SafeRoadsYes! Morphing Into A Very Expensive White Elephant - Big New Money Going Down the Drain!

Another day, another $ 105,000 delivered to SafeRoadsYes! Here are the latest contributions made to SafeRoadsYes! on 28 April and posted by the Michigan Secretary of State today:

• MITA gave another $ 25,000, new total circa $ 5.42 million
• Michigan Aggregates Association gave $ 20,000, their first act of obeisance
• PVS-Nolwood gave $ 25,000, new total $ 75,000
• Operating Engineers Local 324 gave $ 35,000, new total $ 135,000

The motives of three late contributors are pretty obvious. PVS-Nolwood is a chemical company in Detroit specializing in acids and their disposal. As [a very profitable] part of this business, they unload neutralized acid byproducts on wastewater treatment plants as clarifiers. Those wastewater treatment plants just happen to be owned by various units of government which, in turn, use their water billings to rape the public at large. PVS-Nolwood have a long history of sucking up to Michigan’s power elites to further their very lucrative business interests.

The late contribution pattern of MITA and the other contributors to SafeRoadsYes! reeks of desperation and a last ditch scramble for funds. MITA has clearly shot their wad and must have someone on the phone night and day scraping up every last available dollar to spread their entertaining lies. Polls and comments on Proposal 1 articles don’t suggest that they are making much headway, but MITA are definitely not giving up.

The concern here is that the road constructors might believe that their political donations are tax exempt. That is true insofar as MITA and DRC’s Powering the Economy PAC are concerned, but under 26 USC Section 162(e) (1) et seq., these political vehicles’ full tax liability on referendum contributions flows back to the original donors/members, as do their own direct contributions. MITA has ponyed up so much money that their membership are going to get rude surprises as they prepare their 2015 federal returns.

MITA has spent approximately four times their usual annual revenue from membership dues on Proposal 1. We don’t know much about the finances of Michigan’s road constructors because most are privately held, but they have just been through some very lean years and have high debt loads. MITA have blown something in the vicinity of 20% of one year’s gross profits from all MDoT construction contracts pushing this proposal. The tax liabilities being incurred this fiscal year will cripple many of their smaller members, and some of their larger members too. First indications of this distress will be credit downgrades and debt service failures sometime in early 2016. Then the industry will ‘consolidate’.  Governor Snyder did the road constructors no favors enticing them to lead his quixotic Proposal 1 campaign.

The temptation to use their Builder’s Exchanges to drive contract bids higher will be overwhelming as they figure out the ramifications of their actions. Even without outright collusion, consolidation will drive up bid prices.

When the dust settles on Proposal 1, there will be no winners regardless of the outcome. Only losers in varying degrees. MITA’s members will be the biggest losers, by far.

 

Thursday Update – April 30th

Another day, but just $ 55,000 more for SRY from two previously untapped sources:

Schwartz Financial Group is a reputable brokerage with a long history of contributions to establishment Republican candidates, notably Governor Snyder and AG Bill Schuette. Nothing interesting here, they almost certainly got a compelling phone call.

But the NEA? Apparently the MEA’s master pension chiseler, Steven Cook, passed the bill to MEA‘s parent organization. A man truly gifted at spending other peoples’ money.

Nothing from MITA so far today. That well has apparently gone dry.

 

Friday Update – May Day – Ron Boji Arrives on Scene!

End of the week, only $ 30,000 more for SRY from two previously untapped sources:

Ron Boji, the colorful Lansing real estate developer and MDoT Commissioner gave SafeRoadsYes! $ 5,000 yesterday. Not much really, but the new Senate office building deal also seems to be in some trouble.

Robert Thompson is probably best known as the donor whose $ 200 million to create 15 charter schools was rejected by the Detroit Public Schools so they could preserve their level of corruption.  Made his millions as the owner of a Michigan paving contractor, Thompson-McCully, which is probably most germane here.

Nothing further from MITA. That well has surely gone dry.  The MITA membership is probably contemplating their tax liabilities for this little adventure.

 

Sunday Update – May 3rd – SafeRoadsYes! Reloads Big Time

In a special Sunday post, the Secretary of State reported $ 298,000 more for SRY:

MITA scraped up another $ 48,000 from their beleaguered membership, but the big news here in the SoS’s unusual Sunday posting is the other late Friday SRY contributors: Consumer’s Energy ($ 100,000), Michigan Manufacturers’ Association ($ 100,000), and Quicken Loans ($ 50,000).

This brings CMS Energy up to $ 225,000; money extracted from their ratepayers. Proof positive that Michigan’s electricity and natural rates are too high. Infuriating that you can be forced to pay for a political position directly opposed to your interests through your utility bills.

Michigan Manufacturers Association is almost certainly paying off their debt to Michigan’s Republican establishment for the recent replacement of the hated MBT & SBT with the new Corporate Income Tax. This has become a unspoken issue in the Proposal 1 campaign, at least from the left’s perspective. They want to stick manufacturers and other companies with higher taxes to fix the roads. They also believe that Michigan’s decades long road problems are the direct result of the 2012 Michigan corporate tax changes. Delusional.

Quicken Loans is the financial centerpiece of Dan Gilbert’s business empire. Gilbert is well connected to Detroit through his real estate holdings downtown and is probably making a ‘down payment’ on his anticipated purchase of the Guardian Building from bankrupt Wayne County. You think he would have learned that big government is a menace from his False Claims Act indictment, but evidently not. Who said the 1% are smart?

The amount of money reported in this SoS post suggests that SRY has been either deficit spending or is planning some major last minutes antics. We’ll know in a few days.