January 2009

On January 19 I did a post about how states, including Colorado, were being lobbied hard to give corporate welfare handouts to Hollywood. But Tinseltown also wants to get its hook into the federal taxpayer, according to today's Wall Street Journal. I'll regularly be highlighting such corporate welfare giveaways in the days and weeks between now and April 7, when the voters of Colorado Springs will be asked whether they want to create a "dedicated funding stream" that flows into a "jobs creation" fund for the city. Once locals understand what a racket this has become at the local as well as federal level, I'm confident they'll see this is one "game" they don't want to play.

Here's the Journal:

Raiders of the Lost Taxpayer

A tax break for Tinseltown.

A favorite Beltway talking point these days is that government spending juices growth more than tax breaks, which is why the stimulus legislation coursing through Congress has so much of the former. But it turns out that Democrats believe in tax incentives, too, at least for their political supporters.

National Journal reported this week that the Senate's economic stimulus bill includes a provision that would make Hollywood studios eligible for a special 50% write-off of equipment purchases. According to the report, "the provision is backed by firms like the Walt Disney Co., and the industry trade group the Motion Picture Association of America."

The House version of the stimulus already includes a bonus depreciation that lets businesses immediately write off 50% of their 2009 capital expenditures. But the Senate bill expands the definition of "qualifying property" -- specifically to include "certain motion picture film or videotape." Hollywood moguls like Steven Spielberg, David Geffen and George Lucas were among the biggest backers of President Obama's candidacy, and it looks as though Democrats have found a way to return the favor.

So let's see: Democrats object to cutting the U.S. 35% corporate tax rate -- which is higher than in all of Europe, undermines economic growth and discourages job creation -- for all companies on grounds that it favors the rich and powerful. But Democrats will carve out tax loopholes for businesses they like and that write them campaign checks.

There's also the little matter of how badly Hollywood is hurting vis a vis other industries -- or as liberals like to say, of "fairness." According to Variety, which covers show business, ticket sales for 2008 "clocked in at $9.63 billion, ahead of the $9.62 billion earned in 2007. Admissions were down roughly 4%, far less than declines in other sectors of the economy." Tinseltown already has enough stimulation.

Members of City Council either didn't read the last three blog posts I sent them on the subject of the corporate welfare racket, or they weren't swayed by my arguments. Yesterday evening, therefore, a majority agreed to place a measure on the April ballot that will, if approved, place $3.2 million annually (or more than $50 million over the life of the mill levy extension) into a fund earmarked for un-specified "job creation" purposes, seduced by the pleadings of a parade of city "business leaders" who say they can't improve the area's economy without a taxpayer handout.

Proponents of the plan congratulated themselves on their "vision" and "leadership," but trying to hitch the city to the corporate welfare bandwagon actually shows a bankruptcy of both. City and business leaders evidently aren't willing to do the hard work required to improve and optimize the city's overall business climate -- like doing away with the city's business personal property tax, for starters -- so they want to take the lazy city's shortcut by getting deeper into the "incentives" game. They offer false promises that a "dedicated" fund for economic development, placed in the hands of individuals whose own "job creating" credentials are questionable, will boost a local economy held down by many factors beyond the control of a few economic development deal-makers.

So the stage is set for a city-wide debate about whether this is a slippery slope the taxpayers want to step out on, and about what the proper role of government is in the realm of economic development. I challenge any proponents of this idea, including EDC head Mike Kazmierski, to a debate or series of public debates on the topic.

We hope to make Local Liberty Online a clearinghouse for information, analysis, opinions and debate on the subject between now and Election Day. This is what LLO was designed for. And I'm confident that when the facts are widely known, and the debates have been waged, that the taxpayers and voters will turn thumbs down on this unwise and probably-unworkable idea.

So let the debate begin. And may the best argument win.

For the past couple days I’ve been making the case against Colorado Springs getting deeper into a business “incentives” game that exploits taxpayers, risks public resources, creates a mercenary culture in corporate America, pits community against community and has an unproven record of long-term success. A few have written in, asking if I have any better ideas about how to improve the local economy and create jobs in Colorado Springs. And so today I thought I would offer up an alternative approach, that involves less involvement from government and the taxpayers, not more.

Let’s start from the premise that we all want a thriving economy in Colorado Springs. But before we seriously consider paying cash incentives to companies as a means of influencing business decisions -- which is wrong on principle and highly questionable in practice -- let's ask ourselves a few hard questions.

Have Colorado Springs and El Paso County done everything in their power to create an optimal business climate in the Pike’s Peak region, by reducing barriers to entry, minimizing the hassle factor, streamlining the regulatory and permitting process, overhauling antiquated codes and zoning laws, addressing infrastructure challenges, and educating the workforce of tomorrow? Do we consistently work as a community to serve as an incubator for entrepreneurship and opportunity, and strive to make Colorado Springs nationally-known as a great place to do business (and not because we are willing to pay bribes)? Is our tax and regulatory climate calibrated to attract and grow businesses? Are enough of our schools world class?

Until we can honestly answer “yes” to these questions – and we can’t -- the subject of paying cash incentives shouldn’t even be seriously debated, in my opinion. And paying incentives will be self-defeating unless we address those other business climate factors first, since they still matter more to most companies than cash payments do – and they still hold the key to long-term economic vitality.

A case in point

Playing the incentives game can not save an economy that is sinking under the weight of too much government and a lousy tax and regulatory climate, as my home state of Michigan is proving. Few states are deeper into the "incentives game" than Michigan is. Yet all the money the state doles out to companies that promise jobs is being paid, in part, by punitive business taxes that are killing jobs and strangling companies with the other hand. State government is acting as a transfer mechanism, onerously taxing companies with one hand while claiming to “invest” in other companies with another. And because nothing else has been done to curb the high costs of doing business in the state, or to shed the regulatory burdens that make doing business there so difficult, Michigan’s economy continues to sink, despite all the money it is throwing at “job creation”

The lesson applies at the local level, too. Incentives won’t do much good if the rest of the factors that dictate business climate are holding entrepreneurs and businesses back.

Complacency about business climate

We do not have the best business climate that we could in the Pike’s Peak region because it doesn't seem to be the top priority of our political or business leaders, who now seem so enamored with the panacea offered by the incentives game. There seems to be an assumption that this is a reasonably good place to do business, at least compared to our counterparts in the Rust Belt or command-and-control California. And that assumption has bred a certain complacence in city and county offices and among organizations that purport to look out for business interests. That, in turn, has led us to take our eye off the ball, in terms of creating an optimal business climate.

But perhaps we’re not as business-friendly as we assume. And the first step toward recovery is admitting you have a problem.

We are a better place to do business than many other cities, no doubt. But is this one of the best places to do business in the country? Not when the city has a business personal property tax in place. Not when dealing with the regional building and development office is looked on with dread. Not when the city’s primary school system is mired in mediocrity. Not when the city insists on doing jobs – street resurfacing, park maintenance, snow removal – that private enterprise could do instead.

A Sustainable Business Committee

Perhaps in addition to a Sustainable Funding Committee -- from which this corporate welfare slush fund idea originated -- the city and county should appoint a Sustainable Business Committee, tasked with identifying barriers to business entry and success and recommending changes that will help optimize the area's business environment. The task force should consist of actual business people, with real-world experience in job creation. In addition to looking at government as a factor, they should examine education and infrastructure and produce recommendations for improvement in those realms as well.

There are no short-cuts to sustained prosperity

Instead of looking for ways to expand government’s role in economic development, let’s re-examine government’s role in hindering and impeding job creation, and redouble our efforts to clear away the barriers government sets in the path to long-term economic opportunity and prosperity. That’s a far more fruitful place to "invest" our effort and attention than the short-cuts offered by those who want to turn taxpayers into venture capitalists. Playing the incentives "game," as was pointed out Sunday and Monday, is the lazy city’s way to faux prosperity. It benefits a few companies, and empowers a lot of consultants and self-styled “deal-makers,” at the expense of the taxpayers. And we don’t need to go there if we look at the business climate issue candidly and start to work getting the fundamentals right.

City Hall for sale

Almost every city in America is feeling pressure to get in the economic incentives “game,” seduced by arguments that spreading around a little cash, or slashing taxes for select companies, will “create” jobs and keep the local economy “competitive” with other towns that might offer companies more. So cutthroat and pervasive have these shakedowns become, in fact, that one Florida City – I’m not kidding here -- actually threw in its City Hall as a way to sweeten the deal with one company it was courting. Now the company, Palm Coast Data, is preparing to make the former Palm Coast City Hall its corporate headquarters.

What more fitting symbol could there be of the soul-selling some cities are engaging in, beguiled by the idea that paying tribute to companies is the only way to buoy the local economy, and an acceptable way of doing business.

