit-owned real estate valued at more than $500,000.” In a breakdown of states and their number of nonprofits/assets provided by Pew, Ohio is no slouch. It is shown to have 63,178 nonprofits with assets valued at 185.7 billion (that’s with a “B”, Mr. Hottinger) This puts it way ahead of all of its neighboring states save Pa. Both of these articles speak directly to the situation the City of Newark finds itself in. The Republican mayor champions his ability to utilize federal funding to hire new fire fighters while his party cuts federal spending and continues to diminish state support for city infrastructure/safety forces. The streets go unpaved, the bridges unrepaired, the water/sewer lines wait while the west side expands (which will only be accelerated by the Cherry Valley interchange), as also the north side with the new Newton township annexation near the Trout Club. City services must be provided for the new while taxes must be cut for the sake of a party’s national election strategy. Analysis finds that this old saw is a bit dull. “Cutting taxes”, with the obsession it has become, is costing us way too much in the everyday.

A Tax-Saving Plan For Businesses

With the election just barely over, so recent that the last Republican still hasn’t declared victory, those intimately tied to the outcome have already come calling, asking for their due. In an article entitled “Kochs target Republicans on tax breaks” (Politico 11-12-14) Brian Faler recounts “Powerful conservative groups including those backed by the Koch Brothers are pushing Republicans to take a hard line on a raft of expired tax breaks pending in the lame duck, an effort that could jeopardize party leaders’ hopes for a low-drama Congress. Koch-backed Americans for Prosperity, Heritage Action for America and others want Republicans to capitalize on their election victory by killing some of the tax “extenders” they’ve long hated, such as a one subsidizing the wind energy industry.” Meanwhile, back at the ranch, the November 9, 2014 Newark Advocate ran some apparently disparate pieces on the local election income tax increase that “failed”. Their Opinion (editorial) reflects Analysis’s own pre election prediction – that the tax failed due to a lack of leadership marketing: “You could see it in the tepid push from Republican Mayor Jeff Hall, who seemed concerned about being tied to a tax increase a year before he must seek re-election. Outside a few sparsely attended meetings Hall hosted, there was no push by city leaders to show how paving money has been spent, what the needs are and how bad our streets will be very soon.” Ruing the loss, “That’s sad when you realize the successful flipping of 374 voters would have turned a loss into a win.” And ending with (the second to last line) “What’s perhaps most important though is for our leaders to become more willing to tell our community the stark truth rather even if it’s what they don’t want to hear.” Within that same edition, the paper tries to paint “the stark truth” a Joe Williams report “Roads face more decay without funds New tax not in plans for 2015, mayor says” In excruciating and painful detail, the funding of business street improvements that articulate with business interests is spelled out (downtown streetscapes, total west main rebuild from hospital to new fire station and North 21st St.) while residential streets will get winter cold patch at best, maybe some repaving in 2016. “Will that approach work at least long enough to get to the next round of more-permanent repairs? Some say it hasn’t worked so far, but city officials say they don’t know what other options they have right now. “There’s no magic out there for paving streets,” Hall said. “If there was, why would we go out and ask for more (money)?”” Immediately after the Opinion (editorial) promoting “tell(ing) our community the stark truth rather even if it’s what they don’t want to hear.” space is dedicated to a Guest Column from the community’s professional politician. “One way we have worked to revitalize Ohio’s economy is through the establishment of different kinds of tax credits.” Mr. Hottinger then goes on to recount all of the triumphant tax breaks of the last 4 years and the current bills for more. Ironically, this same paper that dresses itself with the stark truth that the populace does not want to hear printed a story by Chrissie Thompson for the Cincinnati Enquirer just the day before (11-8-14 “Leaders may join tax-bill challenge Cincy mayor says it attacks services”). In it Thompson writes of the initiative by Ohio’s local community leaders to restore their portion of state tax funding (lost over the past 4 years or threatening to be even more so by current House Bill 5). “Newark Mayor Jeff Hall said he would consider supporting a ballot initiative but would first have to see the final version of the bill that passes. “I would surely offer opposition (to the bill) if I thought it was not in the best interest of Newark,” he said. Hall, a former city treasurer, said he does not oppose simplifying municipal tax collections, “as long as it just doesn’t become revenue reduction.” “I question, at times, just how broken the tax system is,” Hall said. “(House Bill 5’s) intentions were to simplify taxes, but part of it has become a tax-saving plan for businesses.””

Now that businesses are persons, it certainly is the case that one person’s tax increase is another’s tax credit.

