County Taxpayers to Bankroll Risky Businesses

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.

Windpower Boondoggle

The fate of Governor O’Malley’s windpower boondoggle is  now in the hands of the Senate, as the House has passed the Maryland Offshore Wind Energy Act.  Although the envisioned project is relatively small, the corporate welfare effects are among the largest that the General Assembly has considered.   [Let’s define corporate welfare effects as the net loss to residents:  Amount of public money that will be fed to the well-connected corporation + other losses to residents.]

The bill creates an “Offshore Wind Business Development Fund”, funneling $17.7 million into the pockets of the project developers over five years.  Furthermore, according to the analysis of the State’s Department of Legislative Services,  both state and local expenditures  are expected to increase “significantly beginning in FY 2017 due to higher electricity prices.”

Sounds like a real win-win proposition, doesn’t it?  Only if you are one of the lucky developers poised to rake in both state subsidies and higher rates from the ratepayers, and then get further subsidies from taxpayers to cover the overruns.  For those corporations, it’s a guaranteed gain. For the ratepayers and taxpayers of Maryland, it’s a guaranteed loss.

When is a Library Not a Library?

(Multimedia would be nice.  I’d like to be able to read that title in the voice of Frank Gorshin. )

Just like the Fillmore project – hell, just like every county project, the new seven-story Silver Spring “library” is already over budget – and construction isn’t due to start for another year, at least.  The budget for the project is $63.7 million.

The library space itself – and I love libraries — is questionable.  The space for the library is not twice, not thrice, but five times larger than the current Silver Spring library.  Just how large is the book collection compared to the book collection at the current Silver Spring Library?

But the library space is the minority of the project.  More than half the floors in the building are to be dedicated to non-library uses.  The building will have an art gallery, county offices, public meeting rooms, a coffee shop — a coffee shop! — , subsidized space for some community groups, and – oh, yes – a library.

So why call it a library?  Because, like schools, it’s easier to build public support for a ”library” than for another unneeded county office building, and purchasing support for subsidized space for politically connected community groups.  (How many civic buildings does that make in Silver Spring alone?)

So rather than calling it a seven-story high monument to wastefulness, it’s called a “library.”  Of course, calling it a library doesn’t make it a library.  The Pentagon isn’t a restaurant just because it has a cafeteria.

Welfare for Westfield and Costco

A huge portion of federal government expenditures (close to half) consists of robbing Peter to pay Paul.  It is not nearly as large a part of the MoCo budget, but it’s still significant.

The County Council and the County Exec are now scuffling over how much tax money to give away to politically favored private companies.  Leggett wants to give away $4 million to the Westfield corporation, which in turn would be used to bring Costco to Wheaton Plaza.  Westfield is in tight with the county, having previously been fed $6 million to build a garage at Wheaton Plaza.

The money comes from the Economic Development Fund Loan and Grant Program, which has given out about $25 million to well-connected businesses in the county such as Marriott and others.   In difficult financial times, Ike is proposing to increase this corporate welfare spending by 447% in FY 2012.  The budget target for the Economic Development Fund is $4.92 million;  in the current year, spending is budgeted at $1.53 million.

The County Council voted this week to go with Leggett’s proposal to give the four million to Westfield.  The floodgates are officially open.

Parents’ group lobbies for higher taxes; Barve seeks to oblige

Parents are the most highly subsidized group in Montgomery County.  They get an annual gift of over $20,640* per child from the taxpayers (Okay, it’s not really a gift if I am forced to give it to you, but let’s leave that aside for the moment).  The Gazette reports on a group of parents who thinks that isn’t enough.

They are complaining about small fees charged by schools for extra expenses, supplies and equipment associated with certain activities.  These fees are generally charged for workbooks (which can’t be shared with the next year’s students), , materials for art and photography classes, food costs for international cooking classes, calculators, and other costly “extras.” Right now, these are considered to be incremental activities (beyond the school curriculum and resource base) and students are asked to pay for these additional expenses – if they can afford it.  If they can’t, the school system provides these add-ons for free.  The charges are generally small (less than fifty dollars), but these parents aren’t complaining on the basis of the burden.  They insist that everything provided through the school system should be completely paid for through taxes.   One parent showed up at a school board meeting to request a refund of $8 in towel fees paid for her high school teenager.

Montgomery delegate Kumar Barve seems to have been inhaling the populist air from Denver and St. Paul.   He is seeking to propose a bill that would make it illegal for school systems to charge students fees.  His rationale: “The purpose of public school education is to allow each child to get a great education regardless of their economic background.”  But since everyone gets these services, whether they can afford it or not, no one is being deprived right now.  The only issue is whether parents should bear any portion at all of the costs of extra activities for their children.  For some parents – and for Delegate Barve – the apparent answer is “no.”

*That’s a school operating budget of $2.067 billion, plus capital budget of $778 million, serving 137,763 students this year.