That’s where Colorado Springs finds itself today, with some in City Hall and in the business community arguing that they need the taxpayers to “partner” in their sometimes-risky economic development ventures, in order to “create” or “save” local jobs. And on Tuesday these people might take a major step closer to getting their hands on that long-sought “incentives” money, when City Council decides whether to extend a soon-to-sunset property tax for 16 years, and put the $3.2 million it generates annually into an economic development slush fund, to be used at the discretion of a handful of suddenly-very-powerful insiders.

Yesterday I began to make the case for why City Council should be wary of taking Colorado Springs in this direction. Today I lift the lid a little wider on the Pandora’s Box that beckons. The arguments in favor of getting into the economic incentives “game” – though it might also be called a “racket” -- are seductive, especially in a time of economic turmoil, because they give desperate and naïve people a false sense of control and economic self-determination. But like all manner of seductions, there’s a darker side that isn’t at first obvious.

Here are even more reasons why Colorado Springs should chart a different course toward improving its business climate (a topic I’ll take up in more detail in this space Tuesday):

1.) It’s gotten out of hand

If you do enough research and get the 40,000 ft. view of what might broadly be called the corporate welfare racket, from Washington’s too-big-to-fail bailouts to the generous “incentives” that many state and local politicians are throwing at corporate America, you see a scandal of monumental proportions, which disproportionately benefits opportunists in corporate America at the expense of largely clueless taxpayers.

Author Greg LeRoy has called it The Great American Jobs Scam, and not without reason. LeRoy’s smart growth agenda isn't to my liking, but many of his critiques of how politicos and businesspeople are conspiring to take taxpayers for a ride are spot on target. What’s occurring in Washington is only the most obvious manifestation of a trend toward a corporatist government and economic system. Some describe this as “municipal socialism” when it trickles down to the local level. Ike’s famous warning against the perils of the “military-industrial complex” obviously was directed at defense contractors. But at a time when almost every business sector is either on the take, or trying to get on the take, such warnings apply across the board.

2.) Many beneficiaries don’t need the money

Not just tens of millions, but hundreds of millions of dollars are being handed to companies by state and local governments, based on the promise of generating economic activity. And some very profitable companies are soaking up some of that gravy.

Google has a $260 million “deal” to open data centers in North Carolina. E-Bay just got $27 million from Utah for opening a facility there. Volkswagen received an estimated $400 million in incentives to locate a plant in Chattanooga. Wal-Mart collects incentive payments from the state of Arkansas. Hemlock Semiconductor not long ago was promised a total of $200 million in state and local "incentives" to relocate to the town of Clarksville, North Carolina. And the list of windfalls for successful companies could go on and on.

Millionaire sports team owners have the taxpayers bankrolling their stadiums -- article and article – and even Hollywood has found a way to reach into the taxpayers pockets -- blog post -- by spinning Tinseltown pipe dreams for average Americans and playing one state off against another.

It’s gotten completely out of hand, in short, and it will only get worse, and more cutthroat, unless taxpayers wake-up to the scams and enough cities and states go on a corporate welfare strike. We should lead the way in Colorado Springs. I think many towns and cities, which are feeling similar pressures but want to resist the shakedowns, will be delighted to follow our lead.

We’re told by advocates of localized corporate welfare that we have to play “the game” because many others communities are doing it. But not every community is doing it. And the fact that some are doing it suggests that we face an ever-escalating bidding war, in which cities with fewer qualms about picking citizens’ pockets will always have an advantage. Once we give in to these arguments, and begin to play the “game,” we’re on a slippery slope that only gets steeper. Polls indicate that most Americans are wary of a federal bailout of the Big 3 automakers, and the bailout of big financial institutions, yet these same Americans seem sanguine about the corporate welfare giveaways taking place right under their noses. We'll have to overcome this case of cognitive dissonance if we're going to get the "panhandlers in pinstripes," of all stripes, out of our pockets.

3.) It creates a mercenary corporate culture, in which community loyalty is lacking

By surrendering to the seductions of corporate welfare, we are enabling a mercenary mindset in corporate boardrooms that will come back to haunt us in the long-run, even if we manage to use incentives for short-term advantage. A company that relocates to your town because of subsidies and handouts will likely pull up stakes and go elsewhere when the next good “deal” comes along. We may “win” those jobs in the short-term, but they’re always up for auction to the highest bidder, creating a vicious circle that benefits a few companies at the expense of the taxpayers.

We should put our energy instead into nurturing a home-grown economy, which is more deeply rooted in the community. Of course, when a locally-spawned business grows large enough, the business-poachers may come courting, and some of those companies may succumb to such temptations. But if we’ve created the optimal business climate in Colorado Springs in which entrepreneurship, opportunity and creativity can flourish, we can always count on another crop of businesses to sprout here, many of which will have stronger bond with the city that helped them succeed. We need to concentrate on growing our own, since small businesses can grow up to be big businesses – and stop trying to steal from other people’s gardens.

4.) The economy is too dynamic to be corralled or controlled

Business development gurus make their living convincing people that they can “create” jobs, “save” jobs and “attract” jobs, but the American economy is too dynamic for anyone to control. Forces beyond the control of the EDC or the local “Economic Development Authority” will dictate what companies survive and what companies fail, what jobs are “created” and which jobs are destroyed, and it’s silly to believe incentives will keep a company in business that isn’t otherwise viable. No American company is going to keep a semi-conductor plant open in Colorado as a result of incentives, if that plant no longer makes sense and can’t turn a profit. We have to accept that the economy is in a constant state of flux, which is largely beyond our control, and focus on the things we can control – like keeping the tax and regulatory climate business-friendly, and the cost of living and doing business affordable, and keep the schools turning out an educated workforce, and reducing the hassle factor for business start-ups. That isn’t as easy or glamorous as cutting business “deals” with other people’s money, or wining and dining out-of-town CEOs. But it’s the surest way to ensure that our economy – that part of it that’s within our control – continues to thrive.

5.) It empowers insiders at the expense of the taxpayers

Hard evidence that the incentives game actually “creates” new jobs – as opposed to simply moving them around the map, in a shell-game, or getting money for jobs that would have been created anyway – is sparse, as I explained yesterday. The greatest number of actual jobs “created” by “the game” is inside economic development offices and among the consulting firms who make a living helping companies shake-down communities for incentives. Here’s a link to one of their favorite publications. Look through it sometime, if you want to get a big picture perspective on the one industry the incentives game actually spawned. I’m not sure you’ll like what you see.

Politicians like the game, too, because it enhances their power, and egos, by casting them in the role of “deal-makers” and “job creators.” That’s why there is so much resistance to a proposal by South Carolina Gov. Mark Sanford to end the state’s crazy-quilt of incentive programs and instead improve the state’s business climate by slashing business taxes across the board. Reports The Greenville (S.C.) News:

“The South Carolina Economic Developers’ Association balked Tuesday at a plan put forward by Gov. Mark Sanford to eliminate a passel of tax breaks used to lure business investment in order to pay for elimination of the corporate income tax over a decade.

The governor’s plan would "completely eliminate the very economic development tools that help make South Carolina competitive" for new jobs in a time of rising unemployment, said John Lummus, vice president of economic development at Tri-County Technical College in Pendleton and the current SCEDA president.

The association has more than 650 members, many of whom work in local economic development departments around the state and frequently use some of the 14 tax incentive laws that Sanford wants to eliminate. One of those laws -- a credit against the withholding tax for job creation -- is a "key tool" in the hunt for corporate investment, said Lummus, the former economic development director for Anderson County.

Sanford, however, argued that the tax breaks for economic development favor new and big businesses over longtime and small ones.

"What if you just treated every business the same?" the governor asked during a press conference where he unveiled his tax reform plan.”

"What if you just treated every business the same?" It's a question we might want to ponder in Colorado as well.

Sanford’s approach makes sense. But the economic development people and corporate interests that benefit from the incentives game, and the politicians who use it to curry favor with constituents, don’t want to give it up. The wheelers and dealers like playing with other people’s money. It means political power and job security for a small army of consultants and economic development gurus.

6.) There’s a point of diminishing returns

These handouts are frequently sold as “investment,” since politicos have adopted the language of capitalists, even while pursuing policies that smack of corporatism rather than real capitalism. But not every “investment” is a sound investment, as I pointed out yesterday, using the Frontier Airlines hanger “deal” as a case in point. And politicians have an absolutely horrendous track record when it comes to picking winners and losers, and “investing” other people’s money. It’s a simplistic cliché to argue that “it takes money to make money.” But we’ve all also seen cases where investors pour money into a black hole. That’s okay when it’s private money, invested for personal gain. But the risk increases when the process get de-personalized, and the “investing” is done with other people’s money.

