Monday, June 21, 2010

Boondoggle bill comes due

The Hamilton County Tax Levy Review Commission will be meeting at 138 East Court Street, 6th Floor, today, Monday, June 21 at 4:30pm: The purpose of the meeting is a public hearing to hear comment on options to address funding gaps in the "Stadium Fund" that have been presented during the past month by Commissioner Pepper, Commissioner Portune and Commissioner Hartman.

With the understanding that many things must happen to close the deficit, including help from the Reds and Bengals and some projected money beginning in 2013 from casino revenues, Hamilton County is responsible for payment on the construction bonds that were issued to build the baseball and football stadiums and other boondoggles such as the National Underground Railroad Freedom Center and Riverfront Transit Center. Defaulting on the bonds or on the baseball or football team contract is not an option as the contracts appear to be legally solid and Hamilton County does need to pay its' bond debt. Generally, and somewhat subject to negotiation, the options are:

A)  reduce, but not eliminate the "Property Tax Rollback" (PTR)  that was promised to Hamilton County homeowners in 1996. This PTR gives some money back to Hamilton County residents when they pay their semi-annual tax bill, but does not give any money back to residents of other counties that make taxable purchases in Hamilton County. Because of the PTR to Hamilton County residental homeowners, the net burden of paying the debt is somewhat spread out among our neighboring counties.

B) A 1/4% or 1/2% addition to the Hamilton County sales tax rate for a limited number of years (10 years or 5 years) to make up the deficit.

C) Eliminate the Hamilton County contribution to University Hospital beginning after the end of the current Health and Hospitalization Levy (end of 2011). This option would reduce the amount of the Health and Hospitalization assessment beginning in 2012 for all taxable business and residential properties.This option would also include a reduction of the PTR that was promised in 1996, so the net effect for residential would be that the homeowner would see less of a PTR on their tax bill, but would also pay less tax due to a lower Health and Hospitalization assessment. Business properties would benefit from a lower property tax bill because of the reduction in the Health and Hospitalization levy. This option also considers that  University Hospital might be kept somewhat whole as funding responsibilty for care shifts from local to federal dollars because of the National Health Insurance bill that was passed in congress and signed by President Obama. In theory, National Health Insurnace will cover everyone. Since funding for care of those unable to pay may become the burden of the federal government,  should local taxpayers continue to contribute to University Hospital?

All three options are being discussed by the commissioners and nothing has been decided yet.Comments are welcome. The meeting will probably last about 60-75 minutes.

The Enquirer article on the topic is here. COAST's position is as follows:

1)      First and foremost, the terrible choices we have relating to the Stadium Fund arose not just from the recession as the media and politicians keep telling is, but rather from unrealistic income expectations and massive over-spending in the Stadium Fund.
2)      This has been exacerbated by continued spending from that fund by Commissioners Portune and Pepper, money for attorneys, money for Banks development, money for the Riverfront Transit Center.
3)      In addition, general fund monies and special fund monies that have been mis-directed over the past three years could have been applied to this problem if that had not been squandered
a.       The most prominent of these is the $3 million per year excess in the Convention Center Expansion fund (Transient Occupancy Tax) overage.  Those monies going forward still have not been accounted for properly.  Why not apply them to this problem?
b.      This was squandered, among other things, on the Film Commission
4)      So, there are important lessons out community can learn about pie-in-the-sky projections from politicians and economists that just don’t pan out.  Let’s not make these mistakes again
a.       The most prominent of these is, of course, the Cincinnati Trolley, but there are more.  There are always more.
5)      The property tax rollback (PTR) was a solemn promise to the voters when the tax was enacted.  It must be kept not just as a matter of fiscal policy, but as a matter of civic integrity.
6)      Moreover, the Pepper plan to eliminate part of the PTR is simply dishonest as it provides no long-term relief to the problem; it is a Band-Aid of a fix.
7)      Any tax increase, whether eliminating the PTR or a sales tax increase should be placed before the voters as a choice.
8)      We propose that the County cut over-spending in the general fund and use that surplus to continue to fund the PTR  
Where to cut?  The County Commissioners should not have disbanded and should re-empanel the managed competition committee to ferret savings from a wasteful County bureaucracy.

Wednesday, June 16, 2010

When taxes rise, money takes a hike

Low taxes, warm sunshine and deep discounts on real estate. No wonder IRS data shows the wealthiest among us are headed south.

Surprise: America's wealthy like warm weather and low taxes. That's the takeaway from IRS data, analyzed by Forbes, on moves between counties. They looked for counties that the rich are moving to in big numbers.

Topping the list: Collier County, Fla., which includes the city of Naples. Texas is also a popular destination. Portland, OR (genuflect when you say that) did not make the list.