I Don’t Think We’re In Kansas Anymore

As can be expected, serendipity finds an article by Matt Phillips, appearing with the online Quartz, exemplifying what was presented rather abstractly in the previous post (Are We There Yet?). From the article, “America’s tax-cut obsession is colliding with reality in Kansas” (8-6-14):
“Kansas may be foremost among them. Its governor Sam Brownback, a former US congressman and senator, led an aggressive effort to cut taxes soon after winning office. The idea is that tax cuts would reinvigorate job growth and bolster the state’s economy, replenishing state coffers along the way. It hasn’t worked out all that well. Kansas’s job picture has improved since 2011 when Brownback took office. But rates of job growth have been slower than the country as a whole and compared with nearby states like Nebraska and Missouri. Meanwhile, and predictably, revenues have fallen faster than spending, forcing the state to dip into reserves. Moody’s downgraded its debt rating on Kansas in April, citing “sluggish economic recovery and a structurally imbalanced budget.” S&P followed, axing Kansas’s debt rating today. S&P analysts say that “substantial shortfalls in individual income taxes” will likely eat into the state’s cash cushion at a very low 0.6% of expenditures, far too thin for a period of economic expansion.”
Of particular note is the use of “rate” rather than any substantial indicator of increase or growth. Although there has been real, actual growth or increase in Kansas in the last three years, the “economy”, recognizing only “rates” of growth, determines otherwise. This is reinforced by Moody’s and S&P’s “ratings”. The folks residing in that state, who get up in the morning and look out their window wondering how things are doing this fine day, don’t realize they aren’t in Kansas anymore. They are now in some statistic rated state of the “economy” where the sun never shines. Toward the end of the short article, Phillips writes:
“But from a political tactician’s standpoint, undermining state finances probably isn’t a bad thing. After all, the backdrop of declining state finances makes it much easier to argue that the time for steep spending cuts has come.”

The article is, of course, about governance (“governor Sam Brownback” “time for steep spending cuts has come”). Those being governed live in a state of the “economy”. Those governing (residing in whatever state they desire – Cayman Islands, Switzerland, Oz) utilize the currency of the “economy” (such as financial “ratings”, the promise of jobs creation or growth, “expansion”) to meet expectations attainable only within the “economy” itself (and not found elsewhere). Cool! In light of the Licking County commissioner’s recently stated preference for a public system over a private one, the residents of Newark get up daily to find the “public system” transit service being cut, the “public system” of roads, bridges, sewer and other infrastructure being ever more minimally maintained, the “public system” of fire, EMS, police and health workers continuously understaffed, the “public system” of pre-school programs, of community centers, of housing, of accessible education/training eroding. Etc. But that’s OK. The state of the “economy”, where the citizens reside, is rated up there with the likes of Emerald City.

Are We There Yet?

In the last post (Limited Time Blue Light Special On Aisle 5) news reports of current local business occurrences were analyzed. These (both the news making as well as the reporting) occurred, ostensibly, because they were good for the economy. Analysis also glimpsed Nick Hanauer’s use of “the economy” which differs from that of Paul Ryan’s, or Rand Paul’s, or Donald Trump’s. All of which begs the question, what is “the economy”? An essay by Timothy Mitchell (“Economentality: How the Future Entered Government”) from the Summer 2014 Critical Inquiry is insightful:

“Around 1948, it became common in American political debate to talk about the economy. References to this object in government and newspapers were starting to appear in a routine, repetitive way that made the economy appear for the first time as a matter of fact. It was no longer always necessary to explain what the term meant or to qualify it in some way.
The idea of the economy itself had been around for at least a dozen years. But in the period before the Second World War the word still often carried echoes of an older sense when economy described a process, not a thing. In everyday usage, the term referred to the act of economizing, of making prudent use of limited resources.” (pg. 481)
“By around 1948, a decade after the introduction of national income accounting into the calculations of the federal budget, it was becoming more commonplace to refer to the economy. How should we understand the emergence of this new way of referring to collective life? Was the economy a new object or just an old name for things that already existed? Ultimately, neither option is satisfactory.” (pg. 483)
“It is easier to talk about the economy as an effect.”
“The effect of the economy provided not just a new object of government policy, in the way that governments had also become concerned with, for example, public health, or urban renewal, or social welfare. The economy provided a more pervasive effect, one that has since then escaped attention: a way to bring the future into government.” (pg. 484)
“First, the CEA [Council of Economic Advisers] was set up [1946] not to allow economists into government but to keep them out.”
“Congress created the CEA in reaction against postwar proposals for a Full Employment Act, which would have established full employment as a collective right. Opponents of the right to employment inserted the plan for the council into the employment bill in order to weaken the influence of wartime economists in government and the mechanisms they had developed during the war for maximizing employment and controlling prices.” (pg. 490)
“The CEA was to be a device for this making things public, for an “economic education” (starting with the education of the president). Its regular reports would help bring the economy into effect.
Second, economic expertise had often been concerned with problems of growth: the increase in population, the expansion of trade, a surfeit or shortage of natural resources, or inflation in the money supply. What was new in 1947-48 was not growthmanship but the object that would grow – not population, trade, resources, or wealth, but something less material and therefore more effective: the economy. The growth of the economy was not a question of the governance over resources or the management of national finance. It was a means of bringing the future into government – of governing populations through their futures.” (pg. 491)
“Through such material inscriptions [representations not of actual increases/decreases but of the rates of increase/decrease], the economy emerged as a nonmaterial object, a set of calculations that converted the accelerating growth of modernity into an apparently stable future. In ways like this and many others, the economy, perhaps just for two or three decades, made the future an instrument of government.” (pg. 497)
“Governing people through their future also became a device for managing populations in the formerly colonized world.” (pg. 498)
“One of the most significant of these possibilities [political possibilities] was that industrialized states could attempt to govern not only their own populations but also relations with the rest of the world through their futures.” (pg. 499)
“The economy worked effectively as a mode of government-through-the-future for only a couple of decades. By the late 1960s, the forms of productive growth, energy use, cheap oil, and Middle Eastern politics on which it depended were all under pressure.” (pg. 507)