It’s possible that giving one company a few million dollars to tip a relocation decision in this city’s favor will win the day, and generate more in tax revenue and economic activity than what was “invested.” But does the balance sheet work in our favor if similar incentives are offered to 5 or 10 or 20 companies? At some point, you are putting out more than you’re taking in, and the costs are eclipsing the benefits. It’s called the point of diminishing returns. Where that boundary lies is hard to tell. But few serious studies are conducted on the subject before most state or local governments take this plunge. Colorado Springs needs to look before it leaps. The few serious studies done on the subject -- including one in Kansas I wrote about yesterday -- show that the trumpeted economic benefits are meager, illusive or non-existent.

7.) Other factors still matter more

Companies are more than willing to take incentives thrown their way, and to play one community off against another in an effort to up the bidding, but incentives still rank relatively low on the list of factors that make or break a major business decision. A survey of CEOs done in 2007 found that “state and local incentives” and “tax exemptions” were near the bottom of the top 10 factors that businesses consider. Incentives matter. But of equal or greater importance are: highway accessibility, labor costs, energy availability and costs, availability of skilled labor, occupancy and construction costs, available land, corporate tax rates and environmental regulations.

Our city and county leaders should focus on improving these other factors, most of which are within their control, if we really want to create an optimal business climate, and steer clear of panaceas like “incentives.” The Pike’s Peak region still has a lot of work to do on getting these business climate fundamentals right, before we even begin talking about paying cash on the barrel-head. Colorado Springs is a desirable-enough place to live that we don’t have to resort to subsidies if we focus instead on getting all these other things right. But that takes hard work and focus. The easier and more glamorous route is to put a bunch of money in a pot and dangle it in front if corporate mercenaries, which is why “incentives” are the lazy city’s way to improve the economy.

8.) Such activities can breed corruption

Any time politics and business mix, there’s the potential for ethical lapses, bed-feathering, conflicts of interest and outright corruption. And the economic development racket creates the ideal conditions for such situations to occur. In Baltimore it's led to corruption and scandal; in San Diego, to self-dealing and mismanagement of taxpayer money (article, article, and article); and in Florida, to at least one recent case of self-dealing.

Would creating an economic development slush fund at City Hall’s disposal lead to similar ethical lapses in Colorado Springs? Not necessarily. But the surest way to avoid such situations is to turn our backs on the temptations. And the surest way to do that is to avoid getting into the “incentives game” to begin with.

The Seduction of Colorado Springs

Colorado Springs’ mild flirtation with the corporate welfare racket could become a love affair Tuesday, when a divided City Council decides whether to put a measure on the ballot that would annually earmark $3.2 million in property tax revenues for a “job creation fund,” to be doled out by an as-yet-unnamed entity for as-yet-unspecified purposes. If it all sounds troublingly vague, and a recipe for potential mischief, that’s because it is.

The best thing for City Council to do is let the .665 mills property tax sunset in December, as scheduled, but the group seems inclined to ask the voters for a 15 year extension, diverting the money into the general fund or using it to establish a so-called jobs creation fund. It was the Sustainable Funding Committee’s recommendation to do the latter. But this would be the worst of the three options available to City Council, not only because it doesn’t have a snowball’s chance with the voters but because it puts the city on a slippery slope with a serious downside risk.

Advocates of paying “business incentives” – the current euphemism for what’s more accurately called corporate welfare – argue that Colorado Springs can’t remain competitive, and its economy will suffer, unless we have some money available to entice out of town business and prevent existing companies from going elsewhere. They believe they have the know-how to “invest” taxpayer money wisely and fruitfully, in ways that will boost the local economy. They want to put $51 million of your money into a slush fund, which a handful of city leaders will use as they see fit, for unspecified economic development ends. They think this will help us "grow up," become "a real city" and "start playing with the big dogs," in the words of the publisher of the Colorado Springs Business Journal.

But even if you have no objections to such a concept on principle – which I do – a big picture perspective raises many practical objections, from the most obvious to the less appreciated, which I’ll lay out between now and Tuesday.

The city can’t afford it.

This point would seem too obvious to need much elaboration. The city is scrounging for every dollar, and major budget cuts are looming, including, we’re told, to “vital city services.” Diverting money from concrete needs to pie-in-the-sky abstractions would be the clearest sign yet that the city’s political and business leaders are out of touch with reality, and don’t have their priorities in order.

It’s unfair

Colorado Springs has thousands of businesses, 99.98 percent of which don’t ask anything from government except that it maintains a level playing field, enforces the law and stays out of the way. A tiny number of those businesses think they’re owed something extra from the government, in terms of financial assistance or special treatment – and they’ve learned to play one community off against another in an effort to get what they want. But such playing of favorites, and handing out of special favors, is unfair to the rest of the business community.

Why should local government offer one company something -- expedited permitting, for example, or special tax abatements, or cash payments – that it doesn’t offer all companies? Many companies have gotten on the dole because local leaders and Washington politicians encourage them to. But it’s time to end corporate welfare, at all levels, and insist that companies stop leeching off the taxpayers and start paying their own way.

Rather than jumping aboard the corporate welfare bandwagon, Colorado Springs needs to draw a line in the sand against such shakedowns, setting an example for other cities to follow. We should do everything possible to create a fantastic business climate in Colorado Springs (and can business or political leaders here honestly claim they’ve done that?), but announce to the world that paying business bribes just isn’t something we do. We might even gain some national attention, and encourage other cities to follow our example, and attract entrepreneurs and businesses of a certain mindset, if we become the city that didn’t just say “no,” but “hell no,” to such shakedowns.

The job creation claims are overblown, unproven or illusory

The “incentives racket” creates the illusion of job “creation,” but it really just moves jobs around on the map, depending on which towns or cities will pay the most tribute to mercenaries in corporate boardrooms. Pueblo officials may claim to have “created jobs” when they used millions of dollars in incentives to get the Professional Bull Rider’s Association to move its headquarters there. But all Pueblo really did was move a few jobs from here to there, by picking the taxpayers’ pockets. Pueblo benefits as a result – assuming the millions put out for a new headquarters actually generate a return on the "investment" – but the region’s economy didn’t grow as a result. And we’re all a little poorer because of the anger and resentment such poaching expeditions create.

The State of Kansas has spent at least $1.3 billion on various incentives over the past 5 years. But according to a report released last year, the economic benefits are undetectable and probably trumped-up. “Findings of ineffectiveness include promised jobs weren’t created, return on investment is low or negative, and incentives offered weren’t a determining factor,” according to the report. Some incentives succeeded in influencing companies to move from one county or city to another, yet net economic gains were hard to demonstrate. The Kansas report indicated that most states keep incentives, despite a lack of quantifiable results, due to a fear that they’ll lose out if they go without them, which means they’re simply doing it because everyone else is, lemming-like. A minor industry has been created, consisting of site-selection consultants and economic development deal-makers. But it’s doubtful the economy as a whole gets a boost.

Here's a concise write-up of the Kansas study’s results, as well as an executive summary for those who want to learn more.

Incentives “work” in a very narrow, short-term sense, if you’re comfortable with exploiting taxpayers to fund dog-eat-dog economic warfare between states and cities. But the benefits for the economy as a whole are unproven and probably illusory.

Americans need to concentrate on baking more pies; not stealing slices from someplace else.

These can be risky ventures

Venture capitalism should be left to venture capitalists, not to taxpayers, because these “investments” are frequently risky and when they go bad they result in a waste of taxpayer money. Betting on which ventures will succeed in an economy where many are bound to fail is something for private funds and private initiative. It’s not something government is good at, or suited for. What’s occurring in Washington is a perfect example of the dangers of mixing government and business. But those dangers can trickle down to the local level as well.

How will the city decide where to “invest” these funds? Whose expertise will it count on to make such decisions? Who will monitor the results? Who will be held accountable when “investments” go bad, or if public funds are misspent? None of these questions are answered by the vague proposal that’s been put before council.

And even partnering with an established company carries risks, as Colorado Springs ill-fated “partnership” with Frontier Airlines showed. Only a few months before Frontier went Chapter 11, this city had committed to finance and build a $55 million maintenance hangar for the airline -- despite the fact that anyone looking at the company’s financials at the time could have seen it was flying through turbulent skies. The “deal” was touted as an economic coup for the city, but I harbored doubts. What might happen, and who might be on the hook, if Frontier – whose financials and stock values weren’t looking good at the time -- was sold, merged with another airline, or went belly up? Few people who orchestrated and backed the deal seemed to think seriously about the possibility, as far as I could tell.

A delay in signing on the dotted line is the only thing that kept the city from entering into a 30-year partnership with a now-bankrupt airline. And while Frontier may emerge from Chapter 11, the prospects for its long-term survival – and the chances it will meet the lease payments on the hangar over a 30-year period – are beyond the power of this city’s self-styled venture capitalists to predict.

I wonder if the mayor and other members of city council who backed the “deal” would have been so quick to invest their personal money in a maintenance hangar for a financially-troubled airline? I’m betting not. Yet they had no problem using public money to backstop such a venture. I guess it’s always easier to gamble when you’re playing with other people’s money. But that’s exactly why the public needs to be on guard against being dragged into such ventures

The Frontier airlines “deal” was a debacle narrowly averted, and offers a cautionary tale -- and possibly a preview of coming attractions? -- if the city steps further out on this slippery slope.

Come back tomorrow for the second installment of “Risky Business.”

A report in today's Helena Independent Record highlights one of the great ironies, and great outrages, of our time: that the groups who claim to love our forests the most are seemingly doing everything in their power to destroy them, by obstructing any federal mitigation efforts that involve the harvesting of trees.

Our Western forests are in crisis, with beetles and wildfires destroying vastly more trees every year than the timber industry ever could, even in its heyday. Yet as the story below illustrates, litigious "tree-huggers" are the single biggest obstacle to saving the trees. Bigger than budget constraints. Bigger than bureaucratic inertia. Bigger than "analysis paralysis."

The story pretty much speaks for itself, but it's not an isolated case. Many a national forest has been stymied in its efforts to respond to the crisis, thanks to extremists who would rather see the forests die en mass, and go up in flames, than see a single tree removed by human hands.

Managers of the Helena National Forest had a plan to counter invading mountain pine beetles and buffer nearby communities from the wildfire threat, which involved culling parts of the overly-dense forest in an effort to reduce "fuel loads" and cut out the cancer. That was in 2003. But because there was a commercial element to the plan -- because some of the logs could be milled and put to productive and profitable uses -- the zero-cut crowd, true to form, went running to the federal courts, demanding it be stopped.

Six years later, the plan has been upheld by the Ninth Circuit Court of Appeals. But at this point the damage has been done, and there's not much left of the forest to save.

It's outrageous. It's criminal. It's madness. But it's typical of how knee-jerk obstructionism by gang green is helping to wipe out the very forests they claim to love -- and explains why federal agencies have been so ineffectual in countering the forest health crisis. The 3 groups that helped kill this forest, just for the record, are Alliance of the Wild Rockies, Native Ecosystems Council and the Wildwest Institute. An army of rampaging loggers couldn't have done this forest more harm.

Here's the story:

Court rules in favor of logging project

By Eve Byron

Three environmental groups couldn’t quash a project on national forest lands meant to lessen the threat of wildfires near Clancy and Unionville southwest of Helena, but it appears that the tiny mountain pine beetle has made the Helena National Forest rethink its plan.

In a decision issued Tuesday, the Ninth Circuit Court of Appeals affirmed the Helena forest’s 2003 plan to undertake commercial thinning and other efforts to remove small trees and vegetation on about 1,500 acres. However, Helena District Ranger Duane Harp said the prescription is only good now for about 100 acres containing Douglas fir trees, since about 90 percent of the trees on the remaining 1,400 acres — mainly lodgepole pines — are now dead.

“We are obviously extremely pleased that the Ninth Circuit has found in our favor. But it’s bittersweet news because with the current beetle epidemic, the vast majority of the project area, which was proposed for timber harvest, is now dead,” Harp said. “You can’t use the prescription for green trees on dead trees.

“So I guess we’ve implemented the no-action alternative.”

Mike Garrity, executive director of the Alliance of the Wild Rockies, said that if the Helena forest had worked with his organization and the two others that began appealing the lawsuit in 2004 — Native Ecosystems Council and the Wildwest Institute — that some compromise might have been reached to allow the project to move forward. He said the groups did agree with the forest that some thinning should be done on forest lands near homes while the lawsuit was under way, and that his group has worked with the Helena forest and others in the past to craft projects that wouldn’t be litigated.

“Our main focus was that the forest’s own five-year review of its forest plan showed that it was failing to ensure the viability of species,” Garrity said. “The forest service never disclosed that report to public, as originally planned, and has never addressed that concern even though it continues to implement the same flawed forest plan.”

He added that the appeals court’s decision wasn’t “published,” meaning it can’t be used as precedent, and that they disagree with the findings of the three-member judicial panel that issued the ruling. Garrity said they’re considering whether to ask for an opinion involving more of the appeals court’s judges.

Planning for what became known as the Clancy/Unionville Project began in 1997, because the forest service and some of the neighbors in the area thought this might reduce the threat of large-scale catastrophic wildfire. Harp said he also hoped thinning the forest here would also create a habitat less conducive to mountain pine beetles.

A final Environmental Impact Statement and Record of Decision for the project was issued in 2000, but was successfully appealed and sent back to then-forest Supervisor Tom Clifford by the regional forester. Additional analysis was conducted and a new decision issued in February 2003. It’s that decision that’s been in litigation until this week’s Ninth Circuit Court ruling.

Garrity and others have long disputed that logging is good for reducing the threat of wildfire forestwide; they’d rather see it implemented only near homes for that purpose. They also argue that it’s impossible for the forest to “log its way out of the beetle epidemic.”

“British Columbia has a huge beetle infestation, and they log like crazy in Canada,” Garrity said. “There aren’t any scientific, peer-reviewed papers that say you can log your way out of a beetle infestation.

He adds that once the needles fall off of the dead trees after a year or two, the fire hazard actually is reduced. The danger increases, however, when those trees eventually fall to the forest floor, creating ladder fuels that fires use to creep up a tree from the ground into the crowns of trees.

But Harp said that at this point, the fire hazard has significantly increased in the Clancy and Unionville areas due to the standing dead trees.

Harp said they plan to remove “hazard trees” lining roads in the area that are at risk of falling on vehicles or people. They also may try to sell the dead trees as part of a commercial harvest plan, but will have to do additional studies to look at the impacts. He doesn’t expect any logging, other than possibly for hazard trees, in the area this year, but he wants to proceed as quickly as possible because the longer the dead trees stand in the forest, the less value they have to sawmills.

“We now have to decide if we will do any harvest at all under the Clancy Unionville decision,” Harp said. “We will however, move forward with the prescribed burning and other treatments that are outside the timber harvest units.”

The Denver Post reports today that TABOR-haters under the golden dome think the state's latest budget crisis might be the opportunity they've been looking for to rid themselves of the state TABOR, if they can sell the public on the notion that TABOR, and not a slumping economy, is the source of our fiscal ills. All of which underscores the need to keep our Colorado Springs Taxpayer's Bill of Right in place, as an insurance policy against the day our state TABOR goes away.

The "economic stimulus package" Democrats are streamrolling through Congress, in a rush to make a rendezvous with Barack Obama on one of his first days in office, evidently will also serve as a stealth federal spending bill, with tens of billions of dollars going to fatten the coffers of federal agencies. GovExec.com dug into the bill and produced the following list of agency goodies, all tucked neatly away inside -- expenditures that should be funded as part of the normal budgeting and appropriations process.

President-elect Obama vowed that this would be an earmark-free bill, understanding that Americans would be even more repulsed by the glut of spending if members of Congress began piling their pet projects even higher on the gravy train. There are many definitions of "pork," however, and many different ways to serve it up. And this certainly has that tell-tale aroma.

Here's the report from GovExec.com. Read it and weep.

Stimulus package contains billions of dollars for federal agencies

By Katherine McIntire Peters kpeters@govexec.com
January 15, 2009

Federal agencies stand to gain billions of dollars in funds if the economic stimulus package under consideration in Congress becomes law.

