by Horatio Bunce
The proposed budget for fiscal year 2018, which is July 1, 2017-June 30, 2018, includes spending $1.1 million from Blount County’s General Fund balance to use to recruit one company to Blount County. I sent a list of questions to the Director of Accounts and Budgets, commonly referred to as the Finance Director, Randy Vineyard. His answers directly follow each question.
At the Agenda Committee meeting, I asked Mayor Ed Mitchell what the total costs in incentives will be for this one company. He didn’t know. It is likely that the City of Maryville and the State of Tennessee will also provide incentives. With the county offering to spend $1.1M, this is obviously an expensive proposition.
Your elected local legislative officials are being asked to approve this without knowing the full costs to the taxpayers and with little knowledge about the company. This is somewhat like putting the money into a blind trust and hoping that unelected bureaucrats and a few politicians in the know will make sound decisions with you money.
Things to keep in mind:
- The commission doesn’t receive reports from the Industrial Development Board (IDB), detailing the use and results of your tax money that it receives from the county.
- The IDB doesn’t even provide the commission with a copy of its annual budget.
- Commissioner Jamie Daly and I were blocked for asking questions about the IDB/Blount Partnership/Chamber of Commerce/Smoky Mountain Tourism Development Authority.
- The commission has been provided nothing in writing about this deal/proposal, other than to identify the use of funds as an “Economic Development Project.”
- This $1.1M is in addition to the $1,062,200 that the IDB received this year and will receive again next year.
- The IDB/Blount Partnership has failed to provide a copy of IDB’s open records policy, which I asked for in May.
The Pellissippi Place, AMI, and the IDB’s handling of the racetrack should give us pause before handing over any more money for corporate welfare, particularly when nearly everything about this is a secret. It is past time for the state legislature to pass a local government uniform tax incentives act, which would eliminate the secret, special corporate handouts.
Budget Questions sent to the Director of Accounts and Budgets:
From: Angelie Shankle <email@example.com>
Date: Fri, Jun 2, 2017 at 3:24 PM
Subject: Fwd: Budget Questions
To: Randolph Vineyard <firstname.lastname@example.org>
Dear Director of Accounts and Budgets,
Questions related to Fund 189
1. How much, if any, of the $1,850,000 for IT is money that will be left over from the current budget year? None
2. With the budget request for the upcoming year, what will the total budgeted costs (eliminating duplication of unspent appropriations from prior years) for the IT project be? $1.85m for 17-18; $1.3m prior
3. What is the $1.1M economic development project for? A project that hasn’t been disclosed publicly yet; payback in 2 years; creation of 1000 jobs
4. Is this $1.1M in addition to the $1,062,200 that is current budgeted? Yes
5. Will the economic development costs for FY be over $2M? For FY17-18? If project comes to fruition, yes.
6. If so, is this expected to reoccur in future years? No, not the $1.1m for the econ. dev. proj.
7. What is the $415,000 labeled BCSO officer safety capital needs for? body cams, rifles, ballistic helmets/vests, active shooter kits, jail camera replacements-2nd phase
Questions related to use of Fund Balance and Maintenance of Effort
1. How much of the General Fund balance will be appropriated in the proposed budget? $3.4m
2. What do you anticipate the General Fund balance being at the end of the current fiscal year? haven’t estimated yet, but was $15m FY15-16 year end
3. How much of the School’s General Purpose Fund balance will be appropriated in the proposed budget? $3.1m was proposed
4. What do you anticipate the School’s General Purpose Fund balance being at the end of the current fiscal year? Troy Logan question
5. Does use of the School’s General Purpose Fund balance contribute to the MOE in future years, meaning will the county have to provide the same amount next year even if it does not have the fund balance to supply the same amount? Troy Logan question
6. What is the current school MOE? Troy Logan question
7. What will the school MOE be if the proposed FY 18 budget is adopted? Troy Logan question
According to the Tennessee Department of Corrections, the average daily cost to house an inmate in state prison is $76 a day. That is more than twice what the state pays counties to house state felons. The state currently pays counties a daily per diem of $37. It’s no wonder that the state is content with letting their felons be housed in local jails. It makes their costs lower, their books look better and it frees up more money to spend elsewhere.
