Thursday, December 16, 2004

Attracting People Downtown

Mi Biz has an interesting article on the development of Grand Rapids' downtown and what needs to be done to attract more people.

A study was paid for by the state and the GR Downtown Development Authority to figure out how to get more people to come downtown. I believe it cost over $100k to hire a consultant to issue the report.

The conclusions are a little disappointing. It says, "Grand Rapids must continue investment in public infrastructure but move to the next phase. Invest in marketing, promotions, recruiting, and organizational staffing to accomplish the goals."

For sure, investing in public sector buildings in the immediate downtown area needs to stop. What do you see when you walk out of the new convention center? The city/county buildings, the post office, an empty old age home, and that's about it. The area simply isn't conducive to pedestrian traffic. The real entertainment district is several blocks down, from the BOB, south.

But the conclusion of the report is that the city simply needs to spend more money on marketing. Marketing what? There really isn't much to do downtown. Sure, there are museums, the arena, and a lot of restaurants and bars. But that really is it.

What are we saying? It will take more people living downtown in order for more shopping venues to be viable. But the study recommends one more layer of bureaucracy - a new Downtown Partnership - to spend even more on marketing and such.

Downtown will start doing well and it doesn't need more government - it needs less. Government can foster growth of housing by making it easier to do business in Grand Rapids. Lower taxes would help too. Housing growth downtown continues. It will eventually reach a critical mass, and that's when shopping will take hold. Until then, we don't need more government and bureaucrats, we need less.

Monday, December 13, 2004

Michigan Budget Woes

A new report released by the National Conference of State Legislatures shows that Michigan is one of only three states where government revenues are still below those projected. The other two states and New Jersey and Tennessee.

Interestingly, some states are showing an astonishing level of income tax revenue growth over projection. Examples are Arizona (46%), Georgia (97.4%), Kansas (58%), and Hawaii (106%).

However, Michigan's revenue gap (the gap between projections and actual revenues) stands at $465 million for Fiscal year 2005, which started on October 1st of this year.

This means a couple of things in terms of tax and spending policy. First, we'll see whether the legislature has the guts to do some more cutting, or if they'll try more accounting tricks, such as the property tax shift, to raise more revenue.

Second, the underlying problem of a lack of economic growth in Michigan needs to be addressed. Heavy reliance on manufacturing, high taxes, and heavy unionization make Michigan an unattractive place for business to move. We've seen businesses flee the state in the last several year for other states and other countries. Unless Michigan is made competitive again, the state's economy will continue to groan under the weight of government.

It's an unfortunate reality, but manufacturing isn't the backbone of America any more. It's time to recognize that manufacturing, although still an important part of the economy, is going the way of farming. It simply takes far fewer people to manufacture the same number of items.

We are a service economy now - let's face it and deal with it.

Thursday, December 9, 2004

Twisted Casino Logic

Yesterday the state Senate revoked its approval of a compact with the Gun Lake tribe, effectively ending any chance that an Indian casino will be build (with the state's consent), in the Dorr area.

Senate Majority leader Ken Sikkema was interviewed on WOOD radio this morning and he explained that he voted to rescind the compact because a study showed that 3,000 jobs would be lost in other entertainment industries due to the opening of a casino.

In addition, he mentioned that there are 20 casinos in Michigan and "that is enough."

There are two points here that need to be countered. First, the idea that a new business will destroy 3,000 jobs is a fact of life. While we question that number (the study was commissioned by the Grand Rapids business community, which wants to stop the casino), it is a fact of life that new businesses create (and destroy) jobs continually. The senator's argument only looks at half the equation.

Tuesday, December 7, 2004

City Budget Gnashing

As our readers will know, we've pointed out some pretty ridiculous ways that the city of Grand Rapids spends its money. Now, last week the city manager, Kurt Kimball, went to the City Commission to say that the city needs to restructure the way it spends money.

He says that by 2010 the city will be in a $80 million hole. In addition, if the state reduces its revenue sharing, the hole will be $130 million.

Surprisingly, the focus is on cutting spending, not raising taxes (so far). Kimball's quote in the Grand Rapids Press is: "The question is when, not if, service levels will need to be reduced."

Perhaps there's some light at the end of the tunnel?

As we've pointed out in the past, residents of Grand Rapids already pay the second highest taxes in Kent county. And what do we get for it?

Maybe the city fathers will finally get the drift and look at the spending side of the income statement instead of the revenue side. Higher taxes only continue to push residents and business out of Grand Rapids.

Monday, November 15, 2004

City Budget Wackos

Last week the Grand Rapids City Commission rejected a request by the city staff to send $15,252 to a Colorado Energy firm to buy nothing.

City staff wanted to the City Commission to spend our money to buy what are called Renewable Energy Certificates. These certificates do not buy you anything. The certificates represent the extra cost of producing electricity by using windmills - basically what an energy company loses by producing electricity that costs more than they can sell it for.

That energy company, called Renewable Choice Energy, is a favorite of environmentalists who want to feel better about using electricity. The city wanted us to pay for "our share" of electricity produced by these wind farms, which is just added to the power grid and may or may not have ever been used here in Grand Rapids (most likely not).

This is a purely ideological spend of money that would not benefit the city of Grand Rapids, its citizens, or anyone who pays for city government.

The amazing thing, however, is that it failed on a four to three vote! Unfortunately, the minutes of the meeting do not record the vote, so we aren't exactly sure who voted in favor of this one, but Commissioner Jendrasiak called it "nuts," so we can assume he voted against it.

Not only is it nuts, it's a waste of money. Yet they continue to complain about budget problems.

Wednesday, November 10, 2004

Election Wrap Up

Presidential Election

Well, no surprises here in Michigan. Kerry won the state, garnering 51% of the vote to Bush's 48%. In 2000, Gore got 51% of Michigan to Bush's 46%. Nader got 2% that year, which interestingly points to the idea that Nader voters don't necessarily take votes away from the Democrat.

In Kent county, things were quite different. The vote was strongly in favor of Bush, 58% to 40%. The City of Grand Rapids went a different way, however, and voted 55% Kerry and 43% Bush. In fact, in our analysis, Kerry won all three wards of the city.

Ballot Proposals

The two ballot proposals passed handily. Statewide, Proposal 1 (gambling-related), passed 58% to 42%. Proposal 2 (defining marriage) passed 59% to 41%. We here at GR Pundit were disappointed that both passed. Both were bad legislation, in our opinion.

Look out for higher property taxes now that less lottery money will likely be raised, which transfers to the school aid fund.

Those were the main issues at hand in Michigan and locally. There wasn't much else of interest in local races. We don't think there were any heated competitions or seats seriously up for grabs.

Monday, October 25, 2004

Michigan’s Proposal 2 - NO

Ballot proposal number two, which will appear on the Michigan ballot on November 2nd, amends the state constitution to insert a firm definition of what will be legally allowed to be recognized as a marriage. The proposed amendment reads as follows:

Article 1, Section 25: To secure and preserve the benefits of marriage for our society and for future generations of children, the union of one man and one woman in marriage shall be the only agreement recognized as a marriage or similar union for any purpose.

As contentious as this issue is, we at GR Pundit didn't have a hard time deciding on this one. There are two issues at stake here. First, what is the role of government in marriage and why? Second, what affect would this have on domestic partners (of the opposite sex) who receive employment benefits?

First, what role should the government play in marriage. Marriage is essentially a religious ceremony which then receives recognition from the state. Therefore, there are two components to marriage. First, the religious aspect. Second, the legal recognition of that marriage to confer certain rights on the married couple; namely, the right to child custody, legal co-ownership, and inheritance. However, as the law stands, one must get a license to get married, which essentially licenses a religious ceremony.

How many religious ceremonies are licensed by the state? We can only think of one - marriage. Should baptism be licensed? How about communion?

