Archive for June, 2007

When a society develops to the point that the horizon becomes stagnant and unchanging, with no challenge to breach it, greed and laziness may become the spirit of the day. That society which reaches such a stopping place in life becomes corpulent and corrupt. There becomes no reason to be drawn to the future, having become content with the spoils of the present. Has Maine, and the United States reached such a position? Do we dare strive for a better tomorrow for our offspring, or shall we be content with the riches bestowed upon us by our Fathers?

Maine’s future has become of serious question. The State, County, and locally elected officials show no desire to create a serious solution to the tax problems we are now facing. Spending needs to be cut across the board before tax cuts may be used as a solution. In fact, tax cuts are not a solution at all. In and of themselves, the best a tax cut can achieve is a false sense of contentment with the voters. Voting day comes around and you close the curtain behind you in the polling booth. You see some guys name on the ballot. You think “hey, I’m going to vote for this guy. He worked to get me a tax cut this year. I appreciate a tax cut. I’ll support anyone that will give me a tax cut. I like tax cuts.” But if spending grows without reason, and more importantly, without control, tax cuts will only lead to insolvency. Comrade Baldacci, in a move that appears to be a panicked response to the failure of his last under the table deal to screw the people of Maine, has issued a statement regarding spending control. I quote here a piece from the Portland Press Herald,” Baldacci has said that any tax-reform plan should impose “spending reform” by curtailing administrative costs in state
government and strengthening existing caps that are supposed to limit spending increases at all levels of government.”

All well and good, but will he stick to that philosophy? Also in the headlines, and part of the real tax problem we have is an article regarding State employees contract negotiations. Here is the text of the article:

Two-year state contract includes increases in pay

A deal for 10,000 workers is called the best ‘that could be arrived at’ in the current fiscal climate.

By SUSAN M. COVER Blethen Maine News Service
June 27, 2007

AUGUSTA — State employees who work in the executive branch bargaining unit have approved a new two-year contract. Maine State Employees Association Executive Director Tim Belcher said all four groups – administrative; operations, maintenance and support; professional/technical; and supervisory – approved their contracts Monday night. Combined, those groups represent about 10,000 state workers.
The agreement, which takes effect July 1, calls for workers to receive a $700 lump-sum payment in July and a 2 percent raise in 2008. Workers also will go up a step on the pay scale in 2009, resulting in a raise that is closer to 4 percent in the second year of the contract. Contract talks began in January. In April, with most of the contract settled, state workers held a State House protest to ask for better pay.
For Kathryn Latulippe of Winthrop, a 30-year union member who works in the Department of Professional and Financial Regulation, the raises don’t equal cost-of-living increases. “Wages is always a sticking point,” said Latulippe, a member of the negotiating team. Another bargaining team member, Tom Maher, who works in the Office of Information Technology, said mileage reimbursement was another difficult area to negotiate.
“The big insult to thousands of people working for the state was they said they weren’t going to pay us federal mileage,” he said. Instead, the final agreement gives state workers an increase of 6 cents per mile over the two-year contract. State workers now get reimbursed 38 cents per mile.
Overall, Maher said the process worked well. “This is the best contract that could be arrived at under the current fiscal conditions,” he said.

Here are the contract highlights:
$700 lump-sum payment in July, which equals 2 percent of the


average state employee’s annual salary of $35,000;
2 percent raise in July 2008;
For workers with 25 or more years, a 50 cent-per-hour raise
starting in September;
For employees of an institution, a 30 cent-per-hour raise in July
2008;
For direct-care workers, an additional 30 cents per hour in July
2008.
Belcher said current “political circumstances,” which include a lot
of debate and concern about state spending, sometimes hurt
union members.
“We’re going to turn that debate around,” he said.

 

Perhaps the largest segment of the real budget is the amount of funds that go towards payroll. We often read and hear about the different departments, like DHHS and DIFW and so on, but we never get to see how this money is actually spent. Here we talk about a union contract between the employees and the State of Maine. That would be you and me, but we have zero input into the negotiations. The negotiations are controlled on the state level by people whose job depends upon whoever is holding elected offices. Committees run the government’s daily operations, or rather a department head appointed and/or approved by the committees.

