Archives for December 12, 2012

Eric Evans: Raise Taxes 10% and Lay Off Firefighters Instead of Cutting People’s Garbage Bills

This is the worst trade-off ever. Hopefully there are enough votes against a 10% tax increase to force the multi-hauler dead-enders to buckle:

The plan includes cutting five firefighters and raising property taxes up to another 1 percent on top of the 8.5 percent hike already proposed for 2013 by Mayor John Callahan, council members said. Council members Karen Dolan and Michael Recchiuti say they’d much prefer switching to a single garbage hauler over either of those options.

But a majority of council members don’t favor changing Bethlehem’s private garbage collection system, which would leave a $500,000 hole in the 2013 budget. It’s also looking more likely that Bethlehem won’t get $1 million in contributions from nonprofit organizations, Evans said […]

Increasing property taxes above 8.5 percent and cutting firefighters is council’s last choice, and Evans said he is hopeful Callahan might have better suggestions. About $1 million of the $72.1 million spending plan could be cut without increasing the tax hike or cutting jobs, Evans said.

Clearly the 10% tax hike and firing firefighters is not “Council’s last choice” because Eric Evans and Bob Donchez prefer that choice to the much better option of saving people money on their garbage bills.

The smart political strategy now for John Callahan is to publicly balk at “Councilman Evans’ 10% property hike” and promise to veto any budget that lays off more public employees.

The way the veto works is that the budget is vetoed if Callahan doesn’t sign it within 10 days. Then Council would have to come up with 5 votes to override the veto within 3 days.

The veto threat turns the tables on Council, and raises the political cost to Council members of not passing the single hauler plan for several reasons. First, it makes this a more interesting story, and drags it out for longer in the media. Second, it makes it harder for Council to kill the the single hauler without a vote. The math’s not going to work without the 10% tax hike or more layoffs, so it will likely force a vote on single hauler.

Having to overcome a veto in order to pass a 10% tax hike and more layoffs puts opposition Council members in a real ugly political position, and single hauler starts looking like the better choice. Between the intense media focus on the 10% tax hike vote, and union pressure backing up Callahan’s no-layoffs position, either Donchez or Evans (and if they’re smart, both) is probably going to crack and sign off on the single hauler plan.

John Callahan might be able to win the single hauler fight once and for all if he’s willing to win ugly. It would be a gutsy move, but I think it would pay off to show Democratic primary voters that he’d be willing to play hardball with a Republican opposition as Northampton County Executive.

(Thanks: Lynn Olanoff)

Why Does Philly GOP Councilman Brian O’Neill Hate Job Creators?

I take pro-market positions on some issues not because I have some ideological problem with government regulation as such, but because there are a number of issues where I think a market-based approach gets you closer to the progressive ideal outcome than a regulatory kludge. It’s a means, to be considered on an issue by issue basis, not an end in itself.

But your modern Republican Party talks about the virtues of the free market religiously, as an end in itself to be pursued above all others. Claiming to believe that unconstrained pursuit of individual self-interest leads to maximum prosperity for all is one of the key markers of Republican political identity. It is an idea that is core to their diagnosis of the Great Recession – if only we would roll back all these taxes and government regulations on businesses and polluters and rich guys, the Job Creators would spring into action and all would be right again.

So it’s amusing to me that Brian O’Neill, one of the only real live Republican politicians on Philadelphia City Council, doesn’t seem to have gotten the message because here he is introducing new regulations to block Job Creators from opening businesses in his district:

His original proposal would restrict 15 uses in those districts beyond what was decided on by the Zoning Code Commission and City Council last December. Several members of City Council—in particular Councilwoman María Quiñones-Sánchez, whose 7th District has more CMX-2 than any other—expressed opposition to the changes in a Rules Committee hearing last week.

On Tuesday afternoon, O’Neill circulated to his Council colleagues a handful of amendments to his two bills. In a memo, he explained that the latest version of his bills makes storage facilities and community gardens a Special Exception use in the two districts, rather than prohibiting them outright like his earlier proposal did. He also changed dry cleaning from a special exception to a permitted use, and prohibited gas stations, vehicle repair, and personal vehicle sales and rental in CMX-2, where they were previously allowed by right or by special exception. Under his amendments, the height limit in his proposed CMX-2.2 district would go to 55 feet from 38.

“By-right” zoning is clearly the free market position in this debate. You have the owner of a privately-owned commercial space and the owner of a privately-owned business trying to come together and make a contract that’s mutually beneficial to both of them. It’s a win-win-win. The building owner gets the rent money, the business owner gets a space to sell his wares, and the neighborhood gets a new place to buy stuff.

O’Neill wants to put the government in the middle of that trade, and decide arbitrarily whether or not it’s allowed to happen. It is a perfect example of the kind of regulation the national Republican Party says is holding back job creation, and in this particular instance they’re exactly right. Zoning is an issue where we could use some pro-market voices for letting people do what they want on their own property. But you rarely see city-level Republican politicians willing to look at these issues through that lens, and instead we get this sort of suburban tribalism where Brian O’Neill wants to use the power of the state to force Job Creators to build more parking spaces or else they’re forbidden from opening in his neighborhood.