According to a summary of the 2009 American Recovery and Reinvestment Bill released on Thursday by the House Appropriations Committee, agencies would receive billions to repair and rebuild infrastructure, upgrade computer systems, repair environmental damage and improve energy efficiency. Billions more would be funneled through agencies to states and local governments in the form of grants. The following federal agencies would receive funds to directly enhance their facilities and operations:

Agriculture Department

$650 million for construction and improvements at National Forest Service facilities
$209 million for deferred maintenance at Agricultural Research Service facilities
$245 million to critical information technology improvements at the Farm Service Agency
$44 million to repair and improve security at USDA headquarters
$300 million for fire hazard reduction
$400 million for watershed improvement programs at the Natural Resources Conservation Service

Centers for Disease Control and Prevention

$426 million to complete the agency's buildings and facilities master plan, and to renovate the National Institute for Occupational Safety and Health offices

Defense Department

$350 million for research into using renewable energy to power weapons systems and military bases
$3.75 billion for new construction of hospitals and ambulatory surgical centers
$455 million in renovations to medical facilities
$2.1 billion for repairs to military facilities
$1.2 billion for new housing construction
$154 million to improve troop housing
$360 million for new child development centers
$400 million for new construction to support Guard and Reserve units
$4.5 billion for the Army Corps of Engineers for environmental restoration, flood protection, hydropower and navigation infrastructure (the committee noted the Corps' construction backlog is $61 billion)
$300 million to clean up closed military installations

Energy Department

$1.9 billion for basic research
$400 million for the Advanced Research Project Agency-Energy
$500 million for nuclear waste cleanup

Environmental Protection Agency

$800 million for hazardous waste cleanup at Superfund sites
$200 million to clean up leaking underground storage tanks
$100 million for competitive grants to clean up former industrial sites known as brownfields

General Services Administration

$6.7 billion for renovations and repairs to federal buildings, including at least $6 billion focused on increasing energy efficiency and conservation
$600 million to replace older vehicles with alternative-fuel vehicles

Health and Human Services Department

$900 million to prepare for pandemic flu, support medical countermeasures for weapons of mass destruction and cybersecurity

Homeland Security Department

$500 million for the Transportation Security Administration to install aviation explosive detection systems at airports
$150 million for the Coast Guard to repair or remove bridges deemed hazardous to marine navigation
$1.5 billion to construct GSA and Customs and Border Patrol land ports of entry to improve security and commerce

Housing and Urban Development Department

$2.5 billion for a new program to upgrade low-income housing to increase energy efficiency

Interior Department

$1.8 billion for the National Park Service for infrastructure projects
$325 million for the Bureau of Land Management for infrastructure projects
$300 million for the National Wildlife Refuges and National Fish Hatcheries
$400 million to address deterioration of the National Mall
$500 million to the Bureau of Reclamation to provide clean drinking water to rural areas (the committee noted the bureau has a backlog of more than $1 billion in rural water projects)
$500 million to the Bureau of Indian Affairs to address maintenance backlogs at schools, dams, detention and law enforcement facilities, and roads (the committee noted the bureau has a maintenance backlog at schools alone exceeding $1 billion)
$550 million to modernize facilities at the Indian Health Service

NASA

$600 million, including $400 million to put more scientists to work on climate change research, $150 million for research to improve aviation safety and Next-Generation air traffic control, and $50 million to repair NASA centers damaged by hurricanes and floods last year

National Institutes of Health

$2 billion, including $1.5 billion for expanding jobs in biomedical research and $500 million to implement the repair and improvement strategic plan developed for NIH campuses
$1.5 billion for NIH to renovate university research facilities

National Institutes of Standards and Technology

$300 million for competitive construction grants for research buildings at colleges and other organizations, and $100 million to coordinate research at labs and national research facilities by setting interoperability standards for manufacturing

National Oceanic and Atmospheric Administration

$600 million for satellite development and acquisitions
$400 million for habitat restoration projects

National Science Foundation

$3 billion, including $2 billion for expanding employment opportunities in science and engineering to meet environmental challenges and improve economic competitiveness, $400 million to build major research facilities, $300 million for equipment, $200 million to repair and modernize facilities, and $100 million to improve instruction in science, math and engineering

Social Security Administration

$400 million to replace the 30-year-old National Computer Center
$500 million to process a steep rise in disability and retirement claims

State Department

$276 million to upgrade information technology platforms

U.S. Geological Survey

$200 million to repair and modernize science facilities and equipment

Veterans Affairs

$950 million for medical facilities (the committee noted there is a $5 billion maintenance backlog at the agency's 153 facilities)
$50 million to make monument and memorial repairs at veterans cemeteries

Editorials like this one in the Grand Junction Sentinel raise some interesting questions about the "mileage tax" some in the state would like to levy on motorists, as a way of boosting road funding, yet miss a critical point -- that a gas tax already is a mileage tax of sorts. The more you drive, the more gas you use. The more gas you use, the more tax you pay. Thus, those drivers who put the most miles in, and most wear and tear on the roads, already are paying more toward roadway maintenance.

There's nothing inequitable in the present arrangement, in short, as implied in the arguments of "mileage tax" advocates. This is just another gimmicky justification for reaching deeper into our pockets, without having to face the political storm that jacking-up gas taxes would bring. A "mileage tax" might be a concept worth considering if it were used instead of gas taxes. But backers of this idea obviously want the new "fee" or "charge" imposed on top of existing taxes, and hope that calling it something else will win over the gullible.

It gives the term "tax evasion" a whole new meaning.

If supporters or opponents of Pinon Canyon expansion were looking to this much-anticipated Government Accountability Office report to settle the dispute, with a nail in the coffin or a full-speed ahead -- or to produce some smoking-gun evidence of a Pentagon plot to take over the southern half of Colorado -- they'll be sorely disappointed. The bottom line, based on a cursory read of a report released yesterday (but I read enough of them in my Washington days to write the manual, "How to Read a GAO Report -- if You Absolutely Have To") is that the Army still can't adequately justify the proposal, and that it got balled-up in its own red tape.

Much of the information the Army produced in support of the controversial expansion is incomplete, unconvincing, contradictory or confusing, reports the GAO. It's planning is outdated. But perhaps it faltered most egregiously in the PR campaign, by not making its thinking known to the public earlier in the process. The Army was outflanked in the battle for public opinion, once the plan burst into the public domain, because of procedural ambiguities and rigid conformity to process. The regimentation that's so essential to the success on a battlefield became a liability in the Army's battle to win over public opinion, allowing opponents to keep the Army on the defensive. No matter what the Army said after a certain point, the political battle had already been lost.

This is how a GAO summary explains it:

“Because of a lack of specificity in (Office of Secretary of Defense) OSD and Army communication strategies, the Army has not been consistent or always effective in communicating its approach to acquire training land. According to OSD's policy, no major land acquisition proposal may be made public through official notice until OSD has approved the acquisition. The policy is unclear what public notification, such as informal community outreach, is permissible prior to approval. While the Army's strategic plan emphasizes that it is important to engage the public early in the process, it lacks specificity as to when and in what form this outreach should take place. In California and Hawaii, the Army followed the strategy articulated in its plan, openly explaining why it was acquiring land, which helped ease the start of the acquisition process. Army officials and community groups said that the Army did not adequately explain its reasoning for the proposed expansion at Pinon Canyon. In this case, the public at times relied on rumors and leaked documents. These information sources often did not provide clear, complete, or accurate data. Without a consistent and clear DOD-wide practice that both addresses concerns about early disclosure of land acquisitions and permits some flexibility to engage the public, the Army and other services are likely to experience communication problems similar to those encountered at Pinon Canyon.”

The report's ultimate (though not explicitly stated) finding, however, is that the Army just doesn't have it together enough to explain why it needs the additional acreage. And that’s reason enough, in my view, that it should concede defeat and withdraw, at least for now. Maybe 5 or 10 years down the road, when circumstances have changed, passions have cooled and the U.S. Army has improved its public relations capabilities and gotten it's ducks in order, we can revisit the issue and have a rational debate. But this has been a botched campaign from start to finish.

Maybe they'll soon be offering a new course at the Army War College, titled "How Not to Proceed with Base Expansion."

The Colorado Springs Gazette has a fun editorial today on why the mass migration of Californians to Colorado is a good thing, and a positive sign that we're doing things better here. I agree up to a point, though I think transplants should be required to sign a document, renouncing all the way-out and wacky political ideas for which that state is famous, before being allowed in.

We could set up highway checkpoints and airport screening areas where escaped Californians would be quizzed about their politics, much like California sets up screening points to stop invasive species or contagious plant diseases from crossing state lines. Those unwilling to recant -- to acknowledge the error of their ways and leave California ideas and politics in California -- will be turned back, or given a bus ticket to Portland. California should be quarantined, ideologically speaking, lest its refugees do even more damage than they already have to the intermountain West.

What will be the point of leaving California for Colorado or Wyoming or Montana, after all, if you continue to support the sorts of politicians and policies that made life in the Golden State unbearable?

The editorial correctly credits Colorado's Taxpayer's Bill of Rights as a major reason we're not the basket case California is -- which is something people should keep in mind when they start taking shots at TABOR. And the paper proposes an intriguing new economic development strategy for Colorado, based on each Coloradan personally recruiting a Californian we care about to move here. And I'm willing to do my part.

So hey, all my California friends -- Mac and Jody, Marty, Scott and Molly, Bruce, Paul, Steve -- give it up already and come live in Colorado! The California dream is a dying ember. Taxes are lower here. Hassles are fewer. Avalanches are less of a threat than earthquakes. Sanity still prevails, outside a few urban enclaves. Our economy isn't completely in a shambles -- and you can help make it better. And you'll have the Taxpayer's Bill of Rights (for as long as it lasts) to protect you against the predations of politicians.

We've got plenty of extra beds at the Paige house if you need a place to bunk while getting settled.

