Reality of Local Elections

Municipal elections are over, and after another painful season of watching candidates do stupid things, I just have to say something. These quick “no duh” thoughts are based upon my time as a campaign consultant, and former city staffer. Really, any one who could fog a mirror should be able to figure this stuff out, but we see the same silliness every election cycle. Here’s the two things I’d tell future candidates for Mayor and City Council.

Learn your stuff

I was impressed in the Boise City Council race that Ben Quintana actually spent time going to budget hearings, and council meetings, and generally trying to understand just what it is that a city council member does. I contrast that with one of the other candidates who ran on a platform of helping improve the Boise Schools, and working with ACHD to improve transit. First, neither the Mayor or the Council have any control over anything that happens with Boise Schools. Nothing. Second, ACHD doesn’t have anything to do with transit - that would be Valley Regional Transit. This particular candidate might have well been running on a platform to alter gravity. The point: if you are going to run for a job, get the job description, and learn just what it is that you actually do.

Leave your ideology at home

Candidates all over the Valley ran on various platforms of “streamlining government,” “eliminating waste,” “smaller government,” or lower taxes. Some just came right out and said “I’m the conservative, vote for me.” We need to be clear on this: none of that stuff means anything in local government. The reality of local government is that it is just a basic service provider: cops, fire, water (sometimes), sewer, garbage disposal, public works. You spend a lot of time on questions of planning and zoning. There’s an annual budget cycle. If you are considering running for office, I suggest you spend some time at your local city hall looking for “waste.” It aint there. There are no gigantic slush funds sitting around that could eliminate the need for property taxes if only the greedy mayor and council would just be honest. Cuts at the municipal level happen to basic services, not boards and commissions and pet programs of entrenched federal bureaucrats. So get a clue.

One last bonus tip -

Leave the parlor tricks at home

Norm Semanko offers a great reminder that silly stunts in municipal elections don’t work. His ridiculous over-the-top statement that Reynolds’ spending made him “physically ill” was the capstone of a campaign that did little right. Norm combined ideology and parlor tricks to get his result. We’ve seen the same happen in Boise mayoral races in the past (Winder’s robo calls). I don’t think there’s anything that justifies these kind of tactics - but in a municipal race, it’s just non-sensical. At the end of the day, you have to go live next door to these people, see them at Fred Meyer, the coffee shop, etc. You don’t get to just disappear like congressmen, or presidential candidates.

So those are a few of my election tips for all you elected hopefuls.

Boise, we just can’t have nice things

So the good folks at CCDC just finished making streetscape improvements down on Main Street between 11th and 10th. That would be where Mulligans is if you’re downtown challenged. There’s new brick pavers in the sidewalk, a bulbed out curb with a seating area, new garbage cans, bike racks, street lamps, trees, flowers, and today they are installing game tables and seating. And already - before the job is even finished you people have screwed it up.

Just after the flowers were planted, some dipweed drove over the new curb and right through the flowers. See dead plant, damaged irrigation system, and muddy tire track in the photo below:

And how the genius who accomplished this, actually accomplished this, I’d like to know. The bulb out is protected by parked cars:

But wait - there’s more. Skateboarders have already ruined the concrete walls. Word to the landscape architect: you should have thought of that. Now, however, the wall has to be redone on CCDC’s (ultimately the tax payer’s) nickel.

And you wonder why state leaders are reluctant to invest in infrastructure.

Another Idaho Politician Won’t Leave Washington

I remember when Walt Minnick got elected to Congress I said to myself, “well, one good thing about Walt is that he’s already a rich man so he’ll come back to Idaho and carry on the fight when he’s through being a Congressman.” So much for my prognostication skills.

Apparently I’m the last one to find out that Walt will stay in D.C. as a “consultant” doing work for the Blue Dogs with his former chief of staff. This is disappointing. It really says something about Idaho that the politicians from here never come home. Frank Church didn’t, neither did Kempthorne, LaRocco, Symms - really just about anyone you can recall back to about 1950. Andrus was the only one, really.

And that is disappointing. It says that there isn’t any opportunity here.

