Detroit

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And Even More

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blight-eliminationAs I pointed out the other day, the flow of federal funds used for welfare is, and has been huge in our state.

I also hinted at the ka-ching of ‘excess moneys that local communities get to use.  It keeps them on board and in line. For example, in this case:

In July 2010 Michigan received $498.6 million in federal Hardest Hit Funds (HHF) in response to the housing crisis that led to an unprecedented decline in home prices and high unemployment. MSHDA created the Michigan Homeowner Assistance Housing Corporation (MHA) to oversee distribution of the funds through a program called Step Forward Michigan.

“The Step Forward program has helped unemployed and under-employed people remain in their homes and in our state as they searched for new jobs as our state recovered,” Gov. Rick Snyder said. “That’s important for families who were struggling as our state started its recovery.” 

While the title reads:

“Michigan’s hardest hit families have received $241M worth of assistance since 2010″

Efficient distribution, yes?

Just sayin.

 

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Cronyism, Democrats, Detroit, Michigan, Michigan Politics, Rent Seeking, Republicans, Taxes

Bankruptcy Stalks the Guardian Building

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Dead Man Walking JPEGThe ball is now in the Governor’s court, so to speak.  The report is not public yet, but the press release is out.  It only took the State independent review team 18 calendar days to figure out what everyone knows: Wayne County is in a ‘Financial Emergency’.  Here is the money shot from the Michigan Department of Treasury press release:

The team’s extensive report indicates that numerous conditions led to the determination that a financial emergency exists in the county. Those conditions include the following:

  • The county’s last four annual financial audits re­­vealed notable variances between General Fund revenues and expenditures as initially budgeted, as amended, and as actually realized. In addition, County officials underestimated actual expenditures in three of the fiscal years by amounts ranging from $16.7 million to $23.7 million.
  • County officials engaged in unbudgeted expenditures in violation of Public Act 2 of 1968, the Uniform Budgeting and Accounting Act.
  • Although there was agreement among county officials that existing de­tention facilities are inadequate, there is no consensus about whether to complete construction on a new jail or to renovate existing facilities.
  • According to the county executive’s recovery plan, unfunded healthcare-related liabilities were estimated to be $1.3 billion as of the last actuarial valuation with funding set aside for this purpose of less than one percent of liabilities. Healthcare-related liabilities represent 40 percent of the county’s long-term financial obligations.

The Governor now has 10 days to take one of five actions: do nothing, conduct another ‘neutral’ evaluation, arrange a consent agreement, impose an emergency manager, or file the County for Chapter 9 bankruptcy in U.S. Bankruptcy Court.

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Conservative News, Cronyism, Detroit, Michigan, Michigan Politics, Opinion

Why Did It Take So Long?

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And how much taxpayer money has been lost to cronyism over the last 7 years?

kwamewoodWe’ve been lied to.

Michigan politicians have been telling us that the film credits were needed to compete with other states for years. Its just not so.

People in the industry have been remarking how successful other states have been by giving filmmakers taxpayer money to ‘create’ jobs in those states; all the while competing against Michigan’s excessive subsidizing of the vanity industry which HQs in Hollywood.

But the bottom line?

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All the Other Stuff, Conservative News, Cronyism, Democrats, Detroit, Elections, Humor in Michigan, Michigan, Michigan Politics, Opinion, Philosophy, Republicans

Why telling it like it is should be a newsworthy event.

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Why telling it like it is should be a newsworthy event.

I’ll be honest, the whole kerfuffle regarding the “Confederate Flag” hasn’t drawn very much interest for me because of the following reasons:

One, it’s not directly Michigan-related.

Two, it doesn’t affect me personally or anyone that I know (and I know quite a few people who fall into the category the race-hustlers are trying to round up on their side).

Three, I’m actually amused at the time spent distracting focusing attention away from real issues like disintegrating family structures, a education system whose outcome is criminal, cities which have devolved into war zones, the job situation (just to name a few), which are the direct result of actions taken by democrats (See: Cloward-Piven).

