Union Lobbyists Push Gas Tax Increase Through

The state of Michigan is considering changing its gas tax structure from a flat 19 cents a gallon to a percentage, according to a report this a.m. on WJR’s Frank Beckman Show. The group that has made its pitch for years to increase gas taxes is called the Michigan Infrastructure and Transportation Association (MITA), a non-profit group that states as its top mission in reporting its financial workings to state and federal government, “industrial labor contract negotiations.” Coupled with another of its stated missions, “lobbying,” MITA is quite simply another union front group that has gained particular heft in the past eight years.
The equation is simple: More money for roads means more work for union workers. Beckman this morning told of a possible 18% tax on the price of gas, which would approximately double the tax cost of fuel in the state. Vehicle registration fees are also set to increase, Beckman said.
In December 2007, Gov. Jennifer Granholm resisted MITA’s call for a higher gas tax under a plan that would max it at 28 cents a gallon in 2010:
"I think raising a gas tax now is impossible, because people are hurting. I think we have to look at other ways to fund transportation."
Things are worse now. But an increase is on the way.
Which is fine for the folks at MITA, particularly those salaried employees who work there.
In 2006, the last year the group’s tax records are available (see below), executive vp Robert Patzer made $240,000. Michael Nystrom, the group’s lobbyist, was paid $124,200. And vp of member services Robert Coppersmith’s salary was $101,000.
The guess is that these salaries are much higher these days. And that increased gas tax? File that under “creates jobs.” If you don’t someone will. Just wait and see.
MITA 990 2006

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Urban Woes Will Never Be Fixed - Count on It

I am saddened by a Time story from 1974 that addresses newly elected black mayors in Detroit and Atlanta. In that era, it was novel to have a black man (or woman) elected to such a lofty position, and well worth the ink. But what I find appalling is that the ills spoken of that had befallen each city could well be restated today. In short, nothing has changed, although we have made admirable gains in the race and gender of leadership.
But what has this gotten us? All the money spent on urban renewal, the election of people of color to lead, policies aimed at bettering these cities, all have failed miserably. Some folks have taken notice.
But for most people, there is money to be made in spouting meaningless platitudes about change and the need for more money for this and that. And of course, no one is doing a thing (or think, as I mistyped before spellchecking) to change things. And most likely, I now realize, they never will.

Changing light bulbs in the state - at what cost?

Axis Technologies presented a glowing endorsement of our state’s embrace of pricey new technology
in this release. The Nebraska-based company is selling at around 30 cents a share and has marketed itself as “the Future of Fluorescent Lighting.” There is plenty of money in this assertion in this Al Gore world. But Axis has also made some troubling claims in the past.
A Dow Jones story from 2007 reports that in November 2006, Axis claimed in a press release that it had landed a deal with Walgreen to convert the drug store chain's lighting. But actually it wasn't true at all.
The story says …Axis Technologies…said a private energy-consulting firm notified it of the Walgreen installation. Axis called that "an incredible opportunity" to showcase its energy-saving lighting technology - and its stock, which trades in the Pink Sheets, jumped nearly 43% the next day.
Walgreen disavows the release, as does Energy Solutions Group, an Appleton, Wis., consulting firm whose clients include Walgreen, and complained to the Securities and Exchange Commission.
"The press release is just not an accurate representation," said Walgreen spokeswoman Tiffani Bruce. She said Deerfield, Ill.-based Walgreen has 5,584 drugstores and, to date, no equipment from Axis has been installed in any of them. She said Walgreen raised concerns with Axis, but if it issued a correction, "we haven't seen one."
The story goes on to report that:
Axis hasn't been shy in the past about issuing upbeat information. Its Web site's "success stories" feature a Texas A&M University Energy Systems Laboratory study comparing Axis ballasts against a competing product in a terminal at the Dallas-Fort Worth airport. The 2005 report concluded the Axis product was superior, offering energy savings of up to 37%.
Harold Huff, an associate research engineer at the lab in College Station, Texas, said he wasn't aware that Axis Technologies had posted the findings, but said the results are accurate. He said ballasts used in the test were donated and that the airport hasn't made any decisions yet on purchasing the product.
So what are we to make of Axis’ claims in today’s press release? And we are looking into just how much Michigan has handed over to Axis in exchange for some fluorescent future.

