There is nothing flashy about a couple hundred people crowded into a room where discussion is about state government revenue strategy.  As a photo opportunity, it’s not a great one.  But in Georgia, there might be nothing more important going on during these hot summer days.

The Special Council on Tax Reform and Fairness gaveled itself into action this week in Atlanta.  Media, lobbyists and others with skin in the game filled a huge conference room.  This fall the Council will propose ideas to stabilize state government’s wobbly income stream and make it less vulnerable to economic downturns.  The impact on Georgians could be profound.

“The easy (choices) seem to have already been made and we’re in the sewer,” said new Council chairman A.D. Frazier who was Chief Operating Officer for the 1996 Olympic Games.

Georgia relies on personal income taxes and sales taxes for three-fourths of its state revenue.   Income tax receipts have declined 21% and sales tax receipts are down 17% since 2008.

Frazier challenged six high profile private industry executives and four public sector economists to understand Georgia’s revenue reinvention challenge is large and they should “divide it into bite sized chunks.”  Outgoing Governor Sonny Perdue is the eleventh member.

The process to create a new Georgia state revenue structure is unlike anything ever tried here.  It closely resembles BRAC – the federal government’s model to open, close or realign military bases.  Congress is presented with military base options, it must vote up or down and it cannot offer amendments.  The same idea is being tried to reinvent Georgia’s tax revenue.

Council recommendations will be turned over to a 12-member House / Senate committee when Georgia legislators return in January.  The committee will turn the options that it selects into a bill and the General Assembly will vote up or down without amendments.  Other ideas beyond what the Council proposes could be introduced as separate legislation.

Georgia’s economy is heavily dependent on real estate and banking, two industries that tanked during the current recession.  The state budget also tanked, down from $21 billion in 2008 to $17.9 billion for the new fiscal year that began this past July 1.

And it gets worse.  Three weeks into the new budget the Governor’s Office ordered agencies to cut 4% and prepare for cuts up to 8%.  The state counted on hundreds of millions in Medicaid reimbursement dollars that may not materialize.

Special Council member Jeff Humphreys is Director at the University of Georgia’s Selig Center for Economic Growth.  Humphreys discussed the complexity of tax reform during an interview with the Georgia Public Policy Foundation one day before the Council’s first meeting.

“It’s impossible to shield revenue from ups and downs of the business cycle but I would like to see tax structure at least not accentuate the ups and downs,” Humphreys said.

“During good years revenue zooms upward which tends to produce decision making based on unrealistic expectations.  During bad times, it’s plunging even more than state GDP which means you have to do a lot of budget cutting over a very short period of time.”

Humphreys concluded, “Very little has been done for decades.”

Georgia has not attempted systemic tax reform in 30 years.  The Council will focus on how to increase state sales tax revenue, potentially expand sales tax to services and it will reconsider some 119 special exemptions.  Reductions in personal and corporate income tax rates will be on the table.

There will be a special focus on groceries that currently enjoy a state sales tax exemption.  Analysts estimate reinstating the groceries state sales tax could raise several hundred million dollars annually.  Georgia counties already impose a local groceries sales tax.

Fifteen states that include five southern states impose a groceries sales tax, according to The Federation of Tax Administrators.  Mississippi is the highest in the nation at 7%.  Alabama, Arkansas, North Carolina and Tennessee are the other southern states.

Revenue reinvention is by no means a sure thing.  Maine legislators thought they had the right idea this year with a bill that would expand the state sales tax to services and decrease the state personal income tax rate.  That legislation required ballot box approval and Maine voters rejected it this summer.  Georgia tax reform legislation will not go before the voters.

Georgians can follow the Council’s work at its new website and the Council announced that it will hold statewide meetings to get input from folks beyond Atlanta.

Frazier concluded the Georgia’s Council first meeting with a direct, easy to understand missive to his fellow committee members.  “Model yourself after winners and avoid being a loser.”

BOZEMAN – Supreme Court Justice Antonin Scalia says justices who “rewrite the Constitution” to fit their own views are responsible for the politicization of the nomination process.

Speaking in front of more than 200 people at the Museum of the Rockies in Bozeman, MT on Wednesday night, Scalia said he is not happy with the intrusion of politics into the process.

However, he said, “I prefer this deterioration into politics to the alternative” of unelected judges continually rewriting the Constitution to suit their own views.

“I’d rather have the people write (the Constitution) than the court write it,” Scalia said.

His remarks come as the Senate is considering the nomination of President Barack Obama’s nominee, Elena Kagan, to the Supreme Court.

Instead of looking for people who are most qualified in terms of experience and education, Scalia said the politicization of the process has led to a search for politically acceptable nominees. He was particularly dismissive of the trend to look for “moderate” judges and questioned what a moderate interpretation of the Constitution would look like.

“(Is that) half-way between what it says and what we would like it to say?”

An appointee of President Ronald Reagan to the Supreme Court in 1986, Scalia was confirmed by a vote of 98-0.

Read More

Being an employee in Texas has for years been a desired status. Available jobs, no state income tax and relatively affordable costs of living have drawn folks here for years.

But if you hit some hard times, the place isn’t so hospitable, a recently released audit shows. In fact, one could say the state is in no hurry to police employers who might abuse the rights of employees injured or otherwise compromised.

According to an audit of the division of worker’s compensation, which is operated under the aegis of the state Department of Insurance, pending workers’ comp enforcement cases have been open for an average of 467 days. That’s about a year and three months.

Fifty-eight of those cases have been open since 2007, and one lingers from 2006, when oversight for worker’s comp moved from the dismantled Texas Worker’s Compensation Commission to the insurance department. The division of workers’ comp issues disciplinary orders when providers and carriers have not complied with the law.

Among the audit’s findings:

• Workers’ comp enforcement cases assigned to staff attorneys should be reviewed monthly to make sure they are moving forward. But between March 2009 and March 2010, the division conducted two such reviews.
• Reports monitoring workers’ comp enforcement cases contained inaccurate or duplicate case information.
• As of February, 61 pending cases were assigned to individuals who had left the workers’ comp division in 2009.
• When compared with other enforcement teams at the Department of Insurance, the workers’ comp enforcement team closes a higher percentage of cases with a warning letter and no monetary penalty – 82 percent – than other enforcement teams, such as property or casualty insurance, at 45 percent.
  

It’s almost as if the state were favoring business interests over those of employees.

When we read that another state agency is spending public money on conferences that counsel business owners on how to avoid paying unemployment, it all makes more sense.

Read More

The Big Shakedown begins, based on the Big Lie.

The Big Shakedown is a threat by local officials to lay off up to 500,000 municipal and county workers over the next two years.

The Big Lie is that it is because of the great recession cutting revenues.

Both the shakedown threat and the lie are in a joint announcement by three local government associations this week.

First the threat: “This report from the National League of Cities, National Association of Counties, and the U.S. Conference of Mayors reveals that local government job losses in the current and next fiscal years will approach 500,000, with public safety, public works, public health, social services and parks and recreation hardest hit by the cutbacks. Local governments are being forced to make significant cuts that will eliminate jobs, curtail essential services, and increase the number of people in need.”

Then the lie: “Local governments across the country are now facing the combined impact of decreased tax revenues, a falloff in state and federal aid and increased demand for social services. Over the next two years, local tax bases will likely suffer from depressed property values, hard-hit household incomes and declining consumer spending. Further, reported state budget shortfalls for 2010 to 2012 exceeding $400 billion will pose a significant threat to funding for local government programs. In this current climate of fiscal distress, local governments are forced to eliminate both jobs and services.”

What they fail to mention is state and local governments are taking more money from citizens right now than the record highs of just three years ago.

They don’t talk about spending increases in those years that exceeded revenue gains and inflation.

And most of all they are trying to hide their gross fiscal mismanagement and ledger legerdemain that allows deep deficits to pass as balanced budgets.

States are in on it, too, according to the National Conference of State Legislature’s latest State Budget Update:

“The impact of the severe economic recession that began in 2007 continued to create substantial revenue shortfalls during 2010 legislative sessions.  As a result, state legislatures were prompted to increase taxes and fees for the ninth consecutive year as they worked to shore up state budgets.”

Prompted to increase taxes and fees for the ninth consecutive year? Because of a recession that started less than three years ago?

Now unless they get even more of our money they threaten our safety and health. They hold children, the old and the poor hostage.

They speak of their fiscal atrocities as “structural” as if this is some kind of natural phenomenon like plate tectonics they can do nothing about. The fact is they structured this; they can de-structure it.

