The entire world now knows what crass bureaucratic stupidity, feeble political direction, and witless press coverage did to Flint. We have demonstrated that Flint’s politicians and financial managers made terrible decisions in an effort to replace plunging tax revenue, which had reached statutory and constitutional rate limitations.
The foremost source of revenue expanded was Flint’s water & sewerage charges. Annual free cash flow from water & sewerage charges was increased from nil to $ 28.7 million (bottoms of page 3-13) over the decade from 2004 [FY2005 CAFR, large file] to 2014 [FY2015 CAFR, large file]. The big jump in free cash flow from water & sewerage charges occurred in 2014 as a consequence of Flint River sourcing. Flint only had to pay the DW&SD pirates for water up to April 25th in 2014. Annual free cash flow from water & sewerage charges in 2013 [FY 2014 CAFR, large file] was only $ 9.4 million when they paid DW&SD all year. Why Flint resourced to the Flint River in one number: $ 19.3 million more in cash flow. And most of this $ 19.3 million is now gone with the return to DW&SD water. We will know how much gone later this year.
That $ 28.7 million in free cash flow during 2014 was a 77% markup on actual Flint water & sewerage costs. Only $ 7 million of it was used for infrastructure, mostly to prepare for the now abandoned Flint River sourcing. Only $ 2 million of it was used to pay off water & sewerage debt. The remaining $ 18.5 million was used by other Flint city departments and applied to other Flint obligations. That $ 18.5 million dollars became 22% of all Flint City revenues. Greater than any other source of revenue, greater than income tax revenue, greater than property tax revenue, greater than State revenue sharing, greater than Federal revenue sharing. That $ 28.7 million dollars was the only reason Flint was able to exit emergency management. That and a $ 65.3 million theft from restatement of Flint’s water and sewerage enterprise fund net positions, from their 2014 CAFR to their 2015 CAFR (compare ending 2014 to beginning 2015 net positions on the bottom of pages 3-13).
Let’s consider a counterfactual. Suppose that Michigan’s bureaucrats and political leaders were actually competent and, under the unrelenting scrutiny of a watchful press, arranged for proper chemistry controls of Flint River sourced water. No Flint residents were exposed to lead, no one died from legionella pneumophila, and Flint residents sang the praises of their new water. Its tough to ignore recent history, but do so for a moment so we can explore a very important question:
Would the financial reorganization of Flint under its popularly elected politicians and emergency managers have worked?
Truthfully I have never eaten at the Swiss Inn in Lake George, Michigan, so I have no idea of how accurate some of the statements I have found are.
But I had to find out more about the restaurant owned by a man who commented on one of my own statements. In response to it, and to a recent Capitol Confidential article, he says with his own words:
“As a restaurant owner in northern Michigan, I would disagree with you! The last time the minimum wage went up (30%) I raised my prices only 15 cents to make up for the difference. What we (Small Businesses) need more than ANYTHING, is more spendable income in the hands of the people who spend it, the Middle Class. Giving me and other businesses a tax break did very little to help me. Adding a NEW tax actually took money OUT of our fragile economy, hurting it more. The ONLY thing that would cause me, (or ANY small business), to hire someone, is if there is an increase in the demand for my product or service. I believe the increase of minimum wage will help everyone, putting more money into the economy will not only help the struggling workers, but it will also help the struggling small businesses, and an increase in taxes for the State. Everyone wins!!! As far as a tipped employee goes, the smaller tips you claim will happen, will be taken care of by the $7.60 per hour they will be gaining!”
MDOT’s latest effort at abject buffoonery? Click HERE. What crap. Did you count how many union scale jagoffs were standing around with their prevailing wage shovels in their hands? Ya, I did too. Look, it’s no secret that the real waste within MDOT is the layers of bureaucrats who are more interested in their job security than with accountability of our tax dollars squandered so as not to upset organized labor. What has been The Left’s agenda? Raise minimum wage. Who benefits most from raising the minimum wage? Public sector unions. What has MDOT done to modernize its operations? Not a damn thing other than make damage control propaganda wasting more of our tax dollars instead of fixing roads.