So we come to the conclusion that the government is in the business of deciding which religious practice of marriage is acceptable. Marriage between one man and one woman is ok, but between two men or two women is not. Following that line of logic, the state should then be able to determine who is eligible for baptism and who is not.

We understand that this issue brings up strong feelings but we implore our readers to apply reason and logic to the issue before making a decision.

We have a hard time finding a logical argument against gay marriage. The most-often used argument is that marriage is part of the fabric of society and that if marriage is "ruined" to allow gays to marry, society will somehow collapse. In fact, the proposed amendment's own wording says that the intention is to preserve the benefits of marriage "for the children." But, exactly how would gay marriage harm children or be any different than today's world of straight-only marriage?

Around 50% of marriages currently end in divorce. How, exactly, is that a benefit to society? The tremendous rate of failure of traditional marriage, many involving children, seems to be more of a threat to society than a very small minority who simply want to have the same rights as everyone else.

If two people, who love each other, repugnant as the behavior may be for some, want to dedicate their lives to each other, why not allow that?

What gay marriage proponents often try to use as another option is the concept of a civil union. A civil union essentially confers the legal rights of a marriage on a couple without calling it a marriage. This amendment would outlaw any such civil union legislation in Michigan.

Opponents of this proposed amendment say that it will outlaw domestic partner benefits for those who work for companies that offer such benefits. If a man and woman live together and have a child, but are not married, many companies will offer benefits to the whole family. This amendment appears to outlaw such benefits.

But an even more fundamental question comes to mind. Why should we mess with our constitution on an issue that has purely emotional effects? We can't determine one real, tangible, societal effect gay marriage would have. Who would be harmed by gay marriage?

Our constitution is designed to do two things - define the rights of citizens that government cannot infringe upon and define how government operates. It does not define social issues that should be handled solely by the legislature, nor should it.

For these reasons, we will be voting NO on Michigan's Proposal 2.

Tuesday, October 19, 2004

Michigan’s Proposal 1 - NO

This will be the first in a series of election-related posts. We will focus on local issues only.

Proposal 1 (officially 04-1), which will be on the Michigan ballot November 2nd, 2004, is titled: "A proposal to amend the state constitution to require voter approval of any state gambling authorized by law and certain state lottery games."

This proposal would amend the state constitution to require both a statewide vote and a vote in the locality where a proposed casino is to be built. This not only requires a vote on casinos, but any form of gambling which is authorized by law after Jan 1, 2004. However, Indian casinos and casinos which already exist are exempted from this proposal.

So, basically, what does this do? It makes it nearly impossible to set up any new casinos (non-Indian) in Michigan. If, for instance, Muskegon decides that they want to authorize a casino to boost their local economy, they get to vote on it. Sounds like a good plan, right? Well, then the entire state gets to vote on it separately.

Detroit already has its monopoly on non-Indian casinos. That is why they are heavily supporting this proposal. It essentially gives the Detroit area a veto on any new casinos. It's nearly impossible to get anything passed in this state without the support of SE Michigan. In fact, the proposed amendment specifically exempts the three casinos in Detroit.

But on top of that, this takes the power out of the hands of the legislature to approve casinos or any new form of gambling in the state. Is that something we really want to put in our constitution?

Gambling and casinos are like any other business - they provide a service that people obviously want to take part in. Why should one particular form of business be inserted into the constitution as a special case requiring a vote? Should the entire state vote on every new Starbucks? How about every new car dealership?

So while this sounds like a good plan when they say, "let the local people decide," it is much more than that. It nearly eliminates the possibility of any new casinos or gaming of any kind in Michigan.

Both Governor Granholm and House Speaker Rick Johnson have jointly come out in opposition to Proposal 1. Even though we here at GR Pundit don't put much stock in our politicians - from either side of the aisle - it makes us take notice when a joint opposition is announced.

For these reasons, we at GR Pundit have decided to vote NO on Michigan's Proposal 1.

Tuesday, October 12, 2004

Call to Misguided Renewal

Yesterday, Mayor Heartwell as well as other local politicians and clergy held a rally to overcome poverty. The rally was sponsored by an organization called West Michigan Call to Renewal, which is part of a larger nation-wide Call to Renewal organization.

Notwithstanding the fact that here at GR Pundit we're having a tough time remembering the last time a rally solved the world's problems, we wondered exactly what this organization's goals are.

We found on their website, as part of their mission statement, a typical explanation of what they look for:

We believe the American people are disgusted with politics as usual and hungry for political vision with spiritual values that transcends the old and failed categories that still imprison public discourse and stifle our creativity. The religious community should help lead that discussion and action toward new political and economic alternatives.

They are attempting to throw off the old political labels and look for a third way in using government to achieve their means. Which is exactly where they end up being like any other social favors organization. They pay lots of lip service to finding that "third way" to ending poverty, but they end up supporting the same partisan positions that end up bloating government, raising taxes, doling out money, and ultimately harming people more in the long run.

Their mistake is in thinking that government is the source of economic renewal and improvement - in thinking that government is the ultimate economic uplifter and equalizer. They err greatly on this front. Didn't the so-called war on poverty demonstrate to these people that this isn't the way to help people?

A few examples of the programs they want people to advocate for are listed on their web site:

  • "Reform" of estate tax - no repeal
  • Increased "No Child Left Behind" funding
  • Expansion of the Earned Income Tax Credit (backdoor wealth redistribution)
  • Healthcare socialization
  • Living wage laws

    Hmm. Doesn't sound more than a thinly-veiled arm of the political left in America.

    More government won't solve the problem of poverty. The article from yesterday's Press points to some facts about the local economy:

  • Grand Rapids unemployment was 10.4% in 2003, way above the national average of 6%.
  • Food assistance programs are on the rise
  • 700-800 people were in emergency shelters each night in 2003

    But, as we've reported earlier, Grand Rapids also has the second-highest tax rate in the county.

    The economic interventionists, such as Mayor Heartwell, don't seem to grasp the direct relationship between high taxes and slow (or negative) economic growth. The only way to get people out of poverty, permanently, is to ensure a growing and health economy. High taxes are the kryptonite to a strong economy. Ultimately, as taxes increase, businesses hire fewer people, pay them less, and spend less on growth.

    In addition, a strong education is needed to overcome the dramatically shifting economic picture from manufacturing to a service economy. Yet, Call to Renewal acts like another arm of the National Education Association in advocating more simply more money for education - of course directly from the federal government. If someone can point out to us a (legitimate) study showing a direct relationship between education spending and outcomes, lunch is on us.

    GR Pundit has a few suggestions for really overcoming poverty:

  • Create universal education tax credits, so children stuck in miserable failing schools can benefit from those who wish to donate to education scholarship funds
  • Reduce tax rates for all Americans - growing the economy, creating jobs, and improving the economic opportunities for everyone
  • Reduce the bloat of government

    Pretty simple stuff, but not very exciting the for the busybody politicians out there.
  • Thursday, October 7, 2004

    Dancing Not Evil Any More?

    In a stunning reversal, Cornerstone University's governing board decided to change their rule which prohibited students from dancing, on and off campus.

    Dancing was banned by the University in 1941 because it could cause "personal spiritual harm." Indeed. Evil.

    We just had to comment on that one because it made us laugh.

    We're shocked. Shocked! Another example of declining morals - they can dance now! What is the world coming to?

    Wednesday, September 29, 2004

    Kentwood Teachers to Strike?

    The teachers in Kentwood look increasingly likely to strike within the next couple of weeks. There was even an article in yesterday's Grand Rapids Press about a parent group in Kentwood attacking the school board over the issue. One wonders why they are not attacking the teacher's union as well.

    Just what exactly is the bone of contention here? The foremost issue is that the Kentwood board is refusing to continue with the union-owned health care plan for teachers and other staff. This health plan, called MESSA, is more expensive for the board (thus the taxpayers) than any traditional health plan. In fact, MESSA is just resold Blue Cross, but it is resold by the union to the school district at an inflated rate. In addition, the union demands that 100% of the premium be paid for by the board. They reject any attempt at having the teachers pay for any of their own health care. How many of our readers have a plan that good?

