Rent Seeking

Friday, the Great Lakes Water Authority board approved a 40 year duration lease of Detroit Water & Sewerage Department’s assets and operations outside of the city of Detroit. This approval passed by a 5 to 1 vote with only Macomb County’s representative on the GLWA board opposed. The terms of the lease subordinate the DW&SD to the GLWA, a new intergovernmental authority created out of the ashes of the City of Detroit’s bankruptcy by a Memorandum of Understanding.

This deal was constructed as a lease to evade the 1963 Michigan Constitution‘s requirement, under Article VII, Section 25, for a vote of Detroit’s electors to approve the sale of any public utility. However, by constructing the deal as a lease, the City of Detroit is essentially granting a lease franchise covering the DW&SD’s water and sewerage operations to GLWA. The 40 year term of this lease franchise clearly exceeds the 30 year maximum permitted by Article VII, Section 30 of our 1963 Constitution:
Merriam-Webster defines a ‘franchise’ as “ the right to sell a company’s goods or services in a particular area; also, a business that is given such a right”. Exactly the nature of the GLWA lease agreement with the City of Detroit. Should you doubt that the City of Detroit constitutes a ‘company’, Merriam-Webster defines a ‘company’ as “ an association of persons for carrying on a commercial or industrial enterprise”. Exactly what DW&SD has been doing for over 100 years.

State Representative Kurt Heise (R-20th) from Plymouth has challenged the establishment of GLWA under the 1963 Michigan Constitution’s Article VII, Section 28:
Taken together with the 1963 Michigan Constitution’s Article III, Section 5:
it establishes our Legislature’s authority over intergovernmental units. But these two sections do not unambiguously grant the Michigan legislature exclusive authority over intergovernmental units, so there is probably legal wiggle room here. Contrary to Representative Heise’s contention, a good lawyer could make a case that the U.S. Bankruptcy Court could establish the GLWA under Article VII, Section 28 and Article III, Section 5.

However…..

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All the Other Stuff, Cronyism, Democrats, Fees, Michigan, Michigan Politics, Proposal 15-1, Rent Seeking, Republicans, Taxes

$ 3 Gas Across Michigan: Warming You Up For A Gas Tax Ratchet?

by 10x25MM • June 12, 2015 • 1 Comment

House Road Funding Package Puts Gas Tax Increases on Autopilot --- Tax on B5 Diesel for Heavy Trucks Cut 20%

Southfield, MI Gas Prices 12 June 2015

Michiganders woke up this morning to discover that regular unleaded gasoline prices are now $ 3 per gallon, a $ .25 increase, or more, from yesterday. Refinery problems, summer driving season, and SE MI’s special fuel blend are blamed in the press, but really this price shock is an intended consequence the Federal Reserve’s zero interest policy and their determination to boost stock prices. Oil derivatives are cheaper than dirt when there is no cost to money.

Wall Street wasn’t happy early this year when plunging oil prices drove down stock averages. So someone is furiously selling off Treasury paper and buying oil & gasoline futures contracts. Treasury interest rates have been rising in lockstep with oil & gas prices, on the same days, even the same hours. Officially, no one knows who is behind these trades, but the Federal Reserve is sitting on $ 4 trillion in Treasury paper and is fighting any effort to audit their holdings. A coincidence? Not likely.

Your government extracting more money from your wallet.

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Conservative News, Cronyism, Democrats, Detroit, Fees, Michigan, Michigan Politics, Opinion, Philosophy, Rent Seeking, Taxes

We’ll show you!

by KG One • June 12, 2015 • 4 Comments

You’d better not mess with Detroit! Or, you’ll get what’s coming to you!

The latest shakedown of Taxpayers in Southeastern Michigan took an interesting turn this morning.

Not because of its inaccessible meeting location at Waterworks Park in Detroit.

But, because of something that wasn’t expected during the meeting.

{Oh, you’re gonna love this…}

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Detroit, Fees, Humor in Michigan, Michigan, Opinion, Rent Seeking, Taxes

$uper $oakers and Suckers

by Corinthian Scales • June 12, 2015 • 0 Comments

Yep. Y’alls is getting the government you deserve – good and hard.

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Conservative News, Cronyism, Elections, Michigan, Michigan Politics, Opinion, Rent Seeking, Republicans

Well THAT Was Disappointing ..

by Jason • June 12, 2015 • 8 Comments

What at first appeared to be a reach out to get input for a post-SCOTUS ruling direction was just a scam.

Not at all surprising however.

Given that it was from team Benishek. I though perhaps he was noticing how folks have lost all respect for him, and as contrition, was reaching out to see what would make folks a little more confident in his future performance. Gosh, maybe it was in response to my put up or shut up articles!

The email arrived with this heartfelt message:

” Jason,

With more than three decades in the medical field, I know how important it is for our healthcare system to empower patients and their doctors, not federal bureaucrats in Washington.

Too often, Washington politicians try to pass laws without talking to the people who have to live with the consequences. Any doctor will tell you that listening to your patients is one of the most important parts of medicine. I believe this is true in politics as well.

That’s why I want to hear from you.

Jason, please take my survey to let me know what you think of ObamaCare, and how we can build a better healthcare system.

Our current system isn’t working, and I know we can do better. With your support, we can fight for a bottom up healthcare system that empowers people not politicians.

Thank you for sharing your thoughts,

Dr. Dan”

So I clicked the link. I diligently filled out the form answering the ready-made questions, and then I offered offered some “other thoughts” that were being solicited at the bottom. I typed in:

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All the Other Stuff, Conservative News, Cronyism, Democrats, Detroit, Fees, Fees, Flint Water Fiasco, Michigan, Michigan Politics, Rent Seeking, Republicans, Taxes

Southeastern Michigan Water Fight

by 10x25MM • June 10, 2015 • 3 Comments

Last Act of the Detroit Bankruptcy Stumbles Behind a Wall of Secrecy

The final Detroit bankruptcy plan established a 14 June deadline to reach an agreement transferring operating control of the Detroit Water & Sewerage Department’s (DW&SD) assets outside of Detroit to the newly created Great Lakes Water Authority (GLWA). The State of Michigan, Detroit, Wayne County, Oakland County and Macomb County all signed a Memorandum of Understanding (MoU) creating the GLWA late last year, subject to a 200-day due diligence period. Under the MoU, the City of Detroit would receive a $ 50 million annual lease payment from the GLWA while retaining full control of DW&SD assets and operations within the city. Erstwhile DW&SD customers outside Detroit were promised a 4% cap on annual water and sewerage increases for a 10 year period, which have been running above 10% per annum, in residential bills, in most Southeastern Michigan communities.

In point of fact, what has actually been occurring are secret negotiations over future tax increases across Southeastern Michigan. Water rates have become a surrogate form of incremental taxation. These negotiations will set tax fee increment rates for decades into the future. For taxpayers ratepayers who haven’t even been born yet. How are these negotiations going?

No one who knows is talking. Why?

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