Home Rule Goes Poof!

The home rule provision of the Ohio Constitution was laid to rest today by the Supreme Court of Ohio. Today it's residency requirements tomorrow it's income tax rates or something else. The 5-2 ruling upholding a State law barring the residency requirements was to the delight of police and fire unions and the dismay of city officials all over Ohio.

I guess this decision was inevitable. The State Supremes and the General Assembly have been hostile towards the very precept of local control of governance when it comes to large cities in the north end of the state.

Here are some points on the now defunct residency requirements and a sort of postmortem on our dear friend home rule.

Residency Lost

Police unions in particular are happy about the overturn of the requirements in Akron and Cleveland. I suspect Cleveland is going to be worse off than Akron or Lima. The Cleveland Police Department is already redeploying as a hired mercenary force at this hour. I hear that the County Land Bank is willing to buy up all the vacated homes left by police and fire guys fleeing Cleveland proper.

Many will choose to leave their respective cities and live elsewhere.
Still there are plenty of people who will stay in Akron or Cleveland
for a variety of reasons. What makes a community livable and a desirable to live in? Some would say it's all about the schools. Safety and decent neighborhoods are just as or more important. Of course the State is getting to work on fixing school funding so that will negate the school system variable soon enough.

There is still a need to get public safety employees especially police forces to be cognizant of the community vibe so to speak. The residency requirement was sort of a forced fit in trying to attain that end although it was also an assurance to city finance directors of a certain level of captive income tax revenue. It was never perfect and has bred some animosity between the rank and file and city management. This pervasive tension was probably counter productive to the achieving the better effective policing and healthy relations with the community. Akron's steps to strengthen community relations with a citizen review committee can be a positive force in offsetting the lost residency requirement.

I suspect the decision will be a morale booster for public safety forces. The eradication of a perceived hardship could renew the outlook a lot of public safety workers, I hope. There's always something to complain about in ANY line of work (present company included) but this change may translate into better dialogue and respect between both sides.

Wither Home Rule

Here is an aphorism that I just made up, "Everyone likes activist judges
when the decision falls on their side of the policy argument". This one ruling has changed the local governance landscape. The majority's dependence on Section 34, Article II in particular will leave the door open for more home rule erosion.

What is the future of home rule now that Ohio's merry band of Republican justices have struck such a harmful blow to the provision? Will this ruling impact the way cities govern themselves in other areas besides employment practices? How does a mayor or city council evaluate a policy initiative that would seemingly rely on the once safe harbor of home rule?

I think going forward there will be a chilling effect on local governance. One that could inhibit local leaders from thinking boldly when it comes to addressing challenges (think red light cameras and gun ordinances).

With the residency card pulled from the deck, cities may want to find ways to incentivize employees to live in city limits. There are no doubt numerous carrots that could be offered as a way to entice people to remain residents. As a mayor faced with eroding home rule power do you even bother having staff evaluate and assemble policies that could be wiped out by a legal opinion? Who's to say income tax or property tax abatement offered as an enticement to keep resident employees aren't on shaky legal ground now?

Dead Idea or Not?

I just finished reading The Tyranny of Dead Ideas by Matt Miller and think his book speaks to the death of the residency requirement. A dead idea is a conventional wisdom that has reached the end of it's useful life of determining policy outcomes. Perhaps when residency requirements are looked at in conjunction on with regionalism, tax sharing and other 21st trends in local governance their shelf life looks past due.

That may be the case for a policy like residency requirement that had limited application and mixed results. My fear is that home rule is next up for elimination and that would not be good.

Kasich's Heartland Wisdom

A John Kasich gubernatorial campaign will be a melange a Fox News invective, Ken Blackwell style conservatism and Buckeye Institute policy babble. The added bonus will of course be the omnipresent use of Ohio as heartland theme that Kasich has parlayed into a career on cable television.

When the campaign starts Kasich will divide his time between enforcing supply-orthodoxy (think income tax phase out) and the reclaiming Ohio for the Tea Party elements of the GOP. The latter will involve bitch slapping us with heaping helpings of heartland wisdom. Think of this as the "what's the matter with Ohio" John Kasich. Ohio's voters as seen through the eyes of the Rovian political lens.