    What is the difference in cost? MESSA is $1,013 per month. The Priority Health plan is $790 per month. That means MESSA is 28% more expensive than Priority Health.

    The board wants to cap its contribution to $916 a month, so that if the teachers were to choose to stay with MESSA, they would have to pay $97 per month for their health care premium. If the teachers were to choose to go with Priority Health, the board would pay the teachers an extra $126 per month. They would have no out-of-pocket premium expense.

    But, wait, you may be asking. Isn't the Priority Health plan worse than MESSA? No. Both plans are comparable and the PH plan is in several ways better.

    So that, in a nutshell, is why the teachers are probably going to engage in an illegal strike.

    It's that simple. You're probably wondering why the union is so militant on this issue - it seems like a no-brainer. Well, since MESSA is a union-run health care plan, the union's leadership is very interested in maintaining their monopoly on school health care. It's a very lucrative business that would start falling apart if some school districts were allowed to stray from their control.

    The school board and and administration have dug in, and we applaud them. They are trying to save the taxpayers some money and all they're receiving is grief for that effort.

    Monday, September 27, 2004

    Jenison Tax Revolt

    On saturday, the residents of Jenison rejected a request by their school district for a "recreation millage" tax increase.

    Two things should be noted about this vote. First, typical to the tax-raising crowd that wants to control the outcome of their requests, the vote was held on an odd election date - a Saturday. Usually they think that having elections on odd dates makes it unlikely that the average voter will turn out, so they notify those who are "friendly" to their tax increase about the election date, boosting the "yes" vote and potentially diminishing the automatic "no" voters. Thankfully, this practice has been stopped by last year's election consolidation laws, which will limit all such future tax increase requests to four specific election days a year.

    Second, this is a trend by school districts to try and skirt Proposal A. That law stopped local school districts from raising money via property tax for operating expenses. Instead, funding for schools comes from the state via the sales tax, which we all pay. The recreation millage is a loophole in Proposal A which allows school districts to raise additional operating money by calling it "recreation" money.

    As usual, the school district leaders are complaining that they don't have enough money to operate and that Lansing doesn't pay enough to operate the schools. Nevermind that these are the same school leaders who consent year after year to the teachers union's demands that they (the school district) continue to pay for the union-owned health insurance scheme, which is far more expensive than standard health insurance. Some estimates show that $400 million a year could be saved by Michigan school districts if health care were simply bid out, instead of being monopolized by the union's MESSA health care plan.

    When was the last time we heard charter schools whining about budgets and funding? They don't have the option of raising taxes to build buildings, and they're doing just fine with what they've got.

    But the stunning part is that the residents rejected the tax increase. We're constantly told by public school district leaders that they need more money. That line isn't working any more. Perhaps school districts should examine the expenses side of their budget, instead of always attacking the revenue side.

    Monday, September 13, 2004

    Assault Weapons Ban Expires Today

    There was an article over the weekend putting a local perspective on the expiration of the federal "assault weapons ban."

    First, what exactly did the assault weapons ban actually ban? It made it illegal to manufacture firearms with such evil things as a bayonet, flash supressor, pistol grip, or folding stock. What the ban did not do, is ban semi-automatic firearms. In fact, firearms that were manufactured before the ban went into effect were still legal. Everything the law banned was still available during the time period that the law was in effect.

    What was the practical effect of the law? It basically outlawed the manufacture of firearms with certain cosmetic details. It also outlawed the manufacture of firearms magazines (clips) that could hold more than ten rounds. However, hundreds of thousands of 30 or more round magazines, imported before the ban, are still readily available.

    The weekend GR Press article cites a statistic that in 1995, 3.5% of all gun crimes involved an assault weapon, but only 1.22 percent in 2002. But, it doesn't cite the statistic that all crime is down 55% in the last decade. In fact, crime in the United States is at a 30 year low. That's an inconvenient fact for the gun grabbers. But the point is this; all the weapons that were available before the ban went into effect were still available during the ban.

    Even the US Justice Department's own study on the issue concluded that, "We cannot clearly credit the ban with any of the nation's recent drop in gun violence."

    Grand Rapids Police Chief Harry Dolan is quoted in the GR Press article as saying:

    "Before the ban, (magazines) were at 30 rounds, 50 rounds and 100 rounds. What is the value to anyone other than the military, with a magazine that shoots 100 rounds a minute?" Dolan asked. "I personally have a great deal of respect for hunters and sportsmen. These are made for hunting human beings, not hunting deer."

    Has the chief read the Second Amendment lately? Or how about Michigan Constitution's Article I Section 6:

    Every person has a right to keep and bear arms for the defense of himself and the state.

    It's pretty clear that bearing arms isn't about hunting deer.

    Besides, it's pretty damn hard to fire a semi-automatic rifle at 100 rounds a minute. It seems like the police chief would understand that a little better.

    So, what do we conclude? The same as the government has concluded. The assault weapons ban was meaningless and it is a good that that it is expiring.

    Far more detailed information on the ban is available at the AW Ban Sunset web page.

    9-16-04 CORRECTION: Thanks to a pleasantly belligerent commenter, GR Pundit decided to consult our massive pool of firearms experts and conclude that it isn't so tough after all to fire 100 rounds a minute with a semi-automatic firearm. We regret this error, but rejoice in the fact that it will be easier than we thought to push back the hordes of invading Canadians when the world comes to that point.

    Friday, September 3, 2004

    A Blow to Corporate Welfare

    In an interesting federal appeals court decision yesterday, many state programs which offer tax breaks and other incentives for business to stay in Michigan may be unconstitutional.

    The 6th US Court of Appeals, which covers Michigan, Ohio, and several other states, ruled that a $300 million incentive package that the state of Ohio offered to DaimlerChrylser to keep a plant in Toledo is unconstitutional. Basically, the decision said that such tax breaks and incentives interfere with interstate commerce, which only the federal government can regulate.

    It's an interesting and difficult argument, but apparently it worked. This means that similar programs in Michigan will come under the legal microscope.

    Why does GR Pundit care about this? Because the state of Michigan, through such programs as the Michigan Economic Development Corporation, is regularly in the business of providing special tax breaks and other corporate welfare programs to keep business here. It makes it an uneven playing field for everyone else. Some businesses get to pay lower taxes by threatening to leave the state, while the rest (and us regular people too) then have to pay higher taxes to make up the difference. They say that such incentive programs "create jobs," when in fact they don't. A great real-world example of the harm of such programs can be found here.

    Instead, the Michigan business environment should be made friendly for all business, not just a select few big companies that basically extort more concessions out of the government under threat of closure. Lower taxes for all, looser labor regulation, and less state bureaucracy would help all businesses in Michigan and create far more jobs than "targeted" special treatment for a few companies.

    We'll keep an eye on this one...

    For a longer explanation of this case, see this article.

    Thursday, September 2, 2004

    Democrats Against Democracy

    Yesterday a federal judge ruled against Ralph Nader's attempt to get on the Michigan ballot as the Reform Party's presidential nominee. The Reform Party has split into two factions. The judge said that the Secretary of State shouldn't have to make the determination which Reform Party in Michigan is the real one, so a rejection of his nomination was allowed to stand.

    However, Nader could still appear on the ballot as an independent, because the Michigan Republicans circulated nominating petitions. They turned in enough for him to qualify, but the Democrats cried foul. The state board of canvassers is made up of two Republicans and two Democrats. The two Democrats voted to reject Nader's nominating petitions, which caused a deadlock, essentially rejecting his appearance on the ballot.

    Of course the Nader campaign has gone to court to force the board of canvassers to put him on the ballot. He'll probably win, because we can't understand why the board could reject Nader if he had enough legitimate signatures.