They can do the hard work and precision thrift every business and household in America has to do.

Instead of crudely whacking 500,000 of the workers who probably provide service, politicians can go through every position, person, service, contract, grant and other expense to eliminate the waste, fraud and abuse of fiscal trust.

But that would require them to end sweet deals for cronies, forgo kickbacks, take no-show friends and relatives off the public payroll and actually make some sacrifice themselves.

If you want some examples of how likely that is, check a report at Stateline.org on who gets the fat end of pension reforms.

Take a look at Bell, California, where officials paid themselves millions of dollars a year and racked up tens of millions more in unfunded pension benefits while running that little city into the ground.

Is that going on in your town, city, county, state? Find out, citizens.

Seek Truth in Accounting at every level of government. Ask for copies of budgets and Comprehensive Annual Financial Reports.

Get payroll records. Check contracts, grants and so-called economic development deals.

Attend meetings. Ask questions. Demand answers.

Frank Keegan, frank.keegan@franklincenterhq.org is a national editor for The Franklin Center for Government and Public Integrity, statehousenewsonline.com and watchdog.org . All are available to help anyone dig into government and inform The People.

By Paige Winfield Cunningham on July 29, 2010

Virginia is paying a private firm too much for tax collections that could likely be done in-state, say members of the Treasurers’ Association of Virginia.

In fiscal year 2009, CGI collected just 15 percent of the delinquent taxes it was assigned by the state and retained nearly one-third of the collections for payment. Out of $237 million in unpaid taxes, the global company collected $37 million and held onto $11.5 million.

Hanover County Treasurer Scott Miller thinks that the hundreds of county, city and town treasurers around Virginia could achieve a better success rate.

That’s because local governments have more tools at their disposal to extract the difficult-to-collect taxes that have been overdue for years, Miller says. He’s able to issue bank and wage liens without going to court, seize vehicles and block transactions liking renewing license plates—all tools that are out of reach for private companies like CGI.

“You gotta shake people up a bit, you gotta act meaner than you are,” Miller said. “It’s some pretty powerful tools.”

Tracking down tax delinquents is a large–and potentially lucrative—task for the state. Virginia was owed nearly $2 billion in unpaid taxes as of March 31, the most recent date for which numbers were available from the Virginia Department of Taxation. Spokesperson Joel Davison said numbers updated through June 30 should be available next week.

A majority of that debt is held by individuals, not businesses. Unpaid personal income taxes including penalties and interest total $1.2 billion, while businesses owe another $761 million in income, sales and withholding taxes.

And most of the debt is old debt. About $1.4 billion has been owed for more than one year. Nearly $764 million is more than five years old.

Read More

By Earl Glynn on July 29, 2010

Quick Stats from Recovery.gov about Stimulus Spending in Kansas, 2010 Q1

Recently Recovery.gov updated its data to include stimulus spending from the first quarter of 2010.

Hovering over Kansas on the U.S. map gives the quick stats summary shown at the right.

Some of the curious Recovery.gov Kansas stimulus spending projects that need more research:

• The Administration of Children and Families is spending $26,860 with Spay and Neuter Kansas to address “pet/animal overpopulation in low-income neighborhoods” in Wichita.
• The Kansas Corporation Commission reported 0.12 jobs “for continuing work on the marketing contract to promote Efficiency Kansas.”  Is this effort, and the web site EfficiencyKansas.com, connected to the $281,990 spent with Trozzolo Communications Group for “advertising”?
• Part of a $552,500 grant from the Department of Energy to Johnson County included $8563 to buy 250 wire mesh compost bins from C. E. Shepherd Company, $220 for “worm composter bins” from Hayneedle, Inc., and $1500 for “Professional services for 2-day composting train-the-trainer workshop” from the Johnson County Extension Master Gardeners’ Association, and $538 for 30 “compost thermometers for trainers.”  Also, $493 for “food, snacks and beverages for two-day composting training session for 27 volunteer instructors.”
• The Department of Energy awarded conditionally $2.4 million to the University of Kansas Center for Research in Lawrence to research a hot spring geothermal project in west-central Nevada.  How does this create long-term jobs in Kansas by drilling slimhole exploration wells in Nevada?
• The Department of Justice gave various grants to Johnson County and many cities (Gardner, Leawood, Lenexa, Merriam, Mission, Olathe, Overland Park, Prairie Village, Roeland Park, Shawnee).  In addition, Elsag North America LLC received $48,185 for a”mobile license plate reader, operations license and 3 year additional product warranty.”  There was no description about how this equipment was to be used.
• The Federal Highway Administration awarded a grant of $24,575 to the Kansas Department of Transportation to “plant wildflowers within KDOT R/W at the Lenexa: I-435/K-10 Interchange to provide beautification along I-435.”
• The U.S. Army Corp of Engineers contracted with Weed Free Lawns to spray “weeds that were in the rip rap rock to make a more presentable park” as part of “spraying the weeds on the face of the dam and outlet areas.”  This $5140 for 8 hours of work was spent presumable at Clinton Lake in Lawrence.

