Monday, December 10, 2007

Berger At His Word

State Representative Jeff Berger doesn't know it but he's on to something. For reasons that are lost to us he's become aware that the motion picture industry produces no tax revenue to the state. Why is that? But forget the film industry does Connecticut produce tax revenue from car manufacturing, steel, textiles, toys, computers, televisions, paper, plastic, sporting goods? Of all the things a government can get tax revenue from, well what'ya know we don't produce films in Connecticut.

In his solution to rectify this there is a inking of truth. A bill was passed that gives the tried and tested "tax credit" to film makers and since then four new productions have taken place in the state. As reported in the Waterbury Observer the Connecticut Commission on Culture & Tourism "reports over $130 million in film, television and commercial production here. Connecticut film industry incentives provide a 30% tax credit on qualifying production costs exceeding $50,000."

We don't like tax credits. If someone were manufacturing plastic parts in the state and paid taxes for 20 years, that company would be paying a higher tax then the newcomer who has been given special treatment. Tax credits all but admit that taxes are too high for business, any business and that politicians use a reduction of taxes through credits only on businesses that they favor over others that they don't or have been here for decades. We consider tax laws just that, laws. When one company pays one tax and others another it smacks at equal protection of those laws. How in the world can they see that these special tax credits produce more activity in the industry but fail to see that an across the board tax cut for everyone would do the same for all industries?

Berger and the supporters of these credits have right in front of them the effects of an experiment that worked. Low taxes equals more business. That credits are necessary ought to tell them something about the tax system as a whole. For some reason though we wager that it won't and are perplexed as to why.

Republican Amnesia

The big story in Waterbury politics is the disintegration of the Republican party. Now at third party status right behind the independent party it has lost yet another election and in grand fashion. What happened?

Let's eliminate the obvious. The last two Republican mayors ended up in prison. That they were Italian ought to be and is irrelevant but not when yet another Italian runs this time around. Anthony D'ameilo as far as we're concerned is a good man, successful, intelligent and serves his community well in Hartford. But unless he could give the electorate a reason to vote for him, a platform that transcends stereotypes and party affiliation he would be dead in the water and he was.

But barring the ethnic factor or even if D'ameilo didn't run altogether and the party had Dennis Odle instead it's not likely that we would have seen the party win against the incumbent. The Republican party in the last 27 years has won the important debates nationwide in the all areas of domestic policy from favoring free markets, low taxation, an understanding of welfare and regulatory shortcomings and the importance of family and individual virtue. On the foreign policy side there was the recognition that the Soviet Union was not just a different system but an evil one and nothing short of defeat of that system was acceptable. Almost nothing in the platform of either D'ameilo or Odle ran on principles that put Republicans in office ie: conservative. Odle's plan of a strict accounting system seemed to him to do just fine but on the growth side a weak plan of marketing the town to business and a revamping, from what we can tell, of a hapless quasi-government development corporation and the ever so bad idea of tax abatement is just not enough. D'ameilo's platform, if we can call it that, was far worse advocating a stronger lobbying structure in Hartford for state funds to do whatever. Have these candidates any awareness of just what makes Republicans win in the first place?

Waterbury is not an ideological town, politically. Just like it doesn't have firebrand conservatives it also doesn't have strident liberalism as well and perhaps in some way we could count ourselves lucky. We place religious symbols in the town green on Christmas with no objections, there aren't groups looking to institute school prayer and the like. Indeed there is no liberal/conservative solution to fixing pot holes and getting rid of trash. But there is some efficacy to the argument of economic growth, why it's a good thing and how it's achieved. The destruction of the welfare system on its recipients and the town as a whole. It's in these areas that Waterbury needs solutions and ideas. It used to come from Republicans and if they don't produce them good riddance to them and for whatever it is they stand for, if anything at all, in its place.

Wednesday, November 7, 2007

Election Day

There was nothing more reliable then the old voting booths with its curtain and levers. When the 2000 election became a major mess due to paper punch out cards with "chads" the problem was the voters in Florida weren't up with the times, they were using a system whereby the local government would spend money on paper every election day and voters had to punch out who they wanted elected (then punch them again once in office, literally!). But kidding aside the times they weren't up to was a system of booths with curtains and levers that never seemed to be a problem with anyone anywhere.

But since the mess in Florida calls for reform was in order including Connecticut. In meeting the challenge of reform we now have paper ballots, just like in Florida, replacing a system that was full proof with a tried and potentially failed system of paper ballots with marker pens instead of punch out chads.