The dominance of the list by Florida and Texas--the former has eight of the top 20 counties, the latter four-- makes sense to Robert Shrum, manager of state affairs at the Tax Foundation in Washington, D.C., since neither state has an income tax. "If you're a high-income earner, then that, from a tax perspective, is going to be a driving decider if you're going to move to one of those two states," Shrum says.

After accounting for property taxes, Shrum's analysis shows that Texas has the fourth-lowest personal tax burden in the country, and Florida has the eighth lowest. Shrum also points to eight states that have targeted wealthy households with extra-high tax brackets: California, New Jersey, New York, Maryland, Hawaii, Oregon, Connecticut and Wisconsin. Six of the top 10 counties the rich are fleeing are located in those states.

Read more at Forbes.Com.

Thursday, June 10, 2010

After $17 million, spigot for Democrat Commissioners’ outside counsel is cut off

Will someone, anyone stop them from wasting our money, please!

More than two years ago, Prosecutor Joe Deters noted that the democrat Commissioners were wasting money on their political advisor and outside legal counsel, Tom Gableman and the firm of Vorys, Sater, Seymour & Pease.  He asked repeatedly and politely for the Commissioners to properly supervise the work of the Vorys firm, and to rein in the spending.  Because the Commissioners were also getting free political counsel from the Vorys firm, the democrat Commissioners refused.

In October of last year, at Deters’ request, 12 of 13 Judge on the Common Pleas Court signed an Order terminating the Gableman/Vorys relationship.  Over the next few weeks, the Commission held a series of illegal secret meetings that culminated in Portune and Pepper voting to hire themselves as attorneys to represent the Commission in a lawsuit against their own Common Pleas Court Judges at the Ohio Supreme Court.  This suit has eaten up hundreds of thousands of dollars in legal fees on both sides.

Wednesday, the Ohio Supreme ruled that the Pepper/Portune suit was filed in the wrong Court (great legal work David and Todd!) and lacked merit.  In short, the Common Pleas Court Judges were correct in terminating the Vorys relationship.

So, Messrs. Pepper and Portune, the fountain of taxpayer funding for your political consultants has been cut off.

COAST extends a hearty “Thank You” to Joe Deters for taking on this fight to cut off this waste of tax moneys!

Tuesday, June 8, 2010

Kasich captures lead on "no new tax" pledge

John Kasich had been trailing Ted Strickland in the polls by 5 or 6 points for several months in the Ohio Governor's race.

Then he signed the Taxpayer Protection Pledge from Americans for Tax Reform, promising to oppose and veto any and all efforts to increase taxes.

Now the latest Rasmussen poll has Kasich leading Strickland by 5 points. The magic of fiscal conservatism works every time it's tried!

Monday, June 7, 2010

Hartmann Directs Obamacare Dividend to Local Benefit

County Commissioner Greg Hartmann is proposing to redirect $22 million of indigent care levy funding to bail out the bankrupt stadium fund. He is the only commissioner so far who has presented a well thought out, workable plan for this, and the only one who has committed to fixing what's broken without doing further harm to peoples' budgets through tax increases. He should be applauded for his effort.

Hamilton County's indigent care levy is a leftover relic of a bygone era when we had to care for our own. Recently Congress passed Obamacare making it illegal for insurance companies to deny coverage for pre-existing conditions, requiring every american to purchase health insurance, and providing coverage for those unable to afford it. Thus there are no more uninsured people to receive indigent care, and therefore no need for an indigent care levy. The feds will be handling it from here on out.

However the 1/2 cent sales tax passed to construct two new sports stadiums has been abused by previous commissioners to fund all sorts of things the voters never intended. In addition to the two stadium boondoggles, funds were redirected to the Ft Washington Way boondoggle, part of the Freedom Center boondoggle, portions of the Riverfront Transit Center boondoggle, and The Banks boondoggle.

Now the stadium fund is approaching insolvency and would have to be bailed out with dollars from the county general fund. Those dollars are already barely funding the statutory needs of the county such as courts, sheriffs, etc. Any bailout would necessarily result in a reduction of government services.

Commissioner Todd Portune proposes to fix the deficit strictly through new taxes, while commissioner David Pepper wants to erase the red ink by eliminating the property tax rollback (an old tax cut) which he previously promised was a "deeply illegitimate act" and therefore off the table.

Greg Hartmann's proposal to use the Obamacare dividend to makeup the shortfall in the stadium fund is a responsible and logical strategy to play the political cards we have been dealt. It should be implemented.

2010-06-08 Supplement: Read Hartmann's proposal to the Tax Levy Review committee here. Local 12 coverage of same here. Enquirer Politics Extra coverage here.