 

So let’s take a look at this contract. According to this article, the contract takes effect July 1st, 2007. That’s next week, which allows no time for comment on the taxpayers position to this new raw deal we are getting screwed with. The suggested number of employees is 10,000, and the average wage is $35,000 per year. I work in mid level management and don’t make quite that much. What have they got to complain about? But they will be getting a lump sum payment of $700.00 each. Doesn’t sound like a big deal until you do the math. $700.00 times ten thousand employees equals $7,000,000.00 big green dollars. That’s right. Seven million dollars is coming out of your pockets next week so a bunch of overpaid union activists can stand around and complain about the low wages they’re receiving. Furthermore, next year they’ll get another 2% raise, another seven million plus dollars, and 4% more in 2009. Just for kicks, that adds up to $134,600.00 per week being siphoned out of your wallet. That’s every week for the rest of your taxpaying lives. And that amount goes up every year because of the raises they get.

 

This bozo named Belcher complains that “political circumstances” sometimes hurt union members. Well, you know what? If you don’t like it Mr. Belcher, quit and get the hell out of my state. I don’t get that kind of raise every year in the private sector. My job isn’t as well protected either. If I screw up, or the economy slows enough, I loose my job. My employment depends on my performance, and the results generated by my efforts to my employer. Why isn’t the state held to the same standards as the private sector? There really isn’t any reason why they shouldn’t be. When I’m driving down the highway, and I see a road crew standing around watching one or two of their fellow workers do the work, I wonder where the value is. Why is a truck driver getting paid more than I am, and he’s sitting on the side of route one reading a newspaper. And don’t tell me he was on a coffee break. The street sweeper hadn’t caught up to him to unload. He was wasting time, as well as the taxpayer’s dollar because the project had been poorly planned. You don’t see this sort of thing going on with private contractors.

 

Remember that this is a minimum of fourteen million dollars for the next two years. The state was just misled by these money grubbing socialists into approving a bond package to the tune of eighteen million for water projects. We weren’t told what these projects were going to be. The dollar figures work out to be about the same, what with raises here and there, travel bucks and so on. You don’t suppose we were snookered and the eighteen million to improve water is going to cover the state employee’s higher wages, do you?

 

More on this contract next time. Gotta go tend to my high blood pressure now.


 

I came across this little tidbit in the Portland Press Herald paper today. How many large corporations are left in the United States that are still owned by Americans? The propensity for more and more companies to sell to foreign interests is becoming ridiculous. This is especially bad in this situation. Read this little tidbit…

“By DAVID SHARP The Associated Press
June 26, 2007


“Spanish power utility Iberdrola SA plans to pay $4.5 billion to
“buy Energy East Corp., the owner of Central Maine Power Co.
“and other regional utilities, giving it a foothold in the United
“States, the companies announced Monday

“The boards of both utilities, meeting in New York and Madrid,
“agreed to the deal that would provide Energy East shareholders
“$28.50 per share, representing a 26 percent premium over
“Energy East’s closing stock price on Monday.

“The deal, which is expected to close next year, would require
“approval of shareholders, the Federal Energy Regulatory
“Commission and state agencies.

CMP is the largest electrical company in Maine. Sure, there was a deregulation trick played on us a few years ago. CMP had to divest itself of interests to promote “healthy” competition in the market place. CMP sold off the electrical producing portion of its business, and all they do now is distribute it. FPL (Florida Power & Light) bought the producing end of the business and now every thing is cool. CMP brags about how they’re reducing the costs of distribution. Of course, FPL is charging more for the electricity, so the bills are actually higher than they were a few years ago. But that’s OK because CMP isn’t charging more. You don’t have to use FPL for power, you can by from some other source, you know. Not that any other source is really any cheaper. But here’s the rub.

Energy East owns CMP. OK no problem there. Energy East owns FPL, hmmm. Problem developing? Maybe, since CMP was ordered to divest its producing assets. You see, there really wasn’t any divestiture of the producing part of CMP. CMP, a subsidiary of EE (Energy East) sold its portion of the electrical production business to FPL, another EE subsidiary. If this deal with Iberdrola goes through, our future with electrical power supply in Maine will become very fragile. We will be held to demands from a foreign interest and subject to their whims and wants. If an American business wants to open outlets or factories in almost any other country in the world, they will almost certainly be required to have a majority of stock to be held by citizens of that country.

