Wednesday, September 7, 2011

MAINE GREEN ENERGY NONSENSE: CAN YOU STOMACH ANOTHER STIMULUS WASTE STORY?

If private businesses wasted money the way government does, they would not only go bankrupt at Autobahn speed, but its executives would also end up in jail. It is, after all, illegal in this country to handle private money recklessly. If you are the government, on the other hand, all you have to do is hide your complete lack of accountability, responsibility and business plans in a wrapping paper of good intentions. The latest example comes from Maine, where a "Green Energy Alliance" got millions of stimulus funds - and blew it all in less than two years. The Portland Press Herald has the story:

Lawmakers on Tuesday asked the director of the Office of Program Evaluation and Government Accountability [OPEGA] to draft legislation that would help guide state and quasi-state agencies on how to distribute public funds. That direction came as the Government Oversight Committee continued its probe into the now-defunct Maine Green Energy Alliance, which folded in January amid concerns about its effectiveness and allegations of political favoritism. ... Lawmakers asked OPEGA in late April to look into the rise and fall of the Maine Green Energy Alliance. The nonprofit formed in 2009 to administer $3 million in federal grant funds for home energy audits and weatherization improvements but never reached the number of customers it had hoped. Two weeks ago, OPEGA concluded that the alliance failed, in part, for: lacking a specific plan to carry out its mission, setting ambitious goals that it failed to meet and operating with informal business practices that led to questionable costs. That was enough for lawmakers to ask OPEGA Director Beth Ashcroft to draft legislation for consideration during the next session, which convenes in January. That bill, Ashcroft said, likely will include suggestions outlined in the report, including ensuring that state or quasi-state agencies require that recipients of grant funds “have adequate capacity and proper controls.”

It gets better. The Maine Green Energy Alliance got $3 million, but did not exactly use it responsibly:
Of the half-million dollars spent by the alliance during its brief period of operation, OPEGA said about half of that total was not spent wisely because of informal business practices and poor planning. ... Specifically, legislators on the Government Oversight Committee focused on the perception that the Maine Green Energy Alliance was little more than a nonprofit formed to benefit Democrats. Sen. David Trahan, R-Waldoboro, said the group’s connection to one political party was hard to overlook.

Political favoritism, a failed business plan, millions of dollars slushing around bank in God-knows-what bank accounts... Once again - this is only possible when the money used for these operations has been forcefully taken from its originators: the taxpayers. (See this story from California for a related example.)

As if to hit the nail on the head, the chairman of the government oversight committee sees a wake-up call in this story:
“I realize we’ve gone a long time on this, but I think it’s necessary because if it happened here, it probably happened before and it’s probably going to happen again unless we put some more strictures in the policy,” said Rep. David Burns, R-Whiting, House chairman of the committee. “I’m amazed we don’t already have a policy for the spending of state and federal monies.”

Am I the only one who has a feeling that we will discover an endless list of waste, fraud and financial recklessness once we get to close the books on the stimulus bill?

Tuesday, September 6, 2011

NOT SO SWEET ALABAMA: STATE WORKERS GOT UNLAWFUL PENSIONS FOR 40 YEARS

Out of Alabama comes a sordid little story about state worker pensions. Not only has the state run out of money to pay for its promises to retired state workers, but it has also, for a long time, used a more generous basis for calculating retirement benefits than the law allows. It was not until the state fell into the dungeons of a persistent budget deficit that bureaucrats at the state retirement system realized how bad the pension benefits calculations were. From the Montgomery Advertiser:

Saturday, September 3, 2011

SELECTING WINNERS: MISSOURI GOV WANTS TAX CREDITS FOR ECON DEVELOPMENT

You might think that elected officials would have learned something from the past three years' worth of a deep recession. You'd think they had grasped the concept of "over-spending" and making promises you cannot keep. But a steady stream of news is slowly putting such beliefs to rest. The latest one to join the let's-start-spending-again ranks is Missouri Republican Governor Jay Nixon. His latest stunt is an economic development plan. Technically, as the Columbia Tribune reports, the plan consists of targeted tax credits and not spending increases. However, since he does not compensate for the tax credits with cuts in state spending he is putting the state back on track toward a budget deficit:

Thursday, September 1, 2011

EXODUS: STATE WORKERS RETIRE TO ESCAPE GOV WALKER'S REALITY CHECK

Wisconsin Governor Scott Walker has bravely and successfully fought the public employee unions. Government employees no longer have unlimited access to taxpayers' money. They now have to adjust their private finances to the business cycle just like private employees do. They are, of course, not used to having to take such adult responsibilities: many of them respond by retiring. The Wisconsin Journal-Sentinel reports:

BIAS: UNIVERSITY REPORT FALSELY CLAIMS ONLY TAX HIKES CAN SAVE COLORADO

In a hilarious testimony to academic bias, the University of Denver has produced a "research report" on the long-term trends in the Colorado state budget. The report obviously made a big splash in media, primarily because it makes a villain out of Colorado's TABOR law - a long-term object of curses and attacks from big-government activists. True to its statist ideological foundations, The Denver Post reports on the study and paints a grim scenario for the future of Colorado. Predictably, that scenario can only be washed away with higher taxes:

Wednesday, August 31, 2011

TAX COMPETITION WORKS: MORE INCOME GROWTH IN LOW-TAX STATES

The Tax Foundation is one of the nation's most important think tanks. With integrity and attention to detail, they produce tax statistics from around the country. Their state-level data is second only to the IRS, which of course has infinitely more resources at hand. The latest product from the Tax Foundation is a study of how states differ in attracting and retaining high income earners. The study compared tax filings in all states in 2009 to tax filings in 1999 with respect to the incomes declared. They ranked states based on where the increase in filings above $200,000 has been particularly strong:

Tuesday, August 30, 2011

TRUE COLORS: GOVERNOR MOONBEAM FLOATS TAX HIKE IN UNION TALKS

During the spring budget negotiations in California, Governor Jerry Brown stood out as a thoughtful new kind of Democrat willing to bid farewell to his party's reckless spend-and-tax habits. He closed a budget deal with the state legislature that avoided tax increases and even included a minimal drop in the tax pressure on the state's economy. Now, though, Brown is feeling the heat from his liberal constituents - primarily the state teachers union - and seems to be warming up to the idea of raising taxes. From the Sacramento Bee: