Economic Pressures On Local Governments
http://thedianerehmshow.org/shows/2012-07-03/economic-pressures-local-governments
Stockton, Calif., is the largest U.S. city to declare bankruptcy, and others could follow. A panel joins Diane to discuss economic pressures on local governments and the push for privatizing public services.
Guests
Michael Nadol
managing director, Public Financial Management, former deputy Mayor, Philadelphia, adjunct professor of competitive government, University of Pennsylvania Fels Institute of Government.
Kim Rueben
public finance economist, The Urban Institute, Washington, D.C.
Harris Kenny
policy analyst, Reason Foundation
Kerry Korpi
director of research and collective bargaining, American Federation of State, County and Municipal Employees.
Comments
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In Ohio the Republican controlled State government has given a series of tax breaks to corporations and the wealthy.These cuts were supposed to create jobs,instead we got an $8 billion deficit hole,and lost 500,000 jobs. This void was filled temporarily by spending our "Rainy Day Fund",and adding a huge tax on cigarettes.Now they`ve turned to selling and leasing the People`s Assets.Leasing drilling rights in State Parks,leasing the Ohio Lottery,the Liquor Control,some prisons,and intend on leasing the Ohio Turnpike,that will double the rates.Even returning Pay Toilets at Ohio`s rest stops. Now even more tax breaks like the 'Estate Tax' cuts have the Republicans confiscating tax revenues created for use by cities like the 'Commercial Activities Tax'. These taxes were voted on by Ohioan`s using a prescribed distribution of those taxes. With a corrupt Ohio Attorney General,who refuses to do his job,the people continue to get screwed. To fill some of the void,Cleveland now will charge residents for garbage pick up,a service they`ve already paid for. The T-Party in Ohio is forcing cuts to teachers,cops,fire,all services including the courts.
Bottom line,taxpayers must pay twice for the same service. Once for the service provided.And a second time for a Small Government Corporate replacement and Millionaire Subside.
same post as nohoplophobe.
Mr. Arkus Duntov.Please read your own comment. Understand what you`ve written....PLEASE>>> The $8.Billion hole was filled with T-Party LAYOFFS !!!! The hole was originally created by the series of 4 cuts by Gov.Bob Taft beginning in 2005, designed specifically for corporations and the rich. The final cut was to go to the people,but it was cancelled,we are too broke.
We gave Corporation after Corporation millions of taxpayer dollars in extortion payments. "GIVE US MONEY,OR WE MOVE",only to read how 6 months later that same Corporation is moving jobs anyway.
"In 2003, Taft signed legislation enacting the largest tax increase in state history. Taft was criticized during his tenure for permitting state spending and state taxes to rise. The Taft administration ultimately presided over the largest increase in education funding in state history".
Your saying this is the candidate that was supported by the Tea Party? Taft was a rino. Besides the Tea party as we know it today did not exist then and there is no way they would have supported a candidate with this record.
http://www.toledoblade.com/business/2011/03/20/How-tough-is-Ohio-s-tax-b...
Local business owners say the primary levy on business, the Commercial Activity Tax, has done more harm than good since enacted in 2005 under Republican Gov. Bob Taft.
"It's a double tax," said Charlie Marshall, president of Grismer Tire in Dayton and a Kasich supporter. "You get charged $2,600 for every million in gross receipts despite whatever profits you have. Then on top of that, a lot of business owners are getting taxed on their own personal incomes."
The tax generated $1.3 billion (8 percent of the state's general fund revenue) in fiscal 2010. It replaced the Tangible Personal Property Tax, levied on inventory and equipment. Big manufacturing companies heralded the change; smaller retail businesses and grocery stores protested.
"It's a deterrent to most businesses," said Aaron Delidow, co-partner of the business brokerage firm Provest Properties Inc. of Dayton. "It forces small businesses to carry a higher tax burden. Add federal, state, and local taxes up, and you can easily have a small business owner making $250,000 a year with a 40 percent tax burden."
Does Ohio produce financial statements?
Again Mr. Arkus Duntov,read your own words.Try to understand what you are saying. YES,the Bob Taft increases were the largest in my lifetime, at any level. But those increases didn`t crash Ohio`s economy. The TAX CUTS of 2005 DID. The REDISTRIBUTION of WEALTH,aka SUPPLY SIDE ECONOMICS ......ALWAYS FAIL....IN EVERY COUNTRY.
By the way,did you read the article you added a link to? It says the tax cuts did more harm than good.