A great example of what to expect can be seen in his interview with Steven Colbert in March of 2006. In the segment Kasich extols the virtues of Ohio and its heartland sensibility. We don't windsurf in the heartland Kasich exclaims (Colbert led out of the previous show segment with 2004 footage of John Kerry kite surfing. I don't know why that was pertinent in 2006). Ohioans being heartland dwellers have a keen sensibility to stay away from water sports and wetsuits.

That moment highlighting Kasich's penchant for stoking the flames the urban versus rural nuttery stuck with me. The stupidity of his rant against windsurfing and equating Ohio to some antebellum agrarian society is troubling.

You see, there's this large body of water that runs along the entire northern edge of Ohio. The large body of water I'm referring to is called LAKE ERIE! Perhaps the millions of people who venture to the shores and into its waters partake in activities such as windsurfing and kitesurfing and even surfing! Imagine that, not all buckeye state residents grow alfalfa for a living. I heard that most of us actaully live in the urban centers these days.

Kasich is going to be hitting the trail this summer blabbering about taking back the heartland to the detriment of the real issues voters want to hear about. Let's party like it's 1994. At this point I already have an idea how this will play out and it won't be pretty for Kasich or Ohio's image. At this point I doubt Ted Strickland is loosing any sleep over Kasich's entry into the race. Can someone please prod Mary Taylor into running for Governor?

Akron Recall: Debt Perspective

The question about Akron's indebtedness is clearly over the heads of the Mendenhall Gang. The recall savants made a mistake by wading into the unfamiliar waters of public finance during their kitchen sink approach to unseating the mayor. A constructive argument could be had on the merit of individual investments funded by City debt but, not on the nature of borrowing money alone.

The analysis by CSU professor Ned Hill that was featured in an above the fold story in Sunday's ABJ made this point for us. I’m sure Warner has already been chirping away on the comment section at Ohio.com about how biased the ABJ has been.

Information provided by Professor Hill and the subsequent reporting in the Beacon story separated the uninformed outcry about the destructive force of municipal debt from the accepted practice of using bond financing for capital improvements and development projects.

Often times people who mean well, sound the alarm over a city’s borrowing habits. This a common criticism levied at public official’s who have already gone through a thorough evaluation of a specific project or capital improvement. The debt (or borrowing though issuing bonds) is the final step to getting a project underway. Under competent leadership the evaluation of affordability, credit risk and legal limitations should already have been completed. In the case of Akron it appears these steps where part of the decision to take on additional debt.

Part of disconnect comes from the negative connotation that the term "debt" has when paired with the words increase, municipal and large amounts. The lay person may not be familiar with the positive and enabling role that utilizing the bond markets to fund capital investments has. When it comes to analyzing the use of long-term debt by cities and counties, critics tend to hang on the word debt. That's to be expected because that word has a negative implication when associated with our personal finances.

So instead of focusing on the underlying projects financed by bonds this woefully uninformed bunch attacks the idea of city taking on debt. What's that mean? The increase in municipal debt has grown since the massive tax law changes of the mid 1980's which allowed local governments to use long-term bonds to fund expansion.

Consider this fact about the creditworthy nature of municipal debt. Moody's Investor Service (the same Moody's mentioned in the article) conducted a study of the default rate of municipal issuers over the last three decades. The study concluded that municipal issuers are very unlikely to default on their bonds. In fact the comparative ten-year default rate of all investment grade issuers was only 0.1%. This is much lower than the defaults on investment grade corporate debt over the same period.

What’s my point? Well, my point is that the stigma against using debt financing to fund major investments in infrastructure and economic development is wholly unfounded. Thousands of cites, counties and other governing entities have show prudent use of debt issuance to implement a strategic vision. Merely screaming the word debt is not a useful critique of a public official’s financial stewardship and it’s definitely a reason to run someone out of office. Considering Akron’s debt ratings the City’s management has been graded very favorably.

