FREE WHITEWATER

City, Corporate Welfare, Government Spending, Local Government, Taxes/Taxation

The City of Whitewater’s 2013 Draft Budget: Crony Capitalism

by  • 

So a multi-billion-dollar corporation (market cap $1.77 billion) wants thousands of taxpayer-dollars from a small city to fund a bus the corporation uses to shuttle her workers to and from other towns where they actually live.  The city being imposed upon is Whitewater, Wisconsin, a tiny municipality, like many others, struggling just to balance her annual operating budget.

Whitewater’s situation involves juggling to find ways to support her small downtown merchants and to defend against an infestation of pernicious insects that threaten her many ash trees.  Finding the money to do these things while balancing her budget (as she must) requires hard choices.

About taxpayer funding for multi-billion-dollar Generac Power Systems, I’ve written before.  See, for example,  A Local Flavor of Crony Capitalism, A little consistency would be in order, A Generac bus by any other name, The Generac Bus and Bottom-Shelf Messaging, and The Innovation Express Generac Bus: ‘Public Transit Is Not Expected to Make Money.’

The City of Whitewater’s entire municipal operating budget is about $9 million, but for Generac Power Systems, that entire city budget is merely a small fraction of corporate quarterly revenue. Generac’s annual net income in 2011: $324 million.  Everything the City of Whitewater spends, in a place of fourteen-thousand people, is a tiny part of Generac’s revenue.

How well is Generac doing lately?  Better than ever.  One knows this because her President and CEO, Aaron Jagdfeld, announced Generac’s better-than-ever success in a recent press release:

We initiated our Powering Ahead strategic plan in 2010 that focused on growing the residential standby market, increasing our share of the commercial and industrial market, diversifying our demand, and expanding into new geographies. As a result of our team’s efforts, we have consistently exceeded our own performance goals associated with Powering Ahead and in fact reached many of those targets a year earlier than we had originally planned. We are currently resetting our goals for the next three years and we intend to share those updated growth rates in the near future when we finalize our long-term strategic plan.”

Generac’s stock has since been upgraded.

Congratulations, Mr. Jagdfeld.  Well done.

I’ve just one question: Why in the world would you think our small city – with real needs of struggling people – owes your cash-rich, multi-billion-dollar corporation even a dime of taxpayer’s money for a bus to shuttle your private workers?

I’ve a proposal.  Here in Whitewater, it’s traditional for applicants for city funds to appear before our common council, during an open session, and explain their need for public money. These sessions are televised and recorded, and applicants speak into an open microphone to the elected representatives of the city, explaining why they want city funds.

Surely you could do the same: if you’ve time to give statements  about the better-than-ever performance of your corporation, you’ve time enough to speak to our common council of your ongoing, aching need for taxpayer money.

I’ll do my part, too.  I will post on my websites, and on YouTube, your remarks, along with a transcription of them.

My pleasure, I’m sure.

Until then, we’re left with this: neither your corporation nor anyone else has offered a satisfactory justification for this request.  It remains as it has been, unworthy of both American private enterprise and municipal finance.

Daily Bread

Daily Bread for 10.20.12

by  • 

Good morning.

It’s a partly sunny Saturday for Whitewater, with a high of fifty-five, and northwest winds at 5 miles per hour.

On this day in 1973, it was a Saturday Night Massacre in Washington: “in the so-called Saturday Night Massacre, President Nixon abolished the office of special Watergate prosecutor Archibald Cox, accepted the resignation of Attorney General Elliot L. Richardson and fired Deputy Attorney General William B. Ruckelshaus.”

In Wisconsin history on this day, a fish tale turned out to be true:

1949 – Really Huge Fish Caught

On this date a record-breaking muskellunge (“muskie”) was caught on the Chippewa Flowage near Hayward. The fish weighed 69 pounds, 11 ounces. The muskie became the official state fish of Wisconsin in 1955. [Source: American Profile Note: Linked picture is not the record breaking fish]

Google’s daily puzzle asks about presidential history: “Who married the grandson of the man to whom her father had served two terms as Vice President of the United States?”