Analysis finds that projections on “the future” (as found with “the economy”) are something in which if you follow the directives or “governance” (of the future), then certain expectations will be met. It is not necessarily material expectations for then it would be a “plan”, something Mitchell’s essay clearly shows “the economy” not to be. A plan is something limited within an envelope of a beginning (projected outcome), middle (execution), and end (verifiable achievement or failure). Today the use and meaning of “the economy” is more like that of “technology” – continuously evolving, in flux, with built in anticipation as well as obsolescence, all not contained within a definable certainty, much like a short or long term weather forecast. In 1948 President Truman deployed the army to run the railroads while less than 15 years later President Kennedy muscled the steel producing corporations, both for the sake of governance. After the 2008 financial meltdown no criminal indictments of the individuals involved within the culpable “too big to fail” financial institutions were pursued. The ostensible reason given by the chief prosecutor of the justice department was that such action would be detrimental to “the economy”. When “the economy” is used by political or corporate leaders, the press or political groups, one should automatically question who is being governed? By whom? For what kind of future? For whom? Mitchell’s description of how “the economy” came to be used and what its meaning has become creates an imaginary Looney Tunes cartoon image of a carrot dangling in front of an overworked donkey pulling an overloaded cart asking “Are we there yet?”

Limited Time Blue Light Special On Aisle 5

We’ve all seen this movie, you know, the one where the company comes in or announces it “will stay” and the credits appear with all the tax abatements, grants, etc. and Grow Licking County appears at the end to take credit for the credits. The latest sequel played out July 29, 2014 with Kent Mallett of the Newark Advocate reporting that MPW in Hebron plans a $4.4 million dollar expansion with a promised 25 jobs; all contingent on tax abatements, credits, etc. of course (“MPW plans $4.4 million expansion, 25 new jobs”). “The Ohio Tax Credit Authority approved today a 50 percent, six-year tax credit to MPW for creation of $1 million in new annual payroll.” “The project is contingent on the company receiving approval from the Licking County commissioners and Lakewood Local School District for an enterprise zone tax agreement.” This not being enough “The county will extend an existing sewer line from the Pilot Travel Center truck stop just north of Interstate 70 to the MPW facility at 9711 Lancaster Road SE. “That was a big part of the deal — connecting to a public system and off of a private system,” Bubb said.” (Analysis applauds Tim’s championing of a public system over that of a private one!) The movie wouldn’t be complete without the obligatory cameo starring “Dan Evers, director of the Grow Licking County community improvement corporation, said local officials have pursued the local expansion for about two years.” (not appearing in the cameo but listed on the credits was Columbus 2020, another public-private partnership in partnership with the public-private partnership of Grow Licking County, both of which are partnering with the public-private partnership of JobsOhio, partner!) While this feature was airing, a second summer sequel came out the very same day. The Dispatch released a trailer for the projected opening of a call center for Seattle based Zulily that anticipates 900 new jobs. The Ohio Tax Credit Authority has granted them a 75% income tax credit (the Dispatch’s TV station, WBNS, described this as a “savings” for Zulily!). Analysis acknowledges that this structures some individuals as being privileged to “save” money at the expense of other individuals (who must pay for this savings). Corporations are now individuals; persons, that is. In addition to receiving the same services as other individuals, without Zulily or MPW having to pay for them (such as road maintenance, fire, EMT and police protection, use of the courts), the county (of Licking) will be extending waste water treatment to a company founded on and dedicated to the removal and disposal of industrial waste. We should all be so privileged.

Speaking of Seattle, the transcript of an interview by Paul Solman with Nick Hanauer appeared online (“Why capitalism has nothing to do with supply and demand” PBS Newshour’s Making Sen$e, 7-28-14). “Billionaire venture capitalist Nick Hanauer, whose family owns a pillow company, says there’s a limit to how much his wealth can buy. “I may earn a thousand times the median wage, but I don’t sleep on a thousand pillows,” he tells Paul Solman.” “Nick Hanauer is a billionaire venture capitalist, who made his fortune first as one of the original investors in Amazon, and later in a web ad firm. He’s also been a strong supporter of the increased minimum wage in Seattle, which is where Making Sen$e met up with him this year reporting on his city’s fight to adopt a $15 an hour minimum wage.” In the interview Hanauer points out “If you want to have a sustainable democracy which is prosperous, secure and enjoyable to live in, impoverishing the many to benefit the few is hardly the path to go on. If history is any lesson, at the end of the day, an economy that doesn’t work for everyone eventually will work for no-one.” Addressing the reticence for change he states “The facts are that this change threatens both the pocket books, but more particularly, the status of rich people. One of the most interesting things I’ve learned about litigating these issues is how emotional people can get around seeing themselves, for instance, as job creators. If you are a job creator, you’re very much at the center of the economic universe and everything orbits around you. And if you’re a job creator, a 15 percent tax rate on capital gains, a 15 percent tax rate on carried interest – all these things are the righteous instantiations of sensible economics. But if the middle class is the true job creator in the capitalist economy, all of those advantages and all of that status are essentially a con job.” He continues “This is just one of the somewhat obscure elements of our tax code that massively advantages people like me. Working people pay 39 percent, investors pay 15 percent. And that differential is essentially explained away and justified by this idea that the more money people like me have, the better off you will be.” “You have to remember people like me care a lot about status. That’s why we are where we are.” “Of course, if it’s the other way round, that tax break makes no sense whatsoever. But these arguments don’t just threaten pocket books – they threaten status. And you have to remember people like me care a lot about status. That’s why we are where we are. And so when you mess with status, when you mess with the status of people who care about almost nothing but status…”

