Growls

Last Friday, we growled about Arlington County’s budget situation, and noted the “budget gap” for FY 2010 would be some $40 million (since changed to $35 million). The Arlington Sun-Gazette suggested the County Manager “would propose both service cuts and an increase in real estate tax rates to cover the shortfall.”

In looking for “service cuts,” the Arlington County Board may want to start by asking the County Manager to explain why Arlington is among the “top spenders” in Northern Virginia in many categories. A beginning point should be the Comparative Report of Local Government Revenues & Expenditures for FY 2007, the Virginia Auditor of Public Accounts annual report that focuses on the cost of government in each of Virginia’s counties, cities, and towns. To enhance the comparability, the report includes per capita spending in such categories as general government, public safety health and welfare, public works, and parks, recreation, and culture. For example:

• General Government: Arlington spent $171.59 per capita with other counties ranging from $86.34 (Prince William) to $326.77 (Falls Church).

• Public Safety: Arlington spent $826.94, the highest; the others ranged from $423.75 (Loudoun) to $786.29 (Alexandria).
  

• Health and Welfare: Arlington spent $668.60 with the others ranging from $196.81 (Loudoun) to $685.00 (Alexandria).
  

• Public Works: Arlington spent $286.91 while the others ranging from $99.58 (Loudoun) to $386.74 (Falls Church).
  

• Parks, Recreation and Culture: Arlington spent $265.86; the others ranged from $102.91 (Prince William) to $306.61 (Falls Church).

In studying the explanations for those differences, the County Board should learn about uneconomical programs and inefficient operations, not to mention identifying areas where service cuts can be made most effectively.

Critics may argue that comparing Arlington to other Northern Virginia communities is akin to comparing apples and oranges. However, several years ago, the Alexandria City Council used the Comparative Report with the explicit purpose of looking for economies. The Arlington County Board and the Manager should undertake a similar effort. To paraphrase a former U.S. Senator, a million dollars here and a million dollars there, and soon you’re talking about significant dollars.

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On who will pay for the economic "bailouts?"

"Your children and mine. Not in the form of debt, which is the standard answer, although they'll pay for that too. But the real cost is, to me, that we will lose the goose that lays the golden eggs -- which is our unbelievably flexible and powerful financial system. We have -- until recently -- had the best capital market in the world. We look across both the stock market down to venture capital to angel investing -- the opportunity to find financing for great ideas was really unparalleled in the United States. That right now is at a standstill. If it does not come back, we will all be poorer for it."

    -- Russell Roberts, George Mason University economics professor, pundit, author (Oct. 18)

And about 'public' transit:

"For most transit agencies in the United States, if they were to write a mission statement that is reflective of what they do, they would indicate that they exist for the purpose of serving their employees and vendors."

    -- Wendell Cox, International transportation guru (May 31)

HT Bill Steigerwald's "2008 - The Year in Quotes" column at Townhall.com (Dec. 30)

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With the current economic downturn, and President-elect Barack Obama (D) promising that his administration will create three million jobs, it is worth considering the following portion of this op-ed by Peter Schiff posted this weekend at the Wall Street Journal’s Opinion Journal.

“Governments cannot create but merely redirect. When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all (of) these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.”

“Similarly, any jobs or other economic activity created by public-sector expansion merely comes at the expense of jobs lost in the private sector. And if the government chooses to save inefficient jobs in select private industries, more efficient jobs will be lost in others. As more factors of production come under government control, the more inefficient our entire economy becomes. Inefficiency lowers productivity, stifles competitiveness and lowers living standards.

HT Mark Perry at Carpe Diem.

UPDATE (12/30/08). Don’t believe the wisdom in that Peter Schiff quote? Try the following:

1. In John Tamny’s latest Forbes column, he argues, “(T)he Fed cannot create economic growth . . . some lessons from the Nixon days.”
2. And in this You Tube video, produced by the Center for Freedom and Prosperity, Dan Mitchell explains why Keynesian economics is wrong, and bigger government will not stimulate the economy.
3. Here, Jim Powell, a senior fellow at the Cato Institute writes in a Washington Times op-ed: "There are at least three reasons why Mr. Obama's proposed spending spree probably won't stimulate the economy as hoped, and why permanent and aggressive tax cuts might.”
4. Finally, with more industries lining up for bailouts, Investor’s Business Daily said last Friday that it’s “time to shuck corn,” writing:“The heavily subsidized ethanol industry is the latest to seek a federal bailout. If there is any industry that deserves to go bankrupt, it's this one. Time has come to stop putting food in our gas tanks.”

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An analysis by the Salt Lake City Tribune, posted on December 26, reports that:

“NBA (National Basketball Association) player-run charities . . . face a wide range of problems, from meager funding and high administrative costs to a lack of professional staffing and oversight. Tax records indicate these 89 charities together raised at least $31 million between 2005 and 2007, but only about $14 million of that actually reached the needy causes.”

Several of the findings from the newspaper’s “analysis of 89 stand-alone NBA player charities include:

• Together, they reported revenue of at least $31 million between 2005 and 2007, but only about 44 cents of every dollar raised - or $14 million of that $31 million - actually reached needy causes. The average NBA player foundation put just 51 cents of each dollar it spent toward charitable programs, well below the 65 cents most philanthropic watchdog groups view as acceptable. Tax records show budgets are quickly eaten up by poor planning and administrative costs.

• While a handful of player charities appear to be well-financed and tightly managed organizations that do good, a larger number are unimpressively funded and their activities poorly documented. Up to a quarter of NBA player charities analyzed lacked even basic documentation required by the Internal Revenue Service.

• In spite of their celebrity, NBA athletes seeking public donations often struggle for years before building a viable stream of donations. About a third of NBA player charities analyzed instead remain funded by the athletes' own wealth. Many close for lack of support or because athletes move on.

• Few player-run charities hire full-time directors to manage daily operations, and players commonly put family members, friends and former sports associates on their boards, despite IRS rules requiring that a majority of board members be nonrelatives.

• Some player charities hold lavish fundraising galas that cost tens of thousands of dollars but actually lose money.

Paul Caron, publisher of the TaxProf Blog, provides several “examples of the Form 990 data” of several of the player charities, including:

Steve Nash:  Steve Nash Foundation (2006)):
+ Revenue: $1,487,853
+ Expenses:  Charitable Program:  $318,499; Administration:  $916,531

According to the Tribune, “The NBA and the NBA Players Association know there's a problem. They have begun to address it as a formal part of the league's annual rookie orientation”

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Almost three weeks ago, we growled about what a policy paper from the Cato Institute called Congress’ “culture of spending.” Well, today’s Washington Post has a story on the front page that shows the effects of that “culture of spending.” The story, accompanied by a picture of a beautiful sunset over Chesapeake Bay, discussed the broken promises over cleaning-up the bay.

In essence, the story blamed “Chesapeake progress reports” that “painted ‘too rosy a picture’ as pollution reduction deadlines passed up” followed by these two introductory paragraphs

“Government administrators in charge of an almost $6 billion cleanup of the Chesapeake Bay tried to conceal for years that their effort was failing -- even issuing reports overstating their progress -- to preserve the flow of federal and state money to the project, former officials say.

“The cleanup, which had its 25th anniversary this month, seems doomed to miss its second official deadline for achieving major reductions in pollution by 2010.”

Rather than tracing the problem to Congress’ “culture of spending,” the Post stopped at the bureaucrats in the U.S. Environmental Protection Agency, explaining:

”But the agencies charged with the cleanup have never mustered enough legal muscle or political will to overcome opposition from the agricultural and fishing industries and other interests.

“Instead of strengthening their tactics, though, they tried to make the cleanup effort look less hopeless than it was.

“That picture emerges from internal documents and from interviews with current and former officials involved in the cleanup, including two who served as director of the EPA's Chesapeake Bay Program Office, the closest thing to a "bay czar" that the decentralized effort has.

“William Matuszeski, who headed the program from 1991 to 2001, described how the program repeatedly released data that exaggerated its success, hoping to influence Congress. His successor, Rebecca W. Hanmer, said she was instructed by regional leaders in 2002 not to acknowledge that the effort would fall short of its 2010 goals.

"To protect appropriations you were getting, you had to show progress," Matuszeski said. "So I think we had to overstate our progress." Several state governors said they were unaware of inflated data, and another EPA official disputed Matuszeski's account.

“The cleanup's failure has prompted a coalition of environmentalists and scientists this month to call for replacing the EPA's approach with firm regulations on farms, sewer plants and developers. A group of watermen has joined environmentalists in threatening a lawsuit, hoping a judge can force the EPA to quicken the pace of the cleanup.

“For the bay, the consequences are clear: The vast marsh-rimmed estuary has just as many pollution-driven "dead zones" as it did in the 1980s and less of the life -- crabs, oysters, watermen -- that made it famous.

While the Post is correct in saying the agency (EPA) responsible for cleaning-up the Bay failed and the Post  deserves credit for devoting the resources for the story, the paper did not explain that the cause can be traced back to Congress and the greedy bureaucrats at EPA who were more concerned with growing the EPA’s bureaucracy.

And where were the compassionate “green” interest groups during the past 25 years? Pushing Congress to provide ever more money for EPA to become every more bloated? Will the eco-radicals ever learn the value of cost-benefit analysis? And, finally, will any of the EPA bureaucrats who “tried to conceal for years that their effort was failing” and “issuing reports overstating their progress” go to jail? And will Congress change their “culture of spending” to one of providing oversight and holding bureaucrats accountable for taxpayer dollars?

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The front page of this week’s Arlington Sun-Gazette brought some relatively good economic news, at least for Arlington County taxpayers, i.e., that economic conditions for the county had stabilized. According to Scott McCaffrey’s report:

“The worst may not be completely over, but the county government's budget situation hasn't deteriorated significantly over the past month, County Manager Ron Carlee told County Board members on Dec. 15.

Carlee held firm to his previous projection of a $14 million fiscal shortfall during the current fiscal year, and a projected $40 million gap in the fiscal year beginning next July.

“We are not seeing conditions worsen,” Carlee said.

"Preliminary residential real estate assessments show that the average decline among existing homes will be a little over 2 percent in 2009, which Carlee termed “really quite extraordinary” given the state of the real estate market in many other localities.

“We were concerned that we would see declines of up to 5 percent,” he said.”

For more detail on the county budget, visit the Department of Management & Budget’s budget webpage (most items require Adobe Reader to access) that includes the Manager’s briefing to the County Board on October 21, 2008 and the Manager’s December 15, 2008 “Budget Update” memo to the Board if you prefer the full details. On December 2, the County Manager provided the Arlington County Civic Federation a “fiscal state of the county” (requires Adobe Reader).

What’s the outlook on taxes, then. According to the Sun-Gazette:

“Carlee again signaled that he would propose both service cuts and an increase in real estate tax rates to cover the shortfall.”

That would channel the Board’s guidance for the FY 2009 budget, which required the Manager to propose “a balanced and sustainable base budget within existing tax rates.” Today's Washington Post had this bad news for taxpayers:

"Homeowners whose property values have plummeted as much as 40 percent are unlikely to see a corresponding drop in their real estate taxes next year, and some might face a tax increase as the counties surrounding the District struggle with huge budget shortfalls."

The best observation about Arlington’s budget situation was provided by today’s Mallard Fillmore cartoon strip, which has Mallard saying:

“Across the coutry, property values are falling . . . property taxes are rising . . . reassuring all of us that, no matter how bad things get . . . the government can always make them worse.” (emphasis added)

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Wishing all taxpayers and friends of ACTA a Merry Christmas.

HT to Bookworm Room for the Christmas picture. 

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Earlier this month, U.S. Senator Tom Coburn, M.D. (R-OK), ranking member of the Subcommittee on Federal Financial Management, etc., released a report on the most outrageous, wasteful federal spending of 2008. In his letter to American taxpayers that introduced the report, Senator Coburn wrote:

“As part of my commitment to oversee how federal agencies in Washington, D.C. spend your money, I am releasing a series of oversight reports on federal spending. My hope is that this effort will assist federal agencies – and those of us in Congress overseeing their budgets – to rein in wasteful spending and to demand measurable results before asking taxpayers to send more of their money to the federal government.

