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November 30, 2011

Arlington County’s Continuing Artisphere Boondoggle

The Arlington County Board took at least 15 significant actions, not including “actions related to the procurement of various capital contracts or the amendments of those contracts” between September 2007 and January 2011 regarding the Artisphere. And, that does not include a major discussion at the budget work session follow-up on April 7, 2011 (see the informative staff response to a question raised by a Board member at the March 31, 2011 Parks, Recreation and Cultural Resources work session -- requires Adobe).

We have growled about the Artisphere at least four times in 2011 (here, here, here, and most recently here).

So now comes news that at its November 29, 2011 recessed meeting, the County Manger presented the Board with her new 14-page business plan plus two-pages of financial information and 16-pages of “metrics” for the revised plan (accessible from the Board’s November 29 recessed meeting agenda). Finally, the county’s press release is here.

In today’s Arlington Sun Gazette, Scott McCaffrey reports:

“County Board members on Nov. 29 reacted with cautious optimism to County Manager Barbara Donnellan’s rescue plan for the year-old Artisphere cultural center, while still holding out the possibility that the Rosslyn facility will be shuttered if it continues to swim in red ink.

“Donnellan plans to move the facility’s management from the Department of Parks, Recreation and Cultural Resources to Arlington Economic Development, using its staff to promote corporate rentals of the space to subsidize arts programming.

“The reorganization also adds a chief financial officer to oversee the rescue, cuts hours the facility is open to the public, abandons plans for a full-time restaurant, closes the gift shop and cuts staff.

“As a result, officials predict the annual taxpayer subsidy to fill the Artisphere’s deficit will shrink to $1.6 million, about $1 million lower than had the changes not been made. And they expressed hope that the changes would give the facility a fighting change at long-term success.”

Here’s how ARLnow.com began its discussion of the story of the “major changes proposed for Artisphere:”

“A plan to boost the finances of Artisphere, the struggling county-run arts center in Rosslyn, includes dramatic changes to the original vision for the venue.

“A revised business plan, which will be presented to the County Board this afternoon, will suggest slashing Artisphere’s hours, shuttering its restaurant and retail store, and generating more revenue via corporate event rentals.

“Even if the plan is implemented, however, the task force expects Artisphere to burn through more than $2.3 million in taxpayer funds in financial year 2012 and another $1.6 million in financial year 2013. If the new plan is shelved, Artisphere will require nearly $2.7 million in taxpayer support in FY 2012, the task force said. The one-year-old venue’s original business plan projected only $739,975 in county taxpayer support in FY 2012."

In the Washington Business Journal today, reporter Missy Frederick makes a major point, writing:

“The task force met with stakeholders such as the Rosslyn Business Improvement District and community arts groups before presenting its findings.

“I think there were some pretty big constraints and limitations that we found throughout the work of the task force that I don’t think were really well known by a lot of folks,” Vasquez said.

“The task force looked at several of the project’s strengths and weaknesses. It praised the facility’s Metro-accessible location, experienced leadership staff and ability to draw attendees from outside of Arlington. But it also found that the project had branding issues concerning exactly what the space does and suffered due to the sluggish economy.

“Staffing at Artisphere will remain relatively unchanged in terms of number of employees, though some new positions have been created and others eliminated.”

There’s no doubt that there’s more to growl about this boondoggle, but in the meantime, here’s how Arlington's preeminent budget watchdog, Wayne Kubicki, looks at the Artisphere and its new business plan, and makes the following 13 points:

  1. Before the Artisphere plans were approved, the County Board laid out a marker for then County Manager Ron Carlee – that the facility would require no “new” net tax support, and could break even with approximately $700K of net tax support, which was already being spent for pre-existing County art programs that would relocate to the former Newseum site. Not surprisingly, a business plan meeting that test was produced, and the project went ahead, costing the County $6.7M for construction.
  2. The operating numbers now tell the tale – the Board budgeted $1.3M of tax support for FY12.  Staff now estimates they will miss that number by an additional $1.4M, bringing total support for FY12 up to $2.7M.  The revised business plan presented yesterday projects FY13 needing $1.6M in operating support – nearly $1M more than hoped for.Was the Board sold a “pig in a poke” with the original business plan? Hard to see how one could argue otherwise with a straight face.
  3. The shortfall has come on both sides of the ledger – revenues nowhere near projections (missing the targets by nearly $1M per year), and expenses also running $1M higher than originally anticipated.
  4. The failures have been well documented – among them,  a very poorly planned operational launch, questionable management of events, poor audience targeting and the total failure of getting a revenue producing restaurant.
  5. The new plan, released yesterday, relies heavily on increased event rentals for corporate and social events.  Well and good, if it works – but, in truth, this would probably take this business away from Arlington’s private sector hotels, other conference facilities and restaurants.
  6. Was this all a mistake in the first place?  I submit it was.
  7. As currently projected, by the end of FY13, Artisphere will have cost Arlington taxpayers a total of $10.6M in construction costs and unanticipated operating subsidies.
  8. How long can this go on? Can we count on better oversight from the County Board?
  9. Comments from two separate Board members at yesterday’s meeting reveal the Board’s collective mindset.
  10. One member stated that “free things aren’t necessarily free.”
  11. Another, referring to the figures being presented and the new business plan, said “I’m not in a position to question or challenge any of this.”
  12. That tells you about all you need to know?  Unfortunately, I think it does.
  13. Tax-supported things that don’t work are expensive – and the taxpayers get to pay.

In retrospect, it’s unfortunate the Board didn’t have the foresight presented in the task force’s business plan. That said, it’s not clear the new business plan will fix what needs fixing. What is clear, however, is that government should restrict itself to core government functions such as police enforcement, and stay out of places where it doesn’t belong, e.g., the arts.

UPDATE (12/02/11): ARLnow.com provides the critics reaction today to the county government's Artisphere's new business plan. Critics include Wayne Kubicki and your humble scribe.

November 29, 2011

Energy Secretary Earns November Porker Award

Citizens Against Government Waste (CAGW) has named U.S. Department of Energy (DOE) Secretary Steven Chu its November Porker of the Month, according to a press release from the watchdog group. CAGW explained their decision this way:

“Chu’s weak oversight of DOE’s loan guarantee program (LGP) resulted in huge losses to taxpayers when solar panel manufacturer Solyndra, the recipient of a $535 million loan guarantee, filed for bankruptcy in September.  Now, the Department of Labor (DOL) has announced that Solyndra’s former employees qualify for federal aid packages worth $13,000 each under DOL’s Trade Adjustment Assistance (TAA) program, which compensates and retrains American workers who can prove that their jobs were lost as a result of foreign competition.  The TAA benefits far exceed normal unemployment benefits.  The DOL granted Solyndra’s employees TAA by accepting the company’s claim that it went belly up as a result of unfair competition by Chinese solar panel manufacturers, rather than from mismanagement by company executives.