I am one American bored with the right wing loony names changes. T-Party,Republican,Libertarian,Conservative,Democrat,Tory,Strict Constructionist,Confederate,Federalist.You don`t have to sell me you`re all the same.
Patsy Nomore wrote: "By the way,did you read the article you added a link to? It says the tax cuts did more harm than good."
Better read that again Patsy, cuts? looks like a tax redistribution scheme!
"Commercial Activity Tax, has done more harm than good since enacted in 2005 under Republican Gov. Bob Taft".
Patsy Nomore wrote:' But those increases didn`t crash Ohio`s economy. The TAX CUTS of 2005 DID"
Can you show some proof of this? You apparently are not seeing anything you disagree with, in fact it looks as though your looking at things through an ideological prism.
Quotingnohoplophobe:
'Patsy Nomore wrote: "These cuts were supposed to create jobs,instead we got an $8 billion deficit hole,and lost 500,000 jobs"
You have that backwards, the $8 billion deficit is what caused the need for the cuts and layoffs.'
Sorry, but you're the one that has it backwards. Our forebears developed a model for running public services that worked. It worked, that is, until the wealthy embarked some 3 decades ago on a slow coup d'etat that gradually demolished the progressive tax structure and pushed onto the middle and working class more and more of the burden of maintaining these services. Don't say this is all about local govt. It isn't because our compel society because there's a balance of federal state and local money to keep local govt. running, and as more of the burden is pushed down to the local level it puts pressure on local taxes. This automatically hurts the poorest areas.
mancuroc wrote: "Sorry, but you're the one that has it backwards. Our forebears developed a model for running public services that worked.'
That is a baseless ideological belief.
Our T-Party Governor,John the "Flim Flam Man" Kasich gave Bob Evans Restaurants $ 8 Million Ohio taxpayer bucks. They turned around and announced the move of 110 Ohio manufacturing jobs to Texas.Thanks a lot. Ohio taxpayers are out the tax dollars,the jobs,and the cops and teachers laid off to pay for this folly.This scenario is like "Ground Hog Day" and repeats itself continually.
Whether you call it Corporate Welfare,or Corporate Extortion,it DOES NOT WORK !!!
2001 brought us a 2 trillion in missing dollars debacle...poof, just gone!
2008 we gave in to financial, banker terrorism with the bailouts!
qe1,2, twist....and soon coming qe3!
JPMorgan, caught cooking books!
Barclay, caught cooking books!
Jon Corsi caught, stealing Billions!
On and On and On.....efing amazing
I wonder why shows like these continue to ignore how the Banking Criminals are staging a financial coup against the american public ..... and yet the media continues their blatant cover up to hide their complicity with this, the largest fascist country the World has ever known..
Question: when's it going to stop?
Answer: not until All of America goes Bankrupt!
You know a point is useless when there is a need to insert emotionalism. So a public sector worker feels 105 degree temperatures differently than private sector worker?
I see we have the propagandist from AFSCME on the show, defending the rip-off of the taxpayers.
What is truly needed is a hard cap on what can be spent - the property tax should be capped at 1% everywhere in the U.S., and the city public employee (including teachers) budget should be capped at a very low percentage of the total city budget.
The model in too many places is that the teachers and other public unions' benefits have been cemented in place through the corrupt relationship between the Democrats and the various union interest groups, making it difficult, as the rip-off artists intend it to be, to reduce costs to avoid bankruptcy.
The other half of the main problem is the lifetime pensions - those have to go and be replaced with 401k's.....then the city is always up to date and the promised funds can't be raided - they won't exist.
My advice is to leave these stupidly high tax districts - I myself have reduced my property tax liability to less than 1/10th of what I was paying. So far, I have saved $30k.
It's really like a double bonus, since I wasn't getting anything for that money before. Hmmm...tough choice, keep my money, or waste it on over-priced government and public union employees, especially teachers.
Anytime 2 or more people act to spend someone else's money fraud is the inevitable result. When local governments negotiate with their unionized employees ...
The workers here were bolstered by the community that understand and appreciates their contributions. The union won a new 3 year deal, but with concessions:
http://www.wickedlocal.com/billerica/news/x1221866507/Budget-gap-not-yet...
urbanrage wrote: "cooking books"
just curious rage, why don't you mention the biggest book cooker of all time, the United States Federal Government?