    The Democrats are the ones who have been kicking and screaming to keep Nader off the ballot. Now, we here at GR Pundit perfectly understand that Nader probably tends to take votes from the Democrat candidate, but how does that look? Isn't it a little more than hypocritical to call oneself a Democrat and yet want to limit the choices on the ballot? Maybe it's a new Democratic caucus: Democrats against Democracy. Or maybe they just want to limit the choices to what they approve of.

    "But wait!" We hear our readers screaming, "The Republicans do it too!" Yes, we know. Both major parties do it. It's all about power and maintaining the status quo. Politics is about power; gaining and maintaining power. It's that simple. That's why we here at GR Pundit are thoroughly non-partisan.

    Wednesday, September 1, 2004

    GR Smoking Ban Defeated

    Since we at GR Pundit were asleep at the wheel last week, we missed this one. The Grand Rapids City Commission was asked by a group called Smoke-Free Air for Everyone (SAFE) to pass an ordinance to ban all smoking in public places.

    Thankfully, the commission had the guts to stand up to this one and say no. The nanny-state crusaders want to use the force of government to stop people from smoking basically anywhere, including workplaces and entertainment facilities. I'm sure the Grand Rapids Police Department has nothing better to do than arrest violent and dangerous smokers who are a clear threat to society.

    The disturbing part is that Mayor Heartwell suggested that it be taken up at the county level. Instead of standing up for people's rights, he offered another avenue to impose their paternal tyranny.

    The simple answer here is this: if you don't like the smoke, don't go there. Why should private property owners who open their doors to the public be forced, at gunpoint if necessary, to ban smoking at their establishment?

    Tuesday, August 31, 2004

    Wyoming Tax Revolt Complete

    The Wyoming City Council received the results of the tax vote recount today. Guess what. The people actually, really, truly, voted no.

    See our previous two postings on this subject here and here for analysis of the tax vote.

    Where do they go from here? Perhaps it's time to prioritize spending instead of always asking for more. Michigan's unemployment rate is significantly higher than the nation's average. Government should learn to live on less like the rest of us during this recession.

    Thursday, August 19, 2004

    Mandatory Community Service

    The state education bureaucracy is now in the business of mandating community service for public high school students. The Michigan Department of Education announced yesterday that, starting in 2006, all students who are eligible for the Michigan Merit scholarship must complete 40 hours of community service before they can receive the scholarship. Previously, simply doing well on the state's MEAP test was all the qualification needed to get the scholarship.

    Should it really be up to the state to require volunteering? And isn't that a contradiction in terms?

    It creates a murky situation because the state isn't mandating the community service for graduation - just for a scholarship that not everyone qualifies for anyways.

    But this just goes to show that with government money comes government strings. Local school districts will be forced to add even more bureaucracy to their plate - exactly what they need.

    Instead of focusing on more bureaucrats to administer forced voluntarism, why not focus on the basics? A lot of good volunteering will do when fewer than half of Grand Rapids Public Schools high school students are reading at grade level.

    Monday, August 16, 2004

    Medical Insurance Progress

    We may be seeing the biggest change in the medical insurance industry in decades. In an interesting story from yesterday, Blue Cross of Michigan announced that they will be offering Health Savings Account (HSA) plans beginning in January.

    HSAs are a result of last year's Medicare bill. Although most of the bill was just another gigantic government handout, there was one little gem, and that's the HSA. A health savings account is similar to a retirement IRA where money can be saved in a tax-free way to pay for health costs. In fact, this money can be invested in the same way it can be in an IRA.

    The HSA needs to be linked with a high deductible health plan. Generally the deductible is around $2500. When a person then has a medical expense, the cost is paid out of the HSA and not by the insurance company. If medical costs rise above $2500 in a year, then the insurance kicks in.

    What's the advantage of this? It creates a consumer-driven medical market. Insurance premiums are much lower with HSAs and suddenly we're going to become interested parties in the costs involved. The doctor wants to give you that tetanus booster? Well, 'how much is it?', you'll ask. Suddenly we're responsible for our own costs.

    Any money put into an HSA is tax-deductible and if you invest the money, it is tax free. A lifetime of saving in an HSA could produce hundreds of thousands of dollars, which can be spent tax-free on medical expenses. If you've got more than you can use in the account at age 65, it can be used at a regular tax rate for non-qualifying (non-medical) expenses.

    For an example of how the current health care system drives up costs, consider the following example from columnist Wayne Dunn:

    Is there something special about health insurance that makes it crisis-prone? I mean, we never hear about the horrible "house insurance crisis" or the "spiraling cost of auto insurance."

    It wouldn't be too hard to create such a crisis though. In fact, let's try to map one out.

    Just imagine if politicians resolved that, since automobiles are vital for getting people to work, companies ought to provide for the care and maintenance of its employees' vehicles.

    So political pressure is applied to employers-- maybe through the tax code, or perhaps legislation is passed outright; and, before long, auto insurance is restructured to cover not merely accidents, but routine maintenance and service. For a monthly premium and a $10 or $15 "co-pay," your car insurance would cover the cost of an oil change, tune up, new tires, whatever it needed.

    Something odd would begin happening though. Mechanics would stop hearing the now pervasive, "How much will it cost?"

    Why? Because if all you had to do is plop down ten or fifteen bucks and your insurance paid the rest, why would you care what the mechanic charged? Heck, you'd start taking your car in for an oil change every 1000 miles instead of every 3000. Rather than getting your tires rotated, you'd just have new ones put on. And that rear electric window that won't lower, you'd not think twice about having fixed.

    More info is available at HSA Insider.

    Friday, August 13, 2004

    More Questionable Spending

    We here at GR Pundit sometimes wonder whether our city government ever thinks about what it does.

    The Grand Rapids City Commission yesterday approved the expenditure of $67,700 of taxpayer dollars on an adopt-a-stream program which is operated by the West Michigan Environmental Action Council (WMEAC). The article states that with this money over the last year, over 200 bags of trash were removed by volunteers from local streams.

    But let's take a closer look at this program and the WMEAC. First, WMEAC is not just a group of concerned environmentalists. They are the garden-variety environmental political activists who run such programs as the "Cup of Justice Group," which aims to "...communicate with the Grand Rapids community about the environmental and social justice issues in our cup of coffee." What types of social justice issues? Things like "...consumer awareness and demand for fair trade, shade-grown, [and] bird-friendly organic coffee." Maybe we can sing kumbaya after.

    Second, this adopt-a-stream program is supported by taxpayer dollars. We here at GR Pundit agree with the goal, that is, cleaning up local streams and protecting waterways. Who doesn't support that? But spending $67,700 to pick up 200 bags of trash? Well, we suspect there was some number inflation at the City Commission meeting on the part of the WMEAC presenters. Their own annual report says that 120 bags of trash were picked up last year. That's a great achievement - we don't disagree. But that's at a cost of $564 per bag of trash collected. A cost to us taxpayers.

    Isn't there a more efficient way to do this? Particularly when our city taxes keep getting jacked up while we're told that if we don't increase taxes, police and fire will be cut. How about cutting wasteful spending first?

    Maybe just hire a rubbish company to regularly collect garbage? I seriously doubt that anyone would charge $564 per bag of trash.

    Thursday, August 12, 2004

    Tax Attack Backtrack

    In a sudden revearsal of the onslaught of tax increases we have been hit with in Grand Rapids and Kent county, the county commission announced they would not pursue another tax increase request in November to create a county-wide 911 system.

    They claim that they were planning on holding off before last week's election, but that the results of several tax votes were what sealed the decision.

    The county wanted to increase taxes, again, to support a single 911 system. Currently, each jurisdiction has its own dispatch, which results in a patchwork of police department dispatch systems around the county. That's a legitimate concern, but perhaps the issue should be approached from a different direction.