Car Sales Free Fall; Blame Good Cars

Ouch. Again. We continued this month to stay away from car dealerships in droves. And why not? The cars being built today are of the best quality in history and often times, annual refreshes by automakers do little in the way of changing the looks of a vehicle. Warranties now cover an expanding array of defects and mpg ratings are the highest they have ever been. Yet, the media insists that this is some drastic sign of the ebbing economy. Few stories like this, crediting car companies, are ever written.

More $ for State Appointments from Granholm

How much does it cost to score a Granholm appointment? All three of these appointees to the Michigan Strategic Fund board of directors have donated the maximum to Granholm’s campaigns.

Donations:
Mitchell Mondry $3,400 in 2004
James Petcoff $3,400 in 2005
Paul Hodges III $3,400 in 2006

MEGA addition

The Michigan Economic Growth Authority is overseen by a board of eight. Half of them are major donors to Granholm’s two gubernatorial bids. Who do you think they will follow in terms of recommendations for tax breaks?
These board members include MEGA chair James C. Epolito, who is also president of the Michigan Economic Development Corporation. He donated the maximum $3,400 in 2004 and his wife, Deborah, kicked in another $250 in 2006.
Kirk T. Steudle, head of MDOT, has donated $4,800 to Granholm’s war chest since 2004.
Cullen DuBose also stepped up to the political ass-grab plate with a $3,400 donation in 2005.
And Stanley “Skip” Pruss outdid them all with $8,500 in Granholm donations over the past six years.

MEGA tax breaks for political pals in Michigan

The Michigan Economic Growth Authority was created in 1995 during Gov. John Engler’s administration. Somehow, it went off the tracks under a thick fog of secrecy and stunningly inept bureaucracy (what other kind is there?). The idea was to offer tax incentives to businesses to companies looking for a home, and in 1995, the targeted foes were Ohio and Indiana, which were both giving large tax breaks. It was voted in with a sunset provision of Dec. 31, 1998, which never happened. The Wall Street Journal in an editorial called MEGA, aptly, a “governor’s gimmick." Engler fired back with a letter to the editor: “Those who label MEGA as a vestige of "failed industrial policy" don't understand the reality of the marketplace and what it takes to succeed.”
Among the first companies to receive the break was Borders, which opened its first store in Ann Arbor in 1971. In 1995, its corporate hq was still in Connecticut. It wanted to come home. Would it have without a tax break? Most likely. Have you seen its latest performance reports?
Today, MEGA and tax breaks for businesses are the target of two bills that aim to shine a light on just who is getting these breaks and how. SB 71 passed the Senate 36-0. It requires an annual report from MEGA be given to the legislature to include “the amount of capital investment and the number of jobs required to be created or retained” by each business that enters into a tax break agreement with the Authority.
SB 72 requires the Department of Treasury to prepare and post on the Internet a list of every tax credit available under the Michigan Business Tax, and to submit to the legislature a report showing the number of taxpayers who claimed certain types of credit, including their names and addresses. This one also passed the Senate, 22-14.
Since Gov. Jennifer Granholm succeeded Engler in 2001, there has been concern that many of these tax breaks were given to pals of the administration and ignored smaller businesses because they did not cause headline-drawing job opportunities. The two bills pending in the state House would give citizens some idea of just who is not paying taxes and why. Most MEGA awards are political; at its last board meeting, MEGA handed out tax breaks – 100% for ten years - to Great Lakes Towers, a new wind turbine tower manufacturing company that has zero employees right now. Another recipient was Atwell-Hicks, LLC, a Land Development Consulting firm that is already based in Michigan. The tax break was handed over for its new alternative energy plant.
We can hope these bills will make it through so that more people can see the travesty that these tax giveaways are, and the bad business and political favoritism that MEGA is engaging in.