Why is it foreign interests are allowed to come to this country and buy up company after company, and maintain 100% control? They owe us nothing, and we have no control over their actions, including having an ability to fix costs, and not worry about having to answer for it. These liberals in Washington and Augusta are quick to leap all over big oil and accuse them of price fixing and operating unfairly, why is it they don’t want to say anything against these foreign companies? Could it be that the leftists in the Capitol(s) prefer to have foreign companies own us? After all, most of them are operated by people with a bent towards Socialism. This would help these left leaning liberals to further their cause. Capitalism isn’t the grievous sin they want you to believe it is. Capitalism puts bread on the table and pays the rent. Well, Socialism does too, but it’s a poor quality bread, and the taxpayers pay the rent.

Take a look at your energy usage and the rates you have been paying over the last five years. See if I’m right. This is a bad deal for the state. Let your elected officials know your feelings about it, as well as the regulatory agencies. This is what the article says about our good comrade Baldacci : “Maine Gov. John Baldacci, also in Canada, said he was “cautiously optimistic” about the proposal based on a conversation with CMP President Sara Burns. He said he planned to meet with company officials upon his return to Maine later this week.” Not surprising, since Spain is a Socialist leaning nation. And further from Iberdrola: “The combination with Energy East fits with the philosophy of our strategic plan, will serve to enhance the international expansion we initiated several years ago in markets with stable growth, and consolidates our position as one of the world’s leading electricity companies,” said Ignacio Galan, Iberdrola’s chairman and CEO. “The combination with Energy East fits with the philosophy of our strategic plan, will serve to enhance the international expansion we initiated several years ago in markets with stable growth, and consolidates our position as one of the world’s leading electricity companies,” said Ignacio Galan, Iberdrola’s chairman and CEO.” Yep, I can see it now. All the electricity in the world controlled by just a few greedy Socialists. I think it may be time to stock up on those solar cells. We may need them pretty soon.

To continue on with my comments on tax reform, I’d like to strengthen my arguments steering towards spending reform. This last round of bond questions were clearly approved by the people of Maine. While I doubt that it even came close to a clear majority, it disturbs me that the proponents of these issues were able to convince the public to debate in favor of passage. Infrastructure improvements need to be paid for through taxation. One way to attain the needed funds immediately is to issue bonds to raise the money from private investors. These investors are paid back with interest. These two packages approved on the 12th amounted to a lot more than the one hundred thirty one million asked for. With the federal funds we will be getting, we are adding over 440 million to our tax burden.

The problem I have is that there has not been one shred of information as to what this money is going to be used for. How is nearly half a billion dollars going to be spent in Maine? Who is going to decide where to direct the funding to? How many special interests are going to be served by this windfall of cash?

Tax reform is desired by every person in this state. Well, almost everyone. People are becoming more and more disgruntled with the tax situation in Maine every year that passes. But every year more new taxes are imposed. We keep allowing our elected officials to spend our money without requiring them to answer for, or be responsible for these expenditures. Tax reform is a necessity, but it will come to nothing if spending reform does not precede the tax reform. Skyrocketing costs of government can be curbed only by first curbing the government.

Things have changed over the last few decades in the State of Maine that has caused us to lose our position as a leader in the nation that we once held. We need to return to square one, a rebuild our state government. Part of the reason for passage of the term limit bill was to begin this rebuilding. We were supposed to get rid of ineffectual leaders who were easy prey to the special interest lobby’s. so where do we begin? We begin with the past. We find out what worked right before and try to recreate those conditions.

 

    Take a look at this table from the Tax Foundation. This describes how much was collected in taxes, and how much went back to the state in federal dollars. If you were to look at the tax situation as though it were your own household budget, you’d be in a lot of trouble. As you can see, for each of the years, we have spent more in federal funds than we have contributed in taxes. It is interesting to see that from 1981 to 1989 the ratio was declining.

    In 1990, the ratio started to increase. In 2004 we received back $1.40 for every $1.00 that we paid to the Feds. Why is this happening? When you look at your own budget, you cannot spend more than you earn. If you do, your debt burden increases. If the burden is not eliminated, bankruptcy is sure to be the outcome. Because we take in more Federal dollars than we contribute, we are taking from other states. This makes us a beneficiary state, or welfare state, as I discussed in my post of 16 June. This same set of tables shown here shows that New Hampshire received $ .67 for every dollar of Federal taxes they paid in. Massachusetts received $ .77 and Connecticut received $ .66. what are these states doing that we are not?