Business, City, Laws/Regulations, New Whitewater, Planning

The City of Whitewater’s 2013 Draft Budget: Downtown Whitewater

by  • 

Under the 2013 draft budget, there’s the possibility of the City of Whitewater increasing the contribution for Downtown Whitewater, Inc., to compensate for the loss of funding via Tax Incremental District 4.

While I’d surely rather the city didn’t prop up businesses, and I’d rather it didn’t fund just one area at that, I candidly think additional funding for the next year is necessary until a combination of zoning and enforcement changes takes hold.

(There’s no good reason whatever to support even temporary funding for a large corporation – that’s not implicated here. These are small merchants.)

If the downtown goes under, the gaping hole will take years to fill, and would make any mere marketing effort on behalf of the city impossible to succeed.

The Importance of a Downtown. Our city has a small downtown, with another retail district on the west beyond the university. There were plans for residential expansion elsewhere (via the Bridge to Nowhere, a local monument to bad planning), but it’s really these two areas for retail.

Here’s Whitewater’s challenge: she’ll attract no one if the downtown goes under. I’ve traveled about this last year, through Wisconsin and places far beyond, but I’ve not once seen a successful small town without a thriving district of quaint shops.

If anyone else has, I’d be happy to hear of it. There are suburbs, naturally, without identifiable downtowns, but I’ve never seen a successful rural community without one. Struggling, half-dead communities, surely; successful vibrant ones, not yet.

Our downtown survived the last recession (no small feat), but it’s hardly thriving. It took considerable work to keep it going even as it is.

The Futility of Marketing (without a Thriving Downtown). You may have seen a marketing video, in the syle of a school’s NCAA promotional announcement, encouraging prospective newcomers to Choose Whitewater. It’s hard to over-emphasize how backwards it is to tout the features of a city if the city’s downtown descends into rows of empty storefronts and discarded beer bottles. One block from Main Street, on Center, we’ve problems even now.

No one will choose this city from a video over his or her personal impressions on a visit. No one will choose this city on a guided tour over his or her own explorations. People who think otherwise are mistaken. The best a marketing effort can do is encourage a visit, and (it’s to be hoped) bolster a positive impression a visitor has after his or her own explorations.

No one will choose from a video, story, or pamphlet alone.

The Longterm Solution. A combination of zoning changes and enforcement changes (different but complementary actions) can lift this city far beyond any marketing effort. Just as the best policy is a sound argument, so the best marketing is an open, dynamic city.

Unfortunately, the benefits of that approach will not take hold by January 2013. The zoning re-write is still in process, and improvements and modernization of enforcement policy will take hold gradually.

When those changes do take hold — and through strenuous promotion of actual policy improvements they will – we’ll have a thriving downtown without the need for municpal subsidies. The City of Whitewater should look ahead, and tentatively propose a tapering level of municipal funding for out years.

Who should promote and advertise these genuine improvements? It should be the business people and city officials who have benefitted from the changes or are responsible for enforcing them. A merchant considering a town cares little what someone unconnected to his immediate work thinks about something – he or she cares about the disposition and policies of those who will be directly connected to his or her own work.

In this way, the best advocates will be those who can say that they’ve made zoning or enforcement better, show how that’s been useful to actual merchants, and how it can be helpful to new ones.

Funding Downtown Whitewater in 2013 to include replacement funding lost via TID 4 is a reasonable bridge toward a place of reformed regulations and requirements.

One might even consider it, just perhaps, a Bridge to Somewhere.

Tomorrow: About funding for the Generac Bus.

Film, Poll

Friday Poll: Favorite Horror Film?

by  • 

Over at IGN, there’s a list of the top 25 horror films of all time. I’ve put the top five of that list on this poll, with a sixth choice for ‘other.’