Of course each project should be evaluated on its own costs and benefits to the citizens of Akron. Maybe we didn’t need Inventure Place or Canal Place. That is a discussion that was finished years ago. We’re still waiting for a solid fact-based refutation of the various investments made by the City under Mayor Plusquellic. The recall committee has been largely incoherent on that front.

The County Blowhard

If you want a sampling of what a tyrannical public official with little self confidence is, read this article from Tuesday's Plain Dealer.

Geesh, so much for trying to protect taxpayer dollars and foster unfettered intellectual discourse on County programs. You can imagine how hard it is to exact budget cuts from discretionary County programs when any critique invokes the wrath of hot-headed people in power.

I will post some ideas on the much touted path to County reform shortly.

Convention Busting Bumpers

Finding unconventional bumper sticker pairings is becoming a slight obsession on my part. The daily sojourn to C-town gives me a decent size pool of bumpers to sample from.

I saw this combination on the way up north, a good sized Ron Paul sticker and right below it a "Abortion: One Killed, One Wounded". Now I'm always interested in the followers of Dr. Paul. I can never tell exactly what the essence of Paulism is.

On one hand an abhorrence to central government and strict observance of the constitution is required to be in this camp. On the other hand there never seems to be a strong outcry from Paulites on torture, warrantless surveillance and other government intrusion into reproductive rights. Is Dr. Paul an opponent of birth control? Don't they consider the choice a woman may make about her body and pregnancy her own? I really don't know.

In unrelated news I'm still looking for the bumper sticker that reads, " I drive like an a-hole".

Mandel Promises To Leverage Internet

Someone please tell Josh Mandel that StarOhio is not a constellation that hangs over the Buckeye state. The fresh faced Lyndhurst Republican state rep. announced his candidacy for State Treasurer last week. He throws his hat into the ring with stellar ideas and "utilize technology" to maximize State resources and communicate with constituents.

That's a peachy idea Josh. In case you've been out of the loop, technology is already very pervasive in the financial milieu. Yes the banking sector actually uses computers and web-based appplications to transact business. The State Treasurer's Office has been using a web based portal to provide content, accept tax returns and coordinate the CPIM program for years.

I can't wait to see his full platform on running for Office. If you've been able to catch any of Jill Miller Zimon's posts on the up and coming GOP candidate you'll notice there's not much in there about overseeing the State's financial resources. Of course that doesn't say much about his chances. According to media reports young Mandel has a sizable war chest of over half a million dollars. His Democratic opponent, Kevin Boyce is also not well known and who really wants the State Treasurer to communicate to them anyway?

His one well noted foray into financial policy was a bill that would require Ohio's pension funds to divest from companies connected with the regimes in Sudan and Iran. Good for political points on the right bad for portfolio diversification. I won't knock the guy any further though. I'll give some credit for at least crossing party lines to vote for the House foreclosure bill.

Scenes From Mall B

Mall B in downtown Cleveland is slated to be torn up and replaced with a raised (not razed) mall space once the Medical Mart project gets underway . This ideally situated strip of green space is part thorougfare and part urban park that is a haven for lunchtime solace. It will be missed for many reasons including the assortment of people and activity that create a much needed break from the dreary confines of downtown cube farms,

Gone will be the walkers, landscapers and the lunchtime gatherings. No more bike messengers meeting for a quick smoke break.

I sometimes talk with a guy who combs the lunch time crowd one person at time asking for spare change. He usually gets cross looks or terse denials. I often engage him, I'll call him Joe, in brief conversations:

Me: This is my favorite time of year. The weather is enjoyable and not too hot.

Joe: I don't have problems with the weather, just individuals. Like myself.

My phone rings and Joe walks away.

The mall will be cease to serve its current role as a collection point for office workers and Joes for awhile. The hole (literally) left in its place will change the dynamic of downtown.

Roldo has a gloomier take on downtown in his most recent post.

Akron Recall: A Mayor Knows

Why did fifteen local mayors from both parties draft a letter condemning Akron's recall process? Mayors are by necessity pragmatic people.  They know that managing a city or village requires a balance of long term vision and "up in your grill" micromanagement.  At times the latter can win out to the detriment of the vision thing.

Good mayors get things done. There was a campaign a few years ago that touted this axiom.  The bus tour in support of Ohio's big cities enlisted mayors from large cities including Don Plusquellic.  

Getting things done does not being sheepish or hanging out in the back of the room at conferences. At times brash behavior and bold statements are required to back up brash and bold new ideas.  A mayor on occasion may need to put decorum and congeniality aside to defend their city.  That's what Plusquellic has been doing for the better part of two decades in making the City of Akron the driving force of his career.  Has he offended people with harsh words and braggadocio?  He sure has.

Back to the letter from the gang of fifteen mayors.  The abuse of the recall process a la Warner Mendenhall is a threat to the continuity of leadership that good mayors provide.  What is disappointing is that Don Robart who is Plusquellic's Republican analog in Cuyahoga Falls refused to sign the letter.  The refusal to me is short sighted and was done with calculated partisan intent.  

Robart is in a similar position as Plusquellic.  He's been in office for two decades, has worked tirelessly for his city and has built a healthy list of detractors it the process.  So, why aren't there calls to remove the Mayor of CF from office?  Probably because the city has a sensible recall provision the city charter and nobody wants to waste time on recall effort unlike Akron.  You think the guy would be more empathetic to the other Don's plight.

Speaking of the charter in Akron.  The letter from the mayors recommends the action of an emergency charter review as a way of blocking the recall election.  This is not a goos idea.  AS much as I loathe the recall process the current charter is the legal guideline and has to be accepted as such for now.  Let's ride out this storm for now.  Once the dust settles the recall threshold can be changed to a more sane level. 

Convention Busting Bumpers

I've had a chance to catch some of the media coverage of Obama's commencement speech at Notre Dame. The piece in the NYT was decent. It did seem to reference the common use of graphic imagery on the part of the anti-abortion protesters. The rampant hyperbole used to describe the president's supposed hatred for the unborn was a close second.

Opposition to abortion on religious grounds is not hard to understand. What I have always been troubled with is the primacy placed on this one issue above all other moral questions. Wars built on lies and unbridled greed don't rile the lifers as much these days.

Making the daily drive up to Cleveland today I noticed a car with two bumper stickers. The sticker on the left side read, "Former Fetus Opposed to Abortion". Prominently displayed on the upper right bumper was an Obama 08 sticker.

There it was, a glaring contradiction to the conventional wisdom purveyed by the insurrectionists at Notre Dame. Pro-life is more than a stance on abortion. Supporting a Democrat for president and opposing abortion do not have to be mutually exclusive beliefs. Obama didn't manage to win an election and not grab a portion of the devout Christian vote.

Now, I don't wear my bumper stickers on my sleeve but that driver was a voter I can respect.

Furloughs For Everyone

As the State is grappling with balancing the FY 2010 budget  local governments are also trying to find ways to shore up their fiscal houses.  City and county governments have already had to contend with their 2009 budget cycles and continue to bleed red ink as the recession strains revenue collections.

Staffing costs are the largest component of local government budgets.  A county such as Cuyahoga for example spends as much as sixty percent of its operating dollars to pay employees and provide them with fringe benefits.  Thus any meaningful action that can be undertaken to plug a budget deficit has to involve reducing those people related costs.

The method of last resort is laying off of employees.  Hamilton County , deep in financial distress has already laid off hundreds of people and plans canning more staff this year.  Other counties such as Summit and Cuyahoga  have implemented early retirement programs, the good natured cousin of the lay off.

The relative newcomer to the staffing cut arsenal is the furlough or unpaid leave. Previously, furloughs were a creature of the manufacturing sector.  A plant shuts down for a few weeks and the workers get a paid or unpaid vacation.  The furlough concept is gaining ground as a budget reduction mechanism in the white collar world.  A recent WSJ article highlighted the benefits of using furloughs to cut costs:

Amid the steep job losses, some managers and advisers are touting alternatives to layoffs, including furloughs, pay cuts and reduced workweeks. Some economists say these alternatives slow the recession's downward spiral by preserving jobs, albeit at lower wages.

Some counties in Ohio  are moving to employ furlough programs to check budget deficits that continue to grow unabated.  The only catch has been that O.R.C. does not permit County employees not covered by a bargaining agreement to be furloughed.  Yet another example of the outdated and inflexible means in which county government is organized in the Buckeye State.

In response to the need of counties to have the option of unpaid leave a provision is being tailored for insertion into the Senate version of the budget bill.  The County Commissioner Association of Ohio  has been working on the furlough amendment and plans to have something ready for the Senate bill this month.  Inclusion of the amendment would permit county governments to furlough employees as a cost cutting measure. Of course the deeper the fiscal mess faced by any individual county the more likely lay offs will be necessary. 

Uh, Yeah ...you're going to have to come in on Saturday to make up that furlough time.

Akron Recall Afterthoughts

City Council has certified the recall petitions collected by the Mendehall Whiners Brigade as meeting the signature threshold.  Who even cares at this point how many signatures were collected?  At this point it's all academic.   There will be a recall election on Mayor Plusquellic.

Eric Mansfield raises some intriguing questions in his post from yesterday. There is a whole slew of complicated minutiae that will need to ironed out before an actual election can be held.  I''m sure it will all be worth it in the end. 

Anyway, looking past the election mess and the potential for a new mayoral contest reveals more future relevant questions that should be addressed. 

Has council or someone else started drafting a revision the section of the city charter that deals with the recall process/  Now would be an ideal time to make some basic changes to the amount of signatures required to trigger an election.  I think the current situation speaks to why this jhs to be changed. 

I don't know how often the charter review commission can consider new language but revising the recall language should be given priority.  You see where I'm going with this?  Why not stick a revamped recall version to the charter on the same ballot as the mayoral recall?  Time permitting of course.

Finally, would it be too much to look into the possibility of getting our rabble-rousing barrister dis-barred?  What are the requirements for starting that process?   Where's the Akron Bar Association on this matter?   It seems to me that Mendenhall's flagrant abuse of the civic legal system to pursue personal vendettas rises to the standard of malfeasance. 

State Budget: Missing The Moving Target

The latest update on State tax revenue projections is grim.  Each time Pari Sabety's crew gets another round of revenue data their estimates bottom out even further.   The latest income tax numbers really stink.

Total tax receipts through March were about $200 million below revised estimates, and total income-tax collections for April alone were $322 million, or 22 percent, lower than the already-pessimistic projections...

Due to the cliff diving tax receipts a third round of budget cuts was announced in Tuesday by the administration.  With tax revenue in a tailspin Governor Strickland had no choice but to make deeper cuts to the current year budget, or what remains of it.  The latest reductions could total $900 million and will no doubt harm be felt by the already reeling local governments.   The fiscal year ends on June 30th at which time another beleaguered budget starts anew.

The question arose in my office today.  How can they continue to be off the mark by such a wide margin?  Could it be that no one in Columbus is willing to accept how detrimental an ailing economy couped with short sighted tax cuts can be to the State's revenue sources.  This episode reminds me of Nassim Taleb's book Fooled By Randomness .  The over reliance on historical data to predict where the bottom will be has not worked out to well.  This latest recessionary cycle has broken the mold.

No matter, the new budget will be anything but fresh.  In order to staunch the deficit flow Ohio will have to tap the budget reserve fund (rainy day fund) before the end of the fiscal year.  That means there will be less of those much touted one-time revenue available for the FY 2010 budget.  The Senate Republicans are already complaining.  They will have to find the billion or so dollars needed to restore equilibrium to the next budget

There is now an inescapable fact staring the General Assembly in the collective face. You hear that State senators?    Some form of tax increase coupled with additional cuts to programs will have to be factored into the latest budget bill.  I can't think of another way out of the mess. 

State Budget: Desperately Seeking Sources

Here's where we are with the revenue shell game being played within the State budget process.  The House version of the budget bill was passed last week and the Senate will take the next two months to craft a moderated and tax hike free version of the FY2010 state budget.

The issue of revenue was mitigated somewhat by replacing the administrations projections for tax revenue with the much friendlier estimates derived from the Legislative Service Commission.  Nothing has changed at the core of the budget outlook.  Ohio needs more revenue, preferably from increasing taxes.

Using some one time revenue sources and a newer parlor trick with State sponsored non-profits  being employed to dig up extra money for State agencies in the House Plan.  Willard covers the non profit plan here.  In the end tweaks and nuance can plug the budget hole for the temporarily but they will not erase a structural budget deficit.  

Sunday's Beacon editorial page joins my call to increase taxes, er, set them back to a responsible level:

The absence of stimulus cash. A structural deficit. A commitment to improving public education. Ohio needs a tax increase, one that can be crafted to enhance the state's prospects in the long run, one that reflects responsible stewardship of the state.

The latest battle cry from the reality challenged tax haters in the Ohio GOP is that the one-time revenue in the next biennial budget will lead to a tax hike.  Truth be told, it's the short sighted politically opportunistic tax reforms of 2005 that have gotten us to this low point in the revenue curve.  Think about that for a moment.

The Ohio Senate should meet us half way and address the structural deficit prevalent in the budget.  Find some more budget cuts that can reduce the level spending over the 2010-2011 budget period.  That's the easy part.  

The next step will require some of the more adult members (in both parties) of the Senate to step up and reset income tax rates to a realistic and sustainable level.  Let's face it, 2005 was a different time.  The days of ideological opposition to responsible tax rates is passing.  Let the tea baggers and Jon Kasich wage the losing battle against the income tax. 

The sooner we take these steps the sooner Ohioans can begin working on achieving the school funding reforms that are long overdue.

My Recessionary Confessional

Now that the economic data have stopped cliff diving we can all catch our breath and reflect on the current recession.   Better yet, the purveyors of NPR's Planet Money podcast have set up a phone line where we can leave a recessional confession: 

Did you help break the global economy, or even the local one? Planet Money has a new call-in line for your confessions. It's (202) 371-1775.

If anything the call-in approach provides the platform for a great thought experiment.  Most of us observing the financial system cratering under its own gruesome weight feel (rightfully so) like hapless bystanders.  Digging deep enough reveals a thread to the current crisis in just about everyones' personal life.

The cynical Fausto is willing to admit his role.  I didn't run a hedge fund nor did I leverage a PhD in mathematics into developing synthetic CDO's or credit default swaps.  No, my story is a lot like yours.

I am guilty of turning my home into an ATM by way of a home equity line.  Sure we spent the majority of the credit on "capital improvements" but there was plenty of discretion on our part. A few niceties here and there quickly added up.  I'm not proud of my role in running up the U.S. trade deficit while helping to scuttle personal savings rates.  

I'm one of the more fortunate consumers traversing the real economy.  The equity line is almost paid off and the home value was spared the fate of other declining neighborhoods, keeping the underlying mortgage in the money so to speak.  All I can do is resolve to keep the personal debt to a minimum and maintain a glide path of more prudent savings, and all that.  There is it is, not very sexy.  That's how I contributed to the mess. 

State Revenue Reprise

A belated tip of the hat is in order for Beacon Journal opinion page editor Michael Douglas. Mr. Douglas picked up my theme about the real problem with Ohio's budget outlook in his Sunday column. The one-time revenue being used to balance the next budget is a patch for the gaping hole created by the shortsighted tax reforms championed by the GOP several years ago:

Neither do Taylor and her fellow Republicans take responsibility for their ample share of the shortfall. In 2005, they engineered changes in the state tax code that reduced revenues by a projected $4.4 billion in the next biennium. They slashed individual income tax rates by 21 percent. The state's regimen for taxing businesses required much reworking. What wasn't necessary was lowering further the share of taxes paid by businesses,the percentage having fallen from 40 percent in 1975 to 26.5 percent today.

Governor Ted is left with a fiscal shit sandwich and not many options other than temporarily plugging the deficit with one time money.

I second Douglas' call for some mature members of the General Assembly to step up and begin looking for some solutions for Ohio's revenue pickle. There is a measured approach that can be employed to restore some of the tax reductions without creating undue pressure on taxpayers of Ohio.