    New Hampshire has no income tax, and no sales tax. Their roads generally seem to be in better shape, and the have a smaller percentage of the population on welfare. High tech businesses flock to the state, increasing the employment potential. Tourism is a bigger industry. On a per capita basis, New Hampshire seems to better Maine every way. Granted, they have their problems, who doesn’t, but the point is still there.

    Why does it seem to be a better state, even though their taxes are lower? Could it be that lower taxes are the answer? And if so, how can we, as a state, lower our tax debt burden? The answer is simple. We learn to control our spending, and make sure it does not exceed our ability to collect taxes. Increasing taxes will merely serve to lower our ability to enjoy income, which will reduce spending, lowering collected taxes, causing the state to raise the tax rate and institute new taxes, which will continue to decrease our spendable income.

    It’s a vicious cycle that needs to be broken now. This desire to spend and not be responsible on what we as a state spend money on is crippling our economy. In the next few posts I will be sharing some comments on what I, as a taxpayer would like to see done in the State of Maine. One of the first things, however, I would like to see is for the voters of this state to take a greater interest in the political affairs of the state. We should be paying closer attention to our local governments, and begin attending town council meetings and the like. See what is going on in your own town. Is your community going to share in this nearly half billion dollar payout we are going to be enjoying? If not, why? After that, start paying attention to the county and state level officials. And don’t forget the people we are paying to represent us in Washington.

The solution has to start now, and it has to start with you and I. don’t rely on someone else to reduce your taxes. They are not going to do it. Special interest groups are only interested in spending your money. Let’s see if we can eliminate this aspect of politics, and try to return to and era of fiscal responsibility. Believe me, I know from personal experience what can happen when you are not fiscally responsible. It ain’t pretty. Till next time, hold on to your wallets.

Maine Tax Reform?

Posted: 16/06/2007 in Uncategorized
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So we did it again. Added the debt due for the little grand kiddies. The State of Maine decided to approve more expenditures on bonds, with utter disregard for the consequences. The big issue the Bond votes of 12 June, 2007. They’re both a mild, non threatening issues, #1 requesting approval for nearly 113 million for road and bridge work, the second asks for over 18 million for drinking water and sewer improvements. The thing that disturbs me about both issues is the fact that they are being pushed because of the Federal monies we can get by the approval of these bonds. In the real world, if you approve of #1, you are agreeing to take $373,500,000.00 out of your pocket. Actually, your offspring will be paying the bill. For bond #2 it’ll be a charge of $67,800,000.00. There seems to be no effort to justify hundreds of millions of tax dollars to be spent. Do you want to spend the taxes you pay on these projects? $441,300,000.00 is the grand total of the tax burden in the short haul. Was interest going to be paid on any of these bonds? That will add more to the tab.

Tax reform is needed in this state, and there is no argument from any source, including me. However, for any tax reform to be truly meaningful, we must first have spending reform. By raising more taxes, all we are doing is allowing our elected officials to spend more. We need to begin reigning in that carefree attitude they seem to be afflicted with. The tax burden is way too high. According to the Tax Foundation reports, Maine is a true welfare state. This statement from them explains what I mean by Maine being a welfare state:

“Federal Tax Burdens and Expenditures: Maine is a Beneficiary State :

Maine taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of federal tax collected in 2004, Maine citizens received approximately $1.40 in the way of federal spending. This ranks the state 16th highest nationally, but represents a decline from 1992, when Maine received $1.48 per dollar of taxes in federal spending and ranked 4th highest nationally. Neighboring states and the federal spending received per dollar of federal taxes collected were: New Hampshire ($0.67) and Massachusetts ($0.77).

Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state”
(source Tax Foundation ) for more info, http://www.taxfoundation.org.