But don’t worry the state is here to help local governments out by increasing the daily per diem rate for housing state felons in local jails to $39 a day. That’s a whopping $2 daily increase. Never mind that, at $39 a day, the state still averages saving $37 a day.* State lawmakers and officials need to be able brag about being good stewards of taxpayer money by keeping the state budget lower and having a $2 billion surplus of your money.
Some good news: statewide recidivism was down in 2016.
*The cost savings to the state may be less in counties with a contract for state sentenced felons.
Gas tax and vehicle registration fee increase for 400 jobs?
When will the rule of law be applied equally to all businesses rather than tax breaks and incentives for the special few?
by Horatio Bunce
State Representative Susan Lynn has an email newsletter called the Weekly Wrap. She has recently taken time off from selling Gov. Haslam’s re-branding of Common Core in Tennessee to selling Gov. Haslam’s massive fuel tax increases called the IMPROVE Act, while ignoring the $2 BILLION surplus in over-taxation the state is currently burdened with. Rep. Lynn engages in some….interesting….mathematics in justifying Haslam’s fuel tax increase to declare it “pocketbook neutral”. Meanwhile the Transportation Department is, like the Common Core tactic that worked so well, simply renaming the massive tax increase measure the “Tax Cut Act of 2017“.
As Rep. Lynn insults our intelligence to a slightly lesser degree than “Boss” Doss, I’ll give her a pass as she is from The North™ and possibly thinks us dumb hillbillies would actually use Common Core Math. Since she asked, here’s my calculation on the “Tax Cut Act of 2017”. From her Weekly Wrap:
“Improve Act Close to Floor Vote
The House is close to voting on the Improve Act – I want to know what you think. Please email me to let me know.
“The Improve Act is revenue neutral and now pocketbook neutral for most people. It will lower the sales tax on food a full percent or $1 for each $100 you spend at the store. It will also lower the Hall Income tax and the Franchise and Excise Tax on factories. It will raise the gas 6 cents or if you have a 15 gallon tank – or .90 cents a fill up. If you don’t drive a gas vehicle, it will raise the a (sic) diesel tax and impose a $100 annual registration fee for an electric vehicle.”
So as long as gas prices do not increase and you spend 3:1 food vs. fuel, then it is “pocket book neutral” as long as “most people” maintain this ratio of course. I think “most” still means more than 50% even in Common Core Mathspeak. Of course, if you are buying diesel and need 15 gallons, it will cost an additional $0.12/gallon or $1.80. Oops, there went that pocketbook thingy. I guess I need to buy another $90 in groceries so I can “save” $0.90 to keep your fuel tax increase “neutral”?
But who cares about diesel anyway? What? Oh. The truck drivers. You mean the ones that deliver just about everything you buy at the mega-lo-mart, corporate welfare queens Amazon and FedEx……and the grocery? Yeah, those diesel trucks. Gee, I wonder what that 71% increase in the diesel fuel tax will do to that $100 grocery bill you used to have? Hint: they generally have larger than 15-gallon fuel tanks and lower fuel mileage than your personal car. What will the additional 33% increase in the gasoline tax mean for your grocery budget? I am wondering if the “leadership” Republicans are really this short-sighted or if they are only counting on you being easily fooled?
Conveniently left out of the discussion are the huge cuts to the Hall Income Tax ($102.1M) and cuts to Franchise Taxes ($122.3M), which when combined with the forecast reduction in sales tax on food give a total cut of $279.2M. In other words, the proposed $1 savings on your groceries sales tax only amounts to 19.6% of the “cuts” that we have to pass massive fuel tax increases to make “revenue neutral”.
Then we move on to use of the term “user fees” instead of that bad word “taxes” and explain that “user fees” should be paid by those using the roads, but then despite her photo at the top of the newsletter with “No Socialism” prominently displayed, we are taught that Some Socialism is acceptable when it comes to taxes (or they are not good Republican principles – kind of hard to tell which):
“Why lower some taxes while raising other taxes? Government uses fund accounting. Some taxes go into the General Fund and other taxes go into the Highway Fund. The taxes in the Highway Fund are all user fees – so if you drive – you pay for the roads, and you pay for them in proportion to how much you use them.
