Business and industry – Page 16

Engage the purple shirts (and release the hounds!)

In the wake of the Madison showdown, the Service Employees International Union (affectionately known about these parts as the purple shirts) is holding a number of local rallies to show their support. I don’t think they have the cajones to show up in Salisbury, so they’ll be in friendlier Maryland territory – Annapolis.

The details are as follows (h/t to Ann Corcoran and Potomac TEA Party Report):

Time: 12:00 PM (Tuesday, February 22)
Location: Lawyers’ Mall, Maryland State House
Address: 100 State Circle – Annapolis, MD. 21401

What a way to sully George Washington’s birthday – a real group of freedom fighters would be on Governor Scott Walker’s side, not backing Wisconsin’s ‘cut-and-run’ Democrats. But we know how the SEIU rolls, and it wouldn’t surprise me in the least to see a few of their toadies in the General Assembly sneak out and show their support. (It would be even cooler for GOP members to mount a counterprotest – like these union thugs would vote for Republicans anyway. Our job is playing to the real people of Maryland who believe unions should be kept in check and do what they are supposed to do – organize workers, not play political games.)

As of this moment, the SEIU website shows 26 rallies in 22 states – mainly those where union presence is heaviest. A notable omission from the list is Virginia. Delaware isn’t on the list yet, either; then again, Annapolis isn’t all that far for them.

This would be a great opportunity for those TEA Party activists (well, the ones who aren’t trying to make a living like yours truly) to bring your cameras and verify that these purple shirts act with decorum and respect for opposing views. Yeah, like that will happen – the 1-2″ of snow predicted for Tuesday morning will arrive too soon to cover the mess they’re sure to leave given the track record of lefty protests. It also may give the Anne Arundel County schoolteachers some cover if school is cancelled due to the wintry conditions. (Saves them from calling in ‘sick.’)

In the meantime, I stand with Governor Scott Walker. Maybe we’ll find one of those cut-and-run Democrats hiding in Annapolis at the rally – if so, make sure he or she is returned to Madison, Wisconsin.

The war on rural Maryland

In response to legislation prohibiting septic systems in rural developments, State Senator E.J. Pipkin and Delegate Michael Smigiel created a website called The War on Rural Maryland.

It’s no secret that people in Maryland care about Chesapeake Bay. I’ve noted before that any legislation deemed to be “for the Bay” would likely pass in Maryland regardless of its merits – even the mythical Chesapeake Bay Legalization of Murder Act of 2011 might get the support of rabid environmentalists if they could kill off the right people – after all, it’s “for the Bay!”

(For all you high-strung progressives and PC police types, yes, I’m only kidding. Sort of. Somewhere in this state I’m sure a Jared Loughner type is lurking and he or she may just take up that type of offer if presented.)

But when septic systems in Maryland create a relatively small portion of the problem, the effect on rural development may be akin to taking a sledgehammer to an ant. It’s not like Wicomico County is growing by leaps and bounds, despite what the Census may have said – I’d wager most of that population growth occurred before 2006. Since that point, planned residential developments such as Aydelotte Farms and the Village at Salisbury Lake (a.k.a. the Old Mall) have built up slowly, if at all. The building slump also affected commercial plans such as the Hobbs Road development I was involved in. Overall, the number of building permits issued is well off its mid-decade peak.

While it’s true that other counties in Maryland may be developing faster, the idea of the ban is simple and can be summed up in two words: “smart growth.” (To me, it’s more of a “so-called” concept because who’s to say what is smart for us here on the Eastern Shore? Certainly not some faceless planner locked in an Annapolis or Washington office building.) In other words, under “smart growth” you will develop property where we (the government) tell you to, and if you happen to own property outside that area you may want to build on sometime down the road, well, you’re shit outta luck. We need to preserve those wildlife corridors and wetlands for mother Gaia’s creatures.

The state moved in this direction several years ago with the “flush tax” and accelerated the process last year by requiring nitrogen removal on new septic systems – but they only could cover a portion (if any) of the additional costs incurred by hapless homeowners forced to switch to or install these units.

