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May 31, 2013

Targeting Conservatives. Not Just TEA Partiers? More.

In an article written by David Lightman and Kevin Hall of the McClatchy Washington Bureau, we learn:

"While the developing scandal over the targeting of conservatives by the tax agency has largely focused to date on its scrutiny of groups with words such as “tea party” or “patriot” in their names, these examples suggest the government was looking at a broader array of conservative groups and perhaps individuals. Their collective experiences at a minimum could spread skepticism about the fairness of a powerful agency that should be above reproach and at worst could point to a secret political vendetta within the government against conservatives.

"The emerging stories from real people raise questions about whether the IRS scrutiny extended beyond applicants for tax-exempt status and whether individuals who donated to these tax-exempt organizations or to conservative causes also were targeted."

In other news about the developing IRS scandal, an editorial in the Wall Street Journal, posted yesterday, provides a "Tax-Exempt IRS Primer."

At National Review Online, Eliana Johnson explains why IRS official Lois Lerner claimed her 5th Amendment right against self-incrimination. According to Johnson:

"Her misdeeds go beyond a failure to inform Congress of the IRS’s targeting of conservative organizations, a lapse of which other agency officials, including acting IRS commissioner Steven Miller and former IRS commissioner Douglas Shulman, are also accused. According to documents accessible on the website of the House Oversight Committee, Lerner also misled that body in its investigation; sidestepped lawmakers’ inquiries; and actively defended the intrusive questions that have been widely denounced by the inspector general, the current and former IRS commissioners, and lawmakers on both sides of the aisle.

"If the Treasury Department inspector general’s report published in mid May is to be believed, Lerner’s communications with the House Oversight Committee have been willfully dishonest. And providing the United States government with false or misleading information carries criminal liability."

At the American Spectator, Jeffrey Lord has several contributions to the IRS story. These include the story behind the National Treasury Employees Union here; the stonewalling by the NTEU union president here; a timeline and several important questions of whether there is a "smoking gun' between the scandal and the White House here; another timeline illustrating "the mindset of the Left at work" here; and, finally, a story of the "breach of faith" by the IRS and the FBI here.

And finally, to learn that the former IRS commissioner "visited the White House more than any other cabinet member, read the story, which includes reporting by the Daily Caller, at American Thinker or Hot Air. And speaking of former IRS commissioner Douglas Shulman, the Daily Caller posted a story this afternoon, saying that Shulman's wife works for the liberal group Public Campaign. The Daily Caller writes the following about the source of Public Campaign's money:

"Public Campaign receives “major funding” from the pro-Obamacare alliance Health Care for America NOW!, which is comprised of the labor unions AFL-CIO, AFSCME, SEIU, and the progressive activist organization Move On, among others.

< . . . >

"Public Campaign also receives funding from the liberal Ford Foundation, the Common Cause Education Fund, and Barbra Streisand’s The Streisand Foundation, among other foundations and private donors.

"Public Campaign’s ninth-floor 1133 19th Street NW office in Washington, D.C. is located on the same floor as the liberal groups Common Cause and Center for Progressive Leadership."

What a web we weave?

May 30, 2013

"Too Fabulous To Fail"

A week ago, we growled about a $250,000 grant, which the Arlington County Board used to bailout Signature Theatre, citing a story in the Arlington Sun Gazette. Now, in a local editorial, the Washington Examiner excoriates the County Board for doing so. Here's how the Examiner concluded the editorial, including a few more financial details:

"After inappropriately meeting in a closed-door executive session to discuss the $250,000 grant without a report from Donnellan, the Signature bailout was approved in 29 seconds flat. There was literally not even a minute of public discussion over the propriety of paying the theater's $85,000 delinquent tax bill and its future tax obligations with "savings from last year's budget."

"Under a lease agreement with the county, the theater pays $90,000 in rent, which comes out to about 2.5 percent of its annual ticket sales. Managing director Maggie Boland insisted that "Signature is not in trouble," explaining that the theater has been "controlling expenses" by not paying its taxes. However, homeowners, business owners and other nonprofits in Arlington are strongly advised not to use that excuse next time their county tax bill comes due.

"Signature Theatre, which produces expensive, Broadway-type shows for which it won a regional Tony Award in 2009, moved into a new county-owned building in 2007 but still owes $7.8 million on a construction loan. The terms of its 35-year lease require the theater — not taxpayers — to cover the full costs of operating the facility, including paying all taxes due.

"Other tax scofflaws have their physical property and/or income seized to pay their delinquent taxes, as County Treasurer Frank O'Leary pointed out. Other financially struggling artistic venues have to scale back productions, sublease space or launch pledge drives when money gets tight. But Signature Theatre has friends in high places who apparently believe it's too fabulous to fail, county taxpayers be damned. (emphasis added)

The County Board and County Manager will look taxpayers straight in the eye, and say the money came from the 'closeout' of the prior fiscal year's annual accounting. However. as the Board or Manager will argue, when it suits their argument, all money is fungible. So the Board is catering to another special interest while county taxpayers pick-up the tab.

Kudos to the Examiner's editorial staff for this excellent editorial.

May 29, 2013

The cost of a 'Green Job' was how much?

Earlier this month, the lede of a news article at Daily Caller reported:

"Despite the Obama administration’s generous support for green energy, job creation in the sector has both lagged and come at a hefty cost to taxpayers, according to a new report.

"According to the Institute for Energy Research, the Department of Energy has spent nearly $26 billion since 2009 on its Section 1703 and 1705 loan programs. However, these two programs only yielded 2,308 permanent jobs — meaning the cost to taxpayers was $11.25 million per job. (link to IER report added)

"Clearly, in terms of ‘bang for the buck,” government programs that coddle renewable energy are losers,” according to IER. “In terms of jobs, the losers are the American workers who would otherwise be gainfully employed but for the tremendous waste of taxpayer dollars on the administration’s obsession with “green energy.’"

Subsequently, Investor's Business Daily concluded an editorial, posted May 13, 2013, by writing:

"Also last year, Veronique de Rugy, a senior research fellow at George Mason University's Mercatus Center, testified before Congress that "some 2,378 permanent jobs were claimed to be created under" the Energy Department's guaranteed-loan program.

"This," she said, "works out to a potential cost per job of $6.7 million."

"And then there was the 2012 testimony of Molly Sherlock of the Congressional Research Services.

"Marita Noon, executive Director of Energy Makes America Great, wrote in townhall.com that Sherlock admitted that only 355 green jobs had been created, "which comes out to about $28 million per job."

"Incompetence? It's more like green corruption, a result of blind dedication to an irrational ideology."

Daily Caller also reported on April 30, 2013, that Republican members of the House of Representatives "are questioning the Energy Department’s jobs estimates from green energy companies that participated in the ambitious loan guarantee program and seeking information on the number of actual jobs created." The Daily Caller added:

"The Energy Department estimated that thousands of jobs would be created through the green energy loan guarantee program that funded now bankrupt companies like Solyndra and Abound Solar. The department has issued $15 billion in loan guarantees for 28 projects — only 23 of which are still operational in the DOE’s portfolio.

“Unfortunately, based on Committee staff’s review of the redacted annual loan reviews for each project, it appears that these job estimates have failed to materialize, in part, due to the aforementioned bankruptcies and the precarious financial positions of certain other projects,” Republicans on the House Energy and Commerce Committee wrote to the Energy Department."

We growled about the exorbitant cost of these so-called green jobs on May 8, but we're re-growling this story, hoping the mainstream media will wise-up, and pick-up the story; however, kudos to the CBS News affiliate in Washington, D.C., which did in fact report on the outrageous cost of these 'green jobs.' Sure makes you wonder just how smart the 'smart people' in the Energy Department really are. Not very, it seems to us.

May 28, 2013

'Public Servants' or 'Public Masters'

"The real danger to us all is when government not only exercises the powers that we have voted to give it, but exercises additional powers that we have never voted to give it. That is when "public servants" become public masters. That is when government itself has stepped over the line."

~ Thomas Sowell

HT His Column at Investor's Business Daily

May 27, 2013

Thoughts on Memorial Day

"For love of country they accepted death."

~ James A. Garfield

"And I'm proud to be an American,
where at least I know I'm free.
And I won't forget the men who died,
who gave that right to me."

~ Lee Greenwood

"They are dead; but they live in each Patriot's breast,
And their names are engraven on honor's bright crest."

~ Henry Wadsworth Longfellow

HT Quote Garden's Memorial Day Quotations

May 26, 2013

Thoughts on the IRS Scandal

In lieu of providing an update on the bubbling IRS scandal, let me provide excerpts from the Wall Street Journal's Peggy Noonan's column in this weekend's edition. For a short context, see our May 14, 2013 post at Growls.

We urge you to read Ms. Noonan's entire column, "A Battering Ram Becomes a Stonewall," but this excerpt seems to get to the heart of her column:

"So what did we learn the past week, and what are the essentials to keep in mind?

"We learned the people who ran and run the IRS are not going to help Congress find out what happened in the IRS. We know we haven't gotten near the bottom of the political corruption of that agency. We do not know who ordered the targeting of conservative groups and individuals, or why, or exactly when it began. We don't know who executed the orders or directives. We do not know the full scope or extent of the scandal. We don't know, for instance, how many applicants for tax-exempt status were abused.