The Boston Globe has an excellent editorial the other day urging an end to that state's resistance to, and discrimination against, charter schools. It joins The Washington Post among otherwise left-leaning newspapers that have broken with anti-school reform dogma of teachers' unions, and the Democratic Party, by embracing educational choice as an imperative for the troubled schools in the urban areas the papers serve. And the impact of this can't be underestimated, since such arguments have much more power coming from the left than from the right.

There may be other left-leaning editorial pages out there that have similarly broken ranks, understanding that a slavish conformity to ideology is costing millions of kids a better education and opportunity. But today I can cite only these two.

So bully for The Boston Globe.

Bully for The Washington Post.

The Post blazed this trail by supported a voucher program for the District of Columbia, which must have set unions and Democrats back on their heals. And the paper has generally seemed to support controversial D.C. schools Chancellor Michelle Rhee in her efforts to turn around a terrible school system, including with this Jan. 7 editorial excoriating the D.C. City Council for undermining Rhee. And now comes the Boston Globe, to advocate for lifting the state's caps on charter schools, in response to compelling evidence that they're producing better results.

Here's The Globe:

Raise the cap on charters
January 10, 2009

THE SHORTEST DISTANCE between urban students and quality education is a charter school that is free to lengthen the school day, enhance the curriculum, and assign teachers without interference from teachers unions or downtown bureaucrats. Yet state education officials not only resist lifting tight caps on new charter schools but are now contemplating measures that would undermine opening charter schools under the current cap.

A new Boston Foundation study compared the achievement of Boston students at charter, traditional, and in-district pilot schools, which have adopted some charter-like reforms. The charter schools, which are run by independent boards, topped the list. The most dramatic finding in the new study was the success of charter schools in raising math performance by middle school students - usually a resistant bunch.

For middle school students in Boston, the impact of attending a good charter school meant moving from the 50th to the 69th percentile on the MCAS math test. The study also dispatched the tired argument that charters succeed only because they attract students from education-minded families and leave district schools with the hardest-to-serve students. It compares the achievement of charter school students in Boston with those who were motivated to enter the lottery but failed to win a seat.

With 61 charter schools underway, there seems to be plenty of room under the statewide cap of 120 schools. But a deeper look reveals a problem. State law also requires that no school district be required to transfer more than 9 percent of its net school spending to charter schools. That cap looms over Boston, where there is room for only 111 more charter school seats while 7,000 Boston students linger on waiting lists.

And how does one expand charter school opportunities in North Adams, with room under the cap for only 34 students, or in Somerville, with room remaining for just 70 students? The situation is barely better in Cambridge, Chelsea, Holyoke, Lowell, and other urban districts where the addition of a single new charter would meet or exceed the cap.

Now, to make matters worse, Education Commissioner Mitchell Chester is working on a proposal to the Board of Education that would delay the opening of new charter schools even under the current cap. State education officials are under heavy pressure from school district and local officials who must reallocate per-pupil costs to charter schools in hard times. But these are the same officials who are responsible for running schools that so many families are determined to flee. The touchstone in this debate should be student achievement, not the fiscal challenges in school districts, which can close or consolidate schools to offset declining enrollment.

The best strategy would be to double the potential for new charter schools in low-performing urban districts by raising the net school spending limit from 9 percent to 18 or 20 percent. School districts will howl. But they may also recognize the urgent need to provide their own students with longer school days and deeper opportunities.

Two members of the Sustainable Funding Committee were on the Jeff Crank Show (KVOR) this morning, attempting to justify the three ballot recommendations they presented to City Council Tuesday. Their arguments weren’t just weak, but baffling.

SFC chairman Dan Stuart and panel member Glenn Gustafson (the Chief Financial Officer for School District 11) argued that the elimination if TABOR was needed to improve government efficiency and reduce redundancy, since our city operates under both a city and state TABOR. This complicates life for a few city insiders, apparently – though I’ve yet to hear the specifics of how. So, in order to make their jobs easier, the rest of us should surrender the taxpayer protections afforded by TABOR. Or so their argument goes.

This theme also was heard at Tuesday’s council meeting, where everyone advocating for a repeal of TABOR posed as a good government watchdog and champion of the taxpayer. It was kind of Orwellian.

The best way to improve government efficiency – if that’s not a contradiction in terms – is to put it on a strict diet of tax dollars, which is what TABOR does. Taxing and spending controls enforce discipline where it wouldn’t otherwise be enforced. When we have fewer dollars to spend, we spend them prudently, and try to make them go further. The same should hold true for government. Removing TABOR will inevitably lead to a big push for higher taxes and more spending – while also depriving the citizens of their right to vote on such things -- which will increase bloat and bureaucracy, decreasing efficiency. Their argument defies common sense, logic and experience.

City officials pride themselves on running a relatively lean operation. But that’s by necessity, not choice – because of TABOR. If it once again becomes a matter of choice, the government, and the waste of tax money, will grow, because that’s just the nature of government.

The city TABOR and state TABOR have happily coexisted since 1992 – around 17 years -- meaning that city officials by now know the rules (or should know them) backward and forward. They don’t like the rules, I realize. But they have learned to live with them -- as we citizens have learned to live with the rules government imposes on us. Yet this is the first we’ve all heard about the hardships and inefficiencies this causes – as if the inconvenience of a few city staffers would justify a repeal of the greatest single protection average taxpayers have.

When asked whether limited government views were adequately represented on the SFC, Stuart mentioned 2 panelists who had such views. Two out of 24 doesn’t strike me as a balance. It would be interesting to know exactly how, and who, drew up the list of people to appoint, and what criteria were used.

On a positive note, Stuart and Gustafson indicated that the SFC is still studying a broader array of issues, including what might be done with city assets (like its enterprises) and the possible competitive outsourcing of city services, such as road work and snow plowing. And it will be interesting to see what tangible recommendations result from that. It’s just unfortunate, in my view, that the committee didn’t hold off on going to council until it could produce a balanced package of proposals, that addresses expenditures and assets and outsourcing, as well as revenue. But Stuart indicated that the city was in a hurry to put these measures on the ballot – which is a strong indication of what the city’s goals and priorities are.

Perhaps the SFC and City Council members who back these proposals will come up with more convincing arguments by Monday, when they will discuss the matter again at an informal session (beginning at 1:00). Because if this is the best they can muster, voters won't be kind.

The Gazette beat me to the punch today, in announcing that the TABOR preservation coalition -- I guess it's time we put our heads together and come up with a catchy name -- is growing in numbers and strength. Here's how it was written up in the G's POLITIGAB feature.

"Two more citizen groups have joined a coalition opposed to repealing the Colorado Springs Taxpayer's Bill of Rights. They are the Colorado chapter of Americans for Prosperity, an advocacy group for smaller government, and Taxpayers for Budget Priorities, which wants the city government to turn over more functions to private contractors.

A citizen committee this week recommended that the City Council ask voters to repeal the TABOR amendment in the April 7 election. Committee members said a repeal is necessary because the city's amendment restricts the government's ability to respond to a financial crisis. Even if voters approved a repeal, a similar amendment to the Colorado Constitution by the same name would remain in place.

Other groups opposed to repealing the city's TABOR include Citizens for Cost-Effective Government, Local Liberty Action and Citizens for Your Right to Vote."

And I fully expect that the coalition will continue to grow as word spreads that TABOR is under attack in its birthplace, since its repeal would lend moral and rhetorical support to those who want to kill our state TABOR -- and those who want to stop the idea from taking root elsewhere. What's happening in Colorado Springs has implications far beyond the city limits, which is why the coalition will continue to gain strength. There are good practical and moral reasons to maintain our city TABOR. But there are symbolic reasons as well.

This isn't just a fight for groups, however -- since every citizen has a direct stake in the outcome.

Folks wanting to weigh in should do so, by writing or calling members of city council, sending letters to the G -- opinion@Gazette.com -- or showing up at meetings and speaking their mind. I'm available at 719-576-9055 if you have questions or want to become a part of the effort to preserve or taxpayer protections.

In all the excitement about the TABOR issue, it might have been easy to overlook a troubling tidbit that appeared in this Gazette report, indicating that the Colorado Springs Urban Renewal Authority may seek enhanced powers of eminent domain, to help along a long-stalled downtown redevelopment project.

The authority "wants to shrink the size of the initial area within southwest downtown to reflect the economy, and give itself greater power to condemn land there," reports The Gazette. "The latter change could prove controversial since the City Council set the bar high on the use of condemnation in the area when it designated it for redevelopment."

Just one minor correction to the G's story. Such a change not only "could" prove controversial, but it "will" prove controversial, given the public backlash to the U.S. Supreme Court's infamous Kelo decision, which sanctioned the use of these extraordinary government powers for economic development purposes. If the urban renewal gang thinks this will slip through unnoticed or unopposed, they should think again.