Tuition hikes mount, Hope in the form of sanity

The average college grad finishes $20,000 in student loan debt, a 108% increase in the last decade. In Michigan, we have decided to freeze college welfare at the state level and most schools are promising a tuition increase to offset that horrible deficit. How could anyone dare withhold money from such a hallowed institution as Michigan State University? Well, the state did and now MSU is going to show them.
But the place is made of money and is hiring as if there is no tomorrow. In a glossy, very expensive – glossy, large format, full color - mailout to staff and alumni, the MSU College of Communication Arts boasts of reaching an “all time high of 110 full-time faculty members, adding nearly 30 new positions” in the past five years. Meanwhile, “the number of study abroad programs offered by our college more than doubled and now totals 34.”
It is some sick, twisted boasting in the wake of massive tuition hikes, increases that force students into deeper debt while the university shows absolutely zero restraint.
In Michigan, over the last twenty years, the average state university rate has nearly quadrupled (in non-inflation-adjusted terms), increasing from $2,119 in FY 1988-89 to $8,754 in FY 2008-09. This equates to an annualized increase of 7.4 percent per year. The University Industrial Complex has prospered with no affect on the state’s unemployment rate nor on its gross income.
Then there is Hope College, a private school in Holland, Mich., with an enrollment of around 3,200 students. In a rarely seen burst of responsibility and sanity, the college will freeze wages for staff as it slightly increases tuition.
How many more times do you need to hear it? The next bailout, 2010 style, will be of the student loan industry.

Produce the Note (or actually, just pay your mortgage)

Was reading this Associated Press story that purports to have the solution to those who are losing their homes: A strategy of “produce the note,” or asking the bank doing to repossessing the show proof that they own the place. Many banks sell your mortgage in order to secure the money owed and the actual note holder is a third party. In other cases, a bank may actually lose the note due to bureaucratic bungling.
But the show-the-note strategy is a juvenile tactic aimed at thwarting the actual intent of ownership and the law, sort of an “I had my fingers crossed” sort of deception that this AP reporter and his subjects, seem to think is crafty.
But perhaps even worse than this notion, which one attorney assured me would “fly in the face of the law’s intent,” is that the reporter took the story and the notion from a December piece on a Web site. Either that or he’s incredibly late in re-reporting the strategy.
CNN had a report on this same notion in June. So far, all media reports have included comments from Chris Hoyer, who is part of Consumer Warning Network, which has done some good work, this little tactic aside.
It all goes back to Christopher Boyko, a Bush II-appointed U.S. district court judge in Ohio who dismissed 14 foreclosure fillings in 2007 brought by Deutsche Bank on the ground that the bank could not prove it held the notes. In a rather pointed opinion, Boyko found that "none of the assignments show the named plaintiff to be the owner of the rights, title, and interest under mortgage at issue as of the date of the foreclosure complaint." The case, Whittiker v. Deutsche Bank Natl. Trust Co., No. 1:2008cv0030, is still making its way through the courts. But it would be nice if some of these reports could get away from the consumer perspective and into the actual legality of produce the note.
To that end, I sent a note to the AP’s Chief of Bureau Jim Baltzelle:
From: steve m (avalanche50@hotmail.com)
Sent: Wed 2/18/09 7:09 PM
To: jbaltzelle@ap.org
The AP story below, has been written before - is the AP now a mouthpiece for advocacy groups? And would it not have been fair to seek a judicial voice in the story? One judge in Cleveland hardly speaks for all. I highly doubt this tactic would fly in the majority of courtrooms in the U.S., making this thinly-veiled "advice" a bit dubious
Best
Steve
As has become all too common, the folks dishing out the news are uninterested in engaging in any discussion about their stories.

Nixon V. Obama

In his State of the Union Address in 1971, President Richard M. Nixon asked Congress for a full employment budget, “designed to be in balance if the economy were operating at its peak potential. By spending as if we were at full employment, we will help to bring about full employment.”
Nixon also promised that his budget will stimulate the economy “and thereby open up new job opportunities for millions of Americans.”
What I don’t hear is a promise that government will “create jobs.”
Obama: “The state of the economy calls for action, bold and swift, and we will act — not only to create new jobs, but to lay a new foundation for growth.”
Google the term “create jobs” and you get 134,000,000 hits. But does government create jobs or, as Nixon put it in much better economic days, does it set a policy that opens job opportunities? Unemployment stayed at 5.9% or lower from 1971 until Carter took the presidency, about the rate that most economists would call full employment
depending on your particular economic theory. Creating jobs implies that government can do such. It can in a literal sense, but jobs that take money from free enterprise have historically added to the national debt and only worsened our economy.

Is That a Road or a Chinese Checkerboard?