OK, so Hanauer is in another universe from the Waltons. But maybe the Waltons will have to quit their alien status. Business Insider’s Ashley Lutz provides some background on the recent dollar store buyout news (“America’s Poorest Shoppers Are Putting Discount Stores Out Of Business”, 7-29-14). “Yesterday, Dollar Tree announced it would buy Family Dollar, a chain that is in the process of closing hundreds of stores and firing workers. Other discount stores have been struggling as well, writes Heidi Moore at The Guardian. Fashion discounter Loehmann’s filed for bankruptcy, while Wal-Mart’s sales have declined for the past five quarters. “There’s just not enough money deployed by American families to keep all the discount chains in business,” Moore writes.” “While middle-class shoppers have enjoyed economic recovery, America’s poorest consumers have not, write Paul Ziobro and Shelly Banjo at The Wall Street Journal. Money spent by households earning less than $30,000 has been flat since 2008, WSJ reports, citing the Bureau of Labor Statistics. Total income for that group fell 1% between 2004 and 2012.” “But it’s possible that no amount of discounting will win back these struggling shoppers. “A cash-strapped consumer can’t keep buying forever, no matter how low prices go,” Moore writes.”

Rhetorical Manipulation

Analysis’s raggedy old Webster’s gives “the art of effectively using language in speech or writing, including the use of figures of speech” and “the undue use of exaggerated language; bombast” amongst its definitions of “rhetoric”. Couple that with commercial interest and you get slick Madison Avenue marketing. Case in point would be the recently enacted Ohio legislation SB 310 which, according to the Dispatch, John the Governator will enact. Cincinnati Republican State Senator Bill Seitz originally proposed SB 58, ending Ohio’s alternative energy requirements and standards. His rhetoric centered around “the market” and how these standards would cause the utility companies to charge higher rates. Zanesville’s Republican Senator Troy Balderson revamped the elimination idea with a “freeze” of these standards while the efficacy of the standards themselves are researched (effectively the same, but under the guise of a different rhetoric, temporary suspension versus elimination). His rhetoric centered on determining whether customer costs would be more or less with or without the standards. How noble! The liberals and greenies decry this as a Koch brothers and ALEC conspiracy. Given the preponderance of this very same kind of legislation appearing in state legislatures across the country coupled with the President’s initiative to call attention to global warming and tighten coal fired power plant emission controls, there’s some truth in that. But wait, there’s more. Though Ohio is not the heaviest user of coal in generating its electricity, it is up there amongst the top users. Some of that coal is from Ohio mines. Staying with coal is, to say the least, completely conservative (Webster’s first definition is “disposed to preserve existing conditions, institutions, etc.” Sounds about right). Further “market” rhetoric by conservative legislators is that alternate energy sources (like wind or solar) are currently only possible thanks to state and federal subsidies. Of course the senators elide their own subsidizing shale energy (fracking) with the current tax package that allows the industry to be excused from paying the commercial activities tax. These “elision” fields likewise avoid disclosing that the natural gas produced by this very process, is cheaper than coal to generate electricity. But this just leads to more rhetoric. What about the commercial interest motivating our conservative legislators?

Analysis has a recent AEP bill before it. 15% of this particular bill is attributable to various non-generation, transmission or distribution costs (what it takes to get Sparky from there to here). There is a “Retail Stability Rider”, a “Deferred Asset Phase-in Rider” and a “Phase-in Recovery Rider”. Still unfazed by all the riders? Well, how about the most expensive of the bunch, the “Customer Charge”? Yes, you read that right, a charge just for being a customer. All this thanks to our legislators, John the Governator, and PUCO, though the names have been withheld to protect the guilty. These charges are there because the various utility giants that have control over Ohio can put them there. Enough said. What about those utilities themselves?

6-8-14 Rob Wile for the online Business Insider reports “How Solar Will Destroy The Power Companies, In 5 Easy Steps”. Mr. Wile writes “Barclays recently downgraded the entire U.S. electric utilities sector to “underweight” on the threat posed by widespread adoption of solar-storage.” “The firm’s sweeping case focused in large part on debt markets’ apparent ignorance to challenge utilities are facing.” Wile gives the following five reasons for Barclays move: 1.Solar prices come down (Photovoltaic panels have dropped, and continue to drop in price. OK so much of that is due to subsidy but revisit the riders and customer charges as well as the recent tax package for fracking if you want to embrace that “market” rhetoric. Likewise Tesla has caused the price of storage batteries to continuously drop. Again, look at the legislators’ “laws” to keep Tesla out of Ohio). 2. The defection spiral commences (“Once the prices for everything get cheap enough, homeowners begin to leave the grid.” Duh!) 3. Utilities flail around in their state capitols seeking relief (already happening, dude) 4.The decommissioning process begins (“This is the key moment: Utility companies being forced to upgrade their plants in the face of a declining customer base. That’s a killer combination.”) 5. (this is the one that completely undermines “the market” rhetoric of our conservative legislators) The market turns (“In Germany, aggressive subsidies and a move away from nuclear led to an explosion of renewables expansion. Since the beginning of 2010 (though for reasons that go beyond simply that outgrowth), Germany’s two largest utilities had stock price declines of 55-60%, compared with a near 60% gain in the DAX.”) All this shows that the folks on Wall Street (company John the Governator used to keep when employed by the now belly up Lehman Brothers) know what is coming down. How do they know this?