Its reform for reform sake. It is not fixing what is broken its fixing what is, well, fixed. The old system was mechanical the new system is paper that is scanned in an electric scanner. What could go wrong we don't know yet. If there is a power outage then we would think that the paper could be scanned at a later date. Then we have to trust a system where someone has a thick envelope of votes in his car transporting them to a location where there is power to another scanner. We trust that this is what would happen, we also trust that there will be enough marker pens if they become dry, we also trust that enough paper would be printed up so that the voting place doesn't run out. In all this we trust. But what is trust if there is a system in place that is rigged? If you wanted to rig the old system it would be difficult if not impossible. The mechanical machines were simple devices with no electrical or computer hardrive components, no paper to run out of, no markers to replace, scanners, nothing. We replaced a one step process in a more vulnerable system that could conceivable become manipulated. But in won't be, right? In Waterbury we could always trust our mayor whomever holds the office at anytime, are you worried?

Monday, October 15, 2007

Run Waterbury Like a Business?

Waterbury has a large tax rate that drives businesses away. Waterbury has the largest unemployment rate in the state. So this is easy. Get rid of the high tax so businesses could move in and employ people. WS mentioned before that city government cannot just sign a lower tax bill it has to budget for less. Business tax revenue hover above seven percent of the budget. Even if the budget were brought down, say to a surplus, which it has, it won't make too much of a difference to the business tax end of it.

There is a simple dynamic here, high taxes, high unemployment. No mayoral candidate makes this connection but in all fairness, with the mindset that permeates between all three parties, there is little they can do about it. You need revenues to run the city, if you cut taxes you won't pay the bills.

But the mindset is wrong. The archaic tax system lends itself to business moving to low mill rate towns. Mill rates are lower in small towns because they have smaller budgets. Companies want to move to Cheshire, Prospect, Watertown because they have lower mill rates. They don't have superior quasi government run development corporations, they don't have a marketing plan and go to trade show or offer tax "incentives" (that all but admits taxes are too high), no, they have a number and a small one or smaller then ours. The mindset is that lower taxes or the elimination of certain taxes will bring about less revenue. We say that's not true. Just the opposite. The idea is not to get as much as you can from your customer (tax payers) its to get more customers, lower taxes do just that. Just ask the small towns or states with growing populations or countries that are modern and industrious.

We'll say it again. A low tax brings in more business that highers people who pay taxes who then buy things from other businesses that expand and higher more people. The city grows and when a city grows so does its tax base and so does revenue.

It has to start at the business end. They cannot just pay whatever the mill rate is and have it subject to inventory and equipment. That can't happen, it just can't. The outright elimination of business from this system is what's needed. The solution could be that business pay the tax on property that they reside only and forget the tax on equipment and inventory. That would be the start in the right direction. There's one candidate that goes over the usual laundry list of ideas (old ones) of bringing in business and then adds that he would actively look for locations, as in, in his car driving around. Ridiculous. Other candidates have simular ideas and they all seem to harp on the necessity of getting money from state government to make improvements, that is continue to be a government on state welfare.

If Waterbury were friendly to commerce then it wouldn't penalize it in the form of high taxes, it would then maybe grow with a healthy revenue stream and we wouldn't have to go to Hartford with our hand out. There's always talk about running the city as a business and it always refres to the internal workings of the city, or with marketing stradegies, never has it been used in reference to price point, that is, taxes.

Monday, October 8, 2007

War and Peace

Before the Bosnian evasion there was little drumbeat, alliance building, UN coddling or any public relations maneuvers that led up to war. In fact during the invasion and subsequent troop installment there was little opposition. Sure the president said that this would be a quick incursion and the troops would be home but it didn't happen. If the US erred in the campaign, who cared. Milosevic was a genocidal creep. The racial killings ended and troops are still there keeping the peace. It may not be good policy to invade a country when we have little to no strategic interest. We can assume that since the Democrats are fine with the Bosnian campaign then we can infer they feel war is necessary if a countries leader commits ethnic cleansing.

So here we go years later into Iraq with a president of a different party. Lets say that there were no weapons of mass destruction, or state sponsored terrorism. Would the left be content that we at least stopped a leader that committed ethnic cleansing of its Kurdish and Shia citizens? Democrats are not the bad guy here but there is a matter of inconsistency if one were to say on the one hand Bosnia was okay but Iraq is not even brazen to suggest, as the New York Times editorial and Barak Obama have, that if genocide ensures if we leave, that's okay.

The Iraq war has a lot to be critical of but the end result is that it is a democracy. The country is a mess but seems to be on the mend, is the campaign worth it? If we look at the map we can see that Afghanistan and Iraq are big countries and that if there is stability in these places it would be a lot easier to contain Iran, whom, by all accounts, is a complete menace to the region and the rest of the world.