“I also hope federal agencies and congressional committees alike will welcome these oversight reports and join the effort to identify additional areas of waste, mismanagement, fraud, and abuse. If we work together, we can find better ways to prioritize our nation’s limited financial resources.

“With billions of taxpayer dollars spent on low-priority and questionable projects, 2008 was a banner year for wasteful Washington spending. In a time when the government is spending huge sums to address a struggling economy, Congress needs to ensure efficient use of our own resources before turning to taxpayers and asking for more. No one who pays taxes likes to see the government waste resources. I believe the American taxpayer deserves better.”

Some examples of the “$385 billion the federal government throws away every year through waste, fraud and duplication” include:

• $188,000 for Lobster Institute in Maine, home of the “LobsterCam”
• $1 million for bike paths on Louisiana levees while levees await basic repairs
• $2.4 million for a retractable shade canopy at a park in West Virginia
• $24.6 million for the National Park Service’s 100th year birthday in 2016 - 8 years early
• $3.2 million on a blimp the Pentagon does not want
• $367,000 wasted by a Texas school board on items like an inflatable alligator and under-the-sea waterslide, among other things
• $5 million for a bridge to a zoo parking lot in St. Louis
• $9,000 for a non-functioning airplane-shaped gas station in Tennessee
• $300,000 for specialty potatoes for high-end restaurants

The December 11 press release concludes with the following statement from Dr. Coburn:

“”The story the American people already understand is that Congress’ inability to make common sense decisions about spending priorities is putting our children’s future at risk. Until Congress abandons the short-term parochialism that gives us LobsterCams and inflatable alligators, we will never get a handle on the major economic challenges facing this country.”

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One of the editorials in today’s Investor’s Business Daily (IBD) focuses on California and “what one-party rule is doing to (the) once-golden state.” (emphasis added) Specifically, IBD wonders:

“As the financial crisis in California gets worse, it's pretty clear the real problem isn't the budget at all, but a political system that has resulted in a dysfunctional one-party state.”

The financial newspaper provides this background:

“California's $41.8 billion budget deficit expected over the next two years is a record. No other state even comes close. But despite what the state's politicians say, it's not because of the recent economic downturn. It's because of them.

“The state has a budget crisis for the second time in a decade largely because the Democratic-held legislature has spent money wildly and without any real purpose.

“A reasonable response from a mature group of individuals might be to cut spending — especially since polls show that most Californians don't believe their taxes should be raised. Instead, they've chosen to thumb their noses at the people's will. It shows the danger of what is in effect California's one-party rule.”

After listing several examples of the high cost of just about everything, IBD writes: “ California's tax base is so narrow — 1% of the population pay 50% of income taxes — that you can't "tax the rich" and get more revenue, a long-held Democratic fantasy. California individuals today bear the sixth-highest tax burden in the nation. Raising taxes won't do anything but drive off productive workers and kill the economy.” IBD concludes:

“Members of California's one-party ruling class better start listening to their businesses and productive, overburdened taxpayers, or pretty soon they won't have an economy to fund their government. Then they'll have done the impossible: turning the Golden State into dross.”

One-party rule and the high cost of government. Hmmmm? Have you checked the voting results in Arlington County recently? If you haven’t, take some time and browse around the county’s voter registration office. And is it possible that Indiana Governor Mitch Daniels (R) is onto something with his decision to endorse government reform proposals that would “dump” the equivalent of county supervisors, eliminate other elected officials, and consolidate Indiana’s smallest school districts, according to a report in the Indianapolis Star.

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The initial look at Arlington County’s Fiscal Year 2008 Comprehensive Annual Financial Report (CAFR), which includes the audited financial statements for the fiscal year ended June 30, 2008, shows that year-to-year growth in General Fund spending increased only 4.4%. By comparison, the Bureau of Labor Statistics’ consumer price index (CPI-W) increased by 5.5% during the fiscal year while the “municipal cost index,” published by American City & County magazine, increased by 4.5%.

A significant factor in achieving that overall 4.4% rate is due to the Arlington schools where spending increased only 2.8%. Since K-12 spending during the FY 2008 fiscal year was 36.8% of General Funding spending, it helped offset a 6.3% increase in “general government” spending, a 6.7% increase in public works/environmental services spending, and a 6.6% increase in culture/recreation spending.

Although the County Board will take credit for the decrease, and indeed year-to-year increases for the two prior years averaged 8.25%, a great deal of credit for the effort, we’re quite sure, is due to the efforts of Manager Ron Carlee, CFO MarK Schwartz, and Budget Director Richard Stephenson.

Yes, yes. Come February 2009 when the Manager releases his proposed budget for FY 2010, we’re not likely to be happy, but for now the Manager and his staff deserve some taxpayer thanks. A complete analysis of year-to-year spending will be in the forthcoming  issue of The ACTA Watchdog. If you’re not a member, you can join by using PayPal -- see the column to the right, or contact ACTA about membership.

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We’ve growled twice this month about Arlington Public Schools’ highest cost-per-student (i.e., $19,538) among the Washington DC suburban school districts (December 7 and December 10). A little digging provides a clue of why.

At the Arlington School Board’s Thursday, December 18 meeting, one of the Board’s action items (number E.2. on the agenda) involved the strategy the schools staff should use to address the expected revenue shortfall of $7.5 million as well “a need for $2.8 million of expenditures either not budgeted or projected to be over budget in FY 2009.” Over half of that $2.8 million, by the way, resulted from the unexpected increase in enrollment.

In his October 24, 2008 memo to School Board members, the Superintendent listed “cost saving measures” to be undertaken. For example, limiting profession travel “to travel that is an essential part of an employee’s job” and instituting a hiring freeze for non-classroom positions.

One cost saving measure, however, especially caught our eye. It concerned “food and bottled water.” Here’s how the Superintendent put it:

"The purchase of food is generally discouraged, and staff is encouraged to schedule meetings outside of meal times.  Providing modest food and/or beverages may be appropriate for:

• Meetings or training sessions where a full meal break would be inefficient.
• Recognitions for staff and citizens.