“Solyndra was granted the $535 million loan through a green energy technology section of the LGP, which received a massive increase in funding on the 2009 stimulus package.  The LGP program itself has been the subject of three Government Accountability Office (GAO) reports since its inception, all detailing its management weaknesses, arbitrary selection process, and vulnerabilities to manipulation and politicization.

“Unfortunately, Solyndra was not Sec. Chu and DOE’s only ill-fated LGP recipient.  Beacon Power and Evergreen, Inc., both of Massachusetts, along with SpectraWatt of Oregon, filed for bankruptcy after receiving DOE loan guarantees.  A July, 2010 GAO report concluded that the LGP lacked clear goals and failed to hold all applicants to the same standards.  GAO said that the LGP “has treated applicants inconsistently, favoring some and disadvantaging others,” and that “some applicants … receive conditional commitments before incurring expenses that other applicants had to pay.  It is unclear how DOE could have sufficient information to negotiate conditional commitments without such reviews.”

“Sec. Chu and his colleagues dismissed numerous warning signs that the LGP was a ticking time bomb,” said CAGW President Tom Schatz.  “The dramatic program expansion in 2009 and the continued funneling of taxpayer dollars toward poor investments reeks of poor management and crony capitalism, since Solyndra’s major investors were among the President’s largest campaign donors.  Energy officials interfered in the business and financial operations of the company; they pushed to have news of the Solyndra’s layoffs and escalating financial woes delayed until the day after the elections of 2010, which only amplifies the stench.  Solyndra’s bankruptcy is another example of the waste that results when government officials try to dabble in the markets with the public’s money, and it casts a very unflattering light on all federal loan guarantees, along with all 2009 stimulus spending package itself.  If this is the Obama administration’s idea of how America can ‘invest’ in its economic recovery, taxpayers would much rather keep the money and do it themselves.”

Government shouldn’t be in the business of picking winners and losers, said CAGW, and especially in a volatile sector such as alternative energy. And winning Nobel Prizes, even in a field such as physics, doesn’t magically confer the title of venture capitalist. What a way to fritter away taxpayers hard-earned money!

November 28, 2011

Today's Thought

"[W]hen all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another."

~ Thomas Jefferson, letter to Charles Hammond, 1821

HT Patriot Post.

November 22, 2011

Government Serving the Homeless

The Arlington County Manager announced today she will recommend the County Board acquire 2020 14th Street North, a seven-story, approximately 70,000 square foot “office building and property on the east side of Courthouse Plaza. Acquisition “(w)ill enable creation of (a) comprehensive year-round homeless services center.” According to the press release:

“The County intends to finance the acquisition with previously approved PAYGO (Pay As You Go) funding and through the sale of bonds. The County received a recent appraisal valuing the property at $25.5 million.”

The property currently goes by the trade name of Thomas Building, and is zoned C-3, and consists of two parcels: RPC 17-016-012 and RPC 17-016-013. It was acquired by Branscan Real Estate Opportunity Fund, Toronto, Canada on June 23, 2006. The County Assessor valued the property for $15.5 million as of January 1, 2011 with the improvements valued at $11.2 million. The Manager reported the county would consider using eminent domain to acquire the property, saying:

“The County’s next step will be for the County Board to consider, after a public hearing, a resolution authorizing an offer to purchase the property. If a voluntary purchase is not successful, then the County may acquire the property by eminent domain. The County Board will consider the resolution at its Dec. 13, 2011 recessed meeting.”

The press release explained the county's interest in the property this way:

“Donnellan noted that the County has compelling reasons to acquire the property. The new space will help the County meet immediate and evolving space needs, and allow the County to move toward completing the vibrant, mixed-use complex at Courthouse Plaza that has been envisioned since the 1980s.

“Those plans, created with broad community involvement, envisioned the surface parking lot at Courthouse Plaza replaced with underground parking and including a public plaza, creation of more ground-floor retail businesses, and a combination of public and private offices and homes – all within walking distance of Courthouse Metro Station on the Orange Line.

“The purchase will enable the County to consolidate the majority of operations from two buildings into one.”

And these are the same eminences who talk of vision. Some of the possibilities never entered their vision, however. For example, it seems an ideal location for panhandlers, who could “set the stage for creating a more vibrant mix of public, private and government development that will transform the Courthouse area.”

HT Frank Emerson for the post from the Mises Economics Blog about Portland Oregon’s $50 million Homeless Hilton. Its concluding paragraph pretty much says it all:

“As usual, theft and waste on such a grand scale is referred to as “a noble mission” (the usual “good intentions” argument). Nonsense – it is a purposeful redistribution from the productive class to the government class to fund their pet social missions.”

It would be hard to put it any better.

The press release was newsblogged by ARLnow.

November 21, 2011

Deficit Reduction, Sequestration, and Defense Spending

With not much else receiving attention from the mainstream media, we learned late this afternoon that the so-called “Super Committee fails to reach deficit agreement." As Billy House wrote in National Journal:

“The bipartisan congressional committee tasked with finding at least $1.2 trillion in deficit reduction announced on Monday it cannot reach agreement by the Wednesday deadline, a stark if not unexpected admission that its efforts have ended in failure.

"After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline," the co-chairs, Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., said.”

At American Spectator, Jed Babbin wrote earlier today:

“The supercommittee's failure was supposed to cause panic in the streets. The Defense Department -- in the words of each of the Joint Chiefs and Defense Secretary Leon Panetta -- can't stand the effects of sequestration. On the other side, we've heard from the OWS crowd -- the voice of the White House -- that any cuts in entitlements or other domestic spending just can't be done.

"But the failure to reach a deal hasn't had a noticeable effect on the markets. The news media are talking about it in mild terms. They know the unspeakable secret: that whatever the result, success or failure, cuts or sequestration, the supercommittee results won't take effect until 2013.

“That's right: the whole thing was set up to give the appearance of spending cuts without the reality. And to give Congress another whole year to mess around with the results. It was a put-up job aimed to increase the debt ceiling without forcing Congress to actually do anything that cuts federal spending.

“In short, it was a scam.”

So the “sequester trigger” will be pulled come 2013. And as Veronique de Rugy of George Mason University’s Mercatus Center wrote today:

"The automatic sequester cuts do very little to the overall trend in the growth of debt. In the next ten years, CBO projects that under current law, public debt will reach nearly $14.54 trillion by 2021. In contrast, debt with sequestration shows a rather minute difference of $153 billion, in the $14.38 trillion debt estimate by 2021.”

If easier, check out the following chart that Ms. de Rugy included in a paper earlier this month for the Mercatus Center. It was used in a column by the Washington Post’s George Will “to examine spending increases with and without the budget sequester.” She also prepared an alternative version of the graph, but in chart form here.

