Grand Rapids Pundit

The latest monthly state revenue report was finally released today, and it doesn’t look good. A few of the money quotes:

The revenue collected from Michigan’s General Fund and School Aid Fund earmarked taxes totaled $1.3 billion in May, which was down 13.4% from last year’s level.  This marked the  fourth consecutive month  that tax collections have declined in excess of 10.0%.  While  collections for almost all of the major taxes experienced declines in May from their year-ago levels, the most significant declines were experienced by the sales, use, and income taxes.   Compared with the Senate Fiscal Agency’s monthly breakdown of the revised consensus estimates for FY 2008-09, May collections fell below the monthly estimate by $62.0 million and this shortfall was due primarily to weaker-than-expected sales and use tax collections.

When the Senate Fiscal Agency met in mid-May, they estimated the revenues for the remainder of the fiscal year. Despite the fact that they updated their estimates at that time, actual revenues for May declined by $62 million. In other words, in the matter of a few weeks, their estimates were already off. The budget is deteriorating that quickly.

More:

Sales tax revenue totaled $406.6 million in May, which was down a sharp 22.2% from the year-ago  level.   A consistent historical monthly series for the sales tax is available back to FY 1984-85 and the decline in May marks the largest percentage decline  in monthly sales tax collections during this 24-year period.

. . .

Tobacco tax revenue totaled $84.0 million in May, which was down 5.9% from last year’s level.  Most of  this decline is likely due to the large increase in the Federal tobacco tax that went into effect on April 1.  The Federal tax increase is having a negative impact on Michigan’s $2-per-pack cigarette tax because it boosted the price of cigarettes and therefore is having a negative impact on cigarette sales and Michigan’s tax receipts.

That last quote is vitally important. It perfectly exemplifies the power of taxation. It’s common sense, but the politicians in Lansing don’t seem to get it. The more you tax something, the less of that “something” you’re going to get. Clearly, the more cigarettes are taxed, the fewer cigarettes that will be sold. The same goes for businesses. The more you tax businesses, the fewer businesses there will be, and hence the fewer jobs there will be. Gosh, it’s pretty simple, but our tax-hiking pals in Lansing and elsewhere don’t seem to get it.

Finally, the $406 million of sales tax revenue in May was the lowest monthly level of sales tax collection I could find, going back at least until 2005. Michigan is hurting, folks, and it’s only going to get worse, as exemplified by the state’s skyrocketing 14.1% unemployment rate.

Read a little about how California’s government is collapsing because of that state’s inability to enact any rational level of reform: California Collapsing.

I found an interesting chart, courtesy of city-data.com, showing the median home price in Grand Rapids, as well as the number of homes sold on a quarterly basis. Clearly things are bad and getting worse. Median home prices have dropped almost in half since 2004. Incredible!

Oh, and remember our post about how the stimulus won’t do a damn thing? Below is the Federal Government’s chart, formulated back in January, which attempted to scare people into passing the gigantic wasteful bloated stimulus plan. They wanted to show how bad things would get without the stimulus and how much better things would be if the stimulus did pass. Guess what. Things are much worse than either prediction. The red dots are actual unemployment since January. Just another reason not to believe any of the bilge coming out of Washington when it comes to economics.

An important article appeared in the Grand Rapids Press last week that highlights several issues regarding the failed Silver Line bus system and the false claims of economic development that are touted by the Silver Line’s supporters.

The Grand Valley Metro Council (very much pro-Silver Line) won $400,000 in federal grants to clean up several abandoned sites along Division avenue, in the hopes that this will attract more development. You can almost hear how this would have been announced if the Silver Line had passed. It would have been touted as the first in a series of positive developments because of the Silver Line. Of course, the Silver Line had nothing to do with this grant award, but it underlines the claims that these sorts of transportation projects somehow spur development. However, as this news item shows, the development is largely spurred by government subsidy, not the appearance of a fancy silver-colored bus line. The Rapid supporters confuse correlation with causation. It goes against logic that replacing the current buses with buses that are painted silver will someone convince people and business to move to Division Avenue.

As we have previously pointed out, the development in Portland around mass transit, as the pro-Rapid supporters love to point to, only occurred after government subsidies were enacted. The development did not occur due to the mass transit system. This is the heart of the pro-Silver Line argument; that the Silver Line “would have” spurred several dollars’ worth of development for each dollar spent. This is simply not the case. The only evidence the Rapid points to in support of their argument is a thinly-documented three page article, as we pointed out here.

However, this Press article also points out that they haven’t given up on the Silver Line boondoggle. The article states, “Although [The Rapid] expects the Silver Line route eventually to win the voters’ blessing, plenty of other properties could be helped in the meantime . . .” Clearly they aren’t done with trying to sell this mess to the voters. Based on the negative Silver Line feedback both in the Press and on other online sources, it seems unlikely that they can salvage this project without significant changes. Even the pro-transit people weren’t convinced about the need for the Silver Line.