Academics use a term called “disruptive technology” or “disruptive innovation” to describe what happens when what essentially involved a cumbersome or costly way of doing things is displaced by something, perhaps less comprehensive, but far more accessible and affordable. Case in point would be mobile communication devices (which once were incredibly cumbersome and expensive) and personal computers, now even smart phones. IBM, Hewlett Packard, the old Bell system and others all suffered as a consequence of disruptive innovation/technology (Kodak and Polaroid had to reinvent themselves thanks to digital imaging). Solar is likewise a disruptive innovation/technology. Folks like Seitz, Hottinger, Balderson and other conservatives, “disposed to preserve existing conditions, institutions, etc.” need to be told the jig is up. The rhetorical manipulations employed by them to insure their own reelection financing is failing (“Customer Charge” indeed!); failing on account of the very market they so ardently invoke as the fountain of all solutions for all problems. In the case of alternate energy, is it the market they are dissing, or is it their responsibility (as elected representatives) to solve problems? SB 310 creates one, solves none.

September 28, 2013 Revisited

Donald Sterling, the LA Clippers, et al. are still in the news. No shortage of potential multi-billion (with a B) dollar buyers came out of the woodwork when the professional sports team’s sale was instigated. Oprah said 2 billion dollars was her limit. Steve Ballmer must have surpassed that with over $2 billion according to recent accounts. In addition to all the folks wanting to buy the Clippers, Donald himself sued for over a billion dollars saying he is being cheated. Analysis finds it useful to revisit an Advocate op ed letter written by Newark area State Representative Jay Hottinger intended to educate readers of the enormity of these sums.

“No one knows what $1 trillion dollars looks like, let alone 17 times that, so allow me to try to explain it. A trillion dollars is 1,000,000,000,000 — that’s 12 zeros to the left of the decimal point. A billion dollars is a thousand million, a trillion dollars is a thousand billion.” (Nation’s debt problem demands action, 9-28-13, The Newark Advocate)

Even without a calculator, Analysis finds that just this small sum of folks willing and able to purchase and/or own the LA Clippers involves sums of discretionary income that exceeds 1% of a trillion dollars (5 X 2 bil = 1% of a tril). This is just one professional sports team in just one city in just one country (the US). The discretionary nature of the economics of professional sports (and how they in no way reflect a city’s “home team”) can be found in another mega bucks franchise, the LA Dodgers (another $2 billion purchase). Currently, folks in LA who cannot afford the price of admission can only follow the “home team” on, that staple of the 1950’s, the radio. Mr. Hottinger, who currently is actively seeking (re) election as the area’s State Senator (not State Representative) is himself stuck in the 1950’s with outlooks and solutions to economic concerns. Public entities (like the City of Newark) are finding it difficult to obtain the needed funding for overdue public expenditure on infrastructure, etc. “The question still remains: What will be done about it? In August, state Rep. Matt Huffman, a Republican who serves the Lima area, introduced a resolution calling for a constitutional convention to introduce a balanced budget amendment to the U.S. Constitution. I signed on as a co-sponsor, along with 28 other legislators, all Republicans.” (Nation’s debt problem demands action, 9-28-13, The Newark Advocate) Instead of educating folks about how big a trillion is while promoting and endorsing tax breaks, tax credits and subsidies for those within that rarefied upper income atmosphere of discretionary spending ubiquitous throughout the US today, Mr. Hottinger should address “the question” by going where the money is (and it is there) rather than looking to where it is not.

Because That’s Where The Money Is

Quote ostensibly attributed to the (in)famous bank robber Willie Sutton, though Wiki says it ain’t so (It even spawned the “Willie Sutton, Where the money is” rule of economics). In Newark Ohio, Mayor Hall is saying “Show me the money” when it comes to paving long neglected streets. Newly elected Council person, Jeremy Blake, is saying the mayor should show some leadership on this one. Former Council person, but still wannabe, Rhonda Loomis submits Newark Advocate Facebook commentary saying Blake should show some of those “fresh new ideas” that he claimed to have in order to get elected. The reason given that maintenance of public streets (and other Newark infrastructure) is always at bare bones minimum has always been “lack of funding.” In this Newark is not alone. Today’s Advocate submits a Gannett report by Chrissie Thompson for the Cincinnati Enquirer (Local level officials ask Ohio lawmakers to reverse cuts, 4-2-14). Bipartisan local elected officials from the southwest corner of the state went to our legislators to voice their desire to have money restored for city and township use (to maintain things like roads, etc.). Of note from the article;
“Gov. John Kasich and the General Assembly cut the $700 million Local Government Fund nearly in half in 2011 to help fill an $8 billion hole in the state budget. Republicans also eliminated the $300 million estate tax, 80 percent of which went to cities and townships.”
“Kasich has said Ohio shouldn’t spend the money (“the $1.5 billion savings account the state filled last year with surplus tax money. “A number that almost exactly mirrors what’s been taken from local government funding…””) because it gives job creators confidence about the state’s strength.”
And finally (the one to watch):
“So it’s [“Springfield Township in Hamilton County”] seeking to pass a Joint Economic Development Zone on the May 6 ballot, allowing it to share income tax revenue with Mount Healthy, as townships aren’t allowed to levy income taxes on their own. A bill that’s likely to pass the General Assembly would take away that option for other townships, forcing them to pass the income tax partnership by gathering signatures from a majority of property owners, including businesses.”