If the Iraq war is bad policy to the leading Democratic contenders is it only so because it wasn't executed correctly due to, as they say, an incompetent president? If so then this is an opposition of the means, are they in agreement with the ends which is a stable and free Iraq? Or in the very least, an Iraq that doesn't anymore ethnically cleans its citizens. In short is the opposition to Iraq by Democrats have less to do with mistakes and more to do with the fact that George Bush is running the war?

Monday, October 1, 2007

Met Melt Down

The Mets are done for the season choking in historic proportions. Its one thing to lose a game that a team should have won but to lose in clumps a whole month long is rare. And it is unlike the Mets to do so, traditionally they were a come back by surprise team, unlikely hero's hence the tag "miracle" Mets or Met "magic", "you gotta believe", "amazins" and on and on. The implied pretext to all of this is "we stink and it would take a miracle, magic, faith..." and so the team has turned the corner and now magically lost. They've become the boys of spring-early summer the Aprilmayzins.
And since they've turned the corner then maybe its time to change the image as well. Its time perhaps to shed they're 40 plus year expansion team reputation. They're building a new stadium moving out of horrible Shea which is situated practically on an airport tarmac. They should also ditch their uniform and name. Uniform because by design the orange represents the long gone Giants and blue for the Dodgers. This team has to have its own colors and stop paying homage to they're opponents for the sake of fans long gone. Then there is the name Mets. Maybe not as pressing to change as the colors are but the name is synonymous with their underdog past and degrading nicknames to go with it.
The team needs a fresh start, a re-launch. They won when they weren't suppose to and lost when they shouldn't, both in a big way. The team is not horrible as it stands for the next year it would be a good time to forget all of it and start fresh.

Wednesday, August 29, 2007

Real Estate Melt Down

Remember when home prices were going throught the roof and the thought was 'how are people affording these houses?'. The quick answer, now that the market has gone sour is that they weren't. When prices go up we know that it is a sign of high demand shrinking supply. But when home values go up because of mortgages that should not have been issued then false value is created which affects not only existing homes on the market but home equity markets as well. When values outpaces demand (which ought not to happen) the market will inevitably correct itself. The correction (or bust, to use the common metaphor) will tell us how much values were artificial by its duration.

A possible reason for a bust market of long duration would be that homeowners will not be able to sell their homes because the current market values are such that they will not be able to pay off their existing mortgage. When this happens then these sellers cannot be buyers of upgraded homes. All this will start at a point where first time home buyers are unable to secure mortgages. A healthy market has to wait for mortgage debt to shrink to a point where people are able to sell. This is essentially the senario that ran through 90's. But a "healthy market" doesn't mean back to skyrocketting frenzies, but steady movement and prices that are in line with buyers ability to pay. The long durations of the 90's downturn was a result of bad notes through Savings and Loan institutions of the 80's, it seems history has repeated itself in the form of "sub-prime" lending.

Sub-prime lending basically means that people were borrowing hundreds of thousands and showing little ability to pay. Currently and in the past risky borrowers would go into the Federal Home Administration program (FHA) and because of their risk would force to purchase mortgage insurance (PMI). In sub-prime lending instead of PMI there was a higher interest rate in its place. So the borrower was not only not able to pay for a normal loan was put into a mortgage that they were really really not able to pay. It was a dynamic that defied logic. The mortgage industry simply refused to turn anyone away.

So now the real estate market has to correct itself which means prices must come down to reality. It took a little more then a decade for the market to recover the last time, it just may take that long this time or maybe longer.

Or perhaps not. Waterbury may recover a bit faster then the rest due to the fact that its biggest industry is health care. Unlike the mid-nineties the baby boom generation is heading into an age where health care will figure more and more in their lives and since health care is Waterbury's new brass aging boomers are its next war. Nothing is certain in markets, we're just here to give two possible outcomes.

Tuesday, August 7, 2007

Campaigner Elect

Once again Waterbury will vote for mayor as it has done two years ago. One overlooked aspect of this by-yearly spectacle is that it is by-yearly. Running for office is not cheap, so while running a city for the first year the second year is spent taking time from the job to raise funds and campaigning. Decisions in the first year may affect the mayors ability take on the task of being re-elected in the second. Of the last four elected mayors 3 have been investigated for corruption with two serving prison. Four year term politicians certainly can become corrupt but a two year system magnifies the temptation for nepotism and run in the mill cash in hand corruption.
Then there is campaigning itself. Anyone running for mayor must take time off from their job to run. Including the mayor. Is it wise for the city to allow the mayor to have to spend almost half the time in office running for another term?