    Since each of those jurisdictions pays for its own system already, why not just get each of those cities, towns, and townships to chip in what they'd save by not running their own 911 dispatch system to pay for a county-wide system? It seems like it would be a lot cheaper to run one centralized dispatch, so it would probably save money for everyone involved.

    But then again, the bureaucrats were never accused of being an innovative or efficient bunch. Instead they'd just rather raise taxes for everyone across the county. Then each jurisdiction could spend the "saved" money on much more important things, like midnight basketball.

    Wednesday, August 11, 2004

    Bureaucrats for a Safe Job

    A group calling themselves "Citizens for a Safe Wyoming" is going to ask the county clerk for a recount of the failed revenue enhancement millage that failed last week. No doubt the group is comprised of those being laid off due to the budget cuts.

    Not only can't they let the reality of the citizenry's vote stand - now they are going to cost the taxpayers even more money by asking for a recount, which will cost about $1000.

    While we do feel bad for the Police and Fire Fighters that are going to be laid off, perhaps the blame is misplaced. It isn't the citizenry who they should be angry at. After all, they voted in favor of more money for the Fire Department. Maybe they should focus their blame at the city bureaucrats who can't seem to run government with any level of efficiency.

    Tuesday, August 10, 2004

    Holland Celebrates a Failure

    In a story that made us chuckle here at GR Pundit, residents of Holland celebrated twenty years of Amtrak service on Thursday with balloons and a party. They were celebrating a miserable failure.

    Amtrak is subsidized to the tune of about $1 billion a year in taxpayer funds. In other words, Amtrak loses $1 billion a year. Since 1971, Amtrak has received $39 billion in taxpayer funds to keep operating. No business in the world would be able to continue to operate like Amtrak does.

    But looking at federal dollars is generally easy to dismiss because of the enormity of the federal budget. However, the state of Michigan also subsidizes Amtrak to the tune of $7.1 million a year. The GR Press article says that this funding is split betweek two lines. Since the exact numbers don't seem to be easily available, let's assume that half of the state subsidy goes to the Holland Amtrak line. Since about 73,000 people rode the Holland line last year, that means that Amtrak loses about $47 per rider!

    So, as Holland celebrates a disastrous, bloated, inefficient example of government largesse, we giggle.

    Monday, August 9, 2004

    Store Owner Shoots Thief

    In Saturday's Grand Rapids Press there was an interesting article about a store owner named Leon Moody who shot a man who attempted to rob his convenience store. Moody had a .357 pistol behind the counter and reached for it when the punk jammed a gun in his face and demanded his cash.

    The cowardly puke trying to rob the guy saw the gun, freaked, and ran out of the store. Moody didn't stop there. He chased the guy into the street and shot at him twice, hitting him once in the shoulder. The moron got into an SUV and sped away... but he turned up at an emergency room soon after and was picked up by the cops.

    Our hat goes of to Leon Moody. He exercised his right to arm himself and take responsibility for his own safety and security. Plus he took out one more piece of scum in the process.

    Long live the right to self-defense with firearms!

    Thursday, August 5, 2004

    Wyoming Tax Revolt

    In an interesting development, on Tuesday the voters of Wyoming voted down an operating millage to replace lost state revenue sharing funds. It was a request for 1.5 mills, which would have cost the owner of a $100,000 home about $75 a year. It would have given the city revenue of about $2.8 million a year.

    Of course, as city governments usually do, they are saying that they need to cut police and fire to make up for the lost revenue. This is the type of politicking that we can't stand here at GR Pundit. They always threaten police and fire to scare people, instead of cutting the usual social spending first, and protecting, as much as possible, the most basic functions of a city government.

    Interestingly though, a second funding request specifically for more fire department funding passed, but it was contingent on the first request passing. What does that tell you? The people want to fund the basics - fire protection - but they don't want to fund the other jibberish that the city government does.

    The apparent lesson here is this: people want their city government to do what it should be doing - providing the basics. The rest isn't wanted or needed.

    Wednesday, August 4, 2004

    No Zoo Tax

    What do you know? The citizens of Grand Rapids came through last night! The Zoo tax (oh, wait, I mean wildlife park) went down pretty handily. It looks like the first and second wards of the city (West and NE ends) voted it down, but of course, the third ward, (SE side) voted in favor of it. Is there a tax the third ward hasn't loved?

    Perhaps it's time to question the very premise of last night's vote. Why does the county even run a zoo? Is a zoo a legitimate function of government? It should be able to operate just as any other non-profit organization - through private donations and entrance fees. A zoo is really no different than a taxpayer funded major league stadium. Just another publicly subsidized entertainment venue. Is that really what we should be doing with our tax dollars?

    What bothered us here at GRPundit most was the fact that we were being asked to pay for a new zoo through our taxes, yet we'd still have to pay to get in the door. It's like not being able to get into the house you pay a mortgage on.

    Unfortunately, this probably isn't the last we've heard of an extra tax for the zoo. They'll probably go back to the drawing board and come back in a year or two.

    Sunday, July 4, 2004

    July 4 - 1776

    IN CONGRESS, July 4, 1776.

    The unanimous Declaration of the thirteen united States of America,

    When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

    We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.--Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

  • He has refused his Assent to Laws, the most wholesome and necessary for the public good.
  • He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
  • He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
  • He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
  • He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
  • He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
  • He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
  • He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
  • He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
  • He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
  • He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
  • He has affected to render the Military independent of and superior to the Civil power.
  • He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
  • For Quartering large bodies of armed troops among us:
  • For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
  • For cutting off our Trade with all parts of the world:
  • For imposing Taxes on us without our Consent:
  • For depriving us in many cases, of the benefits of Trial by Jury:
  • For transporting us beyond Seas to be tried for pretended offences
  • For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
  • For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
  • For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
  • He has abdicated Government here, by declaring us out of his Protection and waging War against us.
  • He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
  • He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
  • He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
  • He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

    In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

    Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

    We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.
  • Saturday, June 26, 2004

    Trade isn’t the Problem

    The Detroit Chamber of Commerce commissioned a report to determine the reasons that manufacturers have been leaving Michigan at such a rapid clip. They (correctly) came to the conclusion that free trade isn't the problem. Some of the reasons could be called problems, others are just progress.

    For example, the report concludes that, "Increased manufacturing productivity plays a far greater role in job losses than offshore outsourcing." Just like the telephone switchboard operator has gone the way of the telegraph operator, so have many manufacturing jobs. Automation and higher productivity are displacing far more manufacturing workers than offshoring ever could. The report states, "Increased manufacturing productivity plays a far greater role in job losses than offshore outsourcing."

    Michigan needs to be more attractive to international companies looking to invest in the United States. Another conclusion of the report is that, "Michigan needs to improve the business climate for manufacturers and increase foreign direct investment ('insourcing')." In other words, we need to make Michigan a state that companies want to invest in - a place where they can do business and make money at the same time.

    Some of the report's suggestions follow:

  • Control health care costs
  • Control retirement costs
  • Reduce the federal tax burden
  • Reduce the cost of regulations and regulatory compliance
  • Accelerate the phase-out or replacement of the Single Business Tax

    In other words, less government is needed. Bureaucracy and regulation drive up those costs to business, forcing them to look elsewhere to do business.

    Unfortunately, the manufacturers also call for more government by asking for such things as increased support for manufacturing development programs and increasing state R&D initiatives. However, the recommendations in that area are pretty mild.

    The biggest change the chambers of commerce should push for is a lift on the cap of the number of charter schools in this state. They need an educated workforce, and that strong education starts in elementary school. If the poor state of education in Michigan is to be improved, much has to be done to provide choice for parents and implement true school accountability.
  • Friday, June 25, 2004

    GR Losing Residents

    Today the US Census Bureau released a report showing that the city of Grand Rapids is losing population. Surpised? Hardly. As we've reported earlier, the city of Grand Rapids now has the second-highest tax burden in the county. And what do we have to show for it? A nifty new convention center. Even as young people are moving downtown into the newly-renovated apartments and condos, the population continues to dip.