More of Wacko World Tennessee came to light this week. In an article titled “Report: Tenn. offered contingent incentives to VW” (4-1-14) the AP disclosed that in the taxpayer funded effort to derail the union representation of the VW plant in Nashville “An incentive offer by the state of Tennessee to Volkswagen was made contingent on the labor situation at the German automaker’s plant in Chattanooga developing to the “satisfaction” of Republican Gov. Bill Haslam’s administration, according to documents obtained by WTVF-TV in Nashville.” The incentive offer was quoted at $300 million. In addition to that “Republican U.S. Sen. Bob Corker repeatedly claimed that Volkswagen would announce an expansion at the plant within two weeks of the union being rejected, despite denials from VW management that the two issues were linked. No expansion has been announced in the weeks that have followed the vote.” “Volkswagen wants to create a German-style works council at the plant representing both salaried and blue-collar workers. But to do so, it has said it must work with an independent union, so it called for a three-day vote on UAW representation in February.” Analysis covered Corker’s bio in previous posts. The Ohio connection is with Bill who owns the Pilot Flying J truck stops sprinkled throughout our under-maintained highways (which got caught in deceptive bait and switch practices) while his brother Jimmy owns the Cleveland Browns (which are demanding the taxpayers pay for renovation of their new stadium).

Analysis finds the last Chrissie Thompson quote to be the most troubling. Recently, for considerations of road maintenance and improvement, the Etrna township trustees are considering exactly what our elected state representatives are drafting legislation to outlaw. Of course, within that legislation, property and ownership of business trumps resident voters, indicating an erosion and slippage of democracy (no taxation without representation has become no taxation without business approval). Aggravating the situation is the unspoken “solution” that everyday workers should pay for upkeep of any infrastructure, like roads. Add to this the conservative mantra that ever more must be given to jobs creators (evidenced by John the governator’s income tax cut proposals with sales tax/commercial activity tax increase, and everyday taxpayers supplying the majority of funding for public/private partnerships like JobsOhio, Grow Licking County and Newark Development Partners). It is easy to understand why infrastructure maintenance is lagging in Newark (and throughout the US). Taxpayers are subsidizing the jobs creators, like the Haslam’s and Corker’s, whose companies are the very ones which will cash in on any infrastructure improvement. The jobs creators are taking their subsidies up front, in advance, because “That’s where the money is!”

Newark Advocate Editorial Needs Careful Scrutiny

            It is quite unusual to analyze an editorial as an editorial is itself an analysis, something used to “connect the dots” of the many facts, sides and directions which have made the news and are designated as significant by the editorial itself. The January 4, 2014 Newark Advocate editorial (Etna tax proposal needs careful scrutiny) calls for analysis as the dots connected by the Advocate are all over the map. The issues involved have been covered by this blog’s previous post. Additionally, the paper itself revisits what is involved with that edition’s report by Chad Klimack, Etna, chamber still at tax impasse Trustees promise public forums on proposal. Ultimately the Advocate Editorial Board states that “We agree with the chamber on this one.” What, within the rhetoric of their analysis, led them to such a position? How did they arrive there?

 

            The Advocate lays out certain dynamics and scenarios which they assume others will agree with. Primary claim is that “At issue is Etna’s consideration of a new JEDD or JEDZ, acronyms for two types of joint economic development districts. Normally a JEDD or JEDZ is created to fund improvements to land making it possible for new companies to locate there. Normal income taxes are assessed on the new workers to help pay for things such road and sewer improvements, which made their new jobs possible.” But then a shell game of voters rights and business interest enters in. We are told that “Even worse, Etna trustees could begin taxing current residents and workers without a vote of the public if they chose the JEDD option. A JEDZ must be approved by voters.” and also that previously “One key issue here is that Etna voters have been unwilling to support tax increases of late”.  But the editorial board also notes that “The concept also has been successful in Etna as evidenced by the current JEDZ covering ProLogis Park, where the township says 90 percent of the workers come from outside the township. They pay a 1.5 percent income tax to the township.” The Advocate reinforces its position by stating “Etna’s success is key for Licking County, not only for jobs but the flow of traffic and goods.” And suggesting that “it’s time for Etna to begin looking at other long-term options necessary to create jobs and serve its residents.”

 