I live in Detroit. I am a retired city worker. The banks created the global economic crisis, now they want us to pay for it. The population of Detroit declined because there are no jobs -- the auto industry automated and moved away from urban centers. The property tax revenue is down because the banks foreclosed on the sub-prime loans disproportionately sold to Detroiters and mortgages in general that were sold for the fees generated in the financing of the overproduction of housing. All the while the banks want to get their money first. The crisis is theirs not our. Our lives are short compared to corporations and banks -- it shouldn't be on our backs. Pay the workers and communities, not the banks.
I do not have a problem when the T-Party says,cut workers wages. I do not have a problem when the T-Party says, end unions,no more pensions. I really don`t. My problem comes with the results. Will the American people be better off ? NO! Will taxes down or go away? NO,they go up to most Americans in the 9/9/9 NeoCon scheme. Will our children be released from our debt? NO,the deficits continue to rise at ever faster rates.
Nothing in the NeoCon plan is good for people who work for a living.NOTHING....If you like BAD,keep sucking the T-Party Kool-Aid.
So... There are a few things I would like to point out about pensions. I wonder if you know that many public employees do not get Social Security (a government defined benefit pension that even private sector workers get). You would like to replace their version of Social Security with a 401k. Did you miss what just happened to most people's 401k accounts in the last few years? If I'm not mistaken they lost a bunch of money. If you shift the burden to the employee and they end up with not enough money to buy food/pay rent/go to the doctor/etc. what do you think happens then? Do they starve in the street? Likely not, instead they will probably use some form of public assistance. If that is the case you have not eliminated the burden on the public budget, you have just shifted where the money comes from.
For more information on what happened before we had pensions see: Social Security History, Brief History Essay http://1.usa.gov/N8tQwc
Also interesting reading: Social Security Legislative History http://1.usa.gov/MRz1Ow (I recommend reading the hearing transcripts!)
Another issue is that the city made promises and obligations in the past and now wants to fold on those obligations. You do realize that they made a contract with their workers right? Does the bank understand when you signed a contract to purchase a house you can no longer afford? Does the credit card company understand when you run up a large bill and can no longer afford the payments? Do you expect them to? Then why are you expecting a public employee to be more understanding than the bank or the credit card company? Is it because they are a person and not a company? Because you think a company has a right to have a contract honored and a person does not? I never really understood this line of thinking.
Why is it that when a Republican breaks ranks and fails to fall into lockstep with the rest of the conservative clones, he/she is immediately labeled a "RINO" ? That's just WAY too easy. No wonder all the conservative bloggers have identical posts......even to the point of replying by pointing to someone else's entry. Toe the line or hit the trail.
There seems to be no similar perjorative for Dems that act out of the expected tracks. If Dems can put up with Nelson and Lieberman without inventing a similar tramp-stamp, the Repubs should be able to handle occasional fence jumpers.
Imagine what it might have been like at the formation of Congress when no real parties existed yet and there were no PACs or Grover Norquist or NRA or Koch brothers to whip the parrots into line.
We all long for true statesmen.
"Book Cookery" occurs in both Republican and Democrat controlled Congresses and administrations at Fed and state levels.
e.g. Medicare Part D ...... not entered into the budget
e.g. Afghan War............. not entered into the budget
e.g. Iraq War................. not entered into the budget
e.g. 10+ year tax cuts..... not entered into the budget
e.g. property tax caps..... not entered into the budget
The omissions were budgetary devices invented by Mitch "The Blade" Daniels, now Governor of Indiana. He recently pushed through the anti-union law to make Indiana a Right To Work state again (this was also an experiment tried in earlier years and tossed).
Note: Mitch "misplaced" 200 million in a clerical error back in 2010, then "misplaced" another 300 million in a "computer glitch" last year.
Anybody see a pattern here?
LibVet wrote: 'Why is it that when a Republican breaks ranks and fails to fall into lockstep with the rest of the conservative clones, he/she is immediately labeled a "RINO" ?'
It's not a failure to fall in lock step, it's a failure to follow the very basic principles of conservatism, limited government and fiscal responsibility.
Personally I am a libertarian but I have first hand knowledge many conservatives were quite disgusted with the Bush administration and the Congress that supported his brand of "conservatism" I would certainly brand him a RINO. Although the tea party is perceived as entirely a reaction to Obama the truth is they were for the most part disgusted with Bush as well, I am sure you have noticed the fits they have been causing for incumbent republican candidates nation wide. The conclusion is the republicans are not all marching to the same tune as you suggest.