    What does this mean? It makes for a depressed housing market (fewer homes are needed). So those of us who live in the city who are already hit with lower home values because of poor schools and high taxes, get squeezed even more.

    What's the solution? There's still a lot of wasteful city government. Taxes should be reduced, both property and income tax, to attract businesses and homeowners. As people leave the city and property values decline, so does tax base growth, making the problem worse.

    So, why should we stay in the city, again? Someone remind me.

    Monday, June 21, 2004

    Tax us some more!

    As you may all know (or not know), the Grand Rapids Public Schools millages both passed last week and everyone's property tax will go up another $110 per year, on average. Since November of last year, taxes for residents of Grand Rapids have gone up about $206 per year. And they wonder why the middle class is fleeing the city? Add on top of that the fact that property tax affects those in lower income brackets more than the upper brackets - everyone's getting squeezed.

    Only East Grand Rapids has a higher tax burden in Kent county than residents of GR. Does this sound like a good way to promote growth? Less money will be put to productive use so that the bureaucrats can keep their jobs and developers from outside the city can suck up our tax dollars to build overpriced new school buildings. Do they really expect bricks and mortar to improve our city?

    Friday, June 11, 2004

    ACLU Sues Detroit Schools

    An interesting story came across the wire today saying that the ACLU has sued the Detroit school system for illegally searching students in a high school.

    This is one of the few areas where we applaud the ACLU over here at GR Pundit. They like to ignore some amendments to the constitution while over-interpreting others. Anyhow, back to the story...

    It appears as though a mass-search of Mumford High School in Detroit was conducted by police on Feb 18th. The search included patting down all 1800 students and forcing them into an auditorium while the search was conducted and not allowing them to leave. The term "false imprisonment" comes to mind here. Police are now corralling students into an auditorium and not letting them leave? Sometimes I wish I was an attorney just to go after things like this.

    But, as you already know, this author is not an attorney so I can't give legal advice. However, if I were a student at this high school I would refuse to be searched without a warrant. One such student did this, but was arrested for disorderly conduct. Getting in the way of the government's monopoly on force can be dangerous indeed. Challenging the authorities has historically been a bad idea.

    But, at least one student had the guts to refuse the blanket search. Who knows on what grounds this student refused, but it is a sad testament to what is being taught in schools these days. It's pretty clear the constitution is not a topic of learning any more. Every student should understand his or her right to refuse a search without a warrant.

    Before you reply with "well, you don't understand what kind of crime and drug problem those schools have...", allow me to add this: nothing was found in the search of those 1800 students.

    Friday, June 4, 2004

    "Cool" Cities?

    Amongst all the humorous banter about how government can make a city cool (an oxymoron if we've every heard one), a pollster released the results of a survey of college students this week. They were asked what makes a city cool. It wasn't nifty bars or government-funded entertainment district studies, or whoppingly expensive light rail, or gigantic convention centers - it was pretty simple: jobs. Good jobs.

    However, as bureaucrats and politicians do, they ignore the fundamental conditions that are necessary for the creation of good jobs. That solution involves fewer bureaucrats and politicians, so that one's out of the question.

    Of the respondents that are actually going to stay in Michigan after college, 12% want to move to the Detroit area and 8% want to move to the Grand Rapids area. Notice we say "area." We did a little analysis on the tax rate in Grand Rapids city and came to an interesting conclusion.

    The city of Grand Rapids currently has a property tax millage rate of 26.6998 mills, which means that for every $1,000 of taxable value of a home, the owner pays $26.69. According to the US Census Bureau, the median home value in Grand Rapids is $91,400, which means that the owner of the median home in the city pays about $1,220 in property tax per year. The GR kleptocrats love to point to the fact that Grand Rapids has one of the lowest millage rates in the county. They're right... but there's a catch.

    Grand Rapids residents have the privilege of paying a city income tax! The median household income in the city is about $37,000 and the average household is 2.57 people. For our purposes, we'll make it three people. That means the average household is paying about $451 in additional city income taxes. If we translated that into mills for a $91,400 home, it would mean an additional ten mills, and suddenly we have an effective millage rate of 37.7 mills! That's the dirty secret. Now suddenly the tax burden in Grand Rapids is higher than in the Northview, Forest Hills, Caledonia, Kentwood areas... and the list goes on. About the only municipality with a tax rate higher than in the city is for residents of East Grand Rapids who are also in the East Grand Rapids schools district.

    So, back to cool cities. Instead of suggesting that taxes be lowered to attract those who are affected most by high taxes - the middle and upper classes - they want to spend more taxes on determining what's cool. Bureaucrats are much better at determining what's cool than the average folks who spend their money they way they want to. Sure.

    Friday, May 28, 2004

    Creating Jobs?

    This week the Republicans in the State House agreed to increase the cigarette tax by $.75 per pack, but the Senate Republicans are saying that they will not pass the increase unless the Governor agrees to sign their bills to "create jobs."

    What I don't get here is how they can claim their "life sciences" corridor program will create jobs. There's a simple concept at work here, and it's this: Government can't spend what it didn't already take from someone else (unless you're the federal government and you can print money, but that fails to create jobs in a different way - a topic for another article another time).

    Taxes take money out of the pockets of people who would otherwise spend that money or save it - ultimately being utilized in the most economically efficient way to provide a service or product. However, the Senate Republicans think that taking that money and spending it on a life sciences corridor is a better use of that money. Ultimately, it is the same money, but it's being spent as the politicians see fit, not the individuals interacting in a free market.

    So, in the end, this doesn't create jobs at all, it simply shifts money from a economically efficient sector to one that isn't - evidenced by the fact that these jobs wouldn't exist without the politicians' special favors and pet projects.

    But, to top it off, the cigarette tax will ultimately increase black market activity, as discussed in a previous article on this site.

    Friday, May 21, 2004

    Unplugged Student

    This story caught our attention and we thought it was worth mentioning. A student at Grand Rapids' Union High School was cut off while doing a speech at his graduation cerimony. Nicholas Noel, the president of the Union High senior class, was cut off after describing his school as the "Union High Prison System." Even more humorous was that the rest of his speech included phrases such as calling Union a "foul institution" and a "horribly irresponsible and depraved place to learn these life lessons..."

    The article goes on to say that the school staff apparently expected some sort of un-approved speech from this young man. Sounds like he let the cat out of the bag too early. That's the life lesson here: don't tell anyone before hand when you plan to change your speech from the approved one.

    Wednesday, April 28, 2004

    Tax Attack

    As we earlier reported, the Grand Rapids City Commission went ahead and increased our taxes twice this week. First, they agreed to the 1% tax collection fee which will be added to everyone's property tax bill. In addition, the CiCom voted to increase our trash service property tax levy .2 mills.

    There were two prescient quotes in the above-linked article. First was from second ward Commissioner Rick Tormala, who said, "We're going to charge you a fee for the pleasure of collecting your taxes." How true. Not only is the city taxing the daylights out of us, they charge us for the pleasure. How nice of them. However, he didn't have the guts to vote "no" on it! Instead they agreed on a three year sunset provision, so the tax increase will phase out in three years. Yeah, right!

    In addition, Mayor Heartwell gets the award for Whining Comment of the Month. He said, "We're cutting deeply on the expense side. This is one opportunity we have to raise revenues." How nice. Our still-bloated city government has had to face some cuts, so it decided to extract more money from the citizenry. What about those of us who are completely incapable of increasing our own revenues, either because of unemployment or underemployment, which are at far higher rates in the city than the rest of the state. Our expenses just went up from increased taxes. Again, why can't the City Commission cut more? Because they don't have the political guts.