They’ve The Exorcist at the top-spot, and that’s my favorite. There’s a version on DVD that has a director’s commentary voiceover that’s interesting for William Friedkin’s insights.

What’s your favorite?


Daily Bread

Daily Bread for 10.19.12

by  • 

Good morning.

Whitewater’s work week ends with a likelihood of showers and a high of forty-nine.

On this day in 1987, the stock market fell after the Dow Jones Industrial Average dropped 508 points – 22.6% – its second biggest percentage drop.

On this day in 1781, America achieved a decisive victory over Britain at Yorktown:

Hopelessly trapped at Yorktown, Virginia, British General Lord Cornwallis surrenders 8,000 British soldiers and seamen to a larger Franco-American force, effectively bringing an end to the American Revolution….On October 19, General Cornwallis surrendered 7,087 officers and men, 900 seamen, 144 cannons, 15 galleys, a frigate, and 30 transport ships. Pleading illness, he did not attend the surrender ceremony, but his second-in-command, General Charles O’Hara, carried Cornwallis’ sword to the American and French commanders. As the British and Hessian troops marched out to surrender, the British bands played the song “The World Turned Upside Down.”

Google’s daily puzzle asks about a physicist, with a sitcom hint: “Who, by virtue of his discovery of the Red Shift, set forth the foundation for the theory that has the same name as a sitcom that stars Jim Parsons?”

City, Government Spending

The City of Whitewater’s 2013 Draft Budget (Tax Incremental Financing)

by  • 

What’s tax incremental financing? It’s the creation of a tax district where a municipality spends public funds for improvements in roads, etc., to encourage private investment in that blighted area. The hoped-for revenue from that additional – incremental – new private investment goes to pay for the municipal spending on roads, etc.

It’s an if-you-build-it-they-will-come strategy for developed but struggling (blighted) areas. But for it’s been a pay-upfront-hope-it works-out scheme.

What’s key about this strategy is that it’s very clear that it’s intended for blighted areas — that is, rundown areas – and not as a means to develop vacant areas or ordinary places within a city. Over the years, communities have used it more expansively, often to their regret.

It’s as though one used bandages not exclusively for wounds, but as fashion accessories. They’re not made for that purpose. Bandages are for the truly injured. Using them for other purposes leaves them unavailable when they’re most needed.

I recall hearing years ago someone on Council (now retired) insist that tax incremental financing presented no risks to the city, because municipal spending would only happen if it were prudent to do so.

Consider that: there’d be no reason to worry about municipal over-spending, waste, or failed incentives because one would only request spending if it were prudent.

Years later, it’s clear that we did authorize imprudent spending.

About TID 4: it didn’t fail because of the Great Recession (very few TIDs across the state did), but because profligate municipal spending as incentives was not backed by adequate private guarantees. TID 4 failed as a result of public managerial incompetency, not bad economic conditions.

There’s a technical term for a public proposal that does not have adequate contractual guarantees in return. I came upon that term once, I think, in a financial journal, or while watching CNBC, or perhaps while skimming the Wall Street Journal. I tend to avoid technical terms, but in this case I’ll make an exception.

A public-private partnership without adequate private guarantees is called a dog-crap deal.

Payment in 2013 of principal for TID 4 is $1.3 million, and for interest alone over $450 thousand.

As longtime readers can guess, I’ve no particular inclination to ingratiate myself with politicians or full-time leaders of the city. (There’s my idea of subtle understatement.) Even so, I have a particular sympathy for the new municipal manager and those now in office on this issue: they’ve been saddled with a mess. I’m quite sincere about that.

Our situation is so odd — the very reverse of normal – that we’re actually forced to allocate outside-district funds to prop up TID 6, as it doesn’t generate enough income to meet its expenses. Four other TIDs (#s 5, 7, 8, 9) generate almost no incremental revenue (less than a thousand dollars between the four!).