We’re taking in more than we are contributing to the Federal government. That means other states are supporting us. By increasing the debt by approving bonds to allow more spending, we’re making the problem worse. Apparently today’s politicians feel they have no need to learn from the past. Taxes have always been an issue in this country. There once was a time when our elected officials were more easily controlled by the populace. Responsibility and pride comprised a large part of the American experience. Today, the government controls us and is in turn controlled by special interest needs. Instead of becoming a state that can hold its head high, and be a leader among states, we are doomed to shuffle along accepting handouts from other states, to pay for things we do not need.

With Maine being such a huge welfare state we must remember that somebody has to pay theses bills. We already suck up more in federal dollars than we pay back. That means we are living off of the generosity of the other states. This is a condition that must change. Reducing State expenditures in all aspects of government is the only way to return Maine to a desirable and meaningful place to live. Instead of being New England’s weekend cottage, we can return to the prominence we once held. We can return to being an economic player instead of a little dog eating scraps from its masters plate.

Baldacci’s plan to tax the crap out of us isn’t going to help matters. All it will do is prompt the Legislature to spend more money. Election time is coming, let’s start making these Public Servants responsible for the actions they take. This time around it was over 440 million dollars, what about the next time bonds are asked for? When are we going to mstart demanding spending reform from Augusta?

Gimme a tax break!

Posted: 12/06/2007 in Uncategorized
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That’s right, gimme a tax break. Aren’t I a special interest group? Or at least a special interest individual? Oh yes, that’s right. I’m not special enough o be able to hire a lobbyist to bribe the officials into voting the way I expect them to. The recent tax bill flurry circulating around has been one huge circus. Baldacci signed the bipartisan measure that is supposed to miraculously cure Maine’s tax problems. I’ve said it before, and I’ll continue saying it, these measures will not solve a single problem. At the very least, more problems will be created. Like I mentioned before, these measures will not reduce the tax burden. They will merely serve to redistribute the burden to other sources of revenue.

We, as a state really need to take a closer look at out revenue system. Where do we get our taxes from? What are these taxes charged on? Who gets to get away without paying their taxes? A good example is the ads we see on TV about getting relief from your IRS bill. While this is Federal and not state, the concept is the same. These lawyers claim they can get you out of paying your tax bill. The simple question it why, and how? If these people that owe taxes are really liable to pay them, why are they being allowed to get out of paying them? Why is there a tax amnesty gimmick? Is it because these taxes aren’t actually required to be paid? Does the Revenue Service really say, “These taxes really don’t have to be paid. We just want you to fear us by telling you they are required to be paid.”

How many people are exempt from paying taxes? I can’t tell you how many times I’ve seen people from non profit groups use tax exemption certificates to get out of paying sales taxes that are really due. When a minister buys a piece of furniture or an appliance for the parsonage, the exemption is used to avoid the sales tax. The same thing happens with any other group that wants to buy big ticket items. What power gives them the right to avoid taxes that I have to pay? If I buy a sofa for my house at $500.00, I have to pay $50.00 in sales taxes. If a church or assisted living organization buys the same sofa, they can avoid the extra $50.00. is this really fair?

If we are really going to solve our tax problems as a state, we need to first look at the entire revenue system. It needs to become a system that is equitable for all involved. At the same time, we need to look at what we are spending collected revenue on. Comrade Baldacci wants to consolidate the school systems and reduce administrative costs. That sounds like a good idea, but that is not the real intent of his plan. By taking cues from the Communist governments he has been cozy with, Baldacci actually intends to institute a centralized control. There will be tighter reins placed on what our children will be taught, and it will not be good. They will be taught more Socialist dogma, and will begin to fade away from being strong, independent thinking Mainers. They will become like students in most secondary and higher education institutes.

Many of the children I see today are so vastly different from children of forty years ago that I would wonder of the future of this state. They seem to be in large part more self centered, and under educated in common everyday tasks. As an example, I went to a fast food joint one day. The young girl behind the counter pressed the wrong key before giving my change back. Since the amount to be returned to me was gone, she had to count my change back. She was unable to perform this simple task, and had to ask her manager to do it for her. A simple math exercise, and this High School student was unable to perform it. By removing necessary local control and input to the educational system, our children are suffering because of it. There once was a time when teachers were held responsible for the education results in their classrooms. Poor teachers were replaced when results became unsatisfactory. This ability to guarantee results has been, and will continue to be diminished because of the unions special interest control. School consolidation is a bad idea, plain and simple.