"We know the IRS commissioner wasn't telling the truth in March 2012, when he testified: "There's absolutely no targeting." We have learned that Lois Lerner lied when she claimed she had spontaneously admitted the targeting in a Q-and-A at a Washington meeting. It was part of a spin operation in which she'd planted the question with a friend. We know the tax-exempt bureau Ms. Lerner ran did not simply make mistakes because it was overwhelmed with requests—the targeting began before a surge in applications. And Ms. Lerner did not learn about the targeting in 2012—the IRS audit timeline shows she was briefed in June 2011. She said the targeting was the work of rogue agents in the Cincinnati office. But the Washington Post spoke to an IRS worker there, who said: "Everything comes from the top."

"We know that Lois Lerner this week announced she'd done nothing wrong, and then took the Fifth.

And we know Jay Leno, grown interestingly fearless, said of the new IRS commissioner, "They're called 'acting commissioner' because you have to act like the scandal doesn't involve the White House."

"But the most important IRS story came not from the hearings but from Mike Huckabee's program on Fox News Channel. He interviewed and told the story of Catherine Engelbrecht—a nice woman, a citizen, an American. She and her husband live in Richmond, Texas. They have a small manufacturing business. In the past few years she became interested in public policy and founded two groups, King Street Patriots and True the Vote."

For the details of Mike Huckabee's interview with Ms. Engelbrecht, read the remainder of the column. We'll update you from time to time on the IRS scandal.

May 25, 2013

Cost of Arlington County's Dog Parks Skyrocketing?

The cost of dog parks in Arlington County are skyrocketing. When the one at Fort Ethan Allen, near the east side of the Madison Community Center, 3829 N. Stafford Street, was whittled down from 26,000 square feet to a 22,000 square foot off-leash dog park in 2004, the cost came to $21.41 per square foot. According to the Manager's report, dated December 11, 2004, the new park's fiscal impact would be:

"The proposed relocated Community Canine Area is currently estimated to cost approximately $471,000, including standard construction contingencies. The increase from the previous budget of $400,000 is due to sharp inflation in construction material costs, partly due to the rising prices of steel and diesel fuel, and due to additions to the project scope beyond what was originally envisioned, such as the low deck and improvements to the children’s play area. The budget includes all of the design elements, including fencing, surfacing, drainage, pathways, landscaping, site furniture, etc., as well as removal of the existing CCA in the Historic District.

"Funding for this project is available in the Capital Reserve, and the appropriation will be requested at the time of construction contract award in 2005."

To access the Manager's report, see our December 20, 2004 Growls.

But apparently the same crowd of bureaucrats who brought us the $1 million Super Stop bus stops (see our growls dated March 29, 2013) have designed a $1.6 million dog park. See May 22, 2013 story posted at ARLnow.com. The Manager's report for the Arlington County Board's May 19, 2012 meeting (see agenda item 24) recommended the contract be approved for $1.46 million with a $219,587 contingency, or a total of nearly $1.7 million.

Never fear, however, the dogs will frolic in a park developed with sustainable practices and will be able to enjoy public art, according to the May 19, 2012 press release. Looks like no detail was ignored by staff, according to the Manager's report, which said:

"Thoughtbarn (TB), a multidisciplinary design firm, has been brought aboard to design, fabricate, and install the park signage, as part of a Public Art project. Utilizing a unique approach to integrating form, text, iconography, and alternative energy sources, TB has created signage that provides effective information and direction, encourages the learning experience, creates a sense of place, and enhances the over-all image of the park.

"In addition, the County has collaborated with Alfred State College (ASC) of New York, leaders in training and development in the field of alternative energy technologies, to integrate renewable energy sources (solar power) into the park. ASC is providing design guidance, training, and installation of the solar system. This system will provide power to the pumps and controllers for a unique subsurface irrigation and water management system, as well as the park water feature. ASC also will aid TB in integrating solar technologies into the park signage, for lighting and display purposes.

"This park project strives to be on the forefront of sustainability by utilizing alternative energy, managing and recycling stormwater for use throughout the park, incorporating recycled materials into construction, as well as other best management practices." (emphases added)

So let's do a little arithmetic. The 22,000 square foot Ethan Allen dog park reportedly cost $471,000, or $21.41 per square foot. The Clarendon dog park is .85 acres (or just over 37,000 square feet). A little bit of arithmetic produces a cost per square foot of $45.49.

Now let's see how much the cost of dog parks has skyrocketed. Using the Department of Labor's CPI Calculator, we learn the 2004 cost per square foot would escalate to $26.36 if inflation were included. Thus, the difference in the 2012 cost minus the adjusted cost is $19.15. Multiplying that by 37,000 square feet (.85 acres)  means Arlington County taxpayers have spent $707,000 too much for the Clarendon Dog Park. Take your choice of whether the more than $707,000 is waste, fraud, or abuse.

Sure sounds like Arlington County needs an Inspector General.

For the location of Arlington County's nine "community canine locations," see this Parks and Recreation webpage. And according to this Treasurer webpage, we learn the cost of dog licenses is $10 for one year or $25 for three years.

May 24, 2013

And the May 2013 Porker of the Month Is . . . .

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Citizens Against Government Waste (CAGW) has named Sen. Mary Landrieu (D-Louisiana) is "its May 2013 Porker of the Month for her sour comments on sugar reform in the Senate version of the 2013 farm bill.  The United States sugar program, a misguided relic of the 1930s that CAGW has opposed for many years, arbitrarily protects a select few large and prosperous sugar producers at the expense of U.S. consumers and manufacturers of sugar-containing products and their workers."

Here is CAGW's justification for naming Sen. Landrieu as the May 2013 Porker of the Month:

"In the days leading up to the final farm bill vote in the Senate, Sens. Jeanne Shaheen (D-N.H.), Pat Toomey (R-Pa.), and Mark Kirk (R-Ill.) proposed amendment #925 in an effort to reform import quotas and domestic production limits on sugar that have caused American consumers to pay an average of more than twice the world price for the product since 1982.  On May 22, Sen. Landrieu made her opposition to commonsense reform clear, stating that she would focus on “protecting and supporting the sugar program that functions effectively to balance the amount of sugar coming into our country at no subsidy to the taxpayer,” adding, “yes, the price of a candy bar might be a penny or two higher, but who needs cheaper candy bars?  No one.”

"Sen. Landrieu’s rhetorical confection ignores the sugar program’s enormous costs to consumers and belies the cost to taxpayers.  In 2012, American consumers would have saved $2.9 billion if they had been allowed to purchase sugar at the world price.  Further, the sugar program disadvantages American businesses that rely on sugar as an input, giving competitors in Canada and abroad the upper hand in the market for candy, bread, fruit juice, baked beans, applesauce, and any other sugar-using product.  Indeed, between 1997 and 2011, the sugar-using industry lost 127,000 jobs in the United States.  In Canada, where sugar can be bought at the world price, the value of sugar and confectionary product manufacturing exports to the U.S. grew from $621 million in 1997 to $1.56 billion in 2011, an increase of 157 percent.  Finally, the Federal Feedstock Program, created in the 2008 farm bill, requires the government to buy surplus sugar to be resold to ethanol producers at a loss and is projected to cost taxpayers $193 million over the next ten years.  Clearly, American competitors in sugar-using product industries “need” cheaper candy bars.  Unfortunately, Sen. Landrieu’s efforts appear to have paid off.  Yesterday, Amendment #925 was rejected by a vote of 44-54, with Sen. Landrieu joining status-quo corporate welfare crowd.

“Sen. Landrieu’s antagonism toward sugar reform is plainly misguided,” said CAGW President Tom Schatz.  “The sugar program is the epitome of government picking winners and pre-determining market outcomes.  Consumers unnecessarily spend billions each year on a program that kills jobs, guarantees an inadequate supply, and subsidizes wealthy corporations.  Worse, high sugar prices translate to costlier groceries that disproportionately hurt the poorest Americans.  Sen. Landrieu would do well to remember that each of her constituents is a consumer and taxpayer.  Her outspoken preference for corporate welfare over the welfare of ordinary citizens is tasteless at best.”

CAGW quipped they were "going to name her the Sugar-Glazed Ham of the Month, but it was too expensive." Sounds like another Depression-era program that has worn out its welcome.

May 23, 2013

Apple CEO, Taxes and Congress

In yesterday's Wall Street Journal, Janet Hook and Danny Yadron have a front-page story posted about the "square off" between Apple CEO Tim Cook and the U.S. Senate Permanent Subcommittee on Investigations, chaired by Sen. Carl Levin (D-Michigan). over taxes. Here's the lede from the article:

"Apple Inc.'s tax strategies came under harsh scrutiny Tuesday in the Senate, where lawmakers are finding it far easier to call for a simpler tax code than to produce one.

"Tim Cook, Apple's chief executive, defended the technology giant's tax practices, which Senate investigators say have led Apple to pay no corporate taxes on tens of billions of dollars in overseas income over the past four years. He said the company pays all taxes due and argued the U.S. tax code needs a "dramatic simplification."