In all of the talk about the Super Committee, few pundits talk in-depth of whether Defense spending is adequate. Thanks to Rob Bluey at the Heritage Foundation’s blog, The Foundry, we get to see a picture of defense spending over the past 45 years. As the chart below shows, defense spending is projected to fall significantly below it’s 45-year historical average of 5.2% by 2015. While it doesn't address the question of whether the defense budget, it does provide context.


HT Drudge Report for the National Journal article.
BTW, blogging over the next 7-8 days will be lighter than usual; your humble scribe will be visiting relatives.

November 20, 2011

Who Should Property Owners Really Fear?

Last Thursday, Brian Trompeter of the Arlington Sun Gazette posted an online story saying that local jurisdictions fear the impact of the proposed constitutional amendment that would strengthen Virginia’s eminent domain legislation. Trompeter begins the article this way:

“Officials in Fairfax County, Vienna and Arlington County are raising alarm about a potential amendment to Virginia’s constitution that they say could force localities to pay private-property owners damages under a broader definition of eminent domain.

“Officials in those jurisdictions worry that property owners could demand compensation if access to their properties is temporarily blocked for roadwork, water-main repairs, public events and other municipal activities. Even if localities can defend themselves successfully in court, the effort still will drain their resources, they said.

“Vienna, Fairfax and Arlington officials are opposing the amendment in their 2012 legislative packages. The amendment also is being fought by the Virginia Municipal League.”

The news article provides a great deal more about the process to amend the Virginia Constitution.

To paraphrase Evita, “Don’t cry for Virginia’s local jurisdictions.” Rather, take some time to read the policy report on eminent domain from the Virginia Institute for Public Policy. It’s titled, “The Real Story of Eminent Domain in Virginia: The Rise, Fall and Undetermined Future of Private Property Rights in the Commonwealth,” (requires Adobe), and authored by Jeremy P. Hopkins, counsel with the law firm of Waldo & Lyle, P.C., which is dedicated exclusively to representing property owners in eminent domain and property rights matters.

Below is the short conclusion (minus footnotes) from the Virginia Institute’s policy report:

“Eminent domain reform is not a partisan issue. Th e only real division when it comes to eminent domain is the takers versus the taken from or, as one commentator more eloquently stated, “those who want to save their homes[, farms, and businesses,] and those who want the power to take them.” More specifi cally, the division is special interests versus grassroots, the politically connected versus the politically disconnected, the empowered versus the powerless, and, ultimately, the government and those to whom the government has granted extraordinary power versus the people. Th is division has not changed in over one hundred years in Virginia. “It is simply a question of the weak against the strong.”

“Instead of checking injustice, Virginia’s eminent domain laws have become the “invincible weapon of injustice. ” For far too long, the people of Virginia have stood idly by as their government has slowly degraded private property rights to such an extent that Virginians’ homes, farms, businesses, churches, and other property are no longer secure. Now is the time for Virginians to act, while eminent domain is still at the forefront of the public’s mind and collective action is possible. As the German Reverend Martin Niemoller once said,

“First they came for the Communists, but I was not a Communist so I did not speak out. Th en they came for the Socialists and the Trade Unionists, but I was neither, so I did not speak out. Then they came for the Jews, but I was not a Jew so I did not speak out. And when they came for me, there was no one left to speak out for me.

“If the people of Virginia do not act now and demand constitutional protections for their private property, it will be too late tomorrow, when their own property is threatened, and they become the next victims of Virginia’s inconstant government."

If you're not sure just who property owners in Virginia should fear, take a look at sections IV.A. and IV.B of the policy report where Hopkins lays out just who is abusing who. He explains both Virginia Supreme Court and Virginia Circuit Court decisions. You are likely to walk away wondering why local governments are raising those alarms.

Contact the Virginia Institute for Public Policy for more information. Take a few minutes to review the outstanding collection of reading material available at their website, including both the short essays under Virginia Viewpoints and the longer essays on the constitution, economics, and education.

November 19, 2011

Schools Want More Revenue. What's New?

In an “information item” at the Arlington School Board’s November 15, 2011 (agenda item G.3.of the agenda), the Board received the following motion:

“I move to direct the Superintendent to develop the fiscal 2013 budget based on the County Manager’s proposal to allocate 46.1 percent of total local tax revenue to Arlington Public Schools. If the Superintendent determines that this funding is not sufficient for APS to properly meet the needs of our students, the Superintendent will identify those needs in his proposed budget. After evaluating any unmet needs, the School Board will decide whether to submit a request for additional funding to the County Board.”

One elected eminence quipped to me that it was essentially a return to the days before the "revenue sharing agreement."

On Friday, Scott McCaffrey of the Arlington Sun Gazette reported on the the action by the School Board, concluding his report by writing:

“More than a decade ago, after years of annual wrangling over what amount was sufficient, School Board and County Board members agreed on a complex, multi-step formula to determine what percentage of government funds would be funneled to school operations each year.

“Rising real estate values through the first part of the 2000s made both the county government and, through the revenue-sharing agreement, the school system flush with enough cash to make Arlington the highest-spending school district, on a per-student basis, in the region and across the commonwealth. But then the economic recession hit, and school funding fell just as the student population started to grow significantly.

“For fiscal 2013, which begins next July, County Manager Barbara Donnellan has proposed allocating 46.1 percent of total local tax revenue to fund school operations. The actual dollar amount won’t be known until much later in the budget process.

“For the current fiscal year, the transfer totals more than $385 million, up 7 percent from the year before, plus an additional one-time payment of $6.8 million. The overall school system budget for the current fiscal year is about $475 million.

“Over the past 10 years, the county’s transfer payment to the schools has increased on a per-student basis by nearly 60 percent, county officials say.

“The final decision on how much money the school system will receive out of the county government’s coffers will rest with the County Board. County Board members are expected to meet with their School Board counterparts in late November, where the issue may come up.”

At the moment, we can’t comment on the numbers underlying the nearly 60% increase in the county’s transfer payment. However, it’s worth noting that the 10-year period coincided with the the large growth of real estate values in the county.

The two boards do indeed have a work session scheduled for Wednesday, November 30, 2011 at 4:30 p.m. (requires Adobe) in the County Board Room 307, 2100 Clarendon Boulevard. The meeting is open to the public although there is no public comment.

November 18, 2011

County Board’s FY 2012 Richmond 'Wish List'

At it’s meeting tomorrow, the Arlington County Board "will receive" public comment on the Arlington County Board's 2012 General Assembly Legislative Items. The Board will then “(f)inalize the legislative items at the December 10, 2011 meeting,” according to agenda item #40 at the Arlington County Board's November 19, 2011 meeting.

