Can’t Stop Spending that Cash of Yours

Posted 18 April 2013 by Zinzindor
Categories: Budget and Taxes, County government, Montgomery County

Okay, I don’t really feel all that much sympathy for the county executive.  But watching Ike Leggett maneuver is a little like watching a Buster Keaton movie;  “Oh, no, he’s about to walk under that falling piano!”

Just a couple of weeks ago, Leggett put out his proposed budget for the upcoming fiscal year (2014), detailing plans to (what else?) increase spending and (what else?) increase taxes.  He proposes to increase property taxes by 2.2%.  As the average tax bill in the county is about $4500, that is roughly an additional $100 per household annually.  (You’ve got that just lying around, don’t you?)

Furthermore, he’s is proposing to extend the “temporary” energy tax once again. According to legislation passed two years ago, residential energy taxes are scheduled to go back to 0.5 cents per KWH; instead, they’ll more than double.  Business rates are scheduled at 1.3 cents per KWH; instead, they’ll almost double.  Again, we’re talking hundreds of additional tax dollars to the county, which every home and business has to spare right now because we’re in such flush economic times.

Leggett also proposes to increase spending by $190 million (4.1%) this year, after an increase of $199 million the previous year.
Now comes the County Council budget analysts, who tells us that after increasing spending by $390 million over these two years, the county budget will have a $300 million deficit the following year.

Kate Jacobson, what will I do without you?

Public Service Commission Doesn’t Help the Public

Posted 15 April 2013 by Zinzindor
Categories: Maryland, Regulation

Tags: , , , ,

Nearly a year after the dreadful power outages of the 2012 derecho,  the Public Service Commission has finally taken decisive action, to show how well government can regulate utilities to protect consumer interests.  They’ve decided … to do nothing.

They did, however, note “a significant and unsatisfactory disconnect between the public’s expectations of the distribution system reliability… and the ability of the present-day electric distribution systems to meet those expectations.”

There are two basic ways to ensure that service providers are aware of the needs of their customers, and remain responsive to those needs.  One way is to promulgate and enforce government regulations on the service providers.  The other is to have market pressures and competition as the hammer to induce businesses to meet customer needs efficiently and effectively.

Once again, then, we see the impotence of government regulation when it comes to protecting consumer interests  Contrast it with the consumer sovereignty in a market system.  When products or services don’t meet their expectations, consumers don’t meet for a year to decide to do nothing.  They don’t need to become experts in the ins and outs of distribution systems and economic regulation.  Instead, they simply move their business elsewhere.  The state of Maryland should be focused on revamping the regulatory system to resemble a real market with choice, to enable electricity customers to do just that.

Damn the low-income residents and the jobless: Anybody but WalMart!

Posted 10 April 2013 by Zinzindor
Categories: local government, Montgomery County, Regulation, The War on the Poor

Tags:

The building on the corner of Connecticut Avenue and Aspen Hill Road in Aspen Hill has been empty for three years.  At the same time, downcounty residents have been looking forward to a WalMart opening in the area, where heavy discounts on household goods and groceries would be available.  And to complete the confluence of opportunity and fortune, Walmart is interested in occuping the space, which would establish dozens of jobs.  Sounds like a fortuitous win/win/win situation, right?  Who could oppose this?  Councilman Craig Rice, who is often looking out for the interests of low-income residents,  is eager to see it happen.

But Councilman George Leventhal, who is often looking out for politically popular causes, is trying to stop it.  After all, criticizing Walmart is all the rage among Leventhal’s upper-income constituents.  It’s chic to oppose the lowbrow store, which doesn’t serve gourmet fair trade chai or organic truffles.  Leventhal complained that “the county has not had a chance to weigh Walmart over other potential uses for the land.”

It’s been three years, George, and no one else is moving in there.  Yet he continues to block the approval process, hoping that someone more tasteful might be persuaded to move there.

What To Do About the Bag Tax?

Posted 7 April 2013 by Zinzindor
Categories: County government, Regulation

Tags: , , , ,

What do do about the bag tax?  The County Council is currently considering the question, including options for expanding the tax, increasing it, reducing the types of retail locations which must charge it, and banning plastic bags completely.
MoCo reports that the county has taken in about $2 million from the bag tax, much more than had been expected.  This demonstrates that some combination of the following conclusions is true:

(a) shoppers find bags to be convenient, and are willing to pay for them

(b) grocery shoppers have learned that plastic bags are a more sanitary way of carrying food, and are seeking to avoid the bacterial diseases associated with reusable bags

(c) the bag tax, in the end, has just been a way to raise revenues for the cash-strapped county government.