    On top of that, the CiCom also voted to increase our trash tax. It has gone up by 0.2 mills. The trash tax pays for the completely inefficient and wasteful trash system run by the city. We discussed this earlier, and proposed that the city privatize its trash collection service. Why does all of the citizenry have to subsidize the collection of trash. The tags the city sells do not pay for the service that is being provided. There are quite a few trash collection services available in the city. Instead, the CiCom decides to hike everyone's taxes to make up for the inability of city government to run anything efficiently or even the slightest bit self-sufficient.

    So, this week your property tax went up another $22 per year. That's in addition to the .2 mill increase from last year's ITP transit tax increase, and February's 1 mill increase in the countywide Kent Intermediate School District tax increase. From November of last year through now, the average city homeowner with a $100,000 house has had a property tax increase of $82 per year. Add on top of that the reduction of the personal exemption on the City's income tax, which increased everyone's income tax $13 per year, making the total tax increase $95, just in the last nine months.

    And there's much more to come! The following tax increases are still on the ballot for this year:

  • Grand Rapids Public Schools millage increase on the ballot June 14th (An additional approx $100 per household annual tax increase)
  • The upcoming library millage
  • The upcoming zoo millage

    If they want a cool city, we're a little baffled. There's nothing cool about high unemployment, high proerty tax and income tax rates, and a fleeing middle class.
  • Thursday, April 22, 2004

    House Votes Down Liquor/Estate Taxes

    Well, what do you know? The Michigan Legislature voted down the proposed increase in the liquor tax and the extension of the death tax - also known as the estate tax. I guess the Republicans can come through once in a while on tax issues. But now the House Speaker wants to increase the cigaratte tax more than $.75 per pack. Hopefully the rest of the House members will be able to stand up to that too.

    They can come up with the votes to sink a new tax, but they can't come up with the votes to make some cuts. What's wrong with these people? They can't find anything to cut in the bloated $9 billion general fund budget?

    Wednesday, April 21, 2004

    Sin Tax Update

    The Michigan Legislature will this week take up several bills to increase the cigarette tax, the liquor tax, and to extend the estate tax, which is scheduled to expire at the end of this year.

    For our feelings on the issue, we'll point you to our earlier post on the issue of increasing the cigaratte and liquor taxes and how they help create and increase a black market in those items.

    As for the estate tax, we believe that it is a morally represenhable activity. You pay taxes all your life and then the government taxes you again on the money you've already been taxed on, simply because you died. The federal government has at least repealed the death tax, so the state should follow suit. But of course, the tax and spend politicians who still don't get why business and investment are leaving this state, want to continue taxing the dayligts out of everything that moves - and everything that stops moving.

    The real issue isn't the tax increase per se, but the inability of government and politicians to realize how taxation harms the economy and stunts growth. The more of this they do, the longer it's going to take Michigan to emerge from this slump. The one sure-fire way to dramatically improve economic growth is cutting taxes, as both Kennedy and Reagan proved. But then again, no one ever said that politicians were well-informed on history.

    Thursday, April 15, 2004

    Even More Taxes in GR

    Wow, the Grand Rapids City Commission is at it again. Yesterday they discussed increasing our property tax even more for the city's trash program. Apparently the city's Refuse Collection Fund is going to have a deficit if they don't both increase fees and increase everyone's taxes.

    The refuse collection portion of the fund costs $5.9 million and the property tax brings in $4.9 million. The sale of garbage tags only produce $3.1 million in revenue. So it looks like we, the taxpayers, and subsidizing every bag of trash, because the city loses money on trash collection.

    My question is this: why does the city even run a trash collection service? There is a wide selection of trash collection companies in town and they're all pretty reasonable. And the best part: you only pay if you use them! Right now, everyone in the city gets to pay for trash collection they don't necessarily use. You pay for your own private trash collection service? Congratulations, you get to pay twice; the company who collects your trash and a property tax for the city's trash collection. It's time to privatize the city's trash collection service, reduce the property tax levy that pays for that service, and let those who use the service pay for it.

    Wednesday, March 31, 2004

    GR Taxes Just Went Up Again

    -4/1/04 CORRECTION: The City Commission voted to have a hearing on this issue before voting on it. Is there any doubt they'll vote in favor of it?

    Yesterday the Grand Rapids City Commission voted to tack on an "administrative" fee to our property tax bills. There doesn't seem to have been much media coverage on this issue. This tax increase will raise an additional $1.35 million in general operating revenues.

    Some of the wording in the resolution that the Commission passed is pretty funny. Here's an excerpt:

    "WHEREAS, in view of the City's severely depressed financial condition, the City Commission has a fiduciary responsibility to look to all lawful means for raising revenues to offset the impending huge budget shortfall so that service cuts to the citizens can be minimized."

    Perhaps they should refer to it as the City Government's depressed financial condition, not the city's. But then again, with the incessant tax increases and layoffs around the city, perhaps they were inadvertently accurate with the above wording. Cuts seem to be the last resort to our tax and spend city fathers. Of course, the first thing they go after are police and fire rather than the load of social programs the city government involves itself in.

    And in another contradictory move, the Mayor and Commissioner Tormala are lamenting job growth in Grand Rapids. They created a New Economy Task Force to attract jobs, particularly manufacturing jobs. Maybe they should look at their own policies of high taxation and regulation that create the business-unfriendly environment in Grand Rapids, West Michigan, and Michigan. But they won't. They will propose more subsidies and special favors for some companies... and no relief for the rest of us.

    Monday, March 29, 2004


    It's the irony of the year that the AFL-CIO stopped in Greenville to hold a "Show us the Jobs" rally this weekend. It is organizations like the AFL-CIO that advocate such job-killing measures as forced unionization and living wage laws that end up increasing unemployment.

    It is a pretty well-established fact in the world of economics that unionization, especially forced unionization, increases unemployment. Why? A brief explanation: unions limit the size of the workforce because they require higher wages to do jobs that could be done at lower wage levels. The result is that the supply curve of labor is skewed by higher-than-market wage levels. Employers, in order to remain profitable, are able to hire fewer people with the same amount of money. Therefore, some workers get more money per hour, but fewer workers are employed, increasing unemployment.

    There has been an extensive amount of research on "right to work" states where forced unionization is outlawed (you can't be required to join a union in order to work in a union show in a right to work state). Right to work states have seen faster rates of growth in employment, wages, and decreases in poverty rates that non-right to work states do not show.

    In addition, organizations like the AFL-CIO advocate in favor of so-called living wage laws, requiring companies and government units to pay higher wages. Again, economists understand that the minimum wage increases unemployment (due the same principle as unionization), but the living wage magnifies the problem. Increasing wage levels artificially through regulation distorts the labor market and, once again, forces employers to hire fewer people, once again increasing unemployment.

    And the real sticker is that those hardest hit are minorities, unskilled laborers, and the disabled, since they are the first to go when these types of laws go into effect. Why hire someone who doesn't have the skills at a high wage when you can find someone who does and pay the same?

    So, go ahead AFL-CIO and drive the big bus around getting people whipped up into a frenzy over job creation, but know that you're a big part of the problem.

    Saturday, March 20, 2004

    GRPS Asks for $165 Million

    On Monday the Grand Rapids Board of Education voted to place a bond question on the ballot on June 14th. They split things up into two questions, one for $150 million for buildings and one for $15 million for computers.

    The combined millage rates of the two issues will be 2.3 mills, according to the information we could find on the GRPS web site (for some reason none of media outlets with web sites published the actual millage rates, even the print edition of the Grand Rapids Press).

    The tax-raising politicians always like to point to the cost per month or per day to the average taxpayer to make it sound like a small increase. However, in the interest of full disclosure, we would like to point out the total cost to the average taxpayer. Assuming a 25 year payoff schedule (again, the media didn't report what the rate is), the owner of a $100,000 home would pay about $115 per year in additional taxes. Assuming a modest taxable value increase of 2% per year over 25 years, the total tax per $100k home would be approximately $3,795.

