Thursday, December 31, 2009

“The Last Time That Happened Was During the Great Depression”

I've talked about government employees and their retirement benefits before and how they become an unfunded liability for our Cities, Counties and State. Now everyone is finally talking about it. Some Cities are being forced to face it sooner than others and doing something about it.

What is Michigan doing, trying to get enough interest in the Michigan Fair Tax so Lansing can keep spending. While the rest of us have to tighten our belts, go without, and many loosing everything they have worked for, Our employees don't feel they should have to give up a thing. After all, they have a Union and are organized.

Michigan Forces Business Owners Into
Public Sector Unions
After hemorrhaging members for decades, labor unions have hit upon a new way to shore up their annual dues revenue.

Flint, Mich.

Michelle Berry runs a private day-care service from her home on the outskirts of this city, the birthplace of General Motors. "The Berry Patch," as she calls the service, features overstuffed purple gorillas, giant cartoon murals, and a playroom covered in Astroturf. Her clients are mostly low-income parents who need child care to keep their jobs in a city that now has a 26% unemployment rate.

Ms. Berry owns her own business—yet the Michigan Department of Human Services claims she is a government employee and union member. The agency thus withholds union dues from the child-care subsidies it sends to her on behalf of her low-income clients. Those dues are funneled to a public-employee union that claims to represent her. The situation is crazy—and it's happening elsewhere in the country.

A year ago in December, Ms. Berry and more than 40,000 other home-based day care providers statewide were suddenly informed they were members of Child Care Providers Together Michigan—a union created in 2006 by the United Auto Workers and the American Federation of State, County and Municipal Employees. The union had won a certification election conducted by mail under the auspices of the Michigan Employment Relations Commission. In that election only 6,000 day-care providers voted. The pro-labor vote turned out.

Many of the state's other 34,000 day-care providers never even realized what was going on. Ms. Berry tells us she was "shocked" to find out she was suddenly in a union. The real dirty work, however, had been done when the state created an "employer" for the union to "organize" against. FULL STORY

“The Last Time That Happened Was During
the Great Depression”

Until a few years ago, running a U.S. city was pretty easy. You added services when voters asked, you hired more workers (who were likely to vote for you come election time) to provide the services, and you promised lavish retirement benefits to cops and teachers who weren’t going to retire until long after you left office. If tax revenues didn’t cover day-to-day operations, no problem; Washington was sending plenty of aid to make up the difference.

No longer. The gap between what a typical city gets from sales and property taxes and what it owes its employees is a now a chasm that even trillions in federal stimulus money can’t fill. So for the first time in most Americans’ memory, cities actually have to live within their means. The result, according to today’s Wall Street Journal, isn’t pretty.

As Slump Hits Home, Cities Downsize Their Ambitions

MESA, Ariz. — The police department in this city of 470,000 has lost about 50 officers, and is hiring lower-paid civilians to do investigative work. The Little League has to pay the city $15 an hour to turn on ball-field lights. The library now closes its main location on Sundays, and city offices are open only four days a week. This holiday season, the city didn’t put up festive lights along the downtown streets.

Mesa’s tax receipts, depressed by the recession, will likely come back one of these days. But Mayor Scott Smith doesn’t believe city services will return to prerecession levels for a long time, if ever. “We are redefining what cities are going to be,” says Mr. Smith, a Republican who ran a homebuilding company before his election last year. FULL STORY

Closure of Consumers Energy's B. C. Cobb power plant would mean loss of millions in taxes

By Muskegon Chronicle staff
December 31, 2009, 5:10AM

MUSKEGON — A decision to shut down the B.C. Cobb power plant would be financially crippling to Muskegon because it generates $4 million in annual tax revenues — money used to fund vital government services and education programs, local officials say.

The Cobb plant — Michigan’s oldest operating coal-fired plant — is one of several older facilities Consumers Energy is considering for closure, company officials acknowledged this week.

The loss of the plant — the city’s biggest taxpayer — would be a major blow to the city’s efforts to rebound, Paul said.
“It’s not good news,” he said. “But if it happens, we’ll get through it — we’ll have to.”

Muskegon’s Reeths-Puffer School District, Muskegon Community College and Muskegon Area Intermediate School District would lose a combined total of nearly a million dollars.

Reeths-Puffer receives $568,582, which it uses to make school bond payments, said Dean VanZegeren, R-P’s director of financial services.

If the power plant revenue is lost, the district would have to try to borrow that money from the state’s School Bond Loan Fund, he said. Since the district would have to pay interest on the state loans, it would increase the overall cost. FULL STORY

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