A hearing on HB1107 is slated in front of the Environmental Matters Committee on March 11 at 1 p.m.

But even if we can stave off the ban for a year or two – you know O’Malley and his environmentalist buddies are going to keep knocking on this door until we finally tire of the fight and relent – we Maryland drivers also have the prospect of an additional gas tax hanging over our heads.

Now, the argument on this one is that we’ve not raised the gas tax in nearly twenty years and we need to make sure there’s money in the Transportation Trust Fund. (Of course, that’s until the fund is raided by a certain governor – who shall remain nameless – to balance his budget.) One bill which would make the pilfering more difficult but raise gas taxes 10 cents a gallon now AND provide for automatic increases in the future was introduced by Western Shore Democrats in the House and Senate. Another bill which would force Eastern Shore drivers to subsidize mass transit used across the bay via a 4% sales tax on gasoline is SB451. The House bill will be heard March 1; the Senate bills on March 9.

In general, we on the Shore drive a lot. It’s not uncommon for a resident to put 20,000 miles a year on their car or truck and if they get 20 miles from a gallon of gas the extra dime a gallon would cost them $100 a year. That may not seem like a lot, but for those who make their living on the road and pile on even more mileage it’s a serious dent placed on their finances. This provision also puts in place a permanent tax hike each year, meaning the state takes more and more out of your wallet.

If I didn’t know liberals as well as I do I’d be perplexed that they can back the state getting another dime of pure revenue out of a gallon of gas through taxation yet bitch and moan about the oil companies who actually do the work of extracting, refining, and delivering the gasoline to the pump for your use making a nickel a gallon profit. But I know them so I just shrug my shoulders at their hypocrisy. I’m used to it.

(And yes, I bitch and moan about the state of the roads, too. My suggestion for improvement: stop subsidizing mass transit that no one rides and start filling potholes. Oh, and get rid of that “living wage” crap while you’re at it so we can save a little bit on road construction labor costs.)

But if you’re tired of the state always trying to take, take, take, you may be interested in a brand new website called stopthegastax.com. (Frankly, I’m amazed they got the domain name considering there’s always someone in some state trying to gouge motorists.) There’s still a little construction to do there but you can sign a petition against the gas tax and vent your frustration.

Instead of raising the gas tax, the alcohol tax and income tax rates for the upper crust, why not prioritize what we have and live within our means for awhile? That’s what the private sector has been forced to do.

Tax, tax, tax, tax, tax!

To some, the size of government simply can’t be large enough to redistribute wealth to those they consider “disadvantaged.” Take the group Progressive Maryland, which I prefer to refer to as Regressive Maryland. In either case, they’ve once again combined with the supposedly nonpartisan Maryland Budget and Tax Policy Institute to produce their annual “State of Working Maryland” report describing their wet dream of social architecture and handouts to those they deem deserving.

In their report, they gasp that, “(t)he danger Maryland faces is that most of the gains of the economic recovery will flow to the wealthiest Marylanders.” Isn’t that generally the way those who assume the most risk by investing capital are rewarded? Meanwhile, they also complain that, “(m)ajor deficit reduction should not be on the table until the recovery is firmly on track, that is, until unemployment has dropped and is on a downward trajectory.” So we are supposed to place our children and grandchildren into deeper debt because economic conditions aren’t very good? Well, the problem seems to be that our vast debt is leading to the economic doldrums, folks! How much money shoveled at the problem is enough?

Among the number of charts and graphs enclosed in the report, I found the “Maryland Job Count in Selected Industries” bar chart on page 9 fascinating. It seems Maryland’s growth industries over the last three years are (wait for it) education, health services, and – of course – government! Conversely, those taking the biggest hit over that period are manufacturing and construction. Isn’t that what they want, more government workers? This should be paradise!