Getting past this TID fiasco will take time and hard work.

Any future outlays – where that’s still possible – will require far better guarantees than in the past. The sooner we get past reliance on tax incremental financing schemes the better.

City, Food, Free Markets, Laws/Regulations, Liberty

Whitewater’s ‘Transient Merchant’ Ordinance is Only Half That

by  • 

Whitewater has a Transient Merchant Ordinance, at Chapter 5.28, et seq., of her Municipal Code, but the ordinance’s title is only half right. It’s not merely an ordinance that restricts food trucks’ sales, but also and necessarily consumers’ purchases. It’s part Transient Merchant Ordinance and part Consumer Restriction Ordinance.

Each and every time a city limits what, where, and when someone may sell, it also limits what, where, and when consumers may buy.

Fewer sellers means fewer consumer choices, of tasty and competitively-priced food. The emphasis on regulating merchants obscures the true nature of an ordinance like ours.

After all, why are there restrictions on hours of sale now? It’s because regulators know that if there were no hourly restrictions, consumer demand would spur vendors to establish food trucks to satisfy residents’ preferences.

When the times or places of food sales are restricted, a city is telling adults that no matter what their tastes and preferences, they may not purchase a certain kind of food at a certain time. It’s also, as one can guess, the case of a municipality rigging the game to favor incumbent brick-and-mortar merchants over food trucks.

It’s not the place of city government to put its finger on the scale, so to speak, between kinds of private offerings.

(There’s an irony in this: The State of Wisconsin allows beer sales from 6 AM, but the City of Whitewater will not allow sales of breakfast sandwiches from food trucks in her business district until 9 AM.)

It makes sense to look at other cities’ ordinances, and we’d do well to follow the simplest method of collecting any fees, for example, if we are to adopt that kind of burden for merchants who might sell within our parks. One should be practical: revenue collection of this kind is hardly the mainstay of municipal income, and we’d be foolish to make collection complicated for either vendors or the city.

About practicality, nothing I’ve said prevents local government from conducting fair and reasonable health inspections, etc., on food trucks, just as can be done now with restaurants.

But doubt not what all these time and location restrictions really are: a decision of a municipal government to limit what adult men and women can buy and eat, regardless of their preferences or ability to pay.

Daily Bread

Daily Bread for 10.18.12

by  • 

Good morning.

Whitewater’s Thursday will be a day of likely showers in the afternoon, a high of fifty, and southwest winds of ten to fifteen miles per hour.

On this day in 1867, the United States took possession of Alaska:

On this day in 1867, the U.S. formally takes possession of Alaska after purchasing the territory from Russia for $7.2 million, or less than two cents an acre. The Alaska purchase comprised 586,412 square miles, about twice the size of Texas, and was championed by William Henry Seward, the enthusiastically expansionist secretary of state under President Andrew Johnson.

Russia wanted to sell its Alaska territory, which was remote, sparsely populated and difficult to defend, to the U.S. rather than risk losing it in battle with a rival such as Great Britain. Negotiations between Seward (1801-1872) and the Russian minister to the U.S., Eduard de Stoeckl, began in March 1867. However, the American public believed the land to be barren and worthless and dubbed the purchase “Seward’s Folly” and “Andrew Johnson’s Polar Bear Garden,” among other derogatory names….Public opinion of the purchase turned more favorable when gold was discovered in a tributary of Alaska’s Klondike River in 1896, sparking a gold rush. Alaska became the 49th state on January 3, 1959, and is now recognized for its vast natural resources….The name Alaska is derived from the Aleut word alyeska, which means “great land.” Alaska has two official state holidays to commemorate its origins: Seward’s Day, observed the last Monday in March, celebrates the March 30, 1867, signing of the land treaty between the U.S. and Russia, and Alaska Day, observed every October 18, marks the anniversary of the formal land transfer.