Death By Optionality

The next phase in preventing potentially insolvent banks (C and BOA) from backsliding into the abyss appears to be another accounting trick. The Treasury plan revealed earlier this week will seek to convert government shares of preferred stock held in beleaguered institutions to common stock. Whoopee! I've read that Geithner likes to preserve optionality,to leave as many doors open as possible. In this case Summers and Geithner both are not willing to concede that some form of nationalization is requisite in the case if C and BOA. They prefer to not exercise that option.

There may be some rationalization for the planned common stock conversion but not everyone agrees what that is. Coincidentally, a mention of the plan Treasury wants to implement can be found in the latest IMF GFSR report . The use of a stock conversion plan is mentioned in the section of the executive summary that discusses bank capitalization:

Most capital injections from governments thus far have come as preferred shares and these have carried with them a high cost that may impair the banks’ ability to attract other forms of private capital. Consideration could be given to converting these shares into common stock so as to reduce this burden.

My favorite members of the loyal opposition school of economics including Paul Krugman and Simon Johnson have cast doubt on this maneuver. I see their point on the seemingly futile nature of the stock conversion. The IMF report does provide some counterbalance to the critical outlook on the Treasury plan. This is the same IMF that Johnson used to work for.

Update:I recently purchased a Kindle and find it very conducive to reading dry and lengthy policy papers. More so than if I were to try to read them online. For what that's worth, I'm not quite sure.

One Time Revenue Ain't The Problem

Mary Taylor has unveiled her latest check on the Strickland administration's budget plan.   Auditor Taylor has stepped out of the normal role of the elected position she holds to evaluate what she thinks is the true deficiency in the governor's plan.  

The resulting opinion includes another admonishment of using one time revenues to to balance the budget. It seem the State Auditor doesn't believe the State  budget should depend on any one time revenue to cover an operating deficit.  Perhaps in an effort to lend some of her officialdom to the Tea Party movement Taylor criticizes the use of Federal Stimulus dollars in the budget as well.  This is becoming a frequent theme emanating from the AOS offices.

I have a news flash for Auditor Taylor, those one time revenues are not the real problem.  If she were to probe her memory she may recall one change she helped enact back in 2005 that preordained the need to depend on one time revenues. 

I am referring to the tax reforms enacted in HB66.  The reforms that Taylor and others supported included a sizable 21% decrease in income tax rates over a five year period. The last phase of cuts occurs this year barring any last minute acts of common sense from the General Assembly. The alteration of the tax regime has contributed significantly to Ohio's revenue woes.  A politically motivated rush to tamp down income tax rates has left the State with a insufficient level of tax revenue.  So much for the Laffer curve inspired myth of increasing tax revenue via tax cuts.

The revenue numbers themselves speak to the short sighted nature of the changes enacted in HB66. Until the change was made the State had never had consecutive years of revenue declines in the last fifty years of experience.  The loss trend started as soon as the income tax reforms began to phase in.  Can that be coincidental . 

Yes, the down turn in the economy is a factor in the revenue decline but, the tax reforms have contributed to the shortfalls that have placed Ohio in perilous budget territory.  Consider this, in the fifty years prior to the tax reforms, there were eight  recessions. In those eight periods of economic decline Ohio's tax revenue had never experienced two consecutive years of decreasing collections.

Taylor's memory is either suppressed or she would rather not admit that the actions taken several years ago by her and her Assembly colleagues and Governor Taft have contributed to Ohio's fiscal woes.  Instead Taylor has opted to be the Ohio GOP's factotum on all things critical of Strickland.  From her lofty perch as Auditor of State she can direct her staff to pop out reports focusing on the perceived shortfalls of the adminstrations handling of the budget and finances. 

In order to take on this role it is conceivable that resources have been redirected on churning out Strickland critiques in lieu of focusing on auditing local governments.  County governments alone could use a good deal of oversight, just look at what's transpiring in Cuyahoga County. In fact large entities like Cuyahoga have to pay a few million dollars a year to contract with a large accounting firm though the State to have the annual audit completed.  The AOS claims they don't have the staff to do the largest audits. 

Unfortunately Taylor has decided to provide lip service to local governments that need more audit and performance oversight analysis and go full bore on hunting down the weaknesses in Stickland's budget plan. Why not through in a few invectives about the use of federal ARRA dollars while your at it?  