Here's more detail from Hook and Yadron's article:

"Mr. Cook's appearance before the Senate's Permanent Subcommittee on Investigations focused both on Apple's practices and the broader question of tax reform. One consistent complaint from large companies is that the U.S. taxes multinational companies on their global earnings, while many others tax only profits earned within a country's borders. That gives U.S. companies reason to park foreign earnings overseas: They are taxed only when brought back to the U.S.

"Some U.S. companies with substantial foreign earnings favor legislation to tax only the profit they earn in the U.S. Others, including some that are primarily domestic, place a higher priority on legislation that would reduce the statutory corporate tax rate, now 35%, by eliminating various deductions and credits.

"The Senate panel, in a report released Monday, said that Apple used technicalities in Irish and U.S. law to pay little or no corporate taxes on $74 billion over the past four years. The report focused on the tax implications of Apple's use of overseas entities. The report found no evidence that Apple did anything illegal.

"Sen. Carl Levin (D., Mich.), chairman of the investigations panel, on Tuesday accused Apple of employing "alchemy" and "ghost companies" to escape tax collectors in the U.S. and Ireland, the base of the firm's international operations outside the Americas."

You can read Tim Cook's testimony at the Senate Permanent Subcommittee's website, and watch the nearly almost six-hour video broadcast. Also available are member statements, testimony of other witnesses, and the report of the subcommittee.

But according to a report, yesterday, in USA Today (paper edition), "Apple's tax ingenuity a tough sell" as "Senate critics aren't buying offshore tactics that saved billions."

However, the Washington Post editorial board would have none of that, saying in an editorial yesterday, "It's the tax code, not Apple, that's rotten to the core." Their editorial went on to say, in part:

" . . . It’s in hot water with Congress now, however, because of something it has not done: regularly paid the top U.S. corporate income tax rate of 35 percent on every dollar it earns around the world. From 2009 to 2012, in fact, Apple managed to avoid taxes on nearly a third of its worldwide net profits, some $30 billion, which were booked to its Irish subsidiaries, according to a report by the U.S. Senate Permanent Subcommittee on Investigations. Apple’s actions “undermine the fairness of the U.S. tax code,” the report says.

:We would say rather that Apple’s actions demonstrate the unfairness of the tax code — or at least its hopeless complexity. As a tax-law expert witness explained to the subcommittee Tuesday, everything the company did was arguably legal under U.S. and Irish tax law. Apple’s Irish subsidiary was not registered in the United States, so it owed no tax on this side of the Atlantic; but, under Irish law, Apple was not liable for taxation in Ireland either, since it is not managed and controlled in that country. Actually, most of the money wasn’t taxed anywhere."

In the pullout quote of their editorial yesterday, the Wall Street Journal wrote, "Senators beat up a U.S. success for following the  tax laws they wrote." The editorial also argued for corporate tax reform, saying:

"All of which argues for a corporate tax reform that would at the very least cut the combined U.S. state-federal rate to the mid-20s to be comparable with many of our trading partners. We'd suggest something closer to the Irish model—ideally zero but 12.5% also works—to turbo-charge growth and coincidentally generate lots of new revenue for Mr. Levin's beloved IRS."

At the National Taxpayers Union's blog, Government Bytes, Manzanita McMahon writes, "Apple case highlights need for corporate tax reform." She asks whether it's "really fair to blame Apple, when the company itself is likely the largest corporate tax contributor, shelling out a far-from-modest $6 billion in federal income taxes last year?" She summarizes the post this way:

"NTU has long advocated for lowering and simplifying the corporate tax rate. In a blog post just last month, NTU quoted the RATE coalition, a group of concerned businesses working toward reducing the corporate income tax:

"Today, at 35%, the top federal statutory corporate tax rate is 10 percentage points above the OECD average and nearly 15 points higher when state and local taxes are included,” says the letter, referring to the 34-nation Organization for Economic Cooperation and Development, and signed by 21 CEOs. "The costs to our economy are significant and already being realized. According to a new Ernst & Young study, GDP in 2013 is expected to be between 1.2 and 2.0% lower as a result of our OECD-leading corporate tax rate. Simply put, the U.S. can no longer afford to stand still.

"Not only do high corporate tax rates take a serious toll on our economy, the perverse incentives created by our burdensome and complex system actually produce less revenue, despite record-high rates. NTU Vice President of Government Affairs, Brandon Arnold explains in the Washington Times:

"Eliminating all corporate-tax deductions and credits would produce enough revenue to lower the rate to 28 percent without adding to the deficit. Counter-intuitively for the tax-and-spend group: Those seeking to increase revenue should, in fact, advocate for even lower rates. According to research by the Tax Foundation, reducing the rate further to 25 percent would increase gross domestic product by 2.2 percent and raise federal tax revenue by 0.8 percent.

"Combining such tax reform with serious spending cuts is the only way to tackle the deficit Sen. Levin was so concerned about, while encouraging a more prosperous economy."

Sen. Levin would be wise to ponder long and hard on Ms. McMahon's advice.

The Tax Foundation's tax policy blog also have four posts addressing Apple's tax hearing. Two feature videos. You can find them here, here, here and here. In one, Andrew Lundeen writes that "Apple's appearance before the Senate clarifies the need for comprehensive tax reform." In another, Kyle Pomerleau writes:

"There is another thing that is worth remembering as well.

"It is true that corporations attempt to limit their tax burden through tax planning and the use of credits and deductions in the tax code. These “loopholes” reduce the amount of tax revenue that the government receives.

"However, any discussion of these loopholes requires perspective."

We've previously growled about America's high corporate income tax rates on March 29, 2012 and about America's corporate tax uncompetitiveness on September 22, 2012, but you may want to search for others.

Anyone want to make a guess when we'll get corporate income tax reform?

May 22, 2013

The Arlington County Board Bails Out Signature Theatre

In an explosive report at the Arlington Sun Gazette today, Scott McCaffrey writes that the Arlington County Board voted 5-0 on Tuesday for a $250,000 grant “designed as a one-time offering to help the (Signature Theatre) company get through a period of financial instability, pay off past-due taxes and to meet this year’s tax obligation.” It “will help the theater pay taxes on its performance space, located above the Shirlington Library.”

Here is what the $250,000 so-called grant is designed to do:

“According to Department of Management and Finance director Michelle Cowan, the grant funds will allow the theater to pay off $85,000 in real estate and business tangible taxes that are past due. They also will support $99,000 to cover this year’s real estate taxes and about $30,000 in future business taxes, “leaving around $35,000 remaining that will either help fund a financial consultant study or go to future tax payments,” Cowan said.

“County Treasurer Frank O’Leary confirmed that Signature’s delinquencies include last fall’s real estate tax payment and business taxes.”

Here are the thoughts of the inimitable citizen budget watchdog Wayne Kubicki, as reported by McCaffrey:

"Wayne Kubicki, a veteran budget watchdog, said Arlington taxpayers need more information about what’s going on.

“Let’s see financial statements!” he said, and questioned aloud why County Board members had been able to discuss the issue in closed session.

"The county attorney’s office said it “is standard to bring to the board the terms and conditions of a grant agreement in closed session,” and that a copy of the final agreement will be available once it is finished.

"In recent years, there have been signs that Signature was having trouble meeting its financial obligations on the theater space, which it began occupying in 2007. Terms of the agreement between the theater and county government, which owns the space, have been revised several times.

“As part of the joint-use venture, Signature agreed to fund the cost of interior construction of its space and to lease the facility from the county government for 30 years, a term later extended to 35 years.

“The taxable portion of the Signature property is assessed at $8.72 million, according to county records, which would equate to a 2013 real estate tax bill of just under $99,000.

“The issue is sure to again bring up questions about the Arlington government’s willingness to support arts organizations and venues that are facing economic challenges. The government-run Artisphere has swum in a sea of red ink since its opening several years ago, despite efforts by county officials to cut costs and find an audience.”

The Arlington County press office made the following two points in a press release, which runs almost two pages:

  • County Manager cites County’s longstanding partnership, Signature’s importance to community and Shirlington
  • $250,000 to offset Signature’s real estate taxes

For the record, the county's press release said the 5-0 vote occurred after the Board discussed the grant "in closed session."

Your humble scribe is quoted by Mr. McCaffrey as follows:

“Tim Wise, president of the Arlington County Taxpayers Association, couldn’t help but get a jab in over the Signature funding.

“Despite the apparent massive waste, overpayment and the likelihood of abusing the funds, the grant may yet be worthwhile,” Wise said. “Why? Well, if a severe storm or other event blocks Arlingtonians’ access to D.C.’s 50-plus theaters, attending a Signature event would be all that Arlington’s art crowd would have access to, other than PBS, for a few days.”

Although it's not included in McCaffrey's report, I also pointed out the reference to a "closed/secret session" got me wondering if there is an exception to Virginia's open meeting laws for divvying-up the free show tickets in counties without Inspector Generals? And how much will each County Board member's opening show reception cost Arlington taxpayers?