Rapid Silver Line: FAIL

It’s fantastic news for taxpayers and for fiscal sanity in the Grand Rapids area. Last night the expensive and redundant Rapid “Silver Line” tax increase request went down in flames. The overall vote total was 52% against and 48% in favor, but when looking at the six cities in the Rapid service district, we see that a majority of the cities rejected the request:

Grand Rapids - 53% yes, 47% no

East Grand Rapids - 64% yes, 36% no

Grandville - 36% yes, 64% no

Kentwood - 46% yes, 54% no

Walker - 32% yes, 68% no

Wyoming - 36% yes, 64% no

As you can see, Walker, Wyoming, Kentwood, and Grandville all soundly rejected the tax increase request and even Grand Rapids was closer than expected.

The pro-Silver Line people are predictably dour. The comments of Peter Varga, executive director of the ITP (Rapid), sum up their attitude perfectly. He said it was rejected simply because voters didn’t understand the request. Right. Voters heard from this blog as well as other groups (including our friends at KCFFR) who exposed the bad plan of the Silver Line. The Rapid folks tried their hardest to limit the information available on this request, but active citizens exposed the Rapid and let voters know the facts. This web site alone received thousands of visits from people searching for more information.

The message was clear:

• This new Silver Line was a duplicate of already-existing bus services
• The Silver Line would cost tens of millions of dollars (just for buses)
• The Silver Line would have cut off traffic on Division by shutting down lanes and dramatically increasing congestion
• The Silver Line was slower than existing bus services (see our previous posts on the issue)
• The claims of spurred development and “new jobs” were based on speculation and conjecture

In summary, bravo for the voters of the four cities who rejected this request. Make no mistake, they will be back, asking for more. Their next request will be for more than $100 million for an even more inefficient light rail line.

The supporters of the proposed $110 million Silver Line bus system in Grand Rapids tout it as a “Bus Rapid Transit” line. The proposed route of the Silver Line is up Division from 60th Street, a jog around the hospitals around Michigan street, and back to the Rapid station. The total route, according to Rapid, is 9.8 miles. It will take 35 minutes for the new “Silver Line” to travel this route. An important note here is that, as we’ve previously pointed out, Division will be turned into an effective two lane road (one lane each way) so that these Silver Line buses can have their own dedicated lanes. This supposedly will speed these buses up because they won’t have to share these lanes with regular cars. 

But wait, the Rapid already has a bus, route #1, that travels from the Clyde Park Meijer, down to 68th Street, up Division, and around to the Rapid station. The total distance for the current buses on this route is 12 miles, according to Google Maps. In addition, according to the Rapid’s web site, the buses on this route take about 33 minutes.

Let’s do the math. The Silver Line is supposed to take 35 minutes to travel 9.8 miles, with dedicated lanes on Division. The current #1 bus, traveling 12 miles, takes 33 minutes, sharing the lanes like every other vehicle on the road. The Silver Line factors out to be traveling at around 16.8 miles per hour. The current bus factors out to 20.57 miles per hour.

Huh? How do they call this Bus Rapid Transit? It’s Bus Slow Transit. It’s slower than the regular buses that take the same route now!

Don’t forget that these dedicated Silver Line lanes on Division will squeeze all current traffic on Division down to one lane in each direction. Traffic jam, anyone?

Be sure to cast your vote on this idea on Tuesday, May 5th, if you live in Grand Rapids, East Grand Rapids, Wyoming, Walker, Kentwood, or Grandville.

See our prior posts on this subject:

• Rapid Silver Line - More Concealment and Deceit
• Rapid Silver Line - Another Waste of Money

Grand Rapids Pundit has received one of the pro-Silver Line post cards in the mail, as I’m sure many residents of the ITP service district have (Grand Rapids, East Grand Rapids, Walker, Wyoming, Kentwood, and Grandville). This post card, which you can view here, exemplifies the continued contempt that the ITP/Rapid has for the taxpayers. The post card says virtually nothing about the reason for the tax increase. In fact, they bank on voters knowing as little as possible about this tax increase. The more voters know, the more likely it is that they will vote no.

The only detail the post card has on the Silver Line is as follows:

Silver Line is more like a light rail system than a traditional bus. A proven solution in other communities, it will maximize ridership opportunities, economic development, and travel-time savings. Silver Line vehicles will use:

• Dedicated lanes during peak times
• In-station fare collection to speed boarding
• Intelligent transportation system applications such as signal priority, allowing quick travel between stations

That’s it? Yes, that’s it. As previously stated, they don’t want you to understand all the details.