"When providing food and/or beverages:

• Staff should keep costs low and not exceed APS’ per person reimbursement guidelines ($6 breakfast; $12 lunch)
• Staff should avoid purchasing bottled water.  Instead provide pitchers of ice water.

"School and department end-of-the year picnics should be funded with donations or vending machine revenue."

Sheesh! If avoiding the purchase of bottled water is among the cost saving measures being touted by the Superintendent and his staff, is it any wonder why the School Board has avoided ordering a school efficiency review that would be paid for by the state? Oh, the three newest school board members are all on the record supporting such reviews. For a list of Virginia school districts where efficiency reviews have been completed visit the Virginia Department of Education website.

UPDATE (12/22/08): In the penultimate sentence, "all all" corrected to "are all." The Arlington resident spotting this "typo" will remain anonymous.

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Thomas Krannawitter writes that President-elect Barack Obama likes to compare himself to Abraham Lincoln, according to Krannawitter’s op-ed in today’s Washington Times, even citing that, just like Lincoln, President-elect Obama will be arriving by train to his presidential inauguration.

However, Krannawitter adds, “Yet for all the fussing over Obama-as-Lincoln, no one has dared to mention that in terms of what matters most, their moral and political principles,” Lincoln and Obama “stand diametrically opposed to one another.” Krannawitter explains:

“Lincoln gave his last full measure of devotion defending the idea that the most important rights are the equal natural rights that belong to each individual human being. This is precisely why Lincoln could condemn slavery as a great evil, regardless of what the laws or public opinion said. For Lincoln, a "new birth of freedom" in America required nothing less than a rejection of group identification, a renewed dedication to the founding principle that "all men are created equal," and ultimately offering equal protection under the laws to all citizens and fulfilling what the Founders called the "social contract." Whether one examines his consistent defense of abortion rights, or race-based affirmative action, or progressive tax plans and wealth redistribution, or bureaucratic regulation of select businesses and industries, Mr. Obama stands on the opposite, New Deal principle that group rights eclipse individual rights.

“Indeed, Mr. Obama's principles are much closer to those of FDR. rather than Lincoln. FDR's campaign for "economic rights" required government distinguishing between haves and have nots, taking from the former to give to the latter. The kind of progressive "social justice" that informed the New Deal as well as Mr. Obama's "community organizing" authorizes government bureaucrats to determine who gets what kind of rights and how many, dividing Americans into groups based on victimization and needs: the poor, racial minorities, women, homosexuals, farmers, union members, the elderly, the uninsured, and so on.”

For Krannawitter, the distinction is important, and argues that by following FDR, Obama:

“rejects the Declaration's principle of equal, individual rights. This explains why in a 2001 radio interview Mr. Obama lamented that the modern Supreme Court had not yet displaced individual rights with a Constitutional defense of group rights and schemes of redistribution of wealth and property. This is exactly how Mr. Obama thinks the Constitution should be understood.”

Hold on to your wallets, folks, because your taxes are going higher.

More of Thomas Krannawitter's writings can be found at The Claremont Institute. 

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An Investor’s Business Daily (IBD) editorial today asks:

“With workers losing jobs by the millions and taxpayers forced to rescue banks and carmakers, how does Nancy Pelosi's Congress show it cares? By giving themselves a big pay raise.”

IBD explains:

“What a great time for taxpayers to give senators and congressmen a $2.5 million jump in their already bloated salaries. It's tough to get by on $217,400 a year if you're House Speaker Nancy Pelosi — even if, as the Washington Times reported, you funneled nearly $100,000 from your political action committee to your husband's business over a decade.

“Last year, Pelosi supported a bill banning payments from PACs to congressional spouses, but that didn't stop her from doing it. Most members of Congress have to subsist on only $169,300 annually, so the $4,700 raise they're giving themselves next year should help keep them off food stamps.

“It's hard to know where to start in expressing outrage . . . .”

Even the headline in the Capitol Hill newspaper, The Hill, notes, “With economy in shambles, Congress gets a raise.” The newspaper writes “the average lawmaker makes $169,300 a year, with leadership making slightly more. House Speaker Nancy Pelosi (D-Calif.) makes $217,400, while the minority and majority leaders in the House and Senate make $188,100.”

According to this press release from Citizens Against Government Waste:

“Members of Congress don’t deserve one additional dime of taxpayer money in 2009,” said CCAGW President Tom Schatz.  “While thousands of Americans are facing layoffs and downsizing, Congress should be mortified to accept a raise.  They failed to pass most of their appropriations bills, the deficit is on pace to reach an unprecedented $1 trillion, and the national debt stands at $10 trillion.  In addition, this Congress has been ethically challenged, plagued with corruption allegations, convictions, and sex scandals.”

To express your outrage, following is contact information for Arlington County’s members of Congress (just click-on the link):

• Senator John Warner

• Senator Jim Webb

• Representative Jim Moran

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"The same prudence which in private life would forbid our paying our own money for unexplained projects, forbids it in the dispensation of the public moneys."

    -- Thomas Jefferson, letter to Shelton Gilliam, 19 June 1808

HT The Patriot Post, the conservative journal of record

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How many times have you heard elected officials talking proudly about their ability to make the so-called "tough decisions?" As we growled yesterday, such officials don’t sit on the Alexandria City Council, nor do they sit on the Arlington County Board. That’s apparent from a decision made at the County Board’s meeting on Saturday, December 13  (agenda item #38, and attachment). As the Arlington Sun-Gazette reported yesterday:

“County Board members want permission from the General Assembly for localities to increase the state sales tax by a half-percent to make up for revenue shortfalls.

“The proposal was added by board members to their legislative package, which will be distributed to the six members of the Arlington delegation to the General Assembly. The legislature convenes in January for what is expected to be a six-week session.

“Giving local governments the ability to increase the sales tax would “minimize the potential burdens passed on to homeowners through increased real property taxes,” according to the county government’s legislative wish list.”