The negative effects of the bag tax are beginning to pile up:

- Retail thefts and shoplifting have surged in areas where bag taxes are put into place, as it becomes much easier for shoplifters to pilfer merchandise and slip it into the shopping bags they are already carrying.  This phenomenon seems to be found wherever bag taxes (or bans) have been put into effect.

Council member Craig Rice has noted a corollary to this problem.  As department stores have become suspicious of people walking around with roomy bags, racial profiling leads to more black men being stopped and interrogated by store security personnel.

- Theft of supermarket grocery baskets has increased. Apparently, people figure that they need a convenient way to carry their purchases, but don’t want to pay extra for bags.

- Most distressingly, researchers are finding evidence of illnesses associated with these bans.  This was predictable, as shoppers are carrying fresh meat, vegetables, and fast food fried chicken and hamburgers in these bags, over and over again.   Even beyond microbial contamination, reusable bags often have toxic materials, like lead, that leach into the food people carry. Senator Charles Schumer of New York has called for a federal investigation of this problem.

One-use bags are also more sanitary.  Since people tend not to wash their reusable bags, they increase the risk of food-borne illness.  Studies of San Francisco, which banned plastic bags in 2007, reported that after the bag ban there was a spike in the number of E. coli cases and increase in deaths from foodborne illnesses.  Another study found that 8 percent of all reusable bags contained E. coli and doubted how often shoppers actually wash their bag.

- Finally, the environmental impacts of the bag tax are at question.  There is anecdotal evidence of reduced bag litter in the county’s waterways, but increased litter from bottles and food packaging, which is harder to carry without a bag.  The bag tax, in effect, creates an incentive for increasing this kind of litter.  Not only that, but the tax increases total resource consumption.  People tended to reuse plastic grocery bags for dog waste, lining trash baskets, etc.  The National Black Chamber of Commerce notes that consumption of store-bought plastic bags increased by 400 percent in Ireland, after that country implemented a bag tax.

The bag tax is a classic example of unintended consequences of legislation.  (OK, that’s a generous term.  I’d say it is an example of a failure of policy analysis).  Unless bringing in more revenue for the county government was the main purpose,  the tax is doing much more harm than good.  Certainly expansion of the tax (or a ban) would be even more harmful.

MCPS Superintendent Joshua Starr and Charter Schools

Posted 24 March 2013 by Zinzindor
Categories: charter school, County government, Education, Montgomery County

Tags: ,

Is MCPS superintendent Joshua Starr being hypocritical? He recently wrote in Education Week praise to a Boston pilot school. (Pilot schools are very similar to charter schools, but have somewhat less flexibility in teacher pay and seniority rules). He praised the autonomy given the principal and teachers, and the results of a tailored education that flexibility gives to meet the needs of the students.

Joseph Hawkins notes on Patch that this is nothing new for Starr; he has offered admiration before for progressive schools and others that provide a more flexible approach than that mandated within strict MCPS guidelines. That’s all well and good – but it appears to be just talk. He has spoken out against charter schools, in the fashion of Henry Ford’s dictum about car colors. Everybody should be happy with what MCPS provides – nothing better or different is necessary.

If charter schools are going to be given a chance in Montgomery, they will have to overcome the “one-size-fits-all-and-you-should-be-grateful-we’re-giving-you-this-much” attitude of the teachers’ union and the MCPS leadership.

County Taxpayers to Bankroll Risky Businesses

Posted 12 March 2013 by Zinzindor
Categories: Budget and Taxes, Corporate Welfare

Tags: ,

The Planning, Housing, and Economic Development committee of the County Council approved Bill 3-13 on Monday, allowing the county to funnel taxpayer dollars into private companies.  The bill would allow the county to own as much as 25% of selected businesses.

Private firms can get money from banks or venture capital sources.  Why would they choose taxpayer dollars instead? Either they have been unable to raise money from those private sources, or it’s a cheaper source of capital.

Taxpayers would be dragooned into providing a capital subsidy to private enterprises.  The possible outcomes are limited. Either the public subsidy helps the company succeed over its less politically favored competitors, or the judgment of the banks and venture capital firms is vindicated, and the company fails (taking the taxpayers’ money with it).

Neither one is fair, just, or sustainable.

Executing the Death Penalty

Posted 8 March 2013 by Zinzindor
Categories: Crime

Tags:

Kudos to the Senate (and to the governor) for passing the bill to eliminate capital punishment in Maryland.  Now let’s see it get through the House of Delegates.

Only people with extraordinary faith in the wisdom and competence of governmental administration can believe that the state can carry out executions justly, fairly, and unerringly.   They also need to be blind to the evidence of horrible miscarriages of justice, and innocent lives wasted or taken.

Fortunately, I’m not tainted by such blind faith in the wisdom of the state.

 


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