The $787 stimulus plan signed by President Obama Tuesday allocates $64.1 billion for transportation and infrastructure projects, with $27.5 billion aimed at highways and bridges. The question many have is why states and municipalities have allowed roads to deteriorate at such a pace. Most municipalities have road crews and budgets for such. Leaders are supposed to know and plan for problems. The roads we drive on are part of our quality of life. Third World countries are known in part for their poor roads and infrastructure.
The incredibly depressed state of Michigan is by far the biggest offender in allowing its roads to sag. Drivers here are amazingly docile about the horrendous condition, even holding a contest to see who can find the biggest pothole.
The problem allows a lot of finger pointing but no solutions. And it has a history.
In 1991, then-Gov. John Engler promised to funnel $78 million in road funding to towns and counties. He later rescinded the funding amidst his usual political game playing. In October 1995, the Grand Rapids Press in an editorial promised that in the wake of a defeated gas tax measure, roads would suffer. Higher taxes, it reasoned, would surely make things right.
The state raised its gas tax to 19 cents in 1997 with the promise of good roads in the future: According to an AP story in July 1997, Rep. Clark Harder, D-Owosso, said the public won't see the results of the tax hike immediately. "If we can get another $20 million to $40 million into this year (for road repairs), we'll be doing well," said Harder, a chief negotiator on the road plan. "A year from now people will be saying, `Thank goodness the Legislature did something about this."'
The gasoline tax increase is expected to raise about $200 million a year for road repairs.
Other elements of the road repair package include a 30 percent increase in truck registration and weight fees for $42 million; a one-time, $69 million dip into the state's Budget Stabilization Fund; and a plan to pave the way for reforms that might include the state taking control of more primary roads from local governments.
Michigan Department of Transportation spokesman Gary Naeyaert said the $69 million the state's rainy day fund will pump into road repairs this year will still leave a lot of the work for the years ahead.
Wrong. In a recent interview on WJR, listen to MDOT flak Rob Morosi do the dance.
(BTW, Naeyaert is now head of Naeyaert Advocacy Group, a lobbying group in Lansing)
This is how political promises work, my friends. And don’t be surprised to see other elements of the stimulus plan fail as well.

Eric Holder, a man of race

Eric Holder has lived in a world of black and white. As a judge in Washington D.C., Holder saw a parade of young black teens paraded before him for any number of violent offenses, a shameful testament to lawlessness.
His comments yesterday, noting that America has been cowardly on the issue of race, is one more ridiculous statement from a man obsessed with his own race.
On one hand, it is understandable, given Holder’s front row seat to the horrific occurrence of black-on-black crime. He appears at a glance to be a sensitive man and this has surely affected if not informed his view.
On the other hand, he is speaking to a nation that has just elected its first black president. This is not the time to castigate that same nation on the issue of race.
In terms of his own performance on the issue of race, Holder is at least consistent.
* In 1995, 23-year-old Donzell McCauley, who murdered a D.C. police officer in 1993 – yes, justice moves very slow in the District – asked a federal judge to review the Justice Department’s decision to seek the death penalty. McCauley’s lawyer asked the judge to consider whether McCauley was the victim of racism in the capital-punishment case because he is black. Holder, U.S. attorney at the time, had recommended to the Justice Department against the death penalty in the case, but Attorney General Janet Reno disagreed, and, after several meetings, Mr. Holder and Miss Reno announced that they would pursue the death penalty. Holder later accepted a plea bargain with McCauley that sent the man to prison for life with no parole.
* In 1996, Holder, then the chief prosecutor for the District of Columbia, told a Washington Post reporter who asked him about race-based jury decisions: "We live in a very race-conscious society and it's going to be a part of it. People shouldn't be surprised."
* In 1997, giving an address at a ceremony marking the 40th anniversary of the Civil Rights division of the Department of Justice, Holder, said “Forty years ago, the civil rights problems our country faced were, in some ways, rather obvious. We now live in a time when many must be reminded, if not convinced, that discrimination still exists. Some would have us believe that racism and prejudice are things of the past. At the Justice Department, we know differently.”
* In 1999, a Justice Department study came out revealing that 24% of blacks were dissatisfied with police compared to 10% of whites. The survey was taken in 12 cities. We don’t know which ones, since the Justice Department press release didn’t say. But Holder announced that "There's still too great a gulf between the views of the minority community and white residents,” and said he would initiate meetings with civil rights leaders and police officials to ponder alleged police misconduct involving minorities.
"Next week's conference is aimed at exploring ways to break the barriers of misunderstanding and distrust that are still far too common among many of our nation's police agencies and the residents," Holder said.
Apparently, that conference failed miserably, given his statements of yesterday.