(Thanks: Jared Brey)

If You Want High Speed Internet, Move to Where the Internet Is

Here’s a non-problem if there ever was one:

Anyway, back to Sutton. He lives in a section of Lynn Township that is, by my estimate, some 40 or 50 years behind the times, because there is no cable there.

Sutton started a petition to get cable and posted it in the New Tripoli Post Office, where one of my bosses saw it. Until then, neither she nor I nor anyone else around here imagined there were places in the United States without cable, unless it was by choice, like in UFO cult compounds.

“Our house is right off Golden Key Road, and most of Golden Key has no cable,” Sutton told me the other day.

It’s not such a big deal as far as television is concerned. Sutton and other residents have satellite TV, which is every bit as good as cable, except during massive solar storms. And you never know when one of those will break out.

The Internet is another matter. They can’t get cable Internet and are situated too far from a telephone company switching station to acquire a digital subscriber line, or DSL, which is another high-speed option.

I recall about two years ago I wrote a post arguing that we needed the federal government to invest in deploying broadband to rural areas. That was completely stupid and of course I will invite commenters to indulge in the pleasure of reminding me of how stupid that was. People who want to enjoy all the amenities of modern life shouldn’t buy houses in places it’s too expensive to deploy those amenities to.

(Thanks: Daniel Patrick Sheehan)

Increasing Medicare Age Increases American Health Care Spending

Aaron Carroll explains why raising the Medicare eligibility age will increase, not decrease, American’s health care spending. The government share of the spending goes down, but the private share goes up. It will cost you more, it will cost people on Medicare more. Nobody is better off if we do this:

If we drop 65 and 66-year-olds from Medicare, obviously that will mean the federal government is going to spend less on the program overall. They’ll save something to the tune of about $33.1 billion. But, they’ll be losing the premiums that those people paid for Medicare (about $9 billion), so that means the overall federal Medicare savings is $24.1 billion.

So far so good, right? Sounds like a winner. That is, of course, if you ignore all the extra spending we’d need to do because of this. Here we go.

Lots of those 65 and 66-year-olds will need Medicaid. That will cost the federal government about $8.9 billion. Lots of those seniors will go to the exchanges for insurance. That will cost the federal government about $9.4 billion in subsidies. Oh, that Medicaid will cost states too, about $700 million. The 65 and 66 year olds getting insurance from their employers will cost them about $4.5 billion (they’re expensive). As I’ve reported before, Medicare premiums will go up ($1.8 billion), and exchange premiums will go up ($700 million). And, there will be increased out-of-pocket spending by the 65 and 66-year-olds themselves for premiums, deductibles, co-pays, etc. Add it all up. To save the federal government $24.1 billion, we need to spend $29.8 billion.

In other words, this will cost us $5.7 billion. Here it is in chart form (click to enlarge):

Why Robots, Not Human Politicians, Should Set Parking Prices

When human politicians try to set parking prices, the debates end up being about what’s politically popular or “fair” vs. money for unrelated stuff. This gets the issue all wrong. Parking rates need to be about supply and demand. What is the price that will keep a couple curb spots open on each block all the time? You almost never hear politicians discuss parking prices in these terms. Here is an example from Easton Patch of the wrong way to think about parking prices:

Councilman Roger Ruggles worried the changes were unfair to some downtown Easton visitors. He argued that the new hours would penalize people who came downtown to eat from 6 p.m. to 8 p.m., but not those who visited from 8 p.m. onward.

“By that theory, unless we charge 24 hours a day, we’re being unfair to someone,” countered Councilwoman Elinor Warner.

Councilwoman Warner seems to think this is a knock-down argument against keeping the meters running 24 hours, but actually it is a knock-down argument in favor of that.

The 6pm cutoff is arbitrary, but that’s an argument for basing the prices on some other factor besides time – like the occupancy rate.

Whether or not to charge for curb parking shouldn’t be about politics, it should be about whether or not there is a crowded parking situation. Whenever it’s busy, you should charge. You should charge when there’s a busy afternoon crowd, and a busy bar crowd, and a busy church crowd. Whenever demand management is required, then the right tool is parking prices.

This is a case for replacing political control of parking prices with an algorithm. With electronic meters, Council could task an algorithm with maintaining an 85% vacancy rate at all time. The political issue would be occupancy, not prices, and the price would change depending on how busy it is in order to maintain that occupancy rate.

The meters would be on 24 hours a day, but during the night and early morning when vacant spaces are plentiful, parking would still end up being free. Once the curb occupancy rate started to tick up though as it got later in the morning, the prices would adjust to keep 1 or 2 spaces open on each block.

This is the only truly fair way to set prices. There’s no such thing as too high or too low prices, because the algorithm’s price is always going to be relative to how busy it is.