Saturday, July 28, 2007

Something Has Gone Wrong Too Long

Something has gone really wrong in the justice system and it took the Cheshire horror to bring it to light. Actually the problem has been with us all along and we're just used to it. The simple fact of the matter is when people commit crimes they don't go to jail, or if they do go its not for very long. The Cheshire incident the criminals were given a free pass to do whatever they wanted knowing they just simply will not be locked up. How has it gotten this far? Imagine being a judge and having a convicted arm robber in front of you and having the opportunity to put him behind bars for 25 years, why wouldn't you, why wouldn't anyone? But it happens. The suspicion is that it takes a high intellect to figure out that doing the obvious is somehow wrong and that there is something other then common reason that is so superior. Whatever the case may be it is time to stop trying to understand more about suppose root causes of crime and just simply become "stupid" again and lock up a criminal when they commit a crime. Can't believe this has to be said.

Thursday, July 26, 2007

Chershire Horror

The horrible news in Cheshire of a home invasion that took lives is just incomprehensible. An act of evil for evil sake. Wtbyspectblog extends its condolences to the family and friends of the victims. But what about the perpetrators, what were they possibly thinking or planning, to what end were they looking to achieve? Such acts boggles the mind. If just one perpetrator then perhaps we can say it was an act of singular derangement but when it is more then one it becomes an extraordinary mystery into the workings of human evil only because we can deduce that there was planning, a discussion. What words amongst the two could've been exchanged, what was the true purpose. We would hope that justice is done to these two and perhaps an even a worse fate.

Monday, July 23, 2007

How Taxes And Economies Works

Less then 8% of taxes levied in Waterbury are on business. Now that is somewhat a small number compared to the rest of the budget, but for the businesses paying them it's a lot. And since businesses don't vote in the ballot box they do vote with moving vans and leases in other towns and states.

Here's a short lesson on how things work (wtbyspecblog can do this). Business's exist to hire people to do things. These people get salaries to pay taxes buy cars, homes and food (from other business's) and this is what we call economy.

Lets say something really radical happened and Waterbury eliminated its business tax. Well there would be such an uproar because us poor working suckers would have to pay the difference and that's no fair. But this is false and here's why.

First of all you don't cut taxes in the city. It can be done but city taxes aren't like income or sales taxes. Those taxes are set by a number, a percentage added to payroll or consumer items. City taxes are set by mill rates which are tied to property assesments (in business, inventory and property) and the mill rate is set by whatever the budget needs it to be to pay the bills. So you don't cut taxes you cut the budget, if the budget grows then the mill rate grows and visa versa. So in order to cut taxes you would first have to cut spending in this case by 7-8% first. This is why there is no reshuffling of the tax burden.

So lets say Waterbury cut its budget to eliminate the business tax, what would happen? What won't happen is businesses leaving the city to lower cost in taxes, like what is happening now. You can't get lower then zero. In fact since you can't get lower then zero other employers may look to Waterbury to get in on zero and bring with them employees. The effect will be is that by Waterbury eliminating a tax it can actually increase the number of businesses which will need employees who will spend money on cars, houses, socks, video games, bagles, see how this works. If zero brings in business that brings in people who spend money and pay taxes, then that 7-8% cut in taxes could actually yeild more revenue because of a healthier economic base. You cut taxes and increase revenue, imagine.

Waterbury has one of the highest taxes in the state. Did you know that Waterbury leads the state in unemployment?

No Matter

Waterbury Spectator is an opinion blog located in Waterbury Connecticut about Waterbury and everything else besides. This grand project took me seconds to create and is a testament to what a remarkable country we live in. About a week ago I was viewing an old newspaper page found in a lost corner of a friends workshop, it was dated 1985. One of the ads was for a word processor. The machine was a screen attached to a keyboard and the memory was stored on disk. The cost was over $2000.00. a total reversal of what we are used to seeing in old newspaper ads, not in the inferiority of the product compared to today's computers but of the price. If there were an ad for, say, shoes or overcoats they would be ridiculously cheap. But here's a primitive forerunner of what I'm typing on now and its ridiculously more expensive.

Now suppose Waterbury Spectator were launched then? I would need that word processor, I suppose, a forest of trees for paper and a fleet of trucks for delivery to every home in town every day to have the same affect, well not the same actually because seconds from typing this people all over the world could read it. This is what I mean about remarkable country, we invented it all. Jtalos is a condensed version of John Talleos just in case you were wondering. I could be reached via email at jtalos98@yahoo.com.