Although the Sun-Gazette writes the chances of approval of such a move by the General Assembly are “near nil,” the Board's inclusion of the proposal is merely to prove the veracity of Thomas Sowell in writing, “Today, reality is optional. At the very least, it can be postponed.” Rather than make the so-called tough decisions to cut spending, they prefer raising out taxes. So much for their ability to make the tough decisions.

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When questioned about doing something stupid, youngsters may tell their parents they did it because they friend Johnny or Susie did it. Will the Arlington County Board use that childhood excuse to explain why they are wasting taxpayer money to hire an ethicist?

That childhood remembrance came to mind after reading Kristina Rasmussen’s post yesterday at the National Taxpayers Union blog, Government Bytes. She referenced a Washington Post story that appeared in the Post’s Metro section on Sunday. According to the Post:

“Faced with painful choices about who will suffer most from looming budget cuts, Alexandria officials have taken the unusual step of paying a professional ethicist to help them grapple with the moral issues involved . . . "It is very uncomfortable to admit you're going to have to say no. It's very uncomfortable to make decisions that, quite frankly, are going to make some people's lives go worse," said Michael A. Gillette, an ethicist who helped mental health officials in Alexandria write guidelines for prioritizing assistance when there's not enough money to go around.”

The Post reports he is now receiving an “annual consulting fee” of $9,000.Rasmussen wonders:

“ Don't we elect City Council members to make these hard choices?

I didn't see Alexandria seek the advice of ethicists when they made the moral decision to take more of their residents’ hard-earned money through higher taxes.”

Guess the politicians don’t consider it immoral to plunder taxpayers so they can look benevolent by trying to meet those ever present unmet needs. In neighboring Arlington, County Board members might say they’re just trying to ensure that Arlington remains "a caring community." Thanks Kristina for exposing your city's grand poohbahs.

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"The public cannot be too curious concerning the characters of public men."

    --- Samuel Adams

Note: El Growler Grande will not be blogging for a couple of days.

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Although taxpayers will not see this “tax” show-up on their tax bills, Kristina Rasmussen of the National Taxpayers Unon has authored a study (if you prefer, the study’s press release) in which she shows that taxpayers do indeed pay a “union tax.” She defines it as:

“the premium charged to taxpayers for covering the inflated salaries and benefits of organized public employees.”

She opens her study by saying:

“As more state governments face projected budget shortfalls in an uncertain economy, spending cuts are under serious consideration. At the same time, elected officials are also looking to take concrete steps, such as enacting tax cuts, to help stimulate economic activity.

“A reduction in the "government employee union tax" . . . should be an attractive solution for state leaders seeking to balance budgets and/or provide tax cuts.”

She explains that public employee unions represent a high cost of state government, e.g., pointing out that:

“In 2007, state government employees had median weekly earnings of $772, while private sector workers brought home a median weekly wage of $666. From 2000 to 2007, public sector workers enjoyed a 16 percent jump in compensation, while private sector employees received an 11 percent increase.

“Much of this gap can be explained by the generous increases guaranteed through collective bargaining. The state government workforce is far more likely to be unionized: 30.4 percent of state workers are members of unions compared with 7.5 percent in the private sector. In 2007, unionized state employees commanded median earnings of $865, versus $731 for non-unionized state workers.”

Virginia’s “union tax” is 5.17% with only North Carolina’s lower. Elimination of Virginia’s “union tax” would represent a household income tax savings of $149.43. On the other hand, Michigan’s “union tax is 43.07%, or almost $677 per household. No wonder Michigan is experiencing a net outmigration.

While recognizing the political clout of public sector unions, Rasmussen says, “A compensation realignment between government jobs and private sector positions is long overdue.” We agree.

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 “A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury.”

    -- Alexander F. Tytler [Lord Woodhouselee] (1743-1843),
        Scottish Judge Advoc and Historian

HT Quotes on Power at OnPower.org

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On December 7, we growled that the cost per student of $19,538 of the Arlington Public Schools (APS) is the most expensive in the Washington DC suburbs. The WABE Guide, which we used, contains a great deal of information that Arlington County taxpayers may find of interest, including the sources of revenue for the school districts. In the case of APS, 83.0% comes from local sources, 13.4% from the Commonwealth, and 3.7% from federal and other sources.

That 83.0% number for APS’ local sources of revenue goes a long way towards explaining why APS ranks among the ten Virginia school districts receiving the least state SOQ spending per pupil for FY 2008, according to briefing materials for the December 8, 2008 meeting of the General Assembly’s Joint Legislative Audit and Review Commission (JLARC).

According to the Code of Virginia, JLARC is required to “report annually on the State expenditure in each locality for an education program meeting the SOQ” (Standards of Quality).The briefing materials show that total state spending from SOQ accounts in FY 2008 was $5.09 billion, or $4,269 per pupil. Distributions are based on a complex formula called the “composite index,” which attempts to “share the wealth” among Virginia’s diverse communities.

For FY 2008, Lee County, which is the most southwest of Virginia’s counties, received the most SOQ spending -- $6,913 -- because of it’s lowest composite index (0.1769). On the other hand, APS is one of seven districts with the highest composite index (0.8000). Despite that, the state SOQ spending per pupil among those seven ranges from $2,065 for Goochland to $2,285 for Arlington and $2,353 for Alexandria.

The Fairfax County Public Schools received $2,588 per pupil due to its composite index of 0.7456, receiving the tenth least in state SOQ per pupil.

In growling about APS’ $19,538 per student spending on December 7, we raised a question taxpayers might want to ask Arlington School Board members. Well, here’s another way of looking at per student spending. First, multiply the number $19,538 by  83.0%, which means that Arlington taxpayer are spending $16,217 per student. On the other hand, multiply Fairfax County’s cost per student of $13,340 by 73.2% (percentage of local source revenues), which means Fairfax County taxpayers provide $9,765  of their cost per student.

In the 2007 Community Satisfaction Survey conducted by APS, 76% of the “community” and 83% of parents (of those who answered “Yes” or “No”) thought their tax dollars were  being “well spent” by the school board and school superintendent. Would that response be nearly as high if the survey provided respondents with the APS FY 2009 cost per student of $19,538 for students in the Arlington Public Schools?

UPDATE (12/11/08). The correct amount of local revenue provided by Fairfax County taxpayers is $9,765, and not $7,148, as originally posted. 