            Analysis finds this analysis (editorial) to be somewhat convoluted, but definitely in keeping with the times. What is at issue, the cost of needed infrastructure and how to pay for it, is not covered as an “issue” in the Advocate’s editorial. What we have is a jingo-ist appeal to voters rights and taxation. The Klimack article summarizes the reasoning by the trustees for going down the JEDZ road (which the editorial touts as “successful”) – ““The township’s businesses, [Etna Township Trustee John] Carlisle said, generate traffic, which affect its roads. For that reason, those businesses should pick up some of the cost of maintaining those roads, Carlisle added. “Nobody likes to pay taxes, but somebody has to pay for the infrastructure,” Carlisle said.” A little later Klimack writes “The township for years also has wanted to build a park for its residents, but it has not had the funds to undertake such a project, he said. A zone could fund such an endeavor. “Would it spur economic development?” Carlisle asked. “Who wants to move into a community where the kids don’t having anything to do, like go to a park?”” The Newark Advocate editorial completely ignores that southwest Licking county is one of the most active and growing residential areas in the county. Likewise that the 310/70 interchange is used by these folks to access their employment outside their home neighborhoods (and likewise immediately becoming part of the “90 percent of the workers [which] come from outside” some other community). To which Klimack adds ““The letter [from the Chamber] said they feel the (bridge) project is premature, but how can you say it is premature?” Carlisle asked. “There has been an outcry from business owners to widen 310 to get trucks to and from the corporate park for the last four years.”” There was even movement, some time back (contemporary with the development of Pro Logis and Etna Corporate Park), to build an additional interchange onto I70. So far Analysis finds that the infrastructure must be dealt with to accommodate both the business as well as residential growth of the community, that The Advocate considers JEDZ successful, and that JEDZ rely on someone else to pick up the tab (the “90 percent of the workers [that] come from outside the township”). Inferred is The Advocate’s promotion that the Chamber, which represents the business “residents’ of this community who do not vote but have all the rights of its citizens (but not the responsibilities?), should be instrumental in deciding any outcome. It is disingenuous for the editorial board to claim this is about voting rights while promoting the Chamber’s “vote” over the outcome; eliding that “the flow of traffic and goods” benefits the business community as well while advocating that they have a say without bearing any cost. By announcing that “We agree with the chamber on this one.” the Advocate endorses the shell game of taxing “workers [that] come from outside” and the citizens that reside in the community, but not the businesses for whom infrastructure maintenance and improvement are vital to their success. Unspoken (by the editorial board) is that the people of this (or any) community should be beholden to those who “create jobs”, and be more than glad to pay (for) them. This is definitely in keeping with the times. Twenty years ago it was claimed that job losses and lower wages were on account of jobs going overseas or Mexico, as well as goods coming in from there. Today’s news brings “In the end, Boeing worker Bob Dennis told The Associated Press as he prepared to vote for the deal Friday, “I think this is our last opportunity to keep those jobs in the state.”” (Boeing’s Machinists union OKs benefit cuts to keep 777X in Washington state Gil Aegerter NBC News 1-4-14)  The Advocate has reported the same on the demise of Meritor which made even less of an offer to its workers. The Advocate begins its editorial with “We hope the Etna Township Trustees are listening” It appears as though the newspaper itself needs an adjustment with its own auditory reception capability. 

We The People

            Boy, talk about the end of the news cycle (see previous post)! To accompany the seasonal weather, a flurry of news came out of Etna Township just before the holiday. Timing is everything. All Newark Advocate, all the time. “Annexation prompts Etna trustees to file suit against commissioners” December 23^rd. Cute headline, huh? We the people will be paying for both sides of that suit.  Some things to note from the article:

“The Etna Township Trustees have voted to sue the Licking County commissioners over a 1.2-acre annexation that the county panel approved on Taylor Road — one that placed the property in question in Reynoldsburg.”

“As for the road issue, the trustees note that the township will be responsible for maintaining a section of Taylor Road even though the bordering property is within city limits. The annexation also could upset the various costs the township and Reynoldsburg will pay for the multi-million dollar Taylor Road improvement project that is a little more than a year from going to construction.” And finally, the bottom line:

“The project has an overall price tag of about $3.6 million. Etna is paying the largest local chunk at $1.1 million, with the federal government covering roughly over $2 million.”

 

            The other story is “Etna trustees resist call for Burkholder removal” December 24. Of note:

“The Etna Township Trustees took no action Saturday on the request of the Etna Township Economic Development Committee that one of its members be removed from office for an alleged conflict of interest.”

“The alleged conflict is over Burkholder’s position as the Etna Township representative on the Southwest Licking County Community Water and Sewer Board and that group’s advocacy for inclusion in a new tax district being considered by the trustees.”

“The missive said that a majority of the economic panel requested that Burkholder “step down from the position…effective immediately.” The panel also passed a motion to recommend that the trustees remove Burkholder in the event he did not resign.”

“The trustees previously voted 3-0 to deny including the utility as a beneficiary of any new tax district. Schaff indicated he thought Burkholder was lobbying for the inclusion by his advocacy for the tax benefit. Burkholder refuted that viewpoint, saying: “I have not lobbied.””

Of particular interest is how the report ends: “Burkholder served one term as trustee but was defeated for re-election by current Trustee Jeff Johnson. The trustees not only named Burkholder to the two panels that created Saturday’s debate, but also named him as acting township administrator last spring when the post was created. Burkholder was one of two finalists for the permanent appointment before the trustees selected Rob Platte.”

 

            The interesting development, which will be lost in the post-holiday, weekend, New Year news cycle shuffle (much as trash collection gets moved about and forgotten) is the active and immediate opposition to this “new tax district” by the Licking County Chamber of Commerce (Chamber objects to Etna Township tax plan No action yet taken toward formalizing proposal Dec. 24, 2013 by Chad Klimack). The Advocate (and Chamber) were very generous in allowing the people a look see at the content of a letter posted December 24 addressed to the Etna Township trustees voicing the Chamber’s displeasure with this proposed course of action. Analysis recommends reading the entire article as well as online copy of the letter before it becomes a pay-per-view archive. Segments of Klimack’s report that Analysis found of interest:

“Evers [Dan Evers, economic development director of Grow Licking County] asked to speak at Tuesday’s special meeting, but since the meeting agenda included no space for public comment he was not allowed to speak. When asked about the letter and the chamber’s opposition to the proposed taxing districts, Evers said, “The principal concern is that it creates an unanticipated and potentially significant expense for existing businesses.” Evers, who said he did not have a list of opposing township businesses, added the chamber has reached out to various township officials to articulate their concerns regarding the proposal. Those discussions, Evers said, occurred in private.”