The online ARLnow.com news outlet also reported:

"Signature Theatre has sole access rights and branding capability in its current space within a county owned building. It is responsible for the full costs of operating that facility, including real estate and business tangible taxes. Other county supported arts groups performing in county subsidized spaces are not required to pay taxes.

“Signature is thriving, and has a great future ahead of it,” Donnellan said. “This grant addresses an immediate, short-term need by providing temporary relief from a tax burden that is not shared by other supported arts groups.”

"The county emphasizes that the theater is a cultural anchor for Shirlington and provides financial benefits to the community. It estimates that more than $150,000 in annual sales and meals taxes can be directly attributed to Signature’s presence in Shirlington.

"Signature faced several debt-related lawsuits in Arlington General District Court last year, including claims from Waste Management, Conde Nast Publications and the Delancey at Shirlington Village apartment building. The Waste Management and Conde Nast claims were eventually dismissed. The court ruled in favor of Delancey at Shirlington Village."

It's not clear at the moment just why the Board required a closed/secret session to discuss the grant, or why there was no report from the Manager to the Board as normally occurs on County Board agenda items. Nor is it clear how "Signature is thriving," as claimed by the Manager, if Signature needs its taxes to be bailed out. Stay tuned for more information?

May 21, 2013

Useless Spending and Red-Tape

Investor's Business Daily (IBD) has an editorial posted that asks whether America's economic policies are "to the left of Communist China?" The editorial begins:

"The government has decided that less intervention on its part will be better for economic growth. Is this a new initiative coming out of Washington? No. This is the thinking in Beijing.

"Under the headline "China Cuts Red Tape As Premier Li Shows Stimulus Reluctance," Bloomberg reported last week that Chinese Premier Li Keqiang, who "pledged to reduce the government's role in the world's second biggest economy after a new leadership took over in March," wants to cut red tape and regulation.

"Bloomberg went on to report that Chinese government "authorities" are "reluctant to use stimulus to counter a slowdown, saying China must rely on market mechanisms to aid growth."

"Sounds like the opposite of the Barack Obama government, which is obsessed with stimulus spending and is a regulation-writing machine."

The IBD editorial later points out:

"Washington is not only a font of useless spending, it's also a red-tape factory.

"The annual federal regulatory burden is at an all-time high of $1.8 trillion, says the Competitive Enterprise Institute, which has just released "Ten Thousand Commandments," its annual report on the regulatory excesses of Washington.

"That figure is a milestone; it's the first time, says CEI, that the estimated cost of regulation has exceeded half the cost of the federal government."

The rather lengthy editorial ends by saying, "Consequently, this puts Obama and the Democrats who support his liberal policies to the left of China. It's the wrong side of politics and the wrong side of history."

But perhaps we should take a longer view as Glenn Harlan Reynolds does in an op-ed today in USA Today. He sets-up the following comment by citing the trio of scandals currently facing the administration, and then says:

"But serious as these problems are, they're all short-term things. So while at the moment a lot of our political leaders may be wearing sunglasses so as not to be recognized, there's a pretty good argument that, over the longer time, our future's so bright that we have to wear shades.

"That's the thesis of a new book, America 3.0: Rebooting American Prosperity In The 21st Century. The book's authors, James Bennett and Michael Lotus, argue that things seem rough because we're in a period of transition, like those after the Civil War and during the New Deal era. Such transitions are necessarily bumpy, but once they're navigated the country comes back stronger than ever."

Maybe hope does spring eternal. Let's certainly hope so!

May 20, 2013

A Thought on the Duty of Government

"Government's first duty is to protect the people, not run their lives."

~ Ronald Reagan

HT John Hawkins's "40 Best Quotes from Ronald Reagan" at Townhall.com

May 19, 2013

Is Farm Bill More Welfare for Rich Farmers?

An Investor’s Business Daily editorial last week reported that as “noisy scandals” (e.g., IRS, Behghazi, AP) fly around the nation’s capital, “Congress is quietly putting finishing touches on a $1 trillion farm bill that's yet another major expansion of big government in the U.S. economy.”

The following section of the IBD editorial gets to the heart of the problem:

“And the price tag will be a lot higher than it looks. Nearly 79% of all the spending planned over the next decade will go to food stamps, nearly $80 billion a year.

So let's see if we have this straight: We give taxpayer subsidies to farmers to boost our food prices, then hit up taxpayers for more money for food stamps so the poor can afford the higher prices government created. (emphasis added)

“If that sounds insane, it is — no less than Soviet-style thinking.

“What's worse, our farm programs are designed today to enrich a handful of rich, very large agribusinesses. And despite the financial meltdown, big farms are booming.”

Here’s Rick Moran’s advice at American Thinker:

“They're going to mark up the farm bill this week and if I were you, I'd follow the advice of Heritage Action:

"Hold On To Your Wallets: Farm Bill Incoming!"

“Nothing says big government quite like a trillion dollar farm and food stamp bill. And agri-lobbyists went to town in fashioning as many special interest goodies as the could stuff into a single bill.”

The Heritage Foundation published a Backgrounder (No, 2797, May 14, 2013) as well, listing “10 things you should know about the farm bill.” Here are the five “key points,” according to the document:

  1. The "farm bill" is a misleading title for this recurring legislation. About 80 percent of spending in the 2008 bill is dedicated to food stamps and other nutrition programs.
  2. There is a wide range of market-distorting subsidies affecting farm policy that include income support, price controls, operating and land ownership loans, insurance, and disaster relief.
  3. This is a particularly vital time for reform. Federal spending must be reined in, and the condition of agriculture is extremely strong. Net farm income (what farmers earn after expenses) is at its highest levels in 40 years.
  4. Meaningful reform includes considering food stamps and agriculture programs in separate bills, creating much stricter eligibility requirements for subsidies, and imposing caps on crop insurance premiums.
  5. Congress should eliminate flawed programs such as direct payments. However, it should not then replace those programs with something as bad or worse. Congress should consider the farm bill in terms of net reform.

Last Friday, Daren Bakst wrote at the Heritage Foundation’s blog, The Foundry, that when it comes to food stamps and farm programs, “some things just don’t go together.” He explains why the food stamps and the farm programs should be separated this way:

“Sometimes things go better together than you’d think, such as bacon and chocolate, or Hall and Oates, however, not all combinations work. For years, some Members of Congress have thought that food stamps and farm programs—while very distinct from each other—are a great political fit. As Senator Thad Cochran (R–MS), ranking member of the Senate Agriculture, Nutrition, and Forestry Committee recently explained, food stamps should continue to be included in the farm bill “purely from a political perspective. It helps get the farm bill passed.” (emphasis added)

“For taxpayers and voters though, this unholy alliance has been more like oil and water than peanut butter and jelly. The “farm bill,” which is recurring legislation that packages food stamps with farm programs every five years or so, has become a $1 trillion bill of subsidies and welfare programs that ignores sound policy and open and accountable government.”

Rick Moran's advice in his American Thinker piece seems to be real good advice. And while you're holding on to your wallet, hold your elected representatives accountable. Arlington County taxpayers should call or write their representatives on Capitol Hill. Here's the contact information:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

May 17, 2013

A Thought on Big Government

"When the IRS can harass tea-party groups, when the Department of Justice can monitor reporters’ conversations, when the EPA can adopt double standards for ideological allies and opponents, when Health and Human Services regulators can openly extort the businesses they regulate — in short, when there is no accountability — we are no longer citizens but subjects.

"Conservatives often have a difficult time explaining why we support a smaller, more limited federal government. These scandals make that job a little easier. It’s not that we don’t like government, but we don’t like government intimidating and harassing media outlets, businesses, citizen organizations, or anyone else in the manner these scandals have brought to light.

"And we understand that because this kind of corruption and incompetence is inherent in any massive, unaccountable organization, simply passing a new law will not solve the problem. To prevent the next abuse of government power, we need to reduce government power."

~ Mike Lee, U.S. Senator, Utah

HT His National Review Online Op-Ed, May 16, 2013

May 16, 2013

A Focus on Public Debt

In a short paper posted at the Mercatus Center, Veronique de Rugy begins by saying:

"The president and numerous politicians claim that the United States does not have an immediate crisis in terms of debt. The president has gone so far as to say, "In fact, for the next 10 years, it's gonna be in a sustainable place."

"The recent release of budget plans for fiscal year 2014 makes a proper perspective of projections of public debt even more important. This week’s chart shows the debt held by the public as a percentage of the gross domestic product (GDP) under various budget proposals."

She uses the following chart to help readers better understand the various proposals:

She concludes by saying:

"It’s hard to see how any of these budget plans represent a serious attempt to cut the debt, as most of the plans only leave us where we are today, if not worse off. Even the Ryan plan, which promises a 55 percent debt-to-GDP level by 2023, rests on optimistic GDP growth and revenue projections while failing to fully address the unsustainability of the current entitlement programs. The Ryan plan repeals Obama's health care law, but it pushes off urgent Medicare reforms until 2024 and leaves Social Security untouched.

"These plans prove that Washington lacks the commitment necessary to address the true drivers of the debt: spending for entitlement programs and interest costs on the debt itself.