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Investor’s Business Daily (IBD) asks in an editorial today, “Will Washington now throw more good (taxpayer) money after bad?” after learning “(a) new federal report shows that most bailed-out borrowers slip back into default within six months.” IBD’s introduction to their question says:

“It seems agreed on all sides that bad home loans got us into our economic crisis. So, goes one argument, wouldn't it make sense to modify those loans into good ones — that is, loans not in default? That would seem to get at the root cause of the trouble. Besides, help for struggling homeowners is good politics. Sounds like a plan.

“And it is a plan being pushed by Sheila Bair, chairman of the Federal Deposit Insurance Corp., with the support of leading Democrats in Congress. Bair wants to modify some 2 million high-risk loans by giving lenders financial incentives to cut borrowers' interest rates and payments. The cost to taxpayers would be roughly $24 billion. If everything goes as planned — with two-thirds of the targeted homeowners successfully making payments — the FDIC expects to prevent 1.5 million foreclosures next year.”

IBD notes, however, that “(s)ome rain fell on Bair’s parade this week.” Both the IBD editorial and Reuters  then go on to cite data from this Comptroller of the Currency press release, which included:

“Comptroller of the Currency John C. Dugan said today that new data shows that more than half of loans modified in the first quarter of 2008 fell delinquent within six months.

“After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent,” the Comptroller said in remarks at the Office of Thrift Supervision’s National Housing Forum today.

"Mr. Dugan spoke during a panel discussion with OTS Director John Reich, Federal Reserve Board Vice Chairman Donald Kohn, FDIC Chairman Sheila Bair, and Federal Housing Finance Agency Director James Lockhart.

"A key question, Mr. Dugan said, is why is the number of re-defaults so high? “Is it because the modifications did not reduce monthly payments enough to be truly affordable to the borrowers? Is it because consumers replaced lower mortgage payments with increased credit card debt? Is it because the mortgages were so badly underwritten that the borrowers simply could not afford them, even with reduced monthly payments? Or is it a combination of these and other factors?”

The OCC press release goes on to note that Duggan’s:“remarks also provided a preview of the second OCC and OTS Mortgage Metrics Report to be published later this month. The report will show continued increasing delinquencies and foreclosures in process for all first-lien mortgages held by the largest national banks and federally-regulated thrifts. However, the report will show new foreclosures decreasing by 2.6 percent from the second quarter.” (emphasis in the original)

As Rush Limbaugh put it on his show today (story #3) when talking about the Reuters story:

“So you're not paying, and  rather than be tossed out of your house, some wizard of smart from the government shows up, "Okay, okay, okay, okay, you don't like that rate, well, fine, we'll cut your payment by $500 a month, sign here."  "Okay, cool, $500 a month," and six months goes by and they haven't received a payment.  And they don't know why.  Results are surprising.  Gotta do a study now to figure this out.”

One final observation. While the OCC’s Duggan is rather definite in his comments, the Reuters story tries to downplay the data by using the words “suggests” and “tended” in the following lede paragraph:

“Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.” (emphasis added)

Bailout Round-up VI was posted November 24 and Round-up V was posted October 9. 

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American humorist Will Rogers once said, “I don't make jokes.  I just watch the government and report the facts.” One need look no further than to the U.S. Congress for the proof of that wisdom.

The Cato Institute published a Policy Analysis in July 2006 entitled. “Budgeting in Neverland: Irrational Policymaking in the U.S. Congress and What Can Be Done about It” Written by James Payne, a political scientist, he was "interested in the way that Congress decides on spending levels for different programs and agencies of the federal government.” In studying the Congressional appropriations process, he wrote:

“I discovered that Congress was not following a balanced and objective process. I learned that the advocates of higher spending overwhelmed all aspects of congressional communications, including formal hearings, private personal contacts, reports and studies, meetings with constituents, phone calls, and letters . . . Members of Congress virtually never heard that particular programs were unsound, unfair, wasteful, or counterproductive. Lawmakers lived in a ‘culture of spending.’”

Following is the study’s executive summary (For the entire Policy Analysis 574, click here -- both require Adobe Reader):

“Many Americans are disappointed by the huge amounts of money Congress spends, but that’s not the real problem. The real problem is the profoundly irrational system Congress uses to decide how much to spend.

“The basic requirement for intelligent decision- making is to hear arguments and evidence from both sides of an issue. Congress ignores this requirement in its budget-making process. Instead of hearing both the pros and the cons of spending on particular programs, Congress usually hears from only the self-interested supporters of programs. Those biased advocates of spending typically include federal program administrators, whose careers depend on making their programs look good, and lobbyists paid by program beneficiaries to promote programs.

“The avalanche of one-sided propaganda in favor of federal programs creates a false picture for policymakers. They live in a Neverland where federal spending programs are routinely portrayed as necessary, helpful, and effective. The result is that Congress continues to fund, decade after decade, many programs that are wasteful and harmful.

The corrective is for Congress to adopt measures to balance the decision-making process by hearing from opponents of spending programs. “The committees that oversee spending should routinely invite critics of programs to participate in the congressional information-gathering process. Another reform idea is to create a federal “office of taxpayer advocacy” charged with voicing the taxpayer interest when Congress considers program funding decisions. Such procedural reforms are needed if Congress is to get spending under control and begin making serious tradeoffs regarding priorities in the federal budget.

Read the entire study, and the concern of Andrew Roth at the Club for Growth blog and Andrew Moylan at the National Taxpayers Union blog, Government Bytes, becomes fully understandable. A fiscally responsible Congress? Hardly! Possible? That would undoubtedly be wishful thinking.