“The township’s economic panel has spent months debating the creation of a JEDD or JEDZ.”

“The difference between the two is a board or council can create a JEDD via a unanimous vote of its own, while a JEDZ must be created by a vote of the public. Etna Township currently is considering the creation of a taxing district that would cover 65 parcels and roughly 1,670 acres. Almost all the acreage would stand around the Interstate 70-Ohio 310 interchange or around Etna Corporate Park north of U.S. 40. The district near the interstate would encompass all four corners of the interchange and several existing businesses, including those on Columbus Expressway and Ohio 310, north and south of the interchange. The district encompassing the corporate park would include existing businesses inside the park, in addition to hundreds of undeveloped acres between U.S. 40, Mink Street and Refugee Road. [Etna Township Trustee John] Carlisle said the newest proposal, which would include a 1.5-percent income tax, if approved, could help the township generate money to pour into its roads. Township voters in recent years have defeated two road and bridge levies, leaving the fast-growing township without one.”

In light of the Taylor Road annexation, it gets even better: ““We’ve been tapping into our general fund to do road and bridge projects in the township because the road and bridge fund doesn’t have enough funds,” Carlisle said. “Everybody is stuck on the (Ohio) 310 bridge, but this is more than the (Ohio) 310 bridge. this is about doing some things in the township we would like to be able to do.” As Carlisle referenced, the Ohio Department of Transportation and Mid-Ohio Regional Planning Commission have pledged to fund the bulk of the $11-$12 million project to expand the Interstate 70/Ohio 310 interchange, but the township must come up with the remaining $2.6 million. It currently does not have that much money, Carlisle said. Hottinger references the multi-million interchange project in her letter. She said the chamber has talked to “a number” of [unnamed] businesses and property owners who view the project as “premature and perhaps unnecessary and/or ineffective.” Etna officials, in addition to officials from Pataskala, meanwhile, have championed the project, arguing it could reduce congestion and speed up commutes for residents from both communities.”

Who pays, you might ask? “A JEDD or JEDZ only taxes workers and businesses inside the district boundaries, and many of those workers, Carlisle said, come from outside the township. Roughly 10 percent of the people who work inside ProLogis Park live in the township, Carlisle said. The people who do not should help pay for the upkeep of the township’s roads since they use them, Carlisle added. “Every one of those people who work at the corporate park have to drive a township road to get there,” said Carlisle. The chamber would be more amenable to another taxing district, Evers said, if the township was again looking at placing one over undeveloped land.”

“In her letter, Hottinger argues the existing businesses in the township funneled significant investments into their facilities, and a proposed taxing district would generate no expanded services for them.” With the final line being:

“Still, Carlisle cautioned the township has not reached a decision on the matter.

“We’re open to discussions with (the county chamber),” Carlisle said.”

 

            In the 3-26-13 post entitled Ohio Tax Credit, Analysis gave an in depth look at JEDD’s, the Chamber, JobsOhio and Pro Logis, etc. Other posts have referenced these occurrences in Etna township, especially in terms of greenfield development (undeveloped farm land) for which Etna township was highly desirable. Analysis insists on historical context in evaluating these recent pressing developments (of how to pay for infrastructure development utilized by corporate entities as well as the people). One of the businesses included in the 310 interchange projected overlay hosted Governor Kasich and Mitt Romney in a large rally during the 2012 election. That business was touted as a model of how the business outlook is the answer to what we the people need. The Citizens United Supreme Court ruling should also not be overlooked for it enabled the National Chamber of Commerce to lobby unabashedly (and lavishly) for candidates and issues during that election. Lobbying discussed on the evening news out of Washington creates concern. Here we the people are witnessing it in our own backyard. Revolving door political administration occurring in Washington DC likewise finds itself reproduced with Mr. Burkholder’s résumé. Although the Supreme Court has extended 14^th amendment rights of citizenship to corporate entities, unlike we the people, they assert their exception to funding infrastructure that they likewise use (“Every one of those people who work at the corporate park have to drive a township road to get there,”). These corporate “persons” could always claim they only access their buildings by helicopter or drones, but the freight, delivery trucks and airport shuttles beg to differ. The same folks who achieved Citizens United now have McCutcheon vs. FEC before the court, hoping to maintain the un-disclose-able privacy of their monetary stake, along with the privacy that the Chamber employs in establishing corporate exceptionalism from sharing in community infrastructure maintenance and development costs. They prefer to let we the people caught up in the rush hour traffic pay for it (as we go to and from our jobs at these very corporate facilities). Improvements “would generate no expanded services for them.” All this contributes to the income disparity within our country through the bifurcation of we the people into “Us and Them”. Corporate entities (considered persons by the Supreme Court) don’t need to address commonly shared problems through public means but are entitled to “Those discussions … [which have] occurred in private.” Who pays? The 90% of workers who “come from outside the township”. This all just multiplies and reinforces the us/them identity of we the people