What is the Silver Line really? As we’ve previously reported, it is a Bus Rapid Transit line that will dedicate one lane each way on Division Avenue from 60th street to the Rapid Station for use only by these new buses. This means that Division will be limited to one lane each way for regular vehicular traffic during peak traffic hours (rush hour). You heard that right. Division will turn into a traffic nightmare, likely pushing traffic to side streets to find better ways to get where they are going.

They say that this new “traffic priority” system will allow for these buses to travel much faster than current buses (which already travel the same exact route as the proposed Silver Line). How much faster? Well, we don’t really see any improvement. The Silver Line’s route would be 9.8 miles long and would take the new buses 36 minutes to travel. Huh? Yes, that’s right, 16 miles per hour. We don’t honestly understand how they can call this a Bus Rapid Transit line.

But wait, it gets better! This whole project is a $70 million tax increase - all so that they can duplicate the bus route they already have. No kidding: they already have a bus that travels this route. There’s no reason to raise taxes by $70 million just to duplicate what’s already there.

If you are a resident of East Grand Rapids, Grandville, or Walker, you will see no benefit from this line at all. If you are in Kentwood or Wyoming and happen to live near Division street, you might be able to use this new line conveniently, but as said before, there already is a bus line on this route. Basically, very few residents of any of the six ITP cities will see any benefit, yet will be expected to pay for it.

In the same vein as the near-informationless post card, the Rapid’s pro-Silver Line web site lists one source for their claim that the “investment” in the Silver Line will create jobs and produce a return on investment through new development. They reference an article named “Bus Rapid Transit: A Powerful Real Estate Development Tool” by William Kaplowitz. They don’t provide a link to this article, nor the text of it. So we did a simple Google search and came up with the text of the article. Read it for yourself here. The article makes a couple of simple, poorly-documented claims about development, and that’s it. That’s what they use to try and get residents to raise their own taxes by $70 million.

What they don’t discuss is that most of the time this “new” development was already happening or happened only because government created tax incentives to do so. In other words, they confuse correlation with causation. Just because development occurred around same time as the bus system’s implementation, it doesn’t mean that the buses caused the development. For example: there already is a lot of development going on along Division. It is likely that the Silver Line people would say that the Silver Line caused that development if they try and tout the “benefits.” But once again, since there already is a bus line along Division, it’s hard to understand how new buses would suddenly spring up more development.

But this is how the ITP/Rapid works. They don’t release their budgets. They don’t make true ridership numbers (by route, etc.) easily available. They don’t release the true operational statistics of their system. They don’t release the minutes of their board meetings, as the City of Grand Rapids does. They operate as though they don’t need to be accountable. But they’re a publicly-funded body and they need to operate transparently. The Rapid operates secretively so that you don’t understand how they operate. It’s all part of their contempt for taxpayers and efficient operations.

Don’t forget for vote on Tuesday, May 5th if you live in Grand Rapids, East Grand Rapids, Wyoming, Kentwood, Walker, or Grandville.

Read more on this issue:

• Rapid Silver Line: Another Waste of Money
• Rapid Silver Line - Bus “Slow” Transit
• ITP Watch
• ITP Watch: Rapid Silver Line Blog

The ITP/Rapid transit agency is again asking taxpayers for a tax increase on Tuesday, May 5th. Once again, they are using an off-election date to try and get as few voters as possible. If you live in Grand Rapids, East Grand Rapids, Walker, Wyoming, Grandville, or Kentwood, you should vote no on May 5th. 

The new “silver line” that is proposed is what’s called a Bus Rapid Transit (BRT) line. What’s that? Basically, they will cut off two of the four lanes on Division and squeeze regular traffic into one lane each way so that these new “rapid” buses get their own lanes. Did you think rush hour was bad before? If this passes, Division will be a traffic nightmare.

Some common-sense reasons to vote no:

1. This is a $70 million tax increase in the middle of the worst recession since the Great Depression - plus another $40 million in taxes that will be spent from the Federal and State governments - bringing the cost to over $110 million for buses
2. There is already a bus line that has the exact same route
3. The residents of Grandville, Walker, and East Grand Rapids will see absolutely no benefit for their increase in taxes
4. How many people do you think live and work right along Division Avenue? This is another waste of money on a ineffecient and inconvenient fixed-line bus system
5. As previously mentioned, the “Silver Line” will absolutely choke up traffic on Division during rush hours

UPDATE: (4/16/09)

Since this original post, I’ve had several people contact me with more information:

• The Rapid Silver Line will travel 9.8 miles from 60th Street to the Rapid Station near downtown. The total travel time is 36 minutes, which factors out to a whopping 16 miles per hour! Wow, Bus Rapid Transit, indeed!
• The Silver Line will eliminate crucial parking along Division that small businesses depend on.
• The pro-Silver Line web site names one source for their claim that this spending will result in a 400% return on investment. However, a quick search on the Internet reveals that this “source” is just a three page article with no data to back up the claim.
• The Rapid has supposedly done years of studying of this issue. Why don’t they publish any of that information on their web site? What do they have to hide? The Rapid has a history of not publishing data - they still refuse to publish their budget online.
• The Rapid claims that this project will create up to 189 direct and indirect jobs. This project is costing $110 million (assuming it comes in on-budget). This means that there is a cost of $582,000 per job! Where do I apply?