Paying for government by use of user fees is a good Republican principle. Much of government is not user fees but subsidized through the General Fund taxes because some things cannot be paid for by use of user fees. For instance, K – 12 education – most families could never pay all of what it costs to educate their children. TennCare too is a subsidy to the recipient – because the poor cannot pay for their care. Higher education is part user fee and part subsidized – students pay tuition (user fee) but they pay less than half of what their education actually costs – the tax payers through the General Fund subsidize the rest, and they also subsidize the buildings and maintenance for the buildings.”
Wow, for a second there, I thought a sacred cow was getting slaughtered. No, I guess not everyone can afford $10,000 each for their 1.8 kids to go to “free” government school when the average household income is less than $50k and 25% or more of us qualify for food stamps. But maybe we could figure out how multiple private schools provide an education for 40% less, rather than using the super-inflated “free” schools’ price to justify another tax increase. Here’s a little food for thought. Let’s say the “free” schools could cut only half the difference in price to a mere $8000/student/year : $2000 * 1,000,000 public school students = $2,000,000,000 EVERY YEAR.
And the higher education language…students pay less than half of what education costs. Gee, after 13 YEARS (plus any pre-K) of “free” education why should they start paying for it at all? This is more divide-the-people obfuscation since of course everyone paying for tuition (or not) is a taxpayer paying for higher education (and their 20% inflation rates). Even when the students graduate, they pay taxes the rest of their lives in Tennessee. Now that community college is “free”, just wait to see how much it costs!
“So the Governor hopes to lower several taxes in the General Fund thus eliminating the surplus and effectively shifting the surplus to the Highway Fund by raising the user fee taxes. The plan is for all of this reduction and shifting to be as revenue neutral as possible to as many tax payers as possible.
Truly, every person and family will have their own calculous (sic). So please, take out a pencil and paper and do your own math.”
After justifying this massive fuel tax increase with people buying $100 in groceries and not being able to afford public school costs, the lion’s share of the tax breaks are the Hall Income Tax and Franchise Tax folk. Is that really helping “most people” or “as many tax payers as possible”? Because the rest of you dupes will be paying more for your fuel AND more for the same groceries, which means….your grocery sales tax cut is ALSO REVENUE NEUTRAL.
STOP WITH THE LIES ALREADY! IT’S A TAX INCREASE ANY WAY YOU SLICE IT!
by Ron Paul
Just one week in office, President Trump is already following through on his pledge to address illegal immigration. His January 25th executive order called for the construction of a wall along the entire length of the US-Mexico border. While he is right to focus on the issue, there are several reasons why his proposed solution will unfortunately not lead us anywhere closer to solving the problem.
First, the wall will not work. Texas already started building a border fence about ten years ago. It divided people from their own property across the border, it deprived people of their land through the use of eminent domain, and in the end the problem of drug and human smuggling was not solved.
Second, the wall will be expensive. The wall is estimated to cost between 12 and 15 billion dollars. You can bet it will be more than that. President Trump has claimed that if the Mexican government doesn’t pay for it, he will impose a 20 percent duty on products imported from Mexico. Who will pay this tax? Ultimately, the American consumer, as the additional costs will be passed on. This will of course hurt the poorest Americans the most.
Third, building a wall ignores the real causes of illegal border crossings into the United States. Though President Trump is right to prioritize the problem of border security, he misses the point on how it can be done effectively and at an actual financial benefit to the country rather than a huge economic drain.
The solution to really addressing the problem of illegal immigration, drug smuggling, and the threat of cross-border terrorism is clear: remove the welfare magnet that attracts so many to cross the border illegally, stop the 25 year US war in the Middle East, and end the drug war that incentivizes smugglers to cross the border.
The various taxpayer-funded programs that benefit illegal immigrants in the United States, such as direct financial transfers, medical benefits, food assistance, and education, cost an estimated $100 billion dollars per year. That is a significant burden on citizens and legal residents. The promise of free money, free food, free education, and free medical care if you cross the border illegally is a powerful incentive for people to do so. It especially makes no sense for the United States government to provide these services to those who are not in the US legally.
Likewise, the 40 year war on drugs has produced no benefit to the American people at a great cost. It is estimated that since President Nixon declared a war on drugs, the US has spent more than a trillion dollars to fight what is a losing battle. That is because just as with the welfare magnet, there is an enormous incentive to smuggle drugs into the United States.
We already know the effect that ending the war on drugs has on illegal smuggling: as more and more US states decriminalize marijuana for medical and recreational uses, marijuana smuggling from Mexico to the US has dropped by 50 percent from 2010.