We shouldn't expect politicking not to be force in shaping the way policy is sculpted by state office holders. The Auditor's role is much more prescient at overseeing local government finances where the lions share of State dollars actually get spent.  The technocrat veneer once imbued by Taylor is wearing thin.  When a candidate runs for office on her finance acumen and CPA credentials that she possesses it's dissappointing to see them cast aside in favor of the tea party antics currently on display.  I guess we can assume she is running for governor .

Whiteguys and Wingers and Birthers, Oh My

I surveyed the attendees assembling for the Cleveland Tea Bag Festival from my fourth floor perch on Lakeside Avenue.   From this vantage point I could surmise some basic themes emerging in the gathering crowd pf proto-revolutionaries. From the signs people where carrying there was a definitive animus towards the federal government, Obama, taxes of any kind and liberals.

Here are some things I didn't see:

Crispus Attucks - Let's face it, this is a white man's movement.

Non Partisans - The whole tea party theme is a cover for the ant-Obama / Democratic party slant on display at every location I've seen coverage of.

The Independently Wealthy - Let the middle class do the work of shilling for the rich guys.

NPR - Can't imagine the anti-Fox News will do to much to acknowledge today's rallies.

History Majors - The original Tea Party was to protest the actions of a large corporation, this one intends to do their bidding.

Empty Hands - Flags or poster board signs with witty or paranoid sounding slogans were mandatory to gain entrance.

CoExist Bumper Stickers - Doubtful this was a crowd willing to embrace people of all backgrounds.

The Ability to Detect Irony

Far Right Hucksters

A Democrat is president again which means political lunacy is back in vogue.  Just like the cicadas swarm in great numbers every seventeen years reactionary fools converge to the local sports bars to plan the latest peoples' uprising when a liberal leaning president is elected.

A clip of one of one of the meetings is making rounds on the internet.  Local readers will be proud to notice the Copley High School memorabilia in the background.  I'm assuming this was the local gathering of the Glenn Beck 912 viewing party in Fairlawn.

Today's flavor of movement conservatism is a collection of two-bit t-shirt salesman.  Relegated to a series of depraved cottage industries built around a culture of fear and loathing

Here's what they're selling;

• The Tea Party movement is like the new Tupperware party fad. Find the house party nearest to you and show up with a bad attitude about government and a DIY sign. The sale of merchandise is the real pay off. Let's face it these posers will all end up paying their taxes on time.
  

• Your local gun store owner can't hear you over the din of that cash register ringing up sales. A guns and ammo boom is building via the persistent story of a looming federal gun ban. Of course rational people who actually read know that there is no serious move on a gun ban being considered at the national level. At the State level, well just look at what Ohio has done to see the right to bear lots of guns is in no way threatened.
  

• Anything that capitalizes on the fear that Obama is a socialist, communist or the second coming of Hitler is the other growth industry. A hallmark of the loony right is to label anyone diametrically opposed to their world view as a Nazi or Hitler-like. Check out the coverage of the from last week of the Knob Creek Machine Gun Shoot in Kentucky. to see the latest product line in Obama-is-a-fascist gear.
  

The purveyors of this fringe accoutrement know their prospective buyers can't help themselves. 

There is an entire class of consumers that need to accessorize their paranoia with shirts, books and specialty weapons.  Just marketing the product around buzzwords like collectivism, re-education, brainwashing and sleeper candidate gets the cash registers ringing up sales like it was 1995 all over again.  

I actually yearn for the black helicopter days of yore.  There's a fringe movement you can believe in.

Obama Avoids First Base

The right wing has been doing their best to read sinister meaning into President Obama's bow to Saudi King Abdullah.    

It was more likely a slip of decorum or protocol as result of being green around foreign leaders.  Or it could be as some righty prognosticators have suggested a sign of submission to our Saudi overlords.  Would there have been a controversy if he bowed a Japanese head of state?

How quickly memories fade.  It wasn't that long ago that our leaders expressed their admiration to our Saudi friends in an entirely different manner.

I hear the King has sweaty palms.  Maybe that's why Obama opted out of the hand holding.