But the last five pages of the report are where the rubber meets the road – they need to pay for their grandiose schemes somehow. Their wish list includes digging into the pockets of Maryland people and corporations doing business in the state to the tune of nearly $3 billion. (Consider that the state’s portion of our annual budget – not including monies passed down from the federal government – runs around $13 billion.) Apparently the pointy heads who created this report feel that working Marylanders need to cough up a little more.

These are some of the taxation schemes they’re trying to enact, with the amount they are hoping to raise:

Extend the ‘millionaire’s tax’ which expires at midnight tonight for another three years, to raise between $70 and $90 million. That is, it would if any millionaires remain in the state – many have already fled to more tax-friendly places.
The ‘dime-a-drink’ tax on alcohol. They actually quizzed candidates on this one; unfortunately, those who favored raising the tax tended to win at the ballot box (many were unopposed.) So those who like their Bud longnecks, their glass of white Zinfandel, or shot of Southern Comfort will be helping the state supposedly raise over $200 million. Way to tax the poor and middle class.
Raising the gasoline tax by 15 cents a gallon to raise $450 million. The idea is twofold: get people to drive less and perhaps clamor for more mass transit. That’s not working here on the Shore; we just take it in the shorts. The same people who scream about oil companies making maybe 4 cents a gallon profit are the ones who want to deduct an extra buck or two on each tankful (on top of the 23 1/2 cents a gallon they already charge) because it’s been 18 years since the tax was raised. So? For some people it’s been 18 years since they could afford a new car, and this won’t help them a bit.
Combined reporting for corporations will supposedly raise between $92 and $144 million, based on 2007 numbers. Of course, the numbers for 2008 weren’t as favorable for the group so they didn’t use them, claiming the year was an anomaly because it “reflects a low level of profits at the depth of the recession.” Well, guess what – driving business out of the state is going to keep us in a recession. If Maryland adopts combined reporting, business will find another loophole. Trust me on this. Even the Maryland Business Tax Reform Commission, a body mainly hand-picked by the Governor and other Democrats, couldn’t support this turkey.
And now the biggie – expand the scope of the sales tax to include more services, for “Maryland taxes 39 of 168 services included in FTA’s survey of all states.” Yes, only 39 of 168 – that simply won’t do for them. This could raise up to $2 billion. Of course, they’re concerned about “(t)axation of basic household services (which) would disproportionately burden low-income households” but obviously they don’t give a crap about the average working family who will get hammered every time they order a pizza or pay their cable bill.

Of these five, I give the best odds of General Assembly passage to the ‘dime-a-drink’ tax, followed by the ‘millionaire’s tax’, expansion of the sales tax to services and the gas tax increase. I think the General Assembly will heed the advice of the MBTRC and not consider the combined business tax this year, and the gas tax will be a tough sell because pump prices have surged dramatically since this summer. This is confounding experts who usually see prices decline once the summer driving season ends and refineries can revert back to a less expensive blend of gasoline that’s not formulated to fight smog.

Given the 133-55 advantage Democrats have in the General Assembly and our re-electing a governor who won’t say no if the General Assembly passes a tax increase, it’s pretty much a fait accompli we will be stuck with at least one of these increases, if not more. That’s why elections matter, and the fact that many Free Staters are tapped out doesn’t matter to many of those who were elected last month.

It’s not the tone I would have preferred to end the year with, but things are what they are. Since this is almost certainly my swan song post for 2010 (unless something really major happens and I can somehow update from my phone) I hope you all have a happy and prosperous new year in 2011 – despite the best efforts of liberals everywhere.

What’s overlooked in the top story

Today it was announced that the Gulf oil spill, better known around these parts as the Deepwater Horizon disaster, was voted the top news story of 2010 in an annual AP poll of editors and news directors.

But there’s an overlooked element of the story that may last longer than the effects of the light sweet crude which spewed from the ruins of a wellhead (and has mainly either dissipated in the seawater or been removed as tar balls onshore.)