Tuesday, June 1, 2010

City Hall Moving to Sell Our Water in 2010

Cincinnati NAACP Media Release

The City of Cincinnati is in the process of selling Cincinnati Waterworks. The Cincinnati NAACP and partners worked to place Issue 8 on the ballot November 2010. Issue 8 passed and does not allow city hall to sell Cincinnati Waterworks without a vote of the people of Cincinnati. The Democrats and some Republicans on Council will vote to place this issue on the ballot for November of 2010. City Council needs 6 votes to place the issue on the ballot. If Issue 8 had failed 5 members of Council could sell Cincinnati Waterworks with no input from the 350,000 citizens that live in Cincinnati. "I am not interested in Cincinnati Waterworks in any shape or form being privatized. I can not imagine a company like BP controlling the water system in Cincinnati," Christopher Smitherman President of the Cincinnati NAACP says.
The city has engaged in the mismanagement of tax payer money for decades. The city leadership has been unwilling to downsize major city departments to bring expenses in line with city revenue. The city leaders are now desperate for money. "Selling off city assets is a bad idea. Selling off our water is criminal," Smitherman says.

Where’s the Money ?

Guest editorial by Cincinnati City Council candidate Amy Murray:

Since the inception of the Cincinnati Streetcar issue, it has been polarizing. The upside of this debate has been the engagement of many people and groups in the larger discussion of Cincinnati’s vision for the future.

When I ran for Cincinnati City Council last fall the streetcar issue was front and center. While my positive vision for the city could easily include some form of progressive transport, I see the streetcar as a “want” in today’s real environment, not a “need”. At a time when families and businesses across the country are reflecting on their pocketbooks and budgets, I believe the leadership at City Hall needs to be doing the same.

From the outset there really have been two pertinent issues. One is the concept of the streetcar and the image of a progressive urban transport infrastructure that will hopefully spur development. The other is the financial basics: How much does it cost to build? How much will it cost to operate? These are questions that Cincinnati’s taxpayers face every day before making purchases and investments. Shouldn’t our City leadership be doing the same? Cincinnati City Council has moved ahead without even addressing the operational funding. Where will the money come from? Citizens deserve more specifics on the financial basics and the short and long term impact on our city, already struggling to stay above water.

Council’s recent approval of $64 million in bonds has prompted many (including the Enquirer) to ask, “Where is the plan?” I would rephrase that to “Where is the money?” The bottom line is not about the streetcar, but about the money.

Recall our city budget shortfall precipitated by a flawed and unrealistically optimistic positive income tax estimate. In addition, the city pension fund is in deep crisis with no current solution. Meanwhile, swimming pools across the city are being shut down. But yet, Cincinnati City Council is irresponsibly spending more money on a streetcar with no evidence of being able to maintain it.

When are we planning to put our financial house in order? The events of the past two years should have taught us all that living on credit is not sustainable. Fixing the current financial crisis in our city will be difficult and not without some pain and sacrifice. Nevertheless, it seems fundamental that we must first fix the one crisis before walking headlong into a potential second one.

Amy Murray
City Council Candidate 2009

Testimony of COAST before The Hamilton County Government Reform Task Force

Presented by: Christopher Paul Finney, General Counsel, COAST

Good afternoon co-chairmen O’Reilly and Cook and members of the Task Force.
Thank you for allowing me to speak, if only briefly.  My name is Christopher Paul Finney and I am here to speak on behalf of the organization COAST, the Coalition Opposed to Additional Spending and Taxes.
Who is COAST?
COAST has existed for more than a decade, and has been the leading advocate in southwest Ohio for limited government and lower taxes, and challenging the abuse of power by our elected officials.  We have saved local taxpayers more than two billion dollars in tax increases and wasteful expenditures since our founding in 1999.
Your mission
I have reviewed the County’s web site and note that the mission of the Task Force is to explore:
Alternative forms of operating county government and providing the full range of public services needed by the people of Hamilton County and mandate [sic] by law are better suited to, and more efficient and economical, than existing structures…
The Task Force is then further charged with:
The task force recommendations for an alternative Hamilton County government structure shall be within the scope of those permitted by the Ohio Revised Code in Chapters 301, 302, 305 and 307.
It is a little difficult to understand what that part of the charge is supposed to mean, but since you are to “recommend” alternate forms of County Government and because the only alternate form allowed at present by the Ohio Revised Code is a County Charter, it seems pre-determined that the County Commission desires a recommendation for a County Charter from this Task Force.  That certainly is the common wisdom about why this panel was formed.
That is unfortunate and it is COAST’s hope that you will not return such recommendation to the Commission.  This is because the adoption of a County Charter – any County Charter is a classic Pandora’s Box of problems and unintended consequences.
Statutory County Government.
Current County government – and each elected official within the County – may only do those things that are expressly permitted by statute.
Under this system, the County Commission does not have legislative power.  And they have limited taxing powers.  And there are built-in checks and balances from the independent and occasionally competing elected officials.  These checks and balances tremendously benefit the citizenry.
What is the problem we are trying to address?
Let’s step back and ask ourselves for a moment – why are citizens fleeing Ohio?  Why does Ohio have one of the highest unemployment rates in the nation?  Why has Ohio been the second worst in the nation at job creation over the past decade? 
No one seriously suggests it is because our tax burden is too low, our regulatory environment too lax, or our state and local governments are too small.  Yet, this task force, and so many state and local initiatives, are aimed at expanding the size and scope of government, rather than simplifying it. 
Rather, we would ask you to explore – if your mission allows – whether it is possible that we need to limit the role of state and local government in Ohio to unleash the creative and entrepreneurial potential that the well-educated and hard-working citizens of Ohio possess.
A Charter form of County government offers no “reform.”  It will not serve to unleash potential of Hamilton County residents to address their problems.  Rather, it – by its fundamental nature – radically empowers elected officials and bureaucrats to lord over the citizenry.
Positive aspect of the review.
Before I delve into COAST’s perspectives on the misguided nature of a County Charter, let me say a few entirely positive words about what this Task Force should explore and can accomplish:
è When the current majority took control of the County Commission, they abolished what could have been and should have been the most important reform thrust in recent memory – the Managed Competition Committee.  This Committee was targeted to find savings in how we operate County government in the tens of millions of dollars – enough incidentally to close the gaps in the County general fund and stadium fund budget. You should recommend the re-empanelling of this Committee and the implementation of its recommendations with vigor.