But someone sent me this video, and it…well check it out for yourself regarding one Kid Rock, a do-nothing group of “community organizers” (isn’t that a redundant description), their respective list of accomplishments…and the Confederate Battle Flag.

Yes, the content is “safe for work”.

 

 

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Conservative News, Cronyism, Democrats, Detroit, Fees, Humor in Michigan, Michigan, Michigan Politics, Opinion, Part Time Legislature, Philosophy, Proposal 15-1, Rent Seeking, Republicans, Taxes

Michigan Senate Republicans invoke “leadership” strategy gleaned from watching South Park.

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Just when you thought that things couldn’t get any stranger?

I bet you’re wondering which strategy that is?

Well, wait no longer (Here’s a hint: We’re at Phase 1)

{Click below the fold for details.}

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

Unconstitutional: Great Lakes Water Authority Lease Violates Michigan Constitution

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--- Absence of Enabling Legislation Clearly Violates Article III, Section 6 --- 40 Year Lease Period Clearly Violates Article VII, Section 30

GLWA Detroit Seal ImageFriday, 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:Michigan Constitution of 1963 Article VII Section 30
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:Michigan Constitution of 1963 Article VII Section 28
Taken together with the 1963 Michigan Constitution’s Article III, Section 5:Michigan Constitution of 1963 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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Conservative News, Cronyism, Democrats, Detroit, Fees, Michigan, Michigan Politics, Opinion, Philosophy, Rent Seeking, Taxes

We’ll show you!

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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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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

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

Water is Money Image 2The 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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Conservative News, Democrats, Detroit, Elections, Michigan, Michigan Politics, Opinion, Philosophy, Republicans, Taxes

A Dead Man Walking: Wayne County

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Your Least Loss is Your First Loss

Bankrupcy WC 2Wayne County Executive Warren Evans told the assembled self very important persons at the Mackinac Policy Conference last Friday that he now believes that his county government can avoid bankruptcy. “He is now comfortable with the options” was the report. Little did he know that, on the very same day, Wayne County Circuit Court Judge Lita Popke gave the County 48 hours to pay its retirees $ 49 million dollars to restore their 2010 ’13th check’ retirement benefit. Wayne County told the court flat out that it doesn’t have the money.

The Wayne County Commission voted yesterday to tap most of the last remaining funds in the County’s much abused Delinquent Tax Revolving Fund, however Warren Evan’s subsequent veto threat all but assures that this summer’s county property taxes will increase 1.23 mils to pay this judgement. This property tax increase will not even require a vote of affirmation under the Headlee Amendments to the Michigan Constitution, because it is pursuant to a court order.

’13th checks’ are a devious method of looting pension funds which began in the 1980’s, in Michigan. When some Michigan public pension funds earned more than their targeted rate of return in a year, say 8%, the ‘surplus’ earnings got doled out to retirees in the form of a 13th check.  These 13th checks could amount to far more than the pension fund’s actually surplus.  Retirees never had to give back their prior 13th check payments when the pension funds dialed up a big loss, so the 13th check was an opportunistic form of looting – not an equitable form of risk & gain sharing. This practice has occurred in state pension plans, county pension plans, and city pension plans across Michigan. The particular problem in Wayne County is that Robert Ficano stripped his pension funds of the 13th check payment funds in 2010 to make his books look better. Worst of all, Wayne County’s pension funds are only about 44% funded and their OPEB’s (retiree medical care, etc.) are essentially unfunded.

Wayne County’s accounting is nebulous, to be charitable. A read of their 2014 CAFR (22 MB document, it took a lot of lipstick to make this dead pig look good!) shows that the County is carrying forward an unassigned deficit of $ 82.8 million, and only got it down to this awful level by diverting $ 91.7 million from their dwindling Delinquent Tax Revolving Fund to their General Fund in 2014. Then, depending upon whom in Wayne County government you are talking to, Wayne County is still losing another $ 4 – $ 5 million each month.

This amounts to something over $ 50 million per year.

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