It was the perfect excuse for the Obama Administration to place a lengthy ban on giving out new permits for offshore drilling and then rescind the plans for new drilling leases in offshore waters. In turn, that’s costing our economy thousands of jobs, as Jack Gerard of API points out:

“The oil and natural gas industry is a reliable vehicle for growing the economy and creating good-paying jobs. This decision (to cancel new offshore leases) shuts the door on new development off our nation’s coasts and effectively ensures that new American jobs will not be realized. It will stifle investment, deny billions in revenue for critical government services and increase our dependence on foreign energy sources.

“The oil and natural gas industry is committed to safe and environmentally responsible operations, and both the industry and regulators have added new safeguards to ensure such operations. This reversal on new lease sales off America’s coasts comes on top of a de facto moratorium, which has all but stopped new drilling in the Gulf of Mexico.”

Obviously the story focused on the economic damage to the Gulf seafood industry. Indeed, it was a very tough blow to their finances but for many assisting BP or filing claims for damages with them, they were made as whole as possible. Yet taking away the livelihoods of thousands of oil company workers didn’t seem to be nearly as high on the priority list, and little attention was paid to their demands when they had their own “Rally for Economic Survival” back in July.

Yet where the energy industry is allowed to do its job, there are jobs being created. An oil boom in, of all places, North Dakota has led them to the lowest unemployment rate in the nation (3.8% in November) and the state is doing its best to encourage the Williston Basin boom. And private industry is following suit – see how this works?

On the other hand, so-called ‘green’ jobs tend to be one-time production jobs for the components and limited-duration construction jobs for installations. Once you set a windmill or solar panel, it’s not going to create any new jobs.

It seems to me that the government is quite happy to create or save jobs in the pencil-pushing field, but when it comes to promoting employment by making stuff and extracting natural resources within our borders they seem to fall short (even if they have the prospect of being their precious union jobs.) We’ve lost something around 8 million jobs since the employment peak a couple years back, and while the energy industry might not be able to bring them all back we certainly can make a dent in the number.

That is the story which needs to be reported. Spread the word.

A response on Station 16

It took a few days to come to fruition, but the Station 16 controversy isn’t dead yet – at least not herein. This was a comment (and response) that deserves a post since it would otherwise be buried – and it comes from Joe Albero:

Michael, I’ll try to keep this as brief as possible. It should be known that my original offer of $250,000.00 was well before they created a RFP. In fact, it was because of my offer that they came up with the RFP to assure Joe Albero couldn’t purchase the property, even as a highest bidder. They did the same thing wien they dismantled the Horse Patrol and I offered to buy the horses, if you’ll recall. I offered to buy a fire truck for $5,000.00 with a blown engine, they sold it to a dealer for $2,500.00 instead. Nevertheless, when they created the RFP I stood in front of the Mayor and Council and asked, does this sale INCLUDE the other two lots going to the river. Gary Comegys immediately said, no, are you crazy. He then, (at a different council meeting) said, I wouldn’t sell Joe a damn thing, meaning the Fire Station. Considering the other lots weren’t going with the sale and Comegys stating he wouldn’t sell me the building, there was no reason for me to move forward with a RFP to purchase a piece of property the City was refusing to sell me. Each one of my offers was with no contingency and each check could be cashed immediately. We had already known that Gillis didn’t have an agreement with UMES and that is why he exposed such the night of the meeting, we were on to him and he knew it. My challenge to sue the City is real. The taxpayers are being screwed out of a very valuable piece of property/properties. As you mentioned, I do own a building outright on the Downtown Plaza. If I purchased this property, it too, (along with 18 other properties I own in Wicomico County) would be owned outright. My original proposal, (again, before there was ever a RFP) was explained to the City Council to be an exact replica of Station 7 in Pittsville with the exception of it being an All-You-Can-Eat Seafood Restaurant. Kitchen in the basement, dining on the first floor and a bar on the upper floor. I still to this day have numerous local Doctors who would dive into investing along with me to make this a reality as partners. The restaurant would employ some 70 people and the impact economic wise on the Downtown area would be incredible, while not really competing with the other restaurants Downtown. I say that in the sense that it would not challenge their menu. So please recognize my offer as good clean business. It would not sit empty and it would go under construction immediately. I’d like to say this as well. I like Palmer Gillis and like Palmer, I’m all about getting a really good real estate deal. If he gets the property, well, I hope he does exactly what he says he’s going to do but before they even get started it has been proven his original proposal has failed and the City Council should immediately drop the deal until they see him under contracts with someone willing to do what they proposed. However, that’s not how the City of Salisbury politics works. One final comment. The City should keep the property and forget my offer or Palmer’s. Louise Smith making remarks about how the building will fall apart, PLEASE! Perhaps she should take a walk down the Plaza and look at at least a half dozen properties sitting vacant for the past ten years, there’s nothing wrong with them and if there was Code & Compliance would be all over them. Some of us bought our properties for a great price and we’re sitting on them until the real estate market has a come back. Until then, who cares if the building sits empty, that’s our problem, not theirs or anyone else’s. Since when is everyone else so worried about my investment or anyone else’s anyway. Thanks for letting me share my side of this story and Merry Christmas Michael.