Want to better understand America's public debt? Spend a few minutes studying this paper.

May 15, 2013

Billion Here, Billion There. It's Just Taxpayer Money

At CNS News today, Penny Starr reports that "Health and Human Services Secretary Kathleen Sebelius announced Wednesday the second round of about $1 billion in “Health Care Innovation Awards,” as part of the ongoing implementation of the Affordable Care Act, or Obamacare. According to Sebelius, it was intended "to spur innovation in our health care system by supporting some of the most promising ideas from around the country."

Starr points out that bringing down health care cost is HHS's "top priority."

But here's the kicker in Starr's report:

"But Richard Gilfillan, director of the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services, who took questions from reporters on the conference call, could not tell reporters how much the $900 million awards given out last year has saved taxpayers in health care costs.

"A reporter asked Gilfillan about the $1.9 billion savings over three years that HHS officials had predicted from the first round of awards and whether he could report any savings over the first year.

"All of our round-one proposals, our applicants, have put in operating plans,” Gilfillan said. “They’ve begun operations, but we do not have any estimates to share with you at this time.”

Amazing the things government bureaucrats will do when it's not their money they are spending. Absolutely amazing.

May 14, 2013

Update on the Developing IRS Scandal

Before providing a fairly comprehensive list of links to stories about the IRS abuse of Tea Party and other conservative groups, let me first provide a press release from our friends at the National Taxpayers Union:

"In a statement today, National Taxpayers Union (NTU) Executive Vice President Pete Sepp responded to the situation stemming from the I.R.S.’s admitted misconduct in targeting conservative-leaning organizations for increased scrutiny on non-profit status applications:

“If the power to tax is the power to destroy, so is the IRS's power to deny, delay, and demand endless documentation. In typical Washington, DC fashion, the extent of the damage surrounding the IRS's investigative excesses of conservative organizations is still unfolding. The sooner public officials stop downplaying and start leveling with the American people about how far this abuse of power has gone, the better.

“But whether the immediate issue is nonprofit status for conservative groups, or ill-targeted audits, the underlying concern for taxpayers is the same: Congress must be ever-vigilant in ensuring the IRS exercises its powers prudently and that the tax collection system's abuses are quickly corrected.  In our system of government, compliance with our tax laws should depend more on public trust than secret coercion.

“Instead of the usual displays of righteous indignation and promises to 'get to the bottom' of this unfolding scandal; it's time for a righteous commitment to administrative reform, from the bottom up. At the very least that means additional safeguards such as those found in the Small Business Taxpayer Bill of Rights introduced by Senator John Cornyn. Other recommendations that NTU made in the late 1990s while its Executive Vice President served on the National Commission on Restructuring the IRS merit consideration today. This includes the concept of a citizen review board for IRS actions.

“Make no mistake -- this is not the first time Americans have been treated to the sorry spectacle of a tax agency accused of political bias, nor will it be the last. Unless, of course, politicians are willing to stop posturing and get serious about protecting taxpayers. Whatever type of tax system we may have in the future, it will require constant oversight as well as checks and balances against political manipulation.”

If you haven't been following the story, here are a few stories that provide the background, as well as the Treasury IG's report:

  • Washington Free Beacon also reports, "A long-awaited report by the Treasury Department inspector general confirmed Tuesday that Internal Revenue Service agents targeted Tea Party groups because of their political beliefs. The report said ineffective management allowed IRS agents to single out Tea Party groups applying for tax-exempt status with inappropriate questions and requests."
  • Washington Free Beacon reports that White House Press Secretary Jay "Carney can’t explain why no pne in WH knew about IRS scandal," and embeds a 2-minute video.
  • The editors at National Review Online write, "But the agency’s actions do not appear to be mere mistakes; they give every indication of being misconduct with malice aforethought, a campaign of intimidation conducted by political partisans misusing government power and government resources. If so, those actions are not only unethical but criminal."
  • Washington Post reporters Juliet Eilperin and Zachary Goldfarb write this afternoon, "The report by the Treasury Inspector General for Tax Administration described in detail the use of “inappropriate criteria” to screen political advocacy groups. An IRS unit created a “lookout” list for organizations with keywords such as “tea party” or “patriot” in their names. Organizations faced months of delays in getting their applications approved."
  • Washington Times reporter Sean Lengell writes today, "The report, released Tuesday (i.e., today), suggested lax management resulted in long delays in processing certain applications and allowed “unnecessary information requests to be issued.” The inspector general recommended several interim reforms, including better documenting the reasons why IRS agents believe certain groups are chosen for review."
  • At American Spectator yesterday, Ross Kaminsky provides a comprehensive look at the scandal, at least through yesterday morning, writing, "Apologists suggest that the IRS’s “shortcuts” were an effort to prevent tax-exempt status for “sham” groups which either wanted to misuse the tax code or keep their donor lists secret. Hogwash. This is the United States of Alinsky in its full glory. The IRS’s actions are something one would expect in Venezuela or Cuba, where the central government considers it a proper function to kneecap any opposition."
  • Finally, last Friday's "daily recap" page of the Mark Levin Show provides a link to a March 23, 2012 Landmark Legal Foundation letter that "demanded investigation into IRS intimidation of tea party groups."

Stay tuned! We look forward to the continuing saga of not just this scandal, but to the others that have been, and are, brewing, e.g., Benghazi or the DoJ collection of journalists phone records.

May 13, 2013

Teacher Pay in the Local, D.C. Area

Yesterday's Washington Post carried an above-the-fold story, by Lynh Bui, reporting that to obtain pay raises, some teachers are switching school districts. Here's the lede of Ms. Bui's story:

"After years of pay freezes and unpaid furloughs, physical education teacher Steven Lightman received a roughly $8,000 annual salary bump this school year.

"But it wasn’t because Lightman’s school system decided to give the veteran teacher a raise. He made it happen himself by switching Washington area school districts.

"Lightman, a Prince George’s County teacher for 11 years, started working in Montgomery County last fall. He is one of many teachers reaping the benefits of living in a region where a dramatic boost in pay can be just a county away."

The Washington Post article was accompanied by the following table (online version) listing the average FY 2013 pay at public schools in the District and the region:

The data in the chart above comes from the Washington Area Boards of Education (WABE) and National Education Association/DC Public Schools. We've growled most recently on November 19, 2012 and April 2, 2013 using the FY 2013 report. The last eight WABE "guides" are available at the Arlington Public Schools' website.

Readers are urged to review the actual WABE report since it contains a great deal more information than the average teacher salaries in the above table. For example, on page 38, the WABE report includes beginning salary (step 1, bachelor's degree); maximum salaries; step 1, master's degree; and, step 9, master's  degree.

In addition, on page 42 of the FY 2013 WABE report or "guide," there's a teacher cost comparison, which includes salary and benefits for both a hypothetical salary of $65,000 and for an average teacher salary. When the hypothetical $65,000 salary is compared, the Arlington Public Schools (APS) rank 2nd. When the comparison involves average teacher salary, APS ranks 3rd. It's also worth noting there is very little spread in the range of beginning salaries while the spread increases to almost $25,000 when comparing the employer cost for average teacher salary.

May 12, 2013

Wasting Your Tax Dollars at the State Department?

The U.S. “State Department wastes language-training funds while neglecting high-risk embassies,” according to a report posted today by Michal Conger, staff writer at the Washington Examiner. From her lede:

“Too few State Department employees at high-risk overseas missions speak the local language, while the department spends thousands of tax dollars each year on training for officials who don’t need foreign language skills, the inspector general for the State Department said in a recent report.

“The report backs up the Benghazi Accountability Review Board, which said in a December 2012 report that the lack of Arabic speakers among the personnel assigned to Benghazi was a barrier to communication and situational awareness at the mission.

The State Department spent about $195 million on language training in 2012. Much of that was spent on training officials in positions that don’t require language skills, while shorting missions that do require language proficiency.” (emphasis added)

Congers reports the importance of language oversight this way:

“The lack of oversight means skill doesn’t always match needs at embassies. Missions at three European countries where English is common had nine language-designated positions, while Haiti, Thailand and Indonesia had none, and Egypt had only one.

In some cases, the lack of officials that speak the language can be detrimental, as the IG said it was in Benghazi.” (emphasis added)

And speaking of management at the embassies, Conger reports:

Because embassies bear little of the costs for language training, they don’t consider cost when they request their language designated positions, the State IG said.” (emphasis added)

Although Conger failed to provide a link to the State IG report, two reports were posted May 8, 2013 on the “latest published reports” page:

  • 04/30/13   Review of the Process for Establishing Language Designated Positions (ISP-I-13-24)
  • 03/31/13   Inspection of the Foreign Service Institute (ISP-I-13-22)

In providing context for its "establishing language positions" report, the IG says:

“Proficiency in foreign languages is essential to perform certain functions overseas. For other functions, language skills are helpful. Language skills enhance the Department’s ability to engage with foreign audiences, report on events, and oversee mission operations.

< . . . >

“Numerous Government Accountability Office reports over the past 10 years have highlighted Department challenges in meeting its foreign language needs Most reports address shortfalls in the number of language-qualified officers serving in the Near East and South Central Asia and the number of officers with supercritical language skills such as Arabic and Chinese.”