In addition to the Board’s “wish list,” the Manager’s report includes recommendations from county staff and the various boards and commissions.

Earlier this week in the Arlington Sun Gazette, Scott McCaffrey suggested the Board was considering only “a stripped-down list of legislative priorities” because it knows "which way the prevailing winds will be blowing in Richmond during the 2012 General Assembly.” Here is essentially a summary of McCaffrey’s report:

“The package also seeks additional funding for transportation and maintenance for roads that are under the state government’s control, and asks for full funding of the state’s share for the Washington Metropolitan Area Transit Authority.

“Conspicuously absent from the package is a request to restore taxing authority, eliminated by the General Assembly earlier this year, that allows Arlington to collect one-quarter of 1 percent on hotel bills to fund tourism initiatives.

“Republican lawmakers in Richmond let the tax expire without renewing it, out of pique at the County Board’s lawsuit against the state and federal government over high-occupancy-toll (HOT) lanes on Interstates 95 and 395.

“The county government’s economic-development department has attempted to convince the county’s hotel community to publicly support restoration of the tax, which raised about $1 million a year and largely funded staff positions within the economic-development office.”

The remainder of the news story lists other parts of the draft legislative package. However, we suggest you access the Manager’s report to the Board if you plan to contact the Board.

The County Board is scheduled to meet with Arlington delegation to the General Assembly in a work session on Tuesday, November 29, at 10:00 A.M. at Courthouse Plaza, 2100 Clarendon Boulevard, according to the Arlington Sun Gazette. If you are concerned about anything in the Board's legislative package, you can use the link in the right column.

 

November 17, 2011

The Cost of Complying with IRS Regulations

At the Tax Foundation’s Tax Policy Blog today, William McBride writes that “tax compliance now takes more than 7 billion hours.” McBride cites the following statement made by Douglass Schulman, IRS Commissioner at a speech at the Kennedy School:

“Perhaps the most telling indicator of taxpayer confusion over the code’s complexity is that today, 90% of individual taxpayers pay for professional tax preparation or tax software to prepare their tax returns. IRS research estimates that, over the past 10 years, the burden for the typical taxpayer has increased by about 20% and would likely be even more if they had to prepare returns themselves without any aids or tools. Moreover, we estimate individual taxpayers and businesses spend more than 7bn hours each year complying with filing requirements.” (emphasis added by the blogger)

McBride adds this observation:

“The more than 7 billion hours it takes to comply represents about a 15 percent increase over last year's estimate of 6.1 billion.  To put that figure in context, it amounts to about 3.5 million people working full time for a year, or about 25 percent of the 14 million who are unemployed.” (emphasis added)

Why all GOP presidential candidates don’t have tax reform as a major part of their platforms. is beyond us.

November 16, 2011

Quote of the Day

"[T]he States can best govern our home concerns and the general government our foreign ones. I wish, therefore ... never to see all offices transferred to Washington, where, further withdrawn from the eyes of the people, they may more secretly be bought and sold at market."

~ Thomas Jefferson, letter to Judge William Johnson, 1823

HT The Patriot Post

November 15, 2011

Keystone XL Pipeline: What Not to Like?

In 2008, TransCanada Keystone Pipeline, LP (Keystone) filed an application for a Presidential Permit with the Department of State to build and operate the Keystone XL Project. It would extend 1700-miles from an oil supply hub in Alberta, Canada to delivery points in Oklahoma and Texas, and would be capable of transporting up to 830,000 barrels per day. The estimated cost is $7 billion. Further information is available at this U.S. Department webpage,, and includes access to a three-page fact sheet.

The fact sheet includes a helpful timeline that includes major events and public outreach. In the process, the State Department consulted with at least eight other federal agencies.

The Obama administration announced last Thursday, November 10, that it was “delaying a decision” on the pipeline, as Washington Post opinion writer Robert Samuelson put it. Further details on the decision are available in articles at the Washington Post, the New York Times, and the Christian Science Monitor. The Post reporter described the delay this way:

“The move is the latest twist in a more-than-three-year review process that has evolved from a fairly routine decision within the federal bureaucracy to a very public debate over national energy policy. It pitted environmental activists and an array of citizens along the pipeline’s proposed route against business groups, oil companies and unions whose members would be employed as part of the $7 billion project.”

In his column, Samuelson explained:

"But environmentalists strongly oppose the project on two grounds: They object to oil-sands development that adds to greenhouse-gas emissions; and they argue that a spill from the pipeline might contaminate groundwater, particularly the Ogallala aquifer in Nebraska.

“There are two possible explanations for the delay — politics or incompetence in the original review. “This is all about politics and keeping a radical constituency, opposed to any and all oil and gas development, in the president’s camp in 2012,” said Jack N. Gerard, head of the American Petroleum Institute . Kerri-Ann Jones, the State Department official overseeing the review, denied that. “This is not a political decision,” she said. Although President Obama had conspicuously announced that he could overrule State, she said “there was no effort to influence our decision.”

“Was the original review deficient? In late summer, State released a voluminous environmental impact statement — running hundreds of pages — that gave a green light to the project. The study concluded that Canada would proceed with oil-sands development even if the pipeline were rejected. It would “seek alternative transportation systems to move oil to markets.” This, in effect, disposed of the greenhouse-gas argument; these emissions will occur anyway.”

If you don’t believe the decision was political, check this cartoon by the Houston Chronicle’s Nick Anderson. Below the cartoon, he comments:

“The move is the latest in a series of administration decisions pushing back thorny environmental matters beyond next November’s presidential election to try to avoid the heat from opposing interests — business lobbies or environmental and health advocates — and to find a political middle ground. President Obama delayed a review of the nation’s smog standard until 2013, pushed back offshore oil lease sales in the Arctic until at least 2015 and blocked new regulations for coal ash from power plants.”

At the American Interest blog, Via Meadia, Walter Russell Mead opines:

“The President may think he’s dodging a bullet by putting off his decision until after the election, but he has given the GOP a big pre-Christmas present, one that will go on giving as long as unemployment is a major political issue.

“The nexus of environmental policy and jobs has been a kind of Bermuda Triangle for this administration, where good intentions go awry and the best laid plans misfire. The failure of Solyndra demonstrated the poverty of “green jobs” initiatives, while the economic success of states like North Dakota and Texas are a testament to the continued effectiveness of old-style brown jobs. The President may be retreating from his failed green jobs plans, but still appears reluctant to embrace the more successful brown ones.

“If times are good by 2012, voters may vote their green hopes. If the economy is (as seems likely) still a problem, they will be voting their less verdant fears. This may be one can the White House will come to regret having kicked down the road.”