Civil Service was instituted in the 1870s in this country and we have never succeeded in fixing it. I was in the K-12 public schools for 6 years. Last year the union voted, almost to a person, to insist on their contracted 4% raise which even though it meant a layoff of 6 teachers. If they had, instead, accepted a 3.5% raise, there would have been no layoffs. Even with a 3.5% raise, which many of the residents did not enjoy in their private sector jobs, the property tax levy increased by 7.5% because of pensions and healthcare costs. Previous administrations had promised teacher retirees that the school system would fund 66% of all retiree health care for life for a profession that works 9.5 months of the year. Where is the sanity in that?
As for the NY City fiasco in the early 1970s, I was there. The "bailout" did not come from New York. It did not come from the Feds (President Ford refused. The NY Daily News had a famous headline about that, "Ford to City: Drop Dead"). That bailout came from a very smart Union boss named Albert Shanker, the New York State Teachers' Union president. Shanker used $150 million from the Union's pension fund to buy Municipal Assistance Corporation bonds to help bail out New York City. How many Civil Service Unions would do that today? Just look at Stockton, CA, Viejo, CA, Central Falls, R.I.
Say what you want, but with the pensions and health care costs that most Civil Service Unions have "negotiated," far outpace those in the private sector, and has for many years. If you add up the values of those benefits, the "we took less in salaries for these benefits" argument just falls flat. Total compensation for civil service union members more than makes up for any salary loss. That is precisely what the citizens of San Jose, CA decided just recently, and you could hardly call that city a hot-bed of the Tea Party.
Sure there is, LibVet. They're called "Conservatives"!
Ali sez "If I'm not mistaken they lost a bunch of money. If you shift the burden to the employee and they end up with not enough money to buy food/pay rent/go to the doctor/etc. what do you think happens then? Do they starve in the street? Likely not, instead they will probably use some form of public assistance. If that is the case you have not eliminated the burden on the public budget, you have just shifted where the money comes from. "
Fine. Good. Move them into Social Security. As to whether they have more assets than SS in retirement, they will have to plan for it, like everyone else.
This business of regular folks paying $5k, $7k, in property tax may not hold up, and it shouldn't.
These runaway costs for the school systems need to be brought sharply under control. The corrupt relationship between the Democrats and the teacher's union is responsible for these high property taxes, but it ain't my problem.
Hopefully, other states will heed what Indiana has done, and cap property tax at 1%.
Boy, would there be a lot of screaming in the Chicago area! Well deserved, too.
Smoot,
Maybe you should consider changing your ID to LittleDickens or Ebenezer.
"Are there not workhouses?" "Let them be quick about it and decrease the surplus population."
Your compassion for your fellow man is amazing. Maybe you could call yourself Swift and make a proposal like Jonathan did to the English about Irish kids.........eat them.
ecgberht,
Correction:
You can soon call Herr Lieberman "ex Senator" .
Arkus,
Ironically, you guys DID fall into lockstep about the mandate decision. Ready? Column left, Ho! By the right flank, harch!
@Arkus Duntov
"That is a baseless ideological belief."
No, just fact. You and your allies tend to confuse the two.
Cheryl LaBash wrote:
"I live in Detroit. I am a retired city worker. The banks created the global economic crisis, now they want us to pay for it. The population of Detroit declined because there are no jobs -- the auto industry automated and moved away from urban centers. The property tax revenue is down because the banks foreclosed on the sub-prime loans disproportionately sold to Detroiters and mortgages in general that were sold for the fees generated in the financing of the overproduction of housing. All the while the banks want to get their money first. The crisis is theirs not our. Our lives are short compared to corporations and banks -- it shouldn't be on our backs. Pay the workers and communities, not the banks"
Cheryl: FYI, Detroit was way before this situation with the banks struggling going down. Where was Detroit when the auto industry was mighty, after all the unions were getting everything they wanted in diversifying to attract new business?. By the way Detroit has always been run by the Democrat Machine, where were they?
Happy 4th of July all! for you progressives it's a day of shame for the rest of us it's a time to reflect on all we have lost and hope to get back.
I was a Level III program manager (highest level) for the federal government, managing a program of $365 million. I was very fortunate to have a talented and innovative contract manager. I have to say, though, that this is rarely the case at the federal level, and even more rare at lower levels of government.
Contracting (outsourcing in this case) is very difficult to do well. The deck is stacked in favor of the contractor, and very few people in government are adequately trained to do it. The same holds true for contract management, which requires a related but different set of skills.