Read More

By Jonathan Miltimore

Franklin Center for Government and Public Integrity

A small California city that claims it balanced budgets while paying three employees more than $1.62 million a year may be flooded in red ink from unfunded pension promises, experts say.

And the problem in Bell — population 37,332, median household income $29,946 — is symptomatic of what is happening throughout California and many states and municipalities.

The city annually paid City Manager Robert Rizzo $787,637, Police Chief Randy Adams $464,000 and Assistant City Manager Angela Spaccia $376,288.

Even though they resigned, taxpayers remain on the hook for their pensions, which in Rizzo’s case may cost $31 million on top of lifetime retirement health-care costs.

According to Marcia Fritz, President of California for Pension Reform, “The conditions allowed this to happen; it is happening all across the state to a lesser degree.”

Bell’s actual budget situation is unclear. Several voice messages to the mayor’s office and the city’s public information officer were not returned Tuesday.

But according to a study by The Pew Charitable Trusts, the CalPERS pension system has $59.5 billion in unfunded retirement promises. The Government Accountability Office put the Other Post Employment Benefits debt at $62.5 billion. A recently published Stanford University study commissioned by Gov. Arnold Schwarzenegger reported state retirement promises are underfunded by as much as $500 billion based on standard accounting practices.

Mayor Oscar Hernandez defended Rizzo’s salary in a statement last week, claiming an L.A.  Times story exposing the pay presented a “skewed view of the facts.”

“Rizzo leaves Bell in a far better position than he found it 17 years ago,” Hernandez said in a statement. “A full, fair reporting of the facts would also have demonstrated that [he] delivered Bell from a $20 million shortfall to 15 years of balanced budgets.”

On Monday, Hernandez reversed course, apologizing in a public statement and calling the salaries “indefensible.”

Rizzo, Adams and Spaccia resigned last week, but the city and other California citizens will be paying the bill for years to come. Rizzo’s pension alone will likely fall between $710,000 and $800,000, with annual increases built in, according to Fritz.

“It depends on how his plan was structured, what benefits he took advantage of,” Fritz, a CPA said. She estimated the plan’s lifetime value at about $31 million.

Bell and the other 139 cities and entities in its pension pool will bear the costs, but what those costs will be anyone’s guess, Fritz said.

“Nobody knows,” Fritz said. “Neither does CalPERS (California Public Employees' Retirement System). They probably won’t know for years.”

But experts agree a “balanced budget” offers no real indication of a city’s true financial health. 

Katherine Barrett, a senior advisor for the Pew study, The Trillion Dollar Gap: Underfunded State Retirement Systems and the Road to Reform, said a majority of cities and states are “balancing budgets” by deferring employee pensions and other post employment benefits, an untenable long-term strategy.  

“The vast majority of cities, counties and states have funded very little of what they owe,” Barrett said “Most are dealing with post employment benefits on a pay-as-you-go basis.”

These funding gaps, which the Pew study calculated as of June 2008, will have to be accounted for in future spending, Barrett said.

A report issued last year by the U.S. Government Accountability Office also based on data that predate the market downturn confirms Barrett’s claim. The GAO account, based on the comprehensive annual reports of the states and 39 local governments, reported a funding gap of at least $560 billion in these governments for Other Post Employment Benefits alone.

Latest estimate from The Franklin Center calculated pension fund investment shortfalls nationally of at least $1.3 trillion as of March 31 of this year based on fund earnings data reported last week by the U.S. Census Bureau. Unfunded benefits promises will compound that shortfall.

Barrett said governments deferring retirement fund contributions forces taxpayers and current government employees to make up the difference.

“If governments don’t pay their contributions, over time it’s a serious threat,” Barrett said.

Fritz said a lack of transparency and an affinity for closed “public” meetings have made backroom deal-making routine, resulting in deficits governments cannot maintain.   

Johnathan Miltimore is a national reporter for The Franklin Center on Government and Public Integrity focusing on state and municipal fiscal matters.

A tea party organizer says he has found the smoking gun that links the Democratic Party to the controversial “Tea Party” that is running candidates and seeking official ballot status in Michigan.

A “Jason Bauer” is listed on recent federal election documents and state campaign donation documents as the “political director” of the Oakland County Democratic Party. A “Jason H. Bauer” signed the affidavits as the notary on nine of the mysterious Tea Party Political candidates’ paperwork turned in to the state of Michigan.

A “Jason H. Bauer” has registered twice to run for office in Oakland County, once as a Democrat in May of this year. Both times, the Auburn Hills home address given by “Jason H. Bauer” is the same as the “Jason Bauer” who is identified as the Oakland County Democratic Party political director on the state and federal campaign documents.

The “Jason H. Bauer” signature on the Oakland County document also appears substantially similar to the notary signatures on the Tea Party political party candidate filings revealed this week.

Bauer didn’t immediately return a message left for him at the Oakland County Democratic Party headquarters. A message left for the party leaders wasn’t immediately returned.

Jason Gillman, a tea party organizer from Traverse City and author of the blog “Michigan Taxes Too Much,” discovered Bauer’s involvement while trying to dig up information on the newly formed Tea Party candidates.

“I couldn’t get hold of these people (candidates),” said Gillman, who then said he knew that they had to file affidavits of identity with the state when running for political office. “Otherwise, it’s like these people don’t exist.”

Read More

12.00

Normal
0

false
false
false

EN-US
X-NONE
X-NONE

Laura Brown

Hawaii Reporter

Three hundred Maui Baldwin High School 10^th grade students – two-thirds of the class – failed math classes this year.

Teachers say they must deal with few textbooks, no audio visual aids, tests in the auditorium and block scheduling that requires students to complete courses in 70 days instead of a full year.

But the Baldwin performance is reflected state-wide, according to statistics.

While the Hawaii Department of Education struggles to meet federal regulations, Complete College America says less than two out of three of Hawaii’s students will graduate from high school and only 40 out of 100 graduating students will go on to college.

Only 10 out of each of those 40 students will make it through their freshman year of college. Out of the 100 students, 3 percent will graduate “on time” from a four-year college and 4 percent from community colleges, the report says.

In 2009, Hawaii students’ average score on the National Assessment of
Educational Progress was lower than those in 43 states/jurisdictions and
only higher than that in 1 state/jurisdiction, Washington, D.C.

Alliance for Excellent Education estimates that the lost wages of the 6,200 students who did not graduate from Hawaii’s high schools in 2009 equals at least $1.6 billion over those students’ lifetimes.

Critics say that while DOE employs entire divisions to work on paper compliance with federal mandates, resources are being diverted from students.

Hawaii’s grim dropout statistics documented nationally by several education groups isn’t stopping Hawaii Board of Education Chairman Garrett Toguchi from praising Hawaii public school educators.

When the newly-released preliminary results of the Hawaii State Assessment showed student scores increased slightly to 67 percent of 10th graders being “proficient” in English and 49 percent in mathematics, he issued a statement of congratulations.

The increase surprised some in the community since the 2009-2010 school year was 17 days shorter because of public school teacher furloughs.

But what do the scores mean, how were they obtained and measured, and how do they measure progress? How accurate are the student assessments and what do the scores mean in their real lives?

Editorial Projects in Education Research Center reveals that nearly half of Hawaii’s 13,425 9th graders dropped out of school in 2009.

Hawaii’s high schools also lost 16.7 percent of their students in 10th grade and 34.3 percent in 11th grade.

9th grade scores do not count towards a high school’s Adequate Yearly Progress under No Child Left Behind — only 10th grade scores are used.

Critics point out that HSA test scores give the public the perception that all students are making progress towards student proficiency in reading and mathematics; however, thousands of students are actually being left behind or left out.

For the whole story, please to to:

http://boss.hawaiireporter.com/national-reports-show-hawaii-state-assessment-isnt-tracking-with-student-success/