See our other posts on this subjet:

• Rapid Silver Line - More Concealment and Deceit
• Rapid Silver Line - Bus “Slow” Transit

For more info, visit the new ITP Watch web site: http://www.itpwatch.org

Ouch! The Senate Fiscal Agency just released their February report of state revenue and it’s a doozy. A couple of quotes:

While tax collections in February were expected to fall below last year’s level, due primarily to the impact of the economic recession, the decline was much worse than expected . . . In addition, tax collections fell short of the estimate for February by almost $100.0 million.  Combined with the equally weak level of collections in January, tax collections so far in FY 2008-09 are about $200.0 million below the January 2009 consensus revenue estimate.

Interestingly, tax collections in the current fiscal year (which began in October 2008) were doing fairly well, until now. Last month, however, state tax revenue was down 31% from last year’s February level. Sales tax revenue, a good proxy for economic strength, was down 17% year-on-year in February, while real estate transfer tax revenue was down 41%. Stunning. This indicates (along with Michigan’s highest-in-the-nation unemployment rate of 11.6%) that the economic downturn is actually accelerating. 

This sets the stage for several possible outcomes. Although the structural budget problems aren’t as bad in Michigan as in California, we are heading in California’s direction in terms of budget meltdown, if the current trends continue. The politicians are in a tight spot here. They will almost certainly have to propose additional tax increases as well as budget cuts. The question becomes how does the Republican-majority State Senate react? They caved to last year’s massive tax hike - will they do it again? How do they sell a tax increase when over 1 in 10 Michiganders doesn’t have a job? When the Detroit Three continue to contract and lay people off in massive numbers? When house prices continue to decline, making it more and more attractive to simply walk away from mortgages?

There’s been some buzz lately about the upcoming 2010 census. This post is more of a placeholder for my own future posts on the subject than any official update.

There are some very good reasons to be extremely skeptical of the probing questions the census asks. First, let’s look at what the Constitution says about the census:

Article I Section 2: The actual Enumeration shall be made within three Years after the first Meeting of the Congress of the United States, and within every subsequent Term of ten Years, in such Manner as they shall by Law direct.

It’s pretty simple. The federal government counts the number of citizens every ten years to apportion congressional representation to each state. However, the census has come to be an extremely probing process, asking for your name, age, race, and relationship status, among other things. And that’s just the short form. The long form, which goes to a randomly selected set of people, asks 53 questions: everything from your income, how old your house is, and even what you use to heat your home. What does that have to do with apportioning members of congress? Good question.

There is a lot of resistance to answering these questions, and with good reason. One site I found, called Don’t Trust the Census, makes a pretty good case for not filling out the probing questions. They point to research showing that census data was used in 1943 by the FDR administration to round up and put Japanese-Americans in concentration camps. So much for the census promise that “responses are confidential.”

The main reason the Census Bureau cites for filling out the questions is to make sure that we get our share of the federal welfare state’s booty:  ”People who answer the census help their communities obtain federal and state funding and valuable information for planning schools, hospitals, roads, and more.” Sure.

What to do? Well, federal law says that you can be fined $100 for not answering the census, but my research shows that the last people actually prosecuted for this were in 1973. The Census Bureau claims they’ve never prosecuted anyone for not filling out the form. I don’t mind abiding by the constitution, so in 2000 I simply filled out the first question, asking how many people lived in my home, and I mailed it back. They sent one of their goons out to extract more from me, but I wasn’t home, so they gave up. It was pretty simple.

Some additional links that popped up around the 2000 census:

• Senseless Census
• Boycott the Census

Gimme more. Gimme more. Gimme gimme gimme more.

Today it was announced that Michigan’s unemployment rate hit 11.6%. What is governor Granholm’s reaction? She announces her support for an increase in gas taxes! Great idea! She has already succeeded in increasing the income tax by 12% and increasing business taxes by 22%. That seems to be working out really well. Not.

Her insatiable appetite for more of your money won’t be quenched until no one in Michigan is left with a job.

“In five years, you’re going to be blown away by the strength and diversity of Michigan’s transformed economy.” - Governor Granholm, State of the State address, January 25, 2006 (unemployment rate was 6.2%).