But the Gazette's editorial page was all over it, thankfully, rolling out this strong editorial in response.

Daniel Cole used his regular Friday column in The Gazette to explain how city leaders can sidestep the bruising battle that looms if they place a measure repealing our city TABOR on the April ballot. Council is expected to discuss the issue at an informal session Monday. A coalition opposing TABOR repeal is also watching to see whether City Council attempts to limit or shortchange public comments and discussion on this and two other proposals put forth by the Sustainable Funding Committee, since they're not above using procedure to stack the deck in their favor.

Here is the piece:

TABOR repeal lacks support to take authority from people

DANIEL COLE, GUEST COLUMNIST

On March 19, 2008, ABC's Martha Raddatz informed Vice-President Dick Cheney that, according to a new poll, two-thirds of Americans thought the war in Iraq wasn't worth fighting. "So?" Cheney replied. "I think we cannot be blown off course by the fluctuations of the public opinion polls."

At first listen, Cheney sounds a lot like opponents of TABOR. When defending the position that citizens shouldn't vote on proposed tax increases, the TABOR-haters fall back on a similar, pseudo-republican refrain: "We elect officials to make decisions for us, so they should raise taxes when they think necessary, even if the majority of their constituents disagrees."

There are, of course, certain decisions that citizens should trust to their officials. When it comes to foreign policy, for example, we can only hope that representatives are endowed with greater talents and wisdom than the average Joe, although William F. Buckley, Jr. famously said that he would prefer to be governed by the first 2,000 names in the Boston phonebook than by the entire faculty of Harvard.

When it comes to taxes and services, however, the body politic as a whole possesses a singular expertise. As the direct recipients of government services, the people are in the best position to determine when levels are too low, and as taxpayers, they know when they can afford higher rates.

Thanks to these dual roles, the citizens can weigh the costs against the benefits and strike the ideal balance, with a precision that no politician or bureaucrat could ever hope to match.

After finding themselves thus frustrated on the question of republican principle, the opponents of TABOR turn to the budget's particulars: "We need to repeal TABOR because services are too scarce, especially for the poor, and voters won't voluntarily adopt the necessary tax increases."

With all due respect to the opponents of TABOR, it's not necessarily their place to fix the proper level of services and impose the requisite taxes on everybody else. As Judge Learned Hand wrote, "The spirit of liberty is the spirit which is not too sure that it is right."

Or in the words of President-elect Barack Obama, "We must talk and reach for common understandings, precisely because all of us are imperfect and can never act with the certainty that God is on our side."

If services are indeed too scarce, we need to come together as a community and reach that common understanding: TABOR allows for just this process. But we should never encourage a small group of elites to inflict their particular opinions on an unwilling majority, no matter how misguided we believe that majority to be. Our liberties would be too precarious if the roles were reversed.

City Council is now considering placing a TABOR repeal on the April ballot. Repeal proponents will argue that such a measure would leave TABOR intact, because the city would still operate under the state's version. But citizens who cherish their right to vote on taxation understand that state TABOR is under perpetual assault, so they want an insurance policy against its ultimate demise.

The council would be counting on TABOR's sworn enemies, those who think government should be able to raise taxes willy-nilly, to pass the repeal in April. The debate would divide the citizenry along the standard pro-TABOR and anti-TABOR lines, and like it or not, TABOR's detractors are still the distinct minority.

At an informal council meeting Tuesday, several individuals voiced the same basic concern: the city's version of TABOR (unlike the state's) counts federal money against its spending cap, which means the city might have to decline some of the crisp dollars Obama plans to toss about.

Recognizing the timeliness of the question, the coalition opposing the repeal of TABOR is urging a more modest measure instead, one that would ask voters whether the city's spending limits should exempt federal funds.

If the council insists on a wholesale repeal, it will lose, and rightfully so. As a result, the city would forfeit the federal funds it claims to need, all because certain officials, in their lust to overturn TABOR, will have refused to settle for a measure that actually stood a chance of passing.

Cole, of Colorado Springs, is a writer, translator and political organizer. Readers can reach him at dancoloradan@yahoo.com.

When Gov. Bill Ritter spoke in his State of the State Address about the torments of being trapped in the TABOR "straight jacket," when he's yearning to break free and do some "value-based budgeting," most of us assumed he was speaking metaphorically. But a photo recently unearthed, and posted on Ben DeGrow's blog, Mount Virtus, suggests Ritter may speak from bitter experience.

See the shocking photo for yourself here.

A friend (who shall remain nameless, because he's a respected academic who might suffer for speaking such heresy) also was struck by Ritter's TABOR-rattling and shared with me the following note, which he sent to the governor:

The "straightjacket" of TABOR? Your metaphor from the SOS speech is deliciously apt. Just as straightjackets are designed to restrain people wildly out of control, TABOR is designed to restrain politicians who, were it not for constraints such as TABOR, would be fiscally out of control (see, for example, California).

TABOR is, in fact, one of the reasons why, "Colorado's economy is still in better shape than many other states," which is what you said three sentences after disparaging TABOR in favor of "modern, sensible and value-based budgeting." If we had no TABOR and practiced the type of budgeting you dream about, our economy would be as much of a wreck as California, Michigan, and other like states where bloated, intrusive government poisons the economic climate, compels companies to leave, and discourages entrepreneurship.

You may not like the straightjacket TABOR imposes on you, but it is exactly what I and thousands of others like me intended when we voted for it. Instead of trying to use government to do more, how about if you take an approach that is historically and economically proven—do less.

Those seeking repeal of our city TABOR say we really don't need it, because our state TABOR is there, solid as a rock, to control the growth of government and secure the right to vote on tax increases and public debt. Then along comes Gov. Bill Ritter, with today's State of the State Address, to blow another gaping hole in their arguments.

Here is a quote from this morning's speech, which clearly indicates that Ritter, and the Democrats who control the legislature he was addressing, will be gunning for TABOR in 2009.

"There is also an opportunity here – a chance to address TABOR and the constitutional and statutory straightjacket that makes modern, sensible and value-based budgeting an impossibility. Last year, former House Speaker Romanoff started the conversation, and we need to keep it alive. We need to talk about life after Ref C – whether and when to extend it. We have a chance to find a better way forward, a Colorado way forward."

Does anyone believe that Ritter, when he says he wants to "address" TABOR, means that he wants to preserve and protect it? Clearly, he and other Democrats want to free themselves from "the constitutional and statutory straightjacket that makes modern, sensible and value-based budgeting an impossibility" -- which is how he describes TABOR. He wants to address TABOR the way Barry Bonds addresses baseballs.

In point of fact, our state TABOR is under siege. The Colorado Supreme Court, packed as it is with statists, chips away at it every chance it gets. Many TABOR supporters believe the passage of Ref. C -- which falsely promised to address the state's fiscal woes -- constituted an assault on TABOR. Andrew's Romanoff's ballot measure, which Ritter references, was another attack on TABOR (albeit an unsuccessful one). And Ritter today confirmed that the attacks will continue, until the big-spenders who are on the ascent in Colorado have freed themselves completely from the "straightjacket" called TABOR.

Our city TABOR isn't duplicative or redundant to the state TABOR, as its enemies suggest. It's an insurance policy against the day when the State TABOR goes away.

I had a chance Tuesday, at the City Council special session, to chat briefly with 4 council members about an alternative to TABOR repeal that our coalition had earlier that day put before the Sustainable Funding Committee, offering a third way between doing nothing and doing too much on the issue of how federal funds are counted against the city's spending caps. The idea stirred interest on the committee, but the TABOR repealers ultimately had the votes, so the more extreme proposal was what City Council heard. Some on the SFC even made the rather revealing argument that they weren't interested in resolving the federal funds issue, with our narrowly-tailored amendment, since that would deprive them of the ammunition they need to torpedo TABOR once and for all.

Our proposal was mentioned during the SFC presentation to council, but only obliquely, and I wanted to be sure that the mayor and others on council could read it for themselves -- not only because I think it makes sense, but because I don't want them saying, at some future date, when this issue blows up in their faces, that there was no alternative to putting a total TABOR repeal on the ballot.

But there is an alternative, which they now have in their hands, that deals narrowly with the federal funds issue while preserving the best elements of our city TABOR. And here it is, along with a brief explanation of why it makes sense, just for the record:

“An alternative to TABOR repeal

The Problem: One of the arguments TABOR opponents use, which seems to have special relevance at the moment, when every community may soon be vying for federal stimulus money, is that TABOR unfairly counts federal pass-through dollars against the TABOR spending cap, meaning Colorado Springs might have to turn down any of that money heading its way. But that’s no justification for repealing parts of the city TABOR that still have strong support, including spending limits and the public’s right to vote on tax increases – which would be tossing out the baby with the bathwater.