With Christmas fast approaching, here is a William Warren cartoon (used with permission):

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The new numbers are out from the Washington Area Boards of Education (WABE), and the Arlington Public Schools (APS) has jumped ahead of Alexandria as the most expensive school district in the Washington, D.C. suburbs when compared on a cost-per-student basis. Here are the numbers:

School Division        FY 2009        FY 2008            Increase
                    
Arlington County        $19,538        $18,563            5.25%
Alexandria                $19,078        $19,341           -1.36%
Falls Church              $18,311        $18,474           -0.88%
Montgomery              $15,252        $14,705            3.72%
Fairfax County           $13,340        $13,407           -0.50%
Manassas City            $13,105        $12,067            8.60%
Loudoun                   $12,780        $12,751            0.23%
Prince George’s          $12,517        $12,107            3.39%
Prince William            $10,776        $10,429            3.33%

The FY 2009 “WABE Guide” as the report is called, is available at the Fairfax County Public Schools’ website; as of this evening, the report is not available on the APS website. ACTA members will find a more complete comparison in the next edition of The ACTA Watchdog, which will be the last issue of 2008. (See 12/11/08 "update" below)

Here’s a question for your favorite school board member: For APS, the report shows 19,094 students. Multiply that by the difference between the cost-per-student at APS and the cost-per-student at the Fairfax County Public Schools ($$19,538 less $$13,340 or $6,198). The product is just over $118 million. The question for the school board, therefore, is what are the benefits to Arlington's public school students from spending over $118 million more that it would a like number of students in Fairfax County? Taxpayers would like to know.

UPDATE (12/11/08): The FY 2009 WABE report was added to the APS website on 12/9/08 at 6:09 PM.

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That would be the new Capitol Visitor Center, which opened Tuesday, December 3, in Washington, D.C. According to the CBS News report, it spans “five acres 50-feet beneath the Capitol.” or two-thirds the size of the Capitol. Citizens Against Government Waste (CAGW) provides a brief history of the bloat and mismanagement in this press release on December 2, 2008:

“Initially conceived in the early 1990s and projected to cost $71 million, the CVC has become an example of out-of-control government contracting and mismanagement.  After costs ballooned and construction schedules spiraled out of control, the three-level, underground monument to congressional excess finally came in at a whopping $621 million and three years behind schedule.

“The mismanagement and bloat associated with the construction of the Capitol Visitors Center is emblematic of the rampant waste in the nation’s capitol,” said CAGW President Tom Schatz.  “This boondoggle should give pause to anyone contemplating the expenditure of hundreds of billions more taxpayer dollars for any federal infrastructure projects as part of any new stimulus package.  Like the federal budget itself, Congress used the CVC as a warehouse for tens of millions of dollars in extravagant bells and whistles for itself.  Even more reprehensible, members of Congress seeking to add special features for themselves used security concerns surrounding the September 11 attacks to justify their extravagant add-ons and constant change orders.”

“Original plans called for more than half of the CVC space to be left as unfinished “shell space,” available to be outfitted for future needs.  Instead, in 2001 Congress began implementing its wish list for the unfinished spaces.  The House side got a two-story hearing room and the Senate grafted on a collection of small hearing rooms and a television and radio studio with adjoining makeup facilities so that senators could cut spots for their constituents back home.  Those two efforts alone added $85 million to the cost of the CVC.  The CVC will also have a 450-seat dining area, two orientation theaters (one for each chamber), a large auditorium, and an exhibition hall.

“The Government Accountability Office wrote dozens of reports detailing the financial woes of the project.  At one point, after numerous delays and cost overruns, exasperated members of Congress called the Architect of the Capitol (AOC) on the carpet.  In March, 2007, Rep. Jack Kingston (R-Ga) publicly excoriated the AOC, saying that the CVC had become “a monument to government inefficiency, ineptitude and excessiveness.”  Rep. Debbie Wasserman-Schultz (D-Fla.) said, “I've never seen a bigger boondoggle in my life. It's like they’re playing with Monopoly money.”

“Looks like Congress made doormats out of taxpayers in order to roll out this extravagant welcome mat for tourists on Capitol Hill,” concluded Schatz.”

If nothing else, the CVC should make Senate Majority Leader Harry Reid (D-NV) happy. The Washington Post reported on Wednesday that Reid said, "In the summertime, because it gets so hot here, you could literally smell the tourists coming." The Post points out that “instead of standing in long lines in Washington's sweltering summer, they can wait in air-conditioned comfort for a tour of the Capitol” (The CBS News and Washington Post stories include videos of Sen. Reid calling the tourists smelly, in addition to the Post's accompanying stories)

An example of the mismanagement is that no one seems to know just what the facility was supposed to cost. According to CAGW, it was “projected to cost $71 million.” However, CBS News reports “It was a vision that started out at $261 million,” but the Post reports it “was planned as a three-year $368 million project when construction began in 2002.”

It seems the CVC was beset by the tides of political correctness, according to Sen. Jim DeMint (R-SC) who issued a press release that included the following:

“The current CVC displays are left-leaning and in some cases distort our true history. Exhibits portray the federal government as the fulfillment of human ambition and the answer to all of society’s problems. This is a clear departure from acknowledging that Americans’ rights ‘are endowed by their Creator’ and stem from ‘a firm reliance on the protection of Divine Providence.’ Instead, the CVC’s most prominent display proclaims faith not in God, but in government. Visitors will enter reading a large engraving that states, ‘We have built no temple but the Capitol. We consult no common oracle but the Constitution.’ This is an intentional misrepresentation of our nation’s real history, and an offensive refusal to honor America's God-given blessings.”

Finally, William Warren provides this great cartoon (used with permission), which pretty much says all that need be said about this latest Congressional boondoggle:

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That or environmental wackos gone wild. According to this story posted last Saturday at the website of the Independent newspaper of Grand Island, Nebraska:

“A proposed Environmental Protection Agency tax on livestock operations would be devastating to Nebraska's billion dollar livestock industry, according to Dave Wright, president of the Independent Cattlemen of Nebraska.

“According to Wright, the EPA proposal would establish a greenhouse gas "tax" of $87.50 on each head of beef cattle produced and $175 per head on each dairy animal and $20 for each hog.”

Wright told the Independent, “Most livestock and dairy farmers would not be able to pass along this tax . . . The proposal would put producers out of business and would certainly result in much higher consumer costs for beef, milk, pork, and milk products.” (emphasis added) Almost a week later, the Associated Press picks up the story, quoting Perry Mobley, director of the Alabama Farmers Federation’s beef division who said:

"Who comes up with this kind of stuff? . . . It seems there is an ulterior motive, to destroy livestock farms. This would certainly put them out of business."