Rather than prepare an executive digest, the State IG’s office lists “key judgements,” in this case five of them. If you prefer what the report says rather than what the Examiner has to say, here are the five “key judgements:"

“The Department of State (Department) spent about $195 million providing language training to its employees in FY 2012. Given the strategic importance of language training, and its cost, the Department needs to give greater attention to how it determines language requirements.

“This review and other inspections conducted by OIG found that some positions identified as language designated do not in fact require foreign language skills. Other positions are not language designated but should be, as suggested by the Benghazi Accountability Review Board, which called for providing staff at high-threat posts with more language training.

“Oversight of language designated positions (LDP) is insufficient to identify when the Department is over- or underdesignating language requirements. Most decisions are made at the embassy level. The Department does not review language requirements across embassies and regional bureaus to facilitate consistent application of language designation criteria and appropriate distribution given U.S. policy priorities.

“Stronger oversight would result in better use of Department resources. Establishing language requirements at the professional level at an embassy can trigger language training lasting from 6 months to 2 years, for which the OIG team estimates a cost of between $105,000 and $480,000 per student. Eliminating language requirements for positions that do not require language skills would free up language training funds for positions where language skills are most needed.

“The Language Incentive Pay (LIP) program, designed to encourage officers to gain and maintain language skills in certain hard and super hard languages, has, until recently, suffered from lack of oversight. The Department is now closely reviewing the program, whose costs totaled $11.4 million in 2012.”

If there is a 10-year history of GAO reports detailing the “challenges in meeting its foreign language needs,” shouldn’t some “heads” be rolling at the State Department? And just what did Secretary Clinton do about it during her four years, and what will Secretary John Kerry do about this during the next three and one-half years? Inquiring minds want to know! After all, they are spending taxpayer dollars!

May 11, 2013

On the Burdens of Public Debt

"I regret, as much as any member, the unavoidable weight and duration of the burdens to be imposed; having never been a proselyte to the doctrine, that public debts are public benefits. I consider them, on the contrary, as evils which ought to be removed as fast as honor and justice will permit."

~ James Madison, Debates in the House of Representatives on the First Report on Public Credit, 1790

HT Patriot Post's Quote Database

May 10, 2013

Another Thought on Government

"Things in our country run in spite of government, not by aid of it."

~ Will Rogers

HT Brainy Quotes

May 09, 2013

Confused About ObamaCare?

Joel Gehrke, commentary writer at the Washington Examiner, posted a story today that begins"

"Health and Human Services Secretary Kathleen Sebelius announced Thursday that HHS will spend $150 million to teach people how to enroll in the Obamacare exchanges, after a Democratic senator scolded her for running a poor “public information campaign.”

Gehrke added:

"The health centers funding complements the navigators program, HHS noted. The Washington Examiner’s Paul Bedard reported that tens of thousands of people would be paid between $20 and $48 an hour to serve as “navigators” to help others enroll for the law’s benefits.

"Today’s funding announcement is part of the administration’s larger effort to make applying for health insurance as easy as possible,” HHS said. “For example, last week, we released a single, streamlined application that was shortened from 21 to 3 pages. We are committed to providing the type of assistance that Americans need to ensure that they have access to affordable health care.”

"Retiring Sen. Max Baucus, D-Mont., one of the key authors of Obamacare, scolded Sebelius for her implementation of the law.

“I just see a huge train wreck coming down,” he told her during a recent Senate hearing. “The administration’s public information campaign on the benefits of the Affordable Care Act deserves a failing grade.”

Gehrke includes a 3-minute video produced by CBS News about "health care act concerns." In addition, he provides a link to a related story, says the President "orders top aides to praise Obamacare during commencement speeches."

Another $150 million of taxpayer dollars down the proverbial rathole? Time will tell!

May 08, 2013

The Cost of 'Green' Jobs? $11.45 Million Each!

Over the past few days (May 5 and May 6), we've growled about the number of taxpayer dollars that are being shoveled down the proverbial 'green' rathole.

These include a $121 million "investment" to literally wrap the main federal building in Cleveland, Ohio in a layer of certified 'green' glass, an "investment" that "would pay for itself by the year 2183, 170 years from now." The second "investment" of tax dollars involved "a 5-year, $4 million grant by the National Science Foundation 'to 'promote sustainable energy' through the New Mexico Experimental Program to Stimulate Competitive Research program.'"

Today, Wynton Hall of Breitbart News reports on a new analysis by the Institute of Energy Research (IER), which "finds that since 2009, the Department of Energy’s (DOE) $26 billion loan program created just 2,298 permanent jobs, at a cost of $11.45 million per job created." In his reporting, Hall adds:

"The losers are the American workers who would otherwise be gainfully employed but for the tremendous waste of taxpayer dollars on the administration’s obsession with ‘green energy,’” said IER Policy Associate Alex Fitzsimmons. “As the economy continues to suffer and dollars for federal programs get harder to come by, it is getting increasingly difficult to defend a program that costs so much and produces so little.”

"In his New York Times bestselling book Throw Them All Out, Government Accountability Institute President Peter Schweizer revealed that 80% of Department of Energy loans went to companies owned by or connected to President Barack Obama’s top campaign fundraisers."

You can see the list, which is included in Hall's report. It is sourced to the U.S. Department of Energy's Loan Programs Office.

Never the less, the White House has cancelled White House tours and ordered the furloughing of air traffic controllers. Talk about prioritization of government spending!

May 07, 2013

Arlington County Budget in Numbers, Part I

At the April 2013 meeting of the Arlington County Civic Federation, Federation delegates heard budget presentations from members of the Revenues & Expenditures Committee. In one presentation, which was reported by ARLnow.com on April 11, Suzanne Sundberg wrote an eight-page report (available at ARLnow.com) “detailing what she characterizes as a lack of audit oversight over the county’s finances.”

In my contribution, I presented a series of statistics using data from the statistical section of the FY 2012 Consolidated Annual Financial Report (CAFR) [available at the DM&F webpage], which concludes that fiscal year’s budget cycle. The CAFR’s statistical section provides information about financial trends, revenue capacity, debt capacity, demographic and economic information and operating information. I also provided comparisons of Arlington County to other Northern Virginia jurisdictions using data from the Virginia Auditor of Public Accounts’ Comparative Report of Revenues and Expenditures.

First, however, I noted the Consumer Price Index (CPI-U) over the 10-year period that began with FY 2003 and ended with FY 2012 was 27.4%.

The first chart in my 5-page handout provided an overview of general government expenditures (table D-1 in the CAFR’s statistical section), which increased by 53.7% over the 10-year period 2003 through 2012. Here are the changes for each of the “general government” major functions over the ten years:

  • General Government -- 25.1%
  • Public Safety -- 68.7%
  • Public Works/Environmental Services -- 118.4%
  • Health & Welfare -- 34.7%
  • Culture/Recreation -- 36.8%
  • Education -- 51.1%
  • Non-Departmental -- 78.3%
  • Debt Service -- 70.0%
  • Contributions to Transit -- 114.9%
  • Contributions to Regional Agencies -- 36.5%
  • TOTAL -- 53.7%

The second chart provided an overview of general government revenues (table D-2 in the CAFR’s statistical section), increasing 59.6% from 2003 through 2012. Taxes increased 89.1% while other revenue sources increased less so.

I then discussed how I adjusted the expenditures for inflation and population after noting that for the past 12 years, the Virginia General Assembly’s Joint Legislative Audit and Review Commission (JLARC) has been reporting on state spending, and their reports include adjustments for inflation and population (study #432 at the JLARC website). Here is the essence of the methodology:

  • The county’s population increased from 196,925 to 216,004, according to Table I-1 of the CAFR.
  • In Fiscal Year 2003, total general government expenditures were $713,586,394, or $3,623.64 per capita. Adjusting for population and using the U.S. Department of Labor’s Inflation Calculator results in total general government expenditures would be $976.7 million in Fiscal Year 2012
  • However, total general government expenditures in Fiscal Year 2012 were in fact $1,096.8 million, according to the CAFR, meaning that total expenditures were $120.1 million above the amount, adjusted for inflation and population.

Similar to adjusting county expenditures, I also walked through the trend in debt per capita, adjusting “primary government debt” for inflation and population. Again, here’s the methodology:

  • In Fiscal Year 2003, total primary government debt was $477.8 million, or $3,426 per capita. Adjusting for inflation, using the U.S. Department of Labor’s Inflation Calculator, and adjusting for population would result in total primary government debt of $653.9 million.
  • However, the CAFR shows that in FY 2012, there was $845.8 million in total primary government debt, or $3,915 per capita. The difference of $191.9 million means that debt grew faster than the combination of inflation and population.

I’ll provide the remainder of my Civic Federation presentation, which includes some demographic statistics, changes in the largest principal employers, changes in management efficiency, and the comparisons with other Northern Virginia jurisdictions, later this week.

All of the individual presentations by Revenues & Expenditures Committee members are not yet properly posted at the Civic Federation website. When they are, I will so note in this footnote.