In Wisconsin history on October 18th, 1967, a violent confrontation:

1967 – Police and Student Activists Clash in Madison
On this date club-wielding Madison police joined campus police to break up a large anti-war demonstration on the UW-Madison campus. Sixty-five people, including several officers, were treated for injuries. Thirteen student leaders were ordered expelled from school. State Attorney General Bronson La Follettecriticized the police for using excessive brutality. [Source: They Marched Into Sunlight]

From a GO Comics TrivQuiz earlier this year, here’s a question about singer-songwriter Stephen Demetri Georgiou: “Name two of the albums he released as Cat Stevens before his “retirement” in the late 1970s (excluding compilations).”

City, Freedom of Speech

The Best Authority is a Good Argument

by  • 

In a competitive marketplace of ideas – of left, right, center – each idea questioned and considered – the best authority is a well-reasoned position.

Simple appeals to personal authority – of the kind that have been the foundation of Whitewater’s politics over the last generation – just aren’t good enough anymore.

Who you know matters less than what you know, and what you can show persuasively to others. Some people will easily make the transition from yesterday’s politics to today’s and tomorrow’s, but others won’t.

Of those others, some will give up, finding the new and more competitive environment too difficult. Others will deceive themselves into thinking nothing’s changed, finding instead that they’re increasingly irrelevant. A third group will cling to the situational, hoping that name-dropping about people and places of the past will be enough to anchor itself in the new waters ahead. It won’t.

There’s no substitute, in a competitive environment, for what’s inside, for a center. From that center, there comes a confidence and conviction and competitiveness that makes navigating a changing course easy. A substantial argument doesn’t spring from an empty vessel. It’s not made stronger because like-minded people insist it makes sense to them. Those whose insides depend only on what’s (and who’s) outside won’t do well in a more energetic city.

Many others, though, of the thousands of talented and solid people within the city, will have better experiences and opportunities for their awareness that the only sound authority now is a good and sound argument.

There’s much yet to do. Some scrapping and tussling lies ahead. Whitewater is a beautiful place easily deserving and worthy of that commitment.

For it all, the decade ahead will be better than the one behind.

City, Government Spending, Local Government

The City of Whitewater’s 2013 Draft Budget (Overview)

by  • 

It’s budget season for the City of Whitewater, running into November, and in this post I’ll offer a few overview remarks. Subsequent posts will consider aspects of the budget in greater detail.

The City of Whitewater’s Budget, not Whitewater, Wisconsin’s Budget. A bit of perspective — something lacking in past years — is in order. This is the budget for the City of Whitewater, one entity in a city of hundreds of businesses and organizations, and thousands of people. There have been nearly ten years of ‘the City this’ and ‘the City that,’ as though our local government and the entire city were one in the same.

The absurdity of that puffed-up view was an embarrassment to the community, and led to instance after instance of over-reaching that only embarrassed our community further. City government has a necessary instrumental place within the city, but no more than an instrumental one, to effect the limited goals of her residents. There’s nothing organic about local government – it’s not a living creature, but rather a collection of people paid through the earnings of thousands of others for specific purposes.

The draft operations budget is one of nine-million ($9,199,310) for a city of fourteen thousand. Even in these times when everything in Madison or Washington seems to start high and go higher, that’s still a lot of money.

One-Hundred Fifty Pages. One shouldn’t doubt how bureaucratic even the smallest places in America have become: it takes one-hundred fifty pages simply to outline the budget for a small Midwestern town. Yet it’s all worth reading — as I have from cover to cover — because there is nothing that this government spends that should be hidden from the residents from whom its authority truly derives.

A Draft. This budget’s a draft proposal, as it should be. It’s an opening offer from one part of the government (the full-time municipal manager and his administration) to another part (the elected representatives of the city’s people). One part proposes, one part disposes, so to speak.