On the other hand it also leaves the state without any kind of opposition party. Right now there isn’t really anyone that can really comment for the Democratic Party. Earlier this week we learned that Butch’s crack staff made a $180 million or so accounting error when they computed the budget for this year (remember Pam Lowe was fired for a $10 million error in stats she presented to the Legislature). And who is the media gonna call for a quote? Jerry Brady? The guy’s run for governor twice, and he’s more absent from the scene than Ferris Bueller. So are all of them: LaRocco, Richardson, Hansen, Allred, Minnick, Mauk. Not a one of them has the justpa to stay in the game.

Today, our Governor told the media that he is Constitutionally obligated to promote temperance.

Minnick? Allred? Brady? LaRocco?

Cricket. Cricket. Cricket.

Give the U of I to Washington State

I’m reading through a book by Jim Weatherby and Randy Stapilus, Governing Idaho: People, Politics, and Power and came across an interesting note regarding the creation of the State of Idaho and the Idaho Constitution:

Prospective threats to the Constitution - which was drafted without yet having the benefit of a state to attach it to - quickly arose. The most notable area of opposition came from the northern part of the territory, which was still interested in separation from southern Idaho and joining with Washington State. But northern Idaho was given some spoils in return for support, especially an assurance that the University of Idaho would remain at Moscow.

So - proposition to help cut the budget this session: go ahead and give north Idaho, and the U of I to Washington State. That saves the U of I appropriation of about $150 million. I’m good with that.

Two Better Ways to Fix the State Tax Commission

Unless you’ve been living in a cave for the last two years you are familiar with the issues at the Idaho State Tax Commission. In short, all Idaho is now aware that our state tax commission regularly lets out of state corporations get away with paying way less taxes than they actually owe. This begs only one question.

Why?

A very large part of the problem is caused by legislators, NOT tax commission employees. The root of the problem is how the state of Idaho defines “business income.” Here’s the actual definition from Idaho Statute 63-3027:

“Business income” means income arising from transactions and activity in the regular course of the taxpayer’s trade or business and includes income from the acquisition, management, or disposition of tangible and intangible property when such acquisition, management, or disposition constitutes integral or necessary parts of the taxpayer’s trade or business operations. Gains or losses and dividend and interest income from stock and securities of any foreign or domestic corporation shall be presumed to be income from intangible property, the acquisition, management, or disposition of which constitutes an integral part of the taxpayer’s trade or business; such presumption may only be overcome by clear and convincing evidence to the contrary.

So here is what happens at the Idaho State Tax Commission, and tax commissions all across the country where this definition is used (about 26 states). A corporation gets its tax bill and goes to the tax commission and says - “yeah this income you are trying to tax us on - we don’t think it’s an integral or necessary part of our business operations, so we’re not paying tax on that income.” There isn’t a tax commission in the country that could stand up to an army of well funded corporate lawyers, so tax commissions usually fold and cut a deal for whatever taxes they can get rather than getting their butts kicked in a long and costly lawsuit.

The simple solution, then, and one that lawmakers here have avoided, is to redefine business income. In Texas, North Carolina, Florida, Iowa, Minnesota, and Pennsylvania, they don’t have this issue. Why? Their definition of business income reads:

Business income is all income which is apportionable under the Constitution of the United States.

In short, this says if case law somewhere has called it apportionable income, you’re paying tax on it.

So that change covers most of the problems at the Tax Commission. But former Attorney General Tony Park in a recent Statesman op-ed highlighted another issue - the improper attribution of credits, deductions, exclusions, and exemptions by corporations to their income tax bills. Indeed that is an issue, but Park’s suggested investigation certainly won’t yield any answers, and policy responses by legislators that try to reorganize the Tax Commission won’t solve anything either. So here’s the big idea: eliminate the corporate income tax.

This idea certainly won’t fly in this climate, and it isn’t a new idea, but this is a topic that we need to take seriously. One component of an optimal tax is that it doesn’t cause tax payers to change their behavior (unless we are trying to get them to change their behavior, e.g., cigarette taxes). Another component of an optimal tax, is one that provides adequate revenues to the government. Under both of these cases the corporate income tax completely fails.