For some of the positions of those opposing the pipeline project, Paul Tullis has it here at the Huffington Post. Among supporters of the pipeline, there’s this piece in the Wall Street Journal and a post at the Heritage Foundation’s Foundry blog. In addition, Brandon Greife with the National Taxpayers Union has a detailed post at the NTU’s blog, Government Bytes.

Even the Washington Post on Sunday (appearing in the Wichita Fall, Texas Times Record News) editorialized in support of the pipeline. After writing, “Despite the passion among environmentalists against Keystone XL . . . Canada’s oil will come out of the ground, and someone somewhere will refine it and burn it,” specifically mentioning China, which the Post notes, “already has an $11 billion stake in Canadian oil production.”

At Hot Air, Jazz Shaw takes notes of the “fallout” from the President’s decision to “delay the approval” of the Keystone XL pipeline, and adds that a revised route will do nothing but cause a significant delay and add perhaps $2 billion in cost.

Finally, in a story posted earlier this evening at Canadian Business.com, titled, “Keystone XL prospects brighter after reroute, but experts stress other options, Lauren Krugel writes:

“TransCanada and Nebraska legislators said Monday they would work out a new route together, with the state conducting its own review. While TransCanada believes the move will expedite the process by as much as six months, the State Department is sticking to its early 2013 time frame for now.

“Lanny Pendill, an analyst with Edward Jones in St. Louis, said the development was positive, but not overwhelmingly so.

"Officially it has not changed the time line and this extended time line is what's putting the project at risk to competing proposals," he said.

“The Cushing, Okla, storage hub is brimming with crude, and a way to get that down to the Gulf is sorely needed now, he said.

"I think it's going to take more than one pipe. So to the extent, let's say, the decisions are delayed and shippers decide to jump to a competing proposal, I don't think that means that TransCanada doesn't build this pipe," he said.

"It may just mean that they're not the first pipe, because I think we're going to need more than one major pipe going to the Gulf coast anyway."

Perhaps the NTU’s Greife was correct after all to title his post, “America Needs Keystone Pipeline, Not Keystone Kops.

November 14, 2011

Wasted Taxpayer Dollars - $172 Billion, and Counting

In the Outlook section of yesterday’s Washington Post, Steve Mufson wrote about “the government’s dim record on energy investments.” The following will surely bring back memories to some os us:

“The Clinch River Breeder Reactor. The Synthetic Fuels Corporation. The hydrogen car. Clean coal. These are but a few examples spanning several decades — a graveyard of costly and failed projects.”

Mufson follows-up by saying:

“Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy, but they have managed to burn through far more more taxpayer money than the ill-fated Solyndra. An Energy Department report in 2008 estimated that the federal government had spent $172 billion since 1961 on basic research and the development of advanced energy technologies. (emphasis added)

“What does Washington have to show for these investments? And should the government even be in the business of promoting particular energy technologies?”

The report, U.S. Federal Investments in Energy R&D: 1961-2008 (requires Adobe), was prepared by Pacific Northwest National Laboratory, operated by Battelle, for the U.S. Department of Energy, under contract DE-AC0-76RL01830. Following is the report’s abstract:

“This paper documents nearly a half century of U.S. federal government support for energy research and development (R&D).  Data on energy R&D expenditures disaggregated by major program area are presented here for the first time for the period 1961-2008.  This paper also documents U.S. federal government spending on key large scale energy R&D programs that were initiated in response to the oil crisis of the 1970s.  Since 1961, the U.S. government has invested nearly $172 billion (in inflation adjusted 2005 US dollars) for the development of advanced energy technologies and for the necessary underlying basic science.  Over this period, nearly 24% of the total federal investment in energy R&D occurred during the short seven-year span of 1974-1980. From 1977-1981, energy R&D investments briefly rose above 10% of all federal R&D; however, since the mid-1990s energy R&D has accounted for only about 1% of all federal R&D investments.”

Count the ways that government is able to burn through your tax dollars.

November 13, 2011

IRS Has Serious Internal Control Deficiencies, Says GAO

The U.S. General Accountability Office (GAO) has completed its audit of the IRS’s Fiscal Years 2011 and 2010 Financial Statements (summary, 1-page highlights and full report, both require Adobe). As the GAO reports, “ IRS is a large and complex organization, posing unique operational and financial management challenges for its management. IRS employs over 100,000 people in its Washington, D.C., headquarters and over 700 offices in all 50 states and U.S. territories and in some U.S. embassies and consulates.”

In the report highlights, GAO wrote that it found:

“In GAO’s opinion, IRS’s fiscal years 2011 and 2010 financial statements are fairly presented in all material respects. However, serious internal control and financial management systems deficiencies continued to make it necessary for IRS to use resource-intensive compensating processes to prepare its balance sheet. Because of these and other internal control, compliance, and system-related deficiencies, IRS did not, in GAO’s opinion, maintain effective internal control over financial reporting as of September 30, 2011, and thus did not have reasonable assurance that losses and misstatements material to the financial statements would be prevented or detected and corrected timely.”

While GAO said that “IRS continued to make strides in addressing its deficiencies in internal control,” it also said:

“However, deficiencies remain concerning (1) material weaknesses in internal control over unpaid tax assessments and information security, (2) a significant deficiency in its internal control over tax refund disbursements, (3) a noncompliance with the law concerning the timely release of tax liens, and (4) financial management systems’ lack of substantial compliance with FFMIA requirements . . . .”

GAO also points out that 182 recommendations remain “open” from its prior audits of IRS’s financial statements. Here is how GAO reports that in more detail on page 14:

“We have reported on IRS’s internal control weaknesses in prior audits and have provided IRS recommendations to address these and other less-significant issues. As of the date of this report, 182 recommendations related to our financial statement audits were still open, of which 10 relate to the material weakness in internal control over unpaid tax assessments, 105 relate to the material weakness in internal control over information security, and 9 relate to issues encompassed by the significant deficiency in internal control over tax refund disbursements. For more details on the material weaknesses and the significant deficiency identified as a result of our audit, see appendix I.”

IRS’s “management discussion and analysis” begins on page 23, which contains a great deal of informative data about the IRS, including a number of charts and tables. The financial statements begin on page 58.

HT Tax Prof Blog.

November 12, 2011

Taxpayers Defeat Many Tax-and-Spend Ballot Efforts

Last week, we growled about the efforts of Colorado voters in defeating a statewide tax increase and creating a ‘killing field’ of local tax increases. Now, the National Taxpayers Union (NTU) provides a wrap-up of tax issues during the 2011 election season. Here are two paragraphs from NTU’s press release on Thursday, November 10:

“After 12 states considered thousands of ballot measures over several weeks this fall, the scorecards are finally in. NTU’s 2011 Ballot Guide tracked around 500 initiatives in Ohio alone and a plethora of measures throughout the nation which, taken together, provide a much more complete picture of the intentions of voters than scattered news reports.