Readers wishing a copy of my 5-page presentation can write to El Growler Grande at timwise @ verizon.net.

May 06, 2013

$4 Million More of Your Tax Dollars Down the 'Green' Rathole?

Yesterday, we growled about the federal government spending $121 million to enclose the federal building in Cleveland, Ohio "with 'green' certified glass." Now we learn from a CNS News report today about a 5-year, $4 million grant by the National Science Foundation "to 'promote sustainable energy' through the New Mexico Experimental Program to Stimulate Competitive Research program."

Penny Starr, who reported the grant for CNS News, explained:

"The grant abstract said it “addresses one overarching question that has great potential to transform research in NM and to promote sustainable energy development: How can NM realize its energy development potential in a sustainable manner?”

"The “two-fold” vision for the project, the abstract states, is to “harness” the state’s “abundant renewable energy resources” without harming the environment.

"The project will also improve the flow of science, technology, engineering and math (STEM) and green energy research and development “thus creating new businesses and industry that build upon the state’s human and geographic diversity and intellectual capitol,” the abstract states."

But it's ok to cancel White House tours or air traffic controllers, as Charles Krauthammer commented on in his latest column, posted here today at the Rapid City Journal:

"Things began with the near-comical cancellation of White House tours and ended with not-so-comical airline delays. Obama thought furious passengers would blame the GOP. But isn't the executive branch in charge of these agencies? Who thinks that a government spending $3.6 trillion a year can't cut 2 percent without furloughing air traffic controllers?"

Hold your elected leaders accountable! Contact information for Arlington County taxpayers is available in our Growls post on Saturday.

May 05, 2013

$121 Million of Your Tax Dollars Down the 'Green' Rathole?

On Friday, the Washington Free Beacon reported on a TV report from Cleveland, Ohio's WKYC channel 3 -- pointing out the federal government is "spending $121 million to enclose" the Celebrezze federal "building with 'green' certified glass." A 3-minute WKYC video is embedded in the Free Beacon story.

Rather than talk about spending our tax dollars, liberals/environmentalists like to talk in euphemisms, e.g., substituting investment for spending? Well, get this:

"Local workers and taxpayers are outraged by news the federal government is spending $121 million to surround the Celebrezze Federal Building in Cleveland with another layer of glass to save energy, WKYC reports.

"The so-called stimulus project has created a grand total of 60 jobs.

"Reporter Tom Beres said the “improvements” would save $700,000 a year in energy costs, which, if true, means the glass would pay for itself by the year 2183, 170 years from now.

< . . . >

“I think this is a waste of money,” said another upset citizen. “We’re laying off police officers, EMS workers, but they have money for this.”

"Others interviewed called the project a bad investment and another reason why the government is $16 trillion in debt.

"Federal buildings around the country are getting “green makeovers” as well, costing taxpayers $5.5 billion in all.

“A lot of green to go green,” Beres quipped." (emphases added)

The Free Beacon story then points out, "The Obama administration’s foray into green energy has been disastrous for taxpayers since he took office in 2009," citing such"investments" as Fisker, Solyndra, A123, and Solopower. Sheesh!

Arlington County taxpayers are encouraged to make their opinions known to one or all three of their representatives on Capitol Hill. Contact information is available in yesterday's Growls.

May 04, 2013

"Mischief Afoot?"

The editors of National Review Online (NRO) have written two separate editorials opposing the so-called Marketplace Fairness Act, which NRO says on March 22, 2013 is "a sales tax for Internet transactions." They begin their editorial sayiing. "The founding battle cry of the United States of America was “No taxation without representation!” Senator Mike Enzi (R., Wyo.) and Senator Dick Durbin (D., Ill.) propose to challenge that with the misnamed Marketplace Fairness Act of 2013.

More recently, they penned a second editorial, on April 25, 2013, which begins:

"State and local governments are engaged in an unseemly gold rush, pushing for a new Internet sales-tax regime that would empower them to wring revenues from businesses and individuals far outside their jurisdictions. They seek to overturn the foundational American presumption against taxation without representation, and they do so abetted by parasitical business interests that seek to use the tax code to hobble their more nimble online competitors. When the taxman and the National Retail Federation are on the same side of an issue, there is mischief afoot." (emphasis added)

The NRO editors suggest a "sensible solution," writing:

"The sensible solution is to treat online retailers exactly like any other business: Subject to collecting and remitting sales taxes for the jurisdiction in which they are physically present. To the extent that there is any role for the federal government in this issue, it would be in establishing rules (if necessary) for determining who has jurisdiction over sales involving retailers with multiple physical locations. But we would remind Senator Enzi — and any House Republican thinking of backing this bill — that it is the role of the federal government to enable interstate commerce, not to facilitate an unholy alliance between big business and big government. There was a time when Republicans were clear on that."

It shouldn't surprise taxpayers to learn that taxpayer dollars are being used to lobby against taxpayer interests. In the May 1, 2013 newsletter, County Connections, of the Virginia Association of Counties, Virginia's counties are urged to "reach out to Sen. Mark Warner and Sen. Tim Kaine and urge them to support the Marketplace Fairness Act and vote for final passage on May 6." The VACo newsletter also provide links to both a policy brief and a press release by another lobbying outfit paid for with taxpayer dollars, the National Association of Counties (NACo).

The policy brief, especially, provides much of the background, which goes back to a 1967 Supreme Court decision.

In a "vote alert on April 22, 2013," the National Taxpayers Union urged "all Senators to vote "NO" on S.743, the "Marketplace Fairness Act (MFA) of 2013." NTU wrote, in part:

"Widely opposed by limited-government organizations, this deeply flawed legislation, which opens the door for destructive extraterritorial state tax collection schemes, would inflict a great deal of harm upon taxpayers as well as small businesses.

"NTU has stridently opposed MFA on a number of grounds. The bill would hinder tax competition among the states, and may even encourage governments to “round up” their levels. The Supreme Court’s Quill ruling has prevented state tax collectors from aggressively reaching across their borders, but MFA would overturn this important protection against abuse of power. The bill’s attempt to carve out a sales-tax only exception to this ruling likely won’t survive long, and the way would be paved for state administrators to gain authority over other taxes. Finally, S. 743 gives wide latitude to define taxable “nexus,” including its controversial extension to online advertising affiliates. Even states not participating in MFA’s framework would have new powers."

A search at the NTU website shows there is considerable reading about the so-called Marketplace Fairness Act. Especially interesting are two posts at their blog, Government Bytes. In one post on March 22, 2013, Doug Kellogg identifies all the conservative groups that oppose the MFA. In a second post on April 30, 2013, Manzanita McMahon provides an "impressive slate of opinion pieces" that explain why the MFA is "terrible."

At the Tax Foundation's Tax Policy Blog, Joe Henchman has numerous contributions to understanding the MFA. In an April 26, 2013, post, he writes about "what's in" the MFA. Earlier on April 23, he provided a "run down" of his Congressional testimony.

The Heritage Foundation's blog, The Foundry, also has numerous post about the MFA -- including here, herehere, and here. And that's since mid-April. And here, Elliot Gaiser provides a video and 10 reasons for opposing the MFA.

Are there still question about the MFA legislation? In a letter to one of the bill's sponsors, Sen. Mike Enzi (R-Wyoming), Americans for Tax Reform president Grover Norquist listed 16. The first of them:

"What measures protect businesses from tax audits, court proceedings and penalties like tax liens imposed on a business by state departments of revenue where the business has no physical presence?  How will businessmen and women be protected over time from politicians in a different state that they cannot vote for or against?  Is there a danger of establishing taxation without representation?"

In a full-page letter to your scribe dated April 30, 2013, from Senator Tim Kaine (D-Virginia), Sen. Kaine says there is not much to worry about, saying the legislation "would simply allow states to collect tax on purchases made online if they so choose."

Among the articles concerning the MFA include:

"Do you do at least some of your shopping online? If you’re like most Americans, the answer is “yes.” This leads to my next question: Would you like to pay more for the items you buy?

"I’m guessing the answer is “no.” But if Congress passes the Marketplace Fairness Act, you can expect to see your totals rise when you go to checkout with your online shopping cart."

  • Forbes: Michael Greve, chairman of the board of the Competitive Enterprise Institute and professor at George Mason University, explains the arguments against the MFA. He also points out:

"The debate long predates the Internet – we had the same debate over catalogue sales. Good, bad and idiotic arguments on both sides have been rehearsed time and again. But the Senate’s impending consideration of the Marketplace Fairness Act provides occasion for a few reminders."

  • FrontPage Magazine: Mark Hendrickson writes the Internet sales tax is nothing more than "another assaul on the Constitution." Here is a part of his explaination:

"The reason so many senators favor the Marketplace Fairness Act is simple: State governments are desperate for revenue to fund their ever-escalating expenditures, and their allies in the U.S. Senate are trying to help them collect it. Internet sales in the US totaled $226 billion last year, and a revenue stream that large easily becomes a tempting target for big spenders.