Along the way, there may be changes here or there, but the idea of changes shouldn’t bother anyone. It’s part of a routine process. Two years ago, I think, there was great fuss and huffing from the then-city manager that he was not told about Council’s intentions, and so had to rework his budget. There’s a rumor – unconfirmed to be sure – that one could hear the whining all the way to Palmyra. Needless to say, he should have made better inquiries as part of his job.

Yet, in any event, there was no reason for indignation: one should be flexible and industrious enough to make adjustments with equanimity.

The sky won’t fall for the sake of changes.

Highlighted Alternatives. In three areas, City Manager Clapper expressly highlights funding alternatives: for Downtown Whitewater, for Generac’s taxpayer-subsidized bus line, and for money to fight the Emerald Ash Borer. (In a way, the whole budget’s a series of alternatives, but these are highlighted because spending for some depends at the first instance on reductions elsewhere to maintain a balanced budget proposal .)

There’s no year that doesn’t involve choices; these are simply the most obvious among them.

Tax Incremental Financing. Here’s the elephant in the room, far bigger than any highlighted alternatives of this budget. The last municipal administration went drunk with Tax Incremental Districts, only to vomit a foul mess back on the residents of this city. In all Wisconsin, even during the Great Recession, only a tiny percentage of cities and towns saw their tax incremental districts fall into distressed status.

Whitewater has a long-term anchor tied to her because of the over-use of these districts, and it will be years of trouble yet ahead. I’ve sympathy for those who are stuck cleaning this up.

Tomorrow: The first part of the budget and the TID albatross.

Daily Adams, Presidential race 2012

The Debates & Predictive Markets

by  • 

I follow the presidential predictive markets from Intrade and the Iowa Electronic Markets from the University of Iowa. One can watch how shares are bought and sold, in response to debate performances or any other campaign-related developments. The aftermath of the first debate saw Gov. Romney’s share price rise; Pres. Obama’s shares are seeing a boost after last night’s debate.

Here’s an embedded video of last night’s second presidential debate. One can’t say it wasn’t feisty.

Posted also at Daily Adams.

Daily Bread

Daily Bread for 10.17.12

by  • 

Good morning.

Midweek in Whitewater will bring rain, with a high of sixty-eight.

On this day in 1931, mobster Al Capone was convicted of tax evasion. Capone was released in 1939:

Among Capone’s enemies was federal agent Elliot Ness, who led a team of officers known as “The Untouchables” because they couldn’t be corrupted. Ness and his men routinely broke up Capone’s bootlegging businesses, but it was tax-evasion charges that finally stuck and landed Capone in prison in 1931. Capone began serving his time at the U.S. Penitentiary in Atlanta, but amid accusations that he was manipulating the system and receiving cushy treatment, he was transferred to the maximum-security lockup at Alcatraz Island, in California’s San Francisco Bay. He got out early in 1939 for good behavior, after spending his final year in prison in a hospital, suffering from syphilis.

Plagued by health problems for the rest of his life, Capone died in 1947 at age 48 at his home in Palm Island, Florida.

Google’s daily puzzle asks about a basis for a declaration of war: “What coded diplomatic proposal was published that, along with the sinking of seven U.S. merchant ships, inspired President Wilson to call for war on Germany?”

Libertarians

Radley Balko Sets The Nation Straight

by  • 

Over at The Nation online, Patricia Williams offers a conflation of libertarians, Republicans, Objectivists, Paul Ryan, and Ayn Rand.

Radley Balko succinctly cuts through Williams’s ignorant mess:

A few minor points: Paul Ryan is not a Randian, nor would Ayn Rand have approved of Paul Ryan. Ayn Rand was not a libertarian, and libertarianism is quite different from Randianism. Most importantly, Paul Ryan is not a libertarian.

Also, Ayn Rand did not consider herself part of “the right,” and “the right” did not and still doesn’t claim Ayn Rand.

See, from The Agitator, Balko’s post entitled, For the Record…

Posted also at Daily Adams.