è We think it is important that you shine the spotlight on cronyism, nepotism and other hiring and contracting practices that fail to yield the maximum return for taxpayers. We would even suggest that state legislation on this topic could be appropriate.

è We think this Task Force and the County Commission encourage the independent elected officials to undertake greater cooperation in their purchasing and operations to achieve savings and to be more innovative and creative in adopting the best practices.

è  COAST believes there is tremendous savings to be had by implementing joint operations between the various cities, village and townships in Hamilton County and with County government.  We should explore vehicles to advance this needed cooperation and voluntary consolidation.

è This Task Force could do a great service to County taxpayers and our State by identifying and demanding change in the real reason that Ohio government is terribly inefficient and wasteful:

o   Prevailing wage laws that drive up the cost of capital expenditures completely unnecessarily.

o   A structure for public salary, benefits, and mostly pensions that far exceed that available in the private marketplace, and results in the looting of state coffers by public employees.

o   Civil service laws that prevent competitive structures for hiring, firing, disciplining and promoting public employees, causing countless wasted dollars- and lost opportunities- unnecessarily.

So, there are a number of important “reforms” that are needed, and we would encourage this Task Force to aggressively explore these issues and embrace those things that would truly change the competitiveness of our region and state.
Now, here’s why we think the direction of this Task Force as set forth in The Mission Statement is misguided:
What a County Charter by its fundamental nature does.
Understand that regardless of what the County Charter says, and what structure and limitations are contained in the final document, by adopting a County Charter, we are putting in place a structure that will – short term and long term – empower politicians and bureaucrats to grow in size and scope of County government, to do so with fewer checks and balances and less accountability.  This is inevitable regardless of the claimed limits on power in the document. 
If the County adopts a Charter, by its nature, we will be:
è Creating a structure that gives new taxing powers to the County “Council,” even if the Charter – as in Cuyahoga County – expressly says no new taxing powers. This is because such provision limiting taxing powers can be much more easily amended than currently which requires an enactment of the State Legislature.

è Empowering our pandering class – the politicians – to fund trolleys, Freedom Centers, the Film Commission, the “Arts” and everything else that those “oh so much smarter than us” always advocate and for which they usually succeed in obtaining public funds.

è Giving law-making authority to the County “Council,” meaning every goofy type of regulation and social engineering we have seen from City Hall for the last three decades.  (How’s that working out, by the way?)

è Perhaps most importantly, by eliminating important independent elected offices, removing from County government the checks and balances we presently have.  For example, an independent auditor can appropriately question Commission actions. 

1.      Who at City Hall was questioning the under-funding of the pension system?  The mis-use of the Anthem funds? The wasteful use of outside counsel? An independent Prosecutor, Treasurer, Auditor – and even Coroner, give important perspectives that appointed government simply does not.

è Charter government is a massive power grab by rapacious politicians as against
1.      the people of Hamilton County,
2.      the independent elected officials that assure efficient (and largely honest) operation of County government, and
3.      49 cities, villages, and townships that make up our County.

So I want to conclude by saying that “refrom” is a great thing, and we should commit ourselves to constant improvement in government and business.  But whether that word is contorted to be a power grab to expand government – and thus make us less efficient – or is designed to fundamentally change the structural obstacles to Ohio and Hamilton County competitiveness is the decision before you.
COAST encourages those reforms that will reposition Ohio and southwest Ohio to be competitive for businesses and families. This Proposed County Charter will do exactly the opposite.  Thank you.