"Proponents of the tax focus on “fairness.”  They claim that out-of-state online vendors enjoy a competitive advantage against local brick-and-mortar companies that must pay sales tax to their state governments, and that this inequitable situation must be corrected. This is economically ignorant. The whole point of economic competition is that some businesses have competitive advantages over others. This gives consumers choices and they end up buying from the businesses that give the most value for the least money."

  • Pajamas Media: Rodrigo Sermeno provides a balanced story, but says the MFA "would allow states to force Internet retailers to collect taxes from their customers."
  • Yahoo! Finance: Reports on a press release from the Alliance for Main Street Fairness (AMSF), which highlights "eBay's hypocrisy regarding the Marketplace Fairness Act, which is scheduled for a final vote in the U.S. Senate on Monday, May 6." For the record, Amazon supports the legislation while eBay opposes it, in case you didn't notice from the press release.

If you oppose the "misnamed" Marketplace Fairness Act, and want to petition Congress, you can do so by signing a Grassfire.com online petition here.

Arlington County taxpayers may want to ask their two U.S. senators and U.S. representative whether they, too, consider the above to be valid cases of waste and abuse in the federal government. You can contact them at:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you! Remind your elected representatives how NRO concluded the first editorial cited above, i.e., "taxation without representation is anathema to all Americans — except, apparently, some of those serving in Congress (including Republicans who should know better), and those businesses that would benefit financially from violating this fundamental principle. It is a bad policy from both the economic and moral points of view. "

UPDATE (5/5/13) In a op-ed, posted today at RealClearPolitics.com, Sen. Ted Cruz (R-Texas) explains why he opposes the Internet tax bill," including:

"Basic tenets of economics dictate that when you tax something, you get less of it. That’s why it’s incomprehensible that the U.S. Senate is moving to raise taxes on one of the brightest sectors of our struggling economy.

"The Internet is a thriving ecosystem of entrepreneurial freedom that should be protected and nourished. It has allowed new businesses to compete in the national marketplace in ways that would have been impossible 15 years ago, and it empowers consumer choice. But tax-hungry politicians view the Internet as yet another source of revenue to bail out their big-spending governments.

< . . . >

Senators who vote for it are voting to impose audits, compliance costs, lost wages, and inefficiency on small businesses in every state. And they are potentially crippling an engine of new job creation at a time of economic struggle. This bill will not create jobs; it will not create new opportunities; and it will not create the economic growth our country needs and our people deserve.

< . . . >

"Naturally, state and local governments are salivating at the prospect of getting a purported $23 billion in new revenue from the private economy. Especially when the out-of-state consumers paying those taxes and the out-of-state businesses owners who collect them can’t vote them out of office."

May 03, 2013

$7.9 Billion of Your Tax Dollars Down the Rathole

Susan Jones reports at CNS News today, "The Social Security Administration (SSA) needs to focus on "program integrity," a polite term for reducing fraud and payment errors, the agency's inspector general told Congress last week." According to the Office of Management & Budget, the terms 'erroneous payment' and 'improper payment' have the same meaning. Jones goes on to explain:

"Reducing improper payments is one of the challenges facing the next SSA commissioner, Patrick O'Carroll, Jr., the agency's inspector general, told the House Ways and Means Subcommittee on Social Security on April 26.

"In fiscal year 2012, the Social Security Administration reported $4.7 billion in improper payments in the Supplemental Security Income (SSI) program, a 9.2 percent improper payment rate. (SSI is funded by general tax revenues, not payroll taxes. It helps elderly, blind, and/or disabled people who are poor.)

"SSA reported $3.2 billion in the Old-Age, Survivors' and Disability Insurance (OASDI) program, a 0.4 percent improper payment rate. (OASDI, funded by payroll taxes, is what people generally refer to as "Social Security.")

"That's a total of $7.9 billion, and it includes some underpayments as well as overpayments." (emphasis added)

Don't you think that after 25 or more years, the federal government would figure out how to stop 'improper payments,' or however OMB wants to define this waste of taxpayers dollars? If you want to ask Virginia Senators Warner and Kaine or Rep. Jim Moran what they are doing about 'improper payments' you can easily write or call them -- just go to yesterday's Growls where I included their contact information.

UPDATE (5/4/13). NebraskaWatchog.org reports (HT to Club for Growth) that state auditors found:

"Nebraska sent $7.7 million in federal energy assistance to residents who weren’t eligible to get the money directly, and some of those $250 and $500 checks were cashed at Walmart, grocery stores, restaurants, paycheck advance stories and a keno parlor.

"State auditors had “serious concerns” that the majority of the 19,000 payments “were never used to pay utility bills,” as intended.

"Auditors also found 261 payments totaling nearly $112,000 were sent to dead people — some who had been dead for well over a year and many whose deaths were known to the state before they issued the payments. State officials said those payments were allowable, since they were meant for the household."

At least the State Auditor fully understands the situation, saying, “It’s not a pretty picture."

May 02, 2013

More Waste and Abuse by Your Federal Government?

The CNS News website carries two news articles that should raise the blood pressure of any hardworking, taxpaying American.

The first article by Elizabeth Harrington reports "(t)he U.S. Department of Agriculture (USDA) is spending $4 million to increase the use of food stamps at farmers markets," claiming it is beneficial to the economy." Harrington adds:

"The $4-million outreach is part of a two-year project that expires Sept. 20, 2013.  With the funds, farmers markets can purchase equipment to accept EBT (Electronic Benefit Transfer) cards and wireless access in order to operate the equipment.

"Already, there are 2,091 farmers markets that accept food stamps, as of April 16.

"These grants increase the availability of fresh fruits and vegetables to SNAP customers and further encourage them to purchase and prepare healthy foods for their families using SNAP benefits,” said Agriculture Undersecretary Kevin Concannon in a press release.

"Concannon also argued that the program is good for the economy, claiming 20 cents of every food stamp dollar spent “ends up in the pocket of American farmers.” The food stamps themselves are initially paid for with money taken from taxpayers and redistributed by Congress through the USDA."

In a second news article, Fred Lucas reports that federal bureaucracy "is spending $355,825 in taxpayer dollars to develop a “culturally relevant stigma-reducing intervention” program for the transgender population in India." Lucas adds:

"The National Institutes of Health issued a two-phase grant to the Ohio-based Baldwin-Wallace College to conduct the study. The first phase cost $173,221. The second phase cost $182,604.

"The reason given for the study is “HIV prevalence is disproportionately high among Male-to-female transgenders (Hijra) in India.”

At the same time, however, in a third article at the CNS News website, Penny Starr reports that while overcrowding is causing prisoners to be released, the Department of Justice (DoJ) says "prisons stand empty, underused." Starr continues:

"The Department of Justice’s Office of Inspector General’s April 2013 report on the Federal Bureau of Prison’s plan for the “compassionate release” of old, sick and low-risk inmates cites cost savings and less crowded prisons as benefits.

"But at a House Judiciary hearing last month, Rep. James Sensenbrenner (R-Wis.), questioned a DOJ official on the status of five federal prisons that were either empty or operating at a reduced capacity"

Arlington County taxpayers may want to ask their two U.S. senators and U.S. representative whether they, too, consider the above to be valid cases of waste and abuse in the federal government. You can contact them at:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you!

May 01, 2013

Overbill Federal Government? Still Get $4 Billion Contract.

Judicial Watch's blog, Corruption Chronicles, reported yesterday the U. S. Department of Defense awarded a $4 billion "no-bid" contract extension to a company that had "'overbilled' taxpayers by $757 million." "(R)ather than severing ties," the Pentagon "rewarded (the company) with more business." Here's some of the gory details from the Corruption Chronicles post:

"The deal, one of the largest U.S. military contracts in Afghanistan, involves a company named Supreme Foodservice GmbH that also provided the same services for British troops in the region. The original U.S. contract with Supreme exceeds $3 billion and dates back to 2005. This month a congressional hearing exposed how the company tried to cheat taxpayers by, among other things, improperly billing for a $58 million warehouse and by charging $12 million to deliver food just across the street from that facility!

"At the hearing, before the House Oversight and Governmental Reform Subcommittee on National Security, the DOD Inspector General provided alarming figures that show agency officials failed to provide “sufficient oversight” of the monstrous contract. As a result, the Pentagon overpaid more than $750 million, including $98.4 million in transportation costs and $454.9 million to airlift fresh fruits and vegetables, according to the watchdog.

"A Florida congressman, John Mica, who sits on the oversight committee, offered this assessment during the hearing. “This has to be one of the prime poster childs for a government contract spun out of control.” The Pentagon’s watchdog made these recommendations, which seem like common sense though they’re obviously not being applied; obtain and maintain adequate documentation to support “price reasonableness,” take additional actions to obtain critical information from contractors and develop strategies to recover overpayments.

"This is hardly the first time that the DOD has been under fire for wasting large sums of money. Just last fall a senate report blasted the Pentagon for spending around $70 billion on dubious projects unrelated to its mission. They include billions on research that has little or nothing to do with national defense or medical needs related to military service, including $5.2 billion study fish that overcome political polarization and $1.4 million to create beef jerky treats."

Kudos to the House Oversight and Governmental Reform Subcommittee on National Security for holding the oversight hearings. And kudos to Judicial Watch for their watchdog efforts.