“The results clearly show that voters are in no mood to throw the spending spigots wide open or hand over more of their hard-earned dollars,” said NTU State Government Affairs Manager Brent Mead. “An important opportunity for savings was lost as Issue 2 was defeated in Ohio. Yet, even San Francisco voted for savings from government, among a host of positive ballot victories for taxpayers.”

There’s more, but the following is a good summary:

“In some circumstances where the purpose and period of time were defined, voters were willing to raise taxes,” Mead concluded. “But the prevailing good news for taxpayers is that more tax hikes, spending provisions, and proposals to increase government power were retired than scored.”

We thank our friends at NTU for their efforts.

November 11, 2011

Environmental Protection Under Small Government

Mention of limited government generally brings looks of wonderment to the eyes of progressives, but the suggestion that you would do away with the U.S. Environmental Protection Agency (EPA) would bring absolute 'shock and awe' to a progressive or an environmentalist.

In an op-ed yesterday at the American Spectator, Iain Murray of the Competitive Enterprise Institute and author of  Stealing You Blind: How Government Fatcats Are Getting Rich Off of You writes that “property rights under common law offered greater protection from polluters than do diktats from Washington bureaucrats.” Here is just a portion of his op-ed:

“For much of U.S. history, clean air and water were protected by the courts. This common law system based environmental protection on property rights. No one had the right to damage another person's property, including his land, air, and water. Polluters were held accountable in the same way as trespassers, vandals, and thieves.

“The common law was better for victims because it granted them direct legal recourse against polluters. No new law or regulation needed to be issued. They only had to demonstrate that the pollutant resulted in damage. For that reason, it was also good for businesses, who were not subject to regulation unless they actually imposed costs on others. Both sides also benefited from the ability to negotiate. Firms could offer to pay plaintiffs to allow a certain amount of pollution on their property, which created a natural rather than artificial price for pollution, such as cap and trade policies seek to create.”

According to Murray, “The 1951 case International Paper Company v. Maddox demonstrates all these benefits . . . In case after case, courts affirmed plaintiffs' right to live pollution free. The EPA did away with this direct legal recourse.” On the other hand, he writes:

“For the past thirty years, the EPA has used every power at its disposal to pursue John Pozsgai, a refugee from communism, for the crime of cleaning up a scrap yard he had bought. At one point, they succeeded in sending him to prison, something that has never happened as a result of a true environmental disaster like the BP oil spill . . . .”

So, are the environmentalists interested in a clean environment or a statist government with more bureaucrats and bureaucracy?

November 10, 2011

School Choice and Education Tax Credits

The Virginia Institute for Public Policy (VIPP), an independent, nonpartisan, education, and research organization, published published a study by Adam Schaeffer. It provides a way forward in Virginia for supporters of school choice.

The study explains why “supporters should put their energy behind broad-based education tax credits rather than ones targeting special populations and should promote school choice as a general education reform that will benefit all citizens—parents and nonparents, rich and poor, taxpayers and the state and local governments. basics of school choice policy and politics.”

Below is the executive summary from the study, "Public Education Tax Credits for Virginia: The Way Forward on School Choice" (requires Adobe):

“The factual argument in favor of school choice becomes more compelling with each passing year; choice improves the academic performance of the children participating in the program while modestly improving public school performance and saving large amounts of money. And yet it remains very difficult to pass school choice legislation.

“There are many reasons it is difficult to enact school choice. At the most basic level, our system of government makes it relatively easy for a powerful minority to block legislation. The teachers unions, along with all those directly benefiting from a government monopoly on education, constitute an extremely powerful minority, and they have been very successful at blocking this popular and manifestly effective education reform. Most reforms, however, face an entrenched minority that stands to lose much and therefore fights hard to keep its advantages.

“The question we ask in this paper addresses what can be accomplished within these constraints: what policy and argument are most likely to win the day for school choice in Virginia?

“We analyze a wide range of evidence, including a survey of school choice policy elites and a large survey of the general public, in order to draw conclusions about the best approach to school choice in Virginia. We find that education tax credits are by far the most promising school choice policy for Virginia and that broad-based tax credits that include both a personal-use and a donation component are the most promising kind of tax credit. Model legislation derived from the policy and from political principles discussed below is presented in the appendix to this paper, along with real-world examples of how the legislation would work.

“A policy needs an argument, however, and much of this paper will investigate how the public thinks about school choice reform and which arguments in favor of choice are most effective. We find that the “financial” argument in favor of school choice, which explains that choice policy helps to save money while improving education, is the most effective message supporting education tax credits.

“This paper concludes with a discussion of three promising ways of presenting education tax credits to the public while emphasizing the fiscal benefits of school choice. The “public model” would emphasize the financial frame as first among equals under a broader, higher-level argument that school choice through universal tax credits would mitigate problems affecting the public as a whole.

“The pure “financial model” would emphasize the fiscal and tax-cut side of the tax-credit issue to the exclusion of most other concerns. The “early-education model” would harness the political momentum behind policies expanding access to preschool to promote education tax credits and school choice by emphasizing the educational and financial benefits of those policies.”

Please take the time to read the entire study. If you find the study satisfying browse the VIPP website for other studies and papers. You will not be dissatisfied.

November 09, 2011

Arlington Public Schools Remain Top Spender

The Washington Area Boards of Education (WABE) has published the Fiscal Year 2012 WABE Guide, and once again the Arlington Public Schools rank #1 in the cost per pupil. Here are numbers (available here at APS's Budget & Finance webpage):

  • Arlington County -- $18,047 (4.2% increase)
  • Alexandria -- $17,618 (3.7%)
  • Falls Church -- $16,309 (2.5% decrease)
  • Fairfax County -- $12,820 ((1.8%)
  • Manassas City -- $11,478 (1.1%)
  • Loudoun County -- $11,014 (1.7%)
  • Prince William County -- $9,852 (2.9%)
  • Prince George’s County -- $9,176 (21.0% decrease)

So, the Arlington School Board hit Arlington taxpayers with a “twofer” -- highest cost per pupil and the largest increase from FY 2011 to FY 2012. And imagine, the School Board candidate had no opposition in yesterday’s elections. Can things get any better for Arlington County’s elected worthies?

The following "note" appears at the WABE Guide's "cost per pupil" page. It is the understanding of your humble scribe this cost figure is based upon operating costs, which does not include capital costs.:

"Note: Uniform formulas were developed by the WABE committee for consistency areawide. These numbers are comparable; however, the cost per pupil reported here may differ from that reported in individual districts' budget documents or other reports."

In addition, Montgomery County Public Schools did not participate for the FY2011 WABE Guide and Manassas Park City Public Schools only started participating for the FY2012 WABE Guide.

UPDATE (11/11/11): Scott McCaffrey reports this story in today's Arlington Sun Gazette, and mentions ACTA as the source.

November 08, 2011

‘Post-Constitutional’ Heading Towards ‘Utopian Tyranny’

At CNS News yesterday, Craig Bannister introduced readers to radio talk show host Mark Levin’s speech at Americans for Prosperity’s Defending the Dream conference on Saturday, writing:

"Speaking at the Americans For Prosperity (AFP) event at the DC Convention Center on Nov. 5, Levin said the U.S. has become “a Post-Constitutional government transitioning into an increasingly Utopian tyranny.”

Bannister also wrote this:

“ . . . if liberals aren’t stopped from continuing to increase government size and spending, America will be thrown into chaos, Levin predicted.”

You can watch the speech at the CNS News since it accompanies Bannister’s story, or you watch it at Right Scoop.

HT Mark Levin Show.

November 07, 2011

Taxpayer Pork for the Unions?

An editorial in the weekend Investor’s Business Daily (IBD) explains how “you funnel billions of dollars to your union pals at a time when the government is running record deficits. Easy, you just tuck the money into ObamaCare.” IBD writes:

“According to a new Government Accountability Office report (requires Adobe), the federal government has so far handed out $2.7 billion out of a $5 billion program squirreled away in ObamaCare. (link to report added)

“The Early Retiree Reinsurance Program is advertized as a way to "stabilize the availability of employer-sponsored coverage for early retirees," according to a Health and Human Services memo.

[ . . . ]

“But lift the hood a little and this program looks more like a slush fund for Friends of Democrats.

“Almost as soon as the program was announced, thousands of well-connected unions and government agencies rushed in to apply for the free money. As a result, the agency running the program had to stop accepting applications in May or risk running out of funds.”

The following chart from the IBD editorial lists top recipients getting corporate or union welfare from American taxpayers:


IBD concludes the editorial with these three paragraphs:

"So this ObamaCare money is really being used mainly to pay off unions and governments that would have provided these benefits anyway.

“Even if the government weren't running record deficits and drowning in debt, wasting billions of dollars like this would be unacceptable. But with the country on the fiscal edge, it's an outrage. Is anyone on the debt-reduction "supercommittee" paying attention?”

"Even if the government weren't running record deficits and drowning in debt, wasting billions of dollars like this would be unacceptable. But with the country on the fiscal edge, it's an outrage. Is anyone on the debt-reduction "supercommittee" paying attention?"

The American Thinker's Rick Moran, paraphrasing former Speaker of the House Nancy Pelosi, completes his blog post saying, "The more we discover what's in this bill, the more there is to dislike."

November 06, 2011

Global Warming and Scientific Truth

Last month, Richard Muller, professor of physics at UC-Berkeley, wrote an op-ed in the Wall Street Journal arguing: “There were good reasons for doubt” about about being a global warming skeptic, “until now.” He also said there “are plenty of good reasons why you might be.”  For example, Muller wrote:

“As many as 757 stations in the United States recorded net surface-temperature cooling over the past century. Many are concentrated in the southeast, where some people attribute tornadoes and hurricanes to warming.

“The temperature-station quality is largely awful. The most important stations in the U.S. are included in the Department of Energy's Historical Climatology Network. A careful survey of these stations by a team led by meteorologist Anthony Watts showed that 70% of these stations have such poor siting that, by the U.S. government's own measure, they result in temperature uncertainties of between two and five degrees Celsius or more. We do not know how much worse are the stations in the developing world.

“Using data from all these poor stations, the U.N.'s Intergovernmental Panel on Climate Change estimates an average global 0.64ºC temperature rise in the past 50 years, "most" of which the IPCC says is due to humans. Yet the margin of error for the stations is at least three times larger than the estimated warming.”

Later, Mr. Best explains "why you should not be a skeptic,, at least not any longer," writing:

"Over the last two years, the Berkeley Earth Surface Temperature Project has looked deeply at all the issues raised above. I chaired our group, which just submitted four detailed papers on our results to peer-reviewed journals. We have now posted these papers online at www.BerkeleyEarth.org to solicit even more scrutiny.

[. . . ]

"We discovered that about one-third of the world's temperature stations have recorded cooling temperatures, and about two-thirds have recorded warming. The two-to-one ratio reflects global warming. The changes at the locations that showed warming were typically between 1-2ºC, much greater than the IPCC's average of 0.64ºC."

In an op-ed in this weekend’s Wall Street Journal, Fred Singer, professor emeritus at the University of Virginia responds to Mr. Muller, explaining why he “remains a global warming skeptic.” Mr. Singer writes:

“But the main reason that I am skeptical about the IPCC, and now the Berkeley, findings, is that they disagree with most every other data source I can find. I confine this critique to the period between 1978 and 1997, thereby avoiding the Super El Niño of 1998 that had nothing to do with greenhouse gases or other human influences.

“Contrary to both global-warming theory and climate models, data from weather satellites show no atmospheric temperature increase over this period, and neither do the entirely independent radiosondes carried in weather balloons. The Berkeley study confined its findings to land temperatures as recorded by weather stations. Yet oceans cover 71% of the earth's surface, and the marine atmosphere shows no warming trend. The absence of warming is in accord with the theory that climate is heavily impacted by solar variability, and agrees with the solar data presented in a 2007 paper by Danish physicist Henrik Svensmark in the journal Proceedings of the Royal Society A.

“Moreover, independent data using temperature proxies—various non-thermometer sources such as tree rings, ocean and lake sediments, ice cores, stalagmites, and so on—also support an absence of warming between 1978 and 1997. Coral data also show no pronounced warming trend of the sea surface, and there are good reasons to believe that reported sea-surface warming is an artifact of thermometer measurements.”

Not only does Mr. Singer provide a “fair and balanced” response to Mr. Muller, but he provides a well-reasoned justification for remaining a global warming skeptic. Thank you, Dr. Singer.

November 05, 2011

Quote of the Day

"A careful definition of words would destroy half the agenda of the political left, and scrutinizing evidence would destroy the other half."

~ Thomas Sowell

HT American Spectator

November 04, 2011

Food Stamp Nation. Food Stamp County?

Yesterday, John Hinderaker of the consummate blog, Power Line, noted, “Food stamp use has exploded during the Obama administration, reaching an all-time high of 45.8 million in August.”  However, those numbers have been widely reported in the mainstream media. But then he included the following chart from the Senate Committee on the Budget's Republicans:”

Hinderaker goes on to note:

“To some extent, this growth is the result of record levels of poverty (as measured by the federal government), the result of the Obama administration’s anti-growth policies. But that isn’t the whole story, or even most of it. Normally, one would think that exploding food stamp usage would be nothing to be proud of, but the Democrats have rushed to expand every federal program so as to make as many people as possible dependent on the government. Thus, the food stamp explosion is mostly due to a combination of incompetence and deliberate laxity in administering the program.”