    Those of us who are city residents need to pay a little closer attention to our tax-raising politicians. It seems as though we've got tax increases coming at us from every direction. The economy isn't so hot and layoffs continue. Why can't government trim costs like the rest of us? If you're a bureaucrat, when the going gets tough, demand more money!

    Saturday, March 13, 2004

    Death Penalty in Michigan?

    A committe in the State House voted yesterday to send a bill to the full house for a vote to put the issue on the ballot in November of whether or not the state should have the death penalty. This would amend the state's constitution and remove the current prohibition on the penalty of death.

    Michigan has, in my opinion, a proud history of abolishing the death penalty. In 1846 this state was the first English-speaking territory in the world to abolish the death penalty, under the newly-approved 1835 constitution. Since then this state has had no executions.

    There are a whole host of arguments in favor of the death penalty, and most are dealt with pretty satisfactorily well here, but there is one issue that I believe overrides all practical and utilitarian arguments, and that's this: no one has the right to take someone else's life. What is government? It is simply an extension of the people. Government derives its power from the people. How could government then do what the people themselves are not allowed to do?

    Does this argument then prohibit any punishment for crime? No, it doesn't. People have the right to defend themselves and jailing an individual who has committed a crime allows a level of collective protection from further crime. However, killing someone is a different story.

    Besides, what is the worse punishment for the criminal? Sitting in jail for the rest of their life or getting the early ticket out by being executed?

    Just some philosophical musing from your friendly GR Pundit.

    Wednesday, March 10, 2004

    To GR City Residents: More taxes!

    Attention Grand Rapids city residents: does your wallet seem to be getting thinner? Well, it's going to get thinner again. Yesterday the City Commission voted to decrease your income tax exemption from $1000 to $750, resulting in a tax increase of about $13 per resident. The vote was unanimous.

    The exemption was originally increased so that your taxes would decrease when the transit millage increased. Remember them telling us "this transit millage isn't going to increase your taxes because we're decreasing your income tax." Well, not only has the transit tax increased additionally since then, now the income tax is increasing, wiping out the promised compensation of the difference.

    Let's look at the changes to Grand Rapids' residents' balance sheet in the last several months.

    1. Increased property tax from the transit millage in Nov of 2003
    2. Increased income tax for GR residents and non-residents who work in GR.
    3. Increased property tax from the special education millage of Feb of 2004.
    4. Proposed increase in property tax for the Grand Rapids Public Schools to build new buildings in June of this year.
    5. Proposed increase in property tax for the new zoo, probably in August of 2004.

    The powers that be don't seem to grasp that all these increased taxes harm the economy and decrease growth. Michigan's unemployment is already far above the national average and increased taxes are a proven way to stop or dramatically slow any recovery.

    And Commissioner Jendrasiak, in commenting on increasing your income tax, is complaining about needing more revenue. How about cutting some city government? The rest of us have had to trim back, both in our personal lives and in business. But the City's appetite continues to grow.


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    Friday, February 20, 2004

    Protectionism Hurts Michigan Workers

    An interesting article by GR Spring & Stamping Inc. CEO Jim Zawacki shows how economic protectionism hurts American - and Michigan - jobs. He clearly states the case that the steel tariffs that (thankfully) the World Trade Organization forced the US to repeal, increased steel prices domestically and internationally. The results of protectionist tariffs were higher costs for domestic steel-consuming industries, such as GR Spring & Stamping. When their costs increased, so did their prices to customers, making them less competitive internationally.

    Interestingly, he also points out that protecting inefficient domestic steel foundries made the US less competitive on the international market. China's steel consumption continues to increase, but due to higher US prices of steel, caused by protectionist tariffs that prevent the industry from becoming more efficient, less of China's comsumption is of American steel.

    One of Mr. Zawacki's quotes hits the nail on the head: "Here in the U.S., 190,000-200,000 people make steel. More than 12 million people work for companies that use steel, and those companies are being forced out of business because they simply can’t purchase their raw materials. "

    Protectionism hurts America in the long run and makes us less competitive on the global market. All of this was dealt with very effectively by Frederic Bastiat, who wrote a book called Economic Sophisms. It amazes me that free trade is still such an enormous issue with so many people opposed when all those anti-trade arguments were laid to rest 150 years ago. This isn't a new debate - just one where the old arguments are recycled over and over.

    Wednesday, February 11, 2004

    Governor Proposes Higher Cigarette Taxes (again)

    Once again, Governor Granholm proposed raising the cigarette tax in Michigan. It seems that the policy of attempting to tax-out undesirable behavior is once again in vogue. Since no one (at least yet) is dumb enough to call for an outright ban of cigarettes, taxing them into oblivion seems to be acceptable.

    However, what the governor and other policy-makers seem to be unable to grasp is the law of supply and demand. There will always be a demand, and the government is attempting to limit supply by increasing cost beyond the means of a number of people. But to policy-makers, that is the end of it. Those people will simply give up and go home. Not so in the real world. This is how a black market forms.

    Just ask Sgt. Alain Giroux, a member of the Royal Canadian Mounted Police, who testified to the US Congress that a $1.50 per pack tax on cigarettes in Canada (Granholm is proposing increasing the MI tax to $2.00) has lead to an explosion of the cigarette black market. He estimates that 40% of Canada's cigarette sales are now on the black market. Of course, as with any black market that is forced to operate outside the protection of the law, organized crime and violence have flourished.

    The same article points out that where cigarette taxes increase, cigarette sales decrease, but cigarette smoking does not decrease, which indicates the rise of the black market.

    Not only do these policies increase the size of black markets, they then are used to justify even more government growth, as more police are needed to counter this new black market and the resultant increase in crime. Once again, the taxpayers get it stuck to them twice.

    Monday, February 2, 2004

    Hold on to Your Wallet!

    The era of big government is just beginning...

    The newly-installed Grand Rapids mayor George Heartwell gave his second state of the city speech last week at the Rotary Club downtown. His message? More government is needed to improve the regional economy.

    He essentially outlined three initiatives that included more funding for downtown, a bigger regional mass-transit system, and more centralized land-use planning.

    First, the mayor wants to continue the improvement of the GR downtown district. Sure, downtown's been doing well over the last decade, but the best way to continue that improvement is to keep taxes low. The continuation of renaissance zones seems to be the most effective tool to increase investment. In fact, renaissance zones should be expanded to all of downtown - or even all of the city... then we'd see some enormous growth rates in Grand Rapids. However, the mayor prefers to use taxpayer dollars to subsidize new business growth - as the governor proposed at her state of the state address. No one seems to realize that this $500 million in proposed venture capital has to come from somewhere... and when was the last time bureaucrats were successful in conjuring up the best investment avenues for money?

    Second, and perhaps most laughably, even the new mayor is stumping for light rail service. Nevermind the fact that light rail in most urban and suburban areas is a colossal waste of money, except for in the most densely-populated cities - we need to go for it! (See Myths of Light Rail Transit) And where is the money for this going to come from? That's right! Not the people riding the system, but you and I, the faithful taxpayers of the Interurban Transit Partnership (ITP) service area. The current system subsidizes each rider with taxpayer dollars to the tune of $6 per rider - only 13% of revenue is generated by bus fairs.

    Finally, the mayor wants further expansion of the Grand Valley Metro Council, the regional super-government wannabe organization. Wyoming has smartly refused to join, and kudos to them for that decision. The mayor wants to strengthen the GVMC's land-use powers. In other words, they want to be able to tell you where you can and can't live. As the mayor talks out of one side of his mouth about regional planning, which drives up the cost of housing for everyone, he also talks about affordable housing. One government-caused problem (a housing shortage, which drives up prices), needs to be solved by more government! A perfect circle. Who said politicians don't do everything they can to make themselves important?

    I thought we had learned our collective lesson that increased government spending and revenue is a gigantic drag on the economy - but apparently not. Is it any wonder that Michigan, a high-tax state, has an unemployment rate way above the national average? Maybe it's time to study a little economics and let the market correct our past public policy mistakes.