As we know, corporations will go to great lengths to avoid taxation. This has huge efficiency costs to the economy and administration costs to the government. And what about the corporate income tax as a revenue source? Well, last year the corporate income tax generated just 5% of revenue to the general fund. That share is also declining over time. 30 years ago, the tax contributed about 10% of general fund revenues. Nationwide, revenues from corporate income taxes to state governments averages less than 3% of most states’ budgets.

So the big question is, should we be spending this much time on the State Tax Commission and corporate tax avoidance when we’re talking about a declining revenue source, and one that provides only 5% of revenues to the general fund?

As noted this isn’t the year to be reducing revenues any further (this is about $140 million/yr hit to the budget) but I think we need to take seriously the idea of eliminating this tax altogether. While I wouldn’t advocate this as genuine economic development policy, eliminating the corporate income tax certainly won’t hurt business retention and attraction efforts.

For this year, redefining business income is a simple no-brainer. As the economy improves and revenues increase in the future though, we ought seriously to ask ourselves whether the corporate income tax is even worth maintaining.

Housing Prices Still Dropping. Bueller? Bueller?

I am guessing that in all the state budget cuts we lost the part of government that was responsive to the people whom elected them. Today’s Idaho Statesman has this:

A survey by the National Association of Realtors showed prices rising in 77 of 155 metropolitan statistical areas in the third quarter, compared with the third quarter of 2009. But the Boise/Nampa MSA showed a 14.1 percent decline. Only eight other metro areas had bigger percentage decreases. Ocala, Fla, had the greatest decrease: 20 percent.

Home prices INCREASING in half of the U.S. Boise-Nampa MSA has the ninth WORST housing market in the nation. And Joe Estrella spins this as good news because inventories are falling? That might be good news if employment was expanding (it’s not) but as a stand-alone statistic it means nothing.

But the real surprise is that our electeds continue their head in the sand routine where our economy is concerned. Governor? Mr. Speaker? Bueller? Bueller?

The Loudest Message of All: Local Control

Last night was indeed a huge win for the Republican Party. When all the dust settles it will probably be the largest mid-term shift since the Great Depression. But in Idaho, where the GOP were also big benefactors of a national Tea Party tidal wave, voters sent an additional message: give our local governing bodies more control.

What I am referring to of course was the overwhelming victory of the three Constitutional Amendments - HJR 4, 5, and 7, which variously devolved more fiscal control to public hospitals, airports, and utilities. Idaho, I salute you.

Make no mistake, this vote stands in direct contrast to the usual will of the majority party in this state, one that has never seen fit to devolve local control (Home Rule) to municipalities. Idaho’s cities have less municipal authority that any other state west of the Mississippi. We’re nowhere near the Home Rule we need yet, but this is a good start.

I feared for the outcome of these initiative last night because usually when the voters are angry and confused, complicated issues such as these garner NO votes. I credit Idaho’s voters with being smart enough to resist the utterly ahistorical hysteria promulgated by Dave Frazier at the Guardian Blog, and the Free Market Duck who hides behind that pseudonym. The simple fact is that since the inception of these things called “states,” cities, which were almost always founded first, have gone to state legislatures to get more local authority because the boilerplate constitutions that states adopted all across the east, and then another one in the west usually didn’t give cities (our economic engines) enough authority to even do the basics. Frazier ignores that fact.

Luckily, we can have the work of Professor Richard Wade, one of the most cited historians of the twentieth century, to tell us the real story. From Wade’s seminal text, The Urban Frontier: Pioneer Life in Early Pittsburgh, Cincinnati, Lexington, Louisville, and St. Louis:

Legally cities are the children of states, but in the West many offspring antedated their parents. With the exception of Pittsburgh, the major frontier towns were established before the creation of their states. Indeed, St. Louis saw a half century pass before Missouri entered the Union, while Louisville and Lexington were more than a decade old by the time Kentucky gained its independence from Virginia. Even the youngster, Cincinnati, had passed its its tenth birthday when Ohio split off from the Northwest Territory.

As I have written before, the same can be said of Boise. Boise was settled in 1863 - the State of Idaho didn’t exist until 1890. Hence, the 2,000 Boiseans that were living in the Valley when “Idaho” was created had been governing themselves for a quarter century. However, unlike almost everywhere else in the nation, Idaho has been painfully slow at recognizing local authority. According to Wade, that stands as an oddity in American History, as he explains the experience in the East, and then in these new western colonies:

Eastern urban life was over a century old when the Revolution brought national independence to the colonies. The new state constitutions generally reaffirmed or regularized established practices or confirmed ancient privileges of local self-rule.

The reason for cities to have some control over their own administrative affairs was quite simple. Theses new state constitutions levied such fiscal austerity upon the cities, that they were left without ability to pay for basic things such as bridges, streets, sewers, wells, and street lights. Thus the remedy was petitioning the legislature for more local control, and amending state constitutions and local charters. In places like Louisville which in the early 1800s were the West, charter amendments were frequent. In fact, Richard Wade notes that their charter was amended twenty-two times before 1815.

So in reality, almost (and that’s being charitable) none of what you hear from folks like Frazier and the Duck, even remotely approaches the usual American experience. The truth is, states, since the early 1800’s have been ceding power to local governments. The supposed constitutional protections that “we’ve always” had are a myth. It wasn’t until 2006, the date of the Frazier decision, that most local authorities in Idaho even questioned their ability to deal with their own capital funding and needs. As Idaho voters figures out, the Boise Airport seems to have amassed a good track record as a responsible public agency, operating as it did without Frazier’s supposedly so important Constitutional protection from 1925 to 2006. For 81 years with no assumed Constitutional protection the Boise airport hasn’t recklessly mismanaged public money. What makes Frazier think that would happen now? Frazier’s “Constitutional protections” have only existed in practice for FOUR years. Again voters were clever enough to figure out that these entities - hospitals, airports, and utilities, have served Idahoans well - better than the STATE I’d contend, and voted YES on all these amendments.

At least now we can close the book on Frazier. Hopefully, we’re turning to a new chapter of devolution of power from the state to the governments and public entities that are closest to the people.

Tea Party are you listening?

My appearance on Fox 12: Constitutional Amendments

I made a quick appearance on the news last night to talk a bit about the Constitutional Amendments that are on the Idaho ballot today. I suspect that there is still a lot of confusion out there about these proposed amendments. If you have questions, I recommend visiting IdahoVotes.GOV to get some background information. Most importantly, GO VOTE!

More BSU v. U of I

I was a little surprised that the local media thought that the U of I opening a t-shirt shop in downtown was a news story. And the Governor and Mayor show up? Was it news when Palmer Cash opened up downtown? At any rate in the ongoing rivalry between the two schools I think it is worth noting that while U of I is breaking its arm patting itself on the back for opening a merchandising storefront, Boise State has opened an academic storefront downtown on Main Street. Probably enough said there.

Before I leave the subject of U of I though, I am absolutely confounded about this “3rd year law” thing that U of I is proposing to host in the old Ada County Courthouse. I’m confounded because U of I law students have always had the option to do their third year here in Boise - so what’s the news? It still remains to be seem as to what will happen with the U of I law school’s maybe move to Boise - the new space will certainly aid that effort. But what I’m waiting for at least, is word about programming. My guess is that U of I won’t offer anything that will fit the needs of Boise based students, i.e., night classes for working professionals and streamlined financial assistance. Those will certainly be hallmarks of the Concordia program.

And while we’re on the subject of lawyers - there are so many negative comments about lawyers every time there’s an article about either of the law schools. I don’t get it. News flash to the unaware: those with law degrees do lots more than chase ambulances. Lawyers start and manage companies that employ people (Blackfin, and Keynetics are a couple in town that come to mind). Trus Joist and Washington Group were headed by managers with law degrees. I know “lawyers” who run web companies, “lawyers” that run non-profits, and “lawyers” that found start-ups. Yeah, its usually a good thing when a boat full of lawyers sinks, but there is absolutely nothing negative about new law schools coming to Boise.

It’s LGM1’s Birthday

Ok - I am officially turning 42 this weekend, and y’all are invited to come celebrate. We’ll be BBQing on the Traeger (thanks, Sherm!) and drinking some beer, and listening to my vinyl record collection. There may even be a karaoke machine and rock band. All you need to do is come, food and beer is all complements of #LittleCarol.

Saturday
May 1, 2010
Noon - Five

5510 Cassia St.
Boise, ID 83705
up on the Boise Bench