In his blog post, Hinderaker included comments by U.S. Sen. Jeff Sessions (R-Alabama) who made them “after Senate Democrats voted to reject the amendment, offered by Sessions, to the appropriations package that would have fixed a provision in the quadrupling food stamp budget to prevent billions in funds from being mishandled.” According to Sessions:

“This program is not being run honestly, effectively, or fairly. It is deeply disappointing and extremely telling that the Democrat-led Senate voted down even this modest effort to address the almost shameless mishandling of taxpayer funds. We’re in a fiscal crisis that is already killing jobs, and these bills just increase spending—and destroy confidence—that much more.”

Note in the above chart that food stamp expenditures nationally grew 68.2% from 2006 ($41 billion) to 2010 ($69 billion). However, checking the numbers for Arlington County at the Virginia Auditor of Public Accounts’ demographic data shows that food stamp expenditures for Arlington County grew 117.5% for the “non-public assistance” category during the same time span -- from $2.40 million in 2006 to $5.22 million in 2010. Even combining the "public assistance" and "non-public assistance" categories, the increase from 2006 to 2010 is 84.8%.

Rather remarkable numbers since “food assistance distribution dollars” for Virginia increased 90.1% in the “non-public assistance” category, or 76.4% for the two categories combined. Especially remarkable when you consider that Arlington has an employment environment that most other jurisdictions in Virginia, or the country, would envy, as we growled yesterday.

November 03, 2011

Arlington County’s Unemployment Rate Lowest in Virginia

In the Arlington Sun Gazette today, Scott McCaffrey reports that Arlington’s unemployment rate remains the “lowest among the 134 cities and counties of Virginia.”

The chart below provides selected unemployment date for September. Other unemployment data in McCaffrey’s reporting included:

“Statewide, the lowest jobless rates were reported in Arlington, Loudoun, Fairfax County, Alexandria and in Bath County, where the rate was 4.8 percent.

“The highest rates for September were reported in five cities: Martinsville (16.7 percent) Williamsburg (15.1 percent), Petersburg (12.8 percent), Emporia (11.9 percent) and Danville (11.8 percent).

“Across the nation, the lowest jobless rates in September could be found in North Dakota (2.7 percent), Nebraska (3.9 percent), South Dakota (4.1 percent) New Hampshire (5 percent) and Wyoming (5.1 percent). The highest rates were in Nevada (13.2 percent), California (11.4 percent) and South Carolina, Mississippi and Florida (each 10.6 percent).”


November 02, 2011

Colorado Voters Held a Tea Party

Brent Mead. writing at the National Taxpayers Union's Government Bytes, provides a recap of the tax measures on yesterday's Colorado ballot, including a link to a Denver Post story, saying:

“Voters overwhelmingly defeated the only statewide tax increase on the ballot in the country, and created a “killing field” of local tax increases.”

Over the weekend, the Associated Press provided an indepth analysis of the tax measures on the Colorado ballot, including writing:

“The nation's only statewide tax vote on the November ballot asks Colorado voters whether they want to temporarily raise taxes to generate $3 billion for classrooms and colleges — a proposal that has stirred fierce opposition because of the stagnant economy.

“The vote could serve as a test of voters' mood on tax increases and their frustration after endless rounds of education cuts in Colorado.

"If it should pass, it think it will get a fair amount of attention because no one is expecting anything with the words 'tax increase' to pass," said Norman Provizer, a political science professor at Metropolitan State College of Denver.” (emphasis added)

The Wall Street Journal's editorial begins this way:

“You probably won't be reading much about it, and don't look for the results to get a lot of airtime on CNN or MSNBC, but Colorado held a referendum on taxes on Tuesday. The tax increasers got blown away.

“By a nearly 2 to 1 margin, voters rejected a $2.9 billion income and sales tax increase ostensibly earmarked for education. Proposition 103 would have raised the income tax rate to 5% from 4.63% and the sales tax to 3% from 2.9%.”

In the Wall Street Journal, Paul Gigot concluded his Political Diary column with this:

“In other news to give progressives heartburn, pro-voucher candidates prevailed for the school board in suburban Douglas County, where a voucher program has divided the area and is bogged down in legal challenges, and two reformers won seats on the Denver school board. Oh, and Denver voters rejected mandatory paid sick leave for all workers, 64.5% to 35.4%.

“In 2008, Denver voters went for a candidate named Barack Obama by more than 75%, and Colorado gave him 53.5%. Much can change in a year, but Tuesday's results suggest that President Obama's road to re-election is going to be rockier in the Rockies in 2012.”

NTU's Brent Mead adds an important point about the Taxpayer Bill of Rights, which Colorado voters passed several years ago, i.e.:

"Before going into any detail it worth stating that Tuesday once again showed the value of the Taxpayer Bill of Rights (TABOR). As our friends at the Illinois Policy Institute stated on facebook, “This Proposition [103] is losing 65% to 35% and calls for a fraction of the tax increase that the Illinois legislature passed in January. What if Illinois taxpayers were allowed to vote on that one?” That could be true in any number of places. The beauty of TABOR is that it lets the taxpayers, rather than politicians, decide on the appropriate size of government."

Congratulations to Colorado voters!

For more news about the vote: Tax Foundation's Tax Policy Blog, Fox News, BusinessWeek, and Reuters.

UPDATE (11/6/11): At Commentary magazine's Contentions blog, Economic historian John Gordon Steel describes the defeat of new taxes for education as going "down in defeat."

November 01, 2011

Latest Federal Individual Income Tax Data

The non-partisan Tax Foundation published a new report last month which every American taxpayer should read (Fiscal Fact 285, October 20, 2011). It provides a summary of Internal Revenue Service individual income tax data for calendar year 2009. Here is just a small portion of the report presenting federal individual income tax data written by Tax Foundation economist David Logan:

“Each year from 2005 to 2007, the top 1 percent's constantly growing share of income earned and taxes paid set a record. The 2008 reversal of this trend continued in 2009. In fact, the income share for the top 1 percent of tax returns was lower in 2009 than in 2000, largely due to differences in capital gains.

“Another indicator of this reversal in the income and tax shares of the top 1 percent is that, as in 2008, the top 1 percent no longer pays a larger percentage of total income tax than the bottom 95 percent. This trend was exacerbated by the aforementioned precipitous drop in AGI in 2009.  During 2009, the bottom 95 percent (AGI under $154,643) paid 41.3 percent of the total collected, a larger share than the 36.7 percent paid by the top 1 percent (AGI over $343,947).”

There is also a large amount of data presented in tables, but you may want to print out Table 1 so you can keep it nearby for whenever liberal politicians start yapping about “the rich” not paying their “fair share.”

Another great report from the Tax Foundation!