Finally, the threat of terrorists crossing into the United States from Mexico must be taken seriously, however once again we must soberly consider why they may seek to do us harm. We have been dropping bombs on the Middle East since at least 1990. Last year President Obama dropped more than 26,000 bombs. Thousands of civilians have been killed in US drone attacks. The grand US plan to “remake” the Middle East has produced only misery, bloodshed, and terrorism. Ending this senseless intervention will go a long way toward removing the incentive to attack the United States.
I believe it is important for the United States to have secure borders, but unfortunately President Trump’s plan to build a wall will end up costing a fortune while ignoring the real problem of why people cross the borders illegally. They will keep coming as long as those incentives remain.
I’ve been pointing out that here locally the Blount Partnership and Industrial Development Board of Blount County, Tennessee promote corporate welfare through crony deals as well.
Two of the commissioners that simply asked a few questions were blocked by Bryan Daniels and the Blount Partnership. Blount Partnership admits its blocking two county commissioners
For all this central planning Blount County pay is still not keeping up with the rate of inflation.
AMI and other special incentives deals
No contract yet: Transparent Tennessee strikes again
Local Incentives Agreements
Chamber has article against EPA Water Rule
Does this look like someone who should be blocked?
All hail King Daniels!
How do the Mayor and Bryan Daniels explain these economic indicators?
By Ron Paul
November 27, 2016
Former Dallas Federal Reserve Bank President Richard Fisher recently gave a speech identifying the Federal Reserve’s easy money/low interest rate policies as a source of the public anger that propelled Donald Trump into the White House. Mr. Fisher is certainly correct that the Fed’s policies have “skewered” the middle class. However, the problem is not specific Fed policies, but the very system of fiat currency managed by a secretive central bank.
Federal Reserve-generated increases in money supply cause economic inequality. This is because, when the Fed acts to increase the money supply, well-to-do investors and other crony capitalists are the first recipients of the new money. These economic elites enjoy an increase in purchasing power before the Fed’s inflationary policies lead to mass price increases. This gives them a boost in their standard of living.
By the time the increased money supply trickles down to middle- and working-class Americans, the economy is already beset by inflation. So most average Americans see their standard of living decline as a result of Fed-engendered money supply increases.
Some Fed defenders claim that inflation doesn’t negatively affect anyone’s standard of living because price increases are matched by wage increases. This claim ignores the fact that the effects of the Fed’s actions depend on how individuals react to the Fed’s actions.
Historically, an increase in money supply does not just cause a general rise in prices. It also causes money to flow into specific sectors, creating a bubble that provides investors and workers in those areas a (temporary) increase in their incomes. Meanwhile, workers and investors in sectors not affected by the Fed-generated boom will still see a decline in their purchasing power and thus their standard of living.
Adoption of a “rules-based” monetary policy will not eliminate the problem of Fed-created bubbles, booms, and busts, since Congress cannot set a rule dictating how individuals react to Fed policies. The only way to eliminate the boom-and-bust cycle is to remove the Fed’s power to increase the money supply and manipulate interest rates.
Because the Fed’s actions distort the view of economic conditions among investors, businesses, and workers, the booms created by the Fed are unsustainable. Eventually reality sets in, the bubble bursts, and the economy falls into recession.
When the crash occurs the best thing for Congress and the Fed to do is allow the recession to run its course. Recessions are the economy’s way of cleaning out the Fed-created distortions. Of course, Congress and the Fed refuse to do that. Instead, they begin the whole business cycle over again with another round of money creation, increased stimulus spending, and corporate bailouts.
Some progressive economists acknowledge how the Fed causes economic inequality and harms average Americans. These progressives support perpetual low interest rates and money creation. These so-called working class champions ignore how the very act of money creation causes economic inequality. Longer periods of easy money also mean longer, and more painful, recessions.
President-elect Donald Trump has acknowledged that, while his business benefits from lower interest rates, the Fed’s policies hurt most Americans. During the campaign, Mr. Trump also promised to make audit the fed part of his first 100 days agenda. Unfortunately, since the election, President-elect Trump has not made any statements regarding monetary policy or the audit the fed legislation. Those of us who understand that changing monetary policy is the key to making America great again must redouble our efforts to convince Congress and the new president to audit, then end, the Federal Reserve.