It gets worse, though. Timothy Birdnow, writing for PajamaMedia.com this week, explains how “green policies mean less green in our wallets." He explains:

“At first glance, one wouldn’t see a connection between a rash of stolen copper pipes from vacant buildings and sky-high prices for food items — say the $70 that a local St. Louis grocer was charging for a single holiday goose — but those connections are there, and they ultimately stem from environmentalist-driven land use policy imposed by the government. It’s difficult to imagine that restrictions in ANWR may be responsible for copper theft, but responsible it is! Ditto food; why would we pay more for our holiday feast because the price of natural gas has risen?”

The bottom line, according to Birdnow is the age-old law of economics, which is there is no free lunch. He writes:

“The economy is like a cloth; each thread is part of the whole and pulling one thread can unravel the entire thing. For decades we have been tugging out those threads through environmental regulations, civil rights regulations (ahem, subprime mortgages), health and safety regulations, etc. Americans seem to want these things, but are unwilling to pay the price associated with them. Too many in this nation believe that they can have something for nothing. In this life, nothing is free and those costs will have to be passed along. We are reaping the harvest we have sown.

“Oddly enough, few Americans understand these relationships and an angry nation — angry at the price being paid for decades of liberalism — has opted for “change” by electing someone who will redouble the liberal efforts that have caused this mess. Government policy is responsible for our current economic troubles, yet a majority of Americans voted to put government in charge of fixing it. This is reminiscent of the fox guarding the henhouse — oh, and hens are grain-fed and must be kept warm with natural gas, so the price of poultry and eggs will doubtlessly rise.

“So, those of you who voted for Barack Obama have no right to complain when you pay extra for your holiday feast or when you break the bank on your annual Christmas shopping spree. The Bible says that as ye sow, so shall ye reap. America has sown restrictions for years and restrictions mean less of everything. We are now reaping a sparse harvest, placing a horn-o-empty on our tables.

“Just be thankful you haven’t had your pipes stolen.”

When are the politicians going to start making some cost-benefit analysis before implementation of the eco-wacko laws and regulations? Voice your concerns directly to Stephen L. Johnson, Administrator of the U.S. Environmental Protection Agency.

HT to Betsy at Betsy's Page for Birdnow's story of unintended consequences.

UPDATE (12/6/08): Speaking of the environmental wackos, the Atlanta Journal-Constitution reported Thursday, "While neighboring counties encourage recycling, Gwinnett County’s new solid waste management ordinance puts teeth into it. The ordinance provides for a civil fine of $500 for violations, which includes those who fail to 'source separate residential recovered materials.'"

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Investor’s Business Daily introduces an editorial today by saying:

“While Speaker Pelosi prepares another massive bailout package for President Obama's desk come January, an upstart congressman from Texas has an intriguing idea — bail out the taxpayers instead.”

The IBD editorial goes on to explain:

“Rep. Louie Gohmert, R-Texas, has come up with an idea of what to do with that $350 billion, and it involves not rescuing those who have gummed up the works, but relieving the burden on those who have been trying to pull the wagon — suspend FICA and income taxes for two months starting in January 2009.

“Rather than send out a $600 check to people who don't pay taxes — which will evaporate like the morning dew — or spend more billions for banks to buy other banks, Gohmert would declare a tax holiday for FICA (Social Security and Medicare) and income taxes. FICA is the most regressive of taxes. It would be the middle-class tax cut Obama has promised.

“Former speaker Newt Gingrich and his group, American Solutions, calculate that Americans pay over $101 billion in income taxes and another $66.5 billion in FICA taxes each month. Two months' worth is around $332 billion. The employer's portion of FICA would also be suspended, giving businesses large and small $65 billion in tax relief to expand and hire more workers.”

Jed Babbin, editor of Human Events, writes, “Washington is dizzy with a bad case of bailout fever. Hundreds of billions of dollars have been dispensed by Treasury Secretary Hank Paulson without apparent success in reviving the financial markets. Now one Texas conservative is challenging Congress and the White House with a common-sense plan that is much more likely to help our economy recover more than bank bailouts or any handouts to carmakers.” He closes the essay writing:

“Even President-elect Obama should support Gohmert’s plan. Wasn’t he proposing a tax cut for the middle class?”

Here is a “rush transcript” of Rep. Gohmert’s appearance on Fox News’ “Your World With Neil Cavuto” on November 28, 2008.

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Ron Bailey writes at Reason Online (carried as a “federation feature” at the Wall Street Journal’s online Opinion Journal that:

“During the campaign, President-elect Barack Obama promised to stick it to Big Oil with a windfall profits tax. At the time, (R)eason explained why such a tax was a bad idea.” (emphasis added)

According to Bailey, “Obama has now quietly dropped the idea,” noting that:

“President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov.”

Bailey adds "(a)ctivists are dismayed,” but concludes: “Hooray for economic sanity.”

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The National Taxpayers Union (NTU) in a joint venture with the Competitive Enterprise Institute (CEI) launched a new website -- Beyond Bailouts --- recently “to properly assess the government's role in the country's current financial difficulties, establish some real policy solutions for those core problems, and provide an outlet for visitors to petition elected officials,” according to this press release from the National Taxpayers Union.

According to NTU’s Andrew Moylan:

"There's been much finger-pointing around Washington about who's to blame -- for both the conditions that necessitated a rescue package and for allowing one of the largest-ever government intrusions into the private sector to become law . . . Beyond Bailouts seeks to move past the blame game by learning from what went wrong, enacting policies to address those mistakes, and enabling taxpayers to get involved and take control of their hard-earned dollars."

CEI’s Fred Smith added:

"The challenge now is to learn from the mistakes causing the current crisis . . . Our confused regulatory welfare system distorted the market, encouraging bright people to take risks with our money. 'Profit-side capitalism' combined with 'loss-side Socialism' -- the so-called Third Way -- must be ended."

Sick of more bailouts? Sign the petition. Get involved. Write your Congressional representatives. Do so by clicking-on:

Beyond Bailouts

Then ask your friends to sign the petition.

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