The Solution: A clear, sensible and less contentious option – an option more likely to win with voters -- would be to simply modify the charter in a way that exempts federal funds from TABOR spending caps. This would address legitimate short-term concerns about stimulus funding, while permitting the Sustainable Funding Committee, City Council and citizens to more carefully consider whether a total repeal of TABOR is justified, or just an occasional tune-up.

The alternative ballot question might read as follows:

“Shall the city charter be amended to exempt federal funds from being counted as part of the spending limitations formula specified in the city Taxpayer’s Bill of Rights?”

This might need some fine-tuning by wordsmiths and lawyers, but it clearly and concisely resolves the pass-through problem, while preserving the core elements of TABOR that area citizens continue to value.

The consequences of defeat: A total repeal of TABOR is likely to be rejected by voters, which could doom (or at least taint) other proposals put forth by the SFC, and leave the city without any resolution to the most urgent problem, regarding federal pass-through dollars, just as the funds start flowing.”

The Gazette’s latest reporting on the issue generated a lot of responses, most of which were against repeal. I was a guest yesterday on the Richard Randall radio show on KVOR (with Jeff Crank substitute hosting) and this topic had the switchboard smoking, with all but one caller saying, in essence, that folks in City Hall ought to have their heads examined.

Then, this morning, comes this barn-burning editorial in The Colorado Springs Gazette, ridiculing the arguments those gunning for TABOR are using this time (including my personal favorite -- that doing away with TABOR will improve government efficiency). The editorial also takes on the other two Sustainable Funding Committee recommendations, a TABOR refund override of up to $1.2 million and a property tax extension out to 2025. The $3.2 million generated annually from the mill levy extension would go into what one member of council, with admirable candor, called a “slush fund,” for use in various economic development schemes, under the guidance of City Council and the Economic Development Corporation.

Here’s what the G has to say on that topic:

"Then there's the little matter of extending a property tax that's supposed to sunset, in order to preserve $3 million annually to attract and retain businesses. It sounds good, at first. The economy's bad, business is bad, so let's spend money to bring in some glitzy employer from out of town. But let's educate ourselves on this: The city wants to subsidize some businesses, at the expense of others. It would spend $3 million each year to attract new businesses and appease businesses that threaten to leave. That would be paid for in part by business people who don't get subsidized at all, who then have to compete with the payrolls of businesses that are artificially enhanced by subsidies.

The educated taxpayer might reject this idea.

"The purist in me says this just creates a slush fund to give away to businesses," said Councilman Randy Purvis. He has clearly educated himself in fundamental economics, and the fungible nature of taxpayer cash."

Meanwhile, the TABOR preservation coalition is getting attention and gaining allies. State Senator Andy McElhany, speaking on behalf of Citizens for Cost-Effective Government and the coalition, lays out the case pretty clearly in this report on KOAA. I anticipate that Daniel Cole, in his regular Gazette column appearing Fridays, will also have something to say on the subject -- so be sure to look for that. And the coalition is expecting to grow, as word spreads about this latest assault on TABOR. The Colorado Chapter of Americans for Prosperity has joined the fray, adding a lot of clout. The Colorado Union of Taxpayers may join as well. And a national taxpayers group even has taken an interest, understanding that killing off TABOR in its birthplace would provide ammunition to those who don't want this idea to catch-on elsewhere.

If I were sitting on City Council and taking in this response -- and if I were an incumbent hoping for reelection in April -- I would be thinking twice about blithely placing these highly contentious issues on the ballot. Sure, council members can argue that they’re just putting them on the ballot, to give voters a say, and not necessarily endorsing them. And few would argue with granting people a say (it would have been nice on the stormwater tax, for instance). But anyone who’s watched this group over time, or followed the city’s constant battling with TABOR and its author, will see right through that smoke screen.

It now seems clear that the majority on city council, in league with others in city leadership, intended from the start that the Sustainable Funding Committee would help give them cover for another attempt on TABOR’s life, as well as the mill levy extension. And the SFC obliged, hastily rolling out all the revenue-boosting proposals, even while some on the panel are still diligently working toward a more balanced and holistic approach, which also looks at services and assets that might be sold or outsourced.

My fear, as expressed in an earlier post, is that the SFC, with these proposals, is shooting itself in the foot – that it has betrayed itself as an organization strictly interested in helping city officials escape from the fiscal discipline imposed by TABOR. These are all diligent and well-meaning citizens, trying to do what they think is best for the city. These observations aren’t meant to impugn their motives or service. But they and some members of City Council seem woefully out of touch with the mood of the voters if they imagine that any of these proposals will fly under present circumstances.

Chairman of the SFC, Dan Stuart, acknowledged during Tuesday’s special session that a “steep road” lay ahead for those who hope to win public approval for these proposals, and on that I agree. And it’s only going to get steeper from here, unless council does the prudent thing, and spars this city a big fight, by politely asking the committee to temporarily withdraw these recommendations, continue studying the issues, and come back to City Hall at a better time with a more comprehensive, balanced and politically-palatable package to offer.

I fear that the Sustainable Funding Committee will blunder today by recommending to City Council three proposals aimed right at the pocketbook of taxpayers, effectively dooming these ideas to defeat at the ballot box, when what’s needed from the committee is a more balanced and holistic review of the city’s fiscal and structural situation, which looks not just at the revenue side of the ledger, but produces some innovative, out-of-the-box ideas on what might be done to outsource or streamline city assets or services.

Such a balanced analysis, if properly packaged, has the best chance of winning the broad support of taxpayers and voters. People will be more inclined to surrender more money to a city that appears open to reform and innovation. Coming out of the starting gate with a TABOR repeal, property tax refund override and mill levy extension (in which the funds would be earmarked for unspecified economic development purposes) absolutely sets the wrong tone, and threatens to taint and undermine whatever other ideas the committee puts forward. And that’s a shame for those committee members who have been working diligently to take the big-picture look I’m describing.

I fear, in short, that the entire endeavor could be undermined, and the larger opportunity lost, if the committee rushes something forward that is bound to be highly controversial and almost certainly doomed to defeat, judging from the groups – including Local Liberty Action – mobilizing against this.

Some in city leadership seem bent on boosting revenues and freeing themselves from the fiscal discipline of TABOR. They obviously hope the committee will provide them political cover for doing so. And they’re impatient to rush something onto the ballot now. Committee members should resist serving as pawns, however, and not be rushed into proposals that are imbalanced, premature and almost certainly will spark a divisive fight this city doesn’t need. But it was called the “sustainable funding” committee, so perhaps it was inevitable that some members would too narrowly interpret its mandate.

I am not one of those, by the way, who believes TABOR is perfectly conceived and written, or was handed down on tablets from a burning bush. Though I strongly support the law’s key provisions, which set limits on spending growth and give taxpayers a voice in taxing and public debt decisions, I’m open to arguments that the fine print might need fine-tuning. And that’s why Local Liberty Action and other members of the TABOR preservation coalition are offering the SFC and City Council an alternative to total repeal, which addresses one of the most commonly-heard, and most legitimate, complaints about the city TABOR.

Here’s the issue, and the alternative ballot language we propose, as laid-out in a memo being circulated:

“An alternative to TABOR repeal

The Problem: One of the arguments TABOR opponents use, which seems to have special relevance at the moment, when every community may soon be vying for federal stimulus money, is that TABOR unfairly counts federal pass-through dollars against the TABOR spending cap, meaning Colorado Springs might have to turn down any of that money heading its way. But that’s no justification for repealing parts of the city TABOR that still have strong support, including spending limits and the public’s right to vote on tax increases – which would be tossing out the baby with the bathwater.

The Solution: A clear, sensible and less contentious option – an option more likely to win with voters -- would be to simply modify the charter in a way that exempts federal funds from TABOR spending caps. This would address legitimate short-term concerns about stimulus funding, while permitting the Sustainable Funding Committee, City Council and citizens to more carefully consider whether a total repeal of TABOR is justified, or just an occasional tune-up.

The alternative ballot question might read as follows:

“Shall the city charter be amended to exempt federal funds from being counted as part of the spending limitations formula specified in the city Taxpayer’s Bill of Rights?”

This might need some fine-tuning by wordsmiths and lawyers, but it clearly and concisely resolves the pass-through problem, while preserving the core elements of TABOR that area citizens continue to value.

The consequences of defeat: A total repeal of TABOR is likely to be rejected by voters, which could doom (or at least taint) other proposals put forth by the SFC, and leave the city without any resolution to the most urgent problem, regarding federal pass-through dollars, just as the funds start flowing.”

Our hope is that the SFC and City Council will draw back from starting a divisive TABOR repeal fight and get behind this TABOR tune-up instead, which we think addresses the most pressing issue and opens a city-wide dialog about other possible adjustments, while preserving the still-popular TABOR fundamentals.