Yes, it was all one paragraph; I didn’t change a thing. Here’s my response.

Well, since this is your side of the story the questions I have are thus:

First, if you had the money and “numerous local Doctors who would dive into investing along with me to make this a reality as partners” why didn’t you come in as a silent partner in an LLC? If you had a good RFP proposal that Council then rejected it simply because you were involved, then perhaps you would have a leg to stand on in court. Now, I’m no lawyer (far from it) but it would seem to me that you couldn’t prove discrimination simply based on an out-of-context remark by one Council member. If your proposal was properly submitted and that good then Comegys gets outvoted 4-1.

As it stands, the original proposal you outlined and the one Coastal Venture Properties presented are essentially the same aside from the usage of the upper floor (CVP proposes apartments while you propose a bar) and the exception of CVP following through the process where you did not. Your newer proposal would involve office space, which brings me to my other question.

You claim you own almost 20 properties in Wicomico County, a couple of which I’m familiar with – besides the occasional travel by 300 W. Main, I patronize Station 7 on a semi-regular basis so that adjacent property is most familiar to me. I would hope that isn’t representative of the state of your properties as a whole, but the ones which are most ‘famous’ are unoccupied. Seems to me you could use your existing downtown building for the office space for your ‘media empire.’ (I guess you already do since some of your videos were taped there.)

If you had a more successful record in refurbishing and getting tenants for your buildings, perhaps Council would look more favorably upon your ideas.

As for the Station 16 property, it will obviously be up to the citizens and City Council to hold them accountable for what they do. Granted, we don’t have a very good track record but there was a process in disposing of the property and it was done by the book, unless you wish to attempt to prove otherwise in a legal venue.

Merry Christmas to you and yours as well.

I suppose Joe is one of those occasional drive-by visitors so it took him a few days to comment. While I’m glad he gave his side of the story, my common-sense advice is to hope Palmer Gillis and the CVP group can get right to work on restoring the building and perhaps bringing some life to an otherwise moribund downtown. Save your lawsuit money, Joe.

And perhaps I’m opening a giant can of worms by bringing this further into the light, but I thought the response deserved more attention than it probably would have had being buried under nearly a week’s worth of posts. If he’s going to get involved in the discussion I’d welcome comments on what he has to say in this forum.

No business like snow business

I was having a discussion with a small business owner friend this afternoon with the obvious topic of conversation being the white shroud of death overhanging our area. (I realize that, growing up in northwest Ohio, a 2″ snowstorm is much more common to me so I try to account for the local hypersensitive attitude toward winter weather. But I can’t always cut the local natives some slack.)

Anyway, his complaint was that the snow would not just kill his business today but that their likely closing tomorrow will also hurt him. Yet those who actually work for the school district won’t actually be hurting since they are paid whether school is in session or not.

Something about the conversation got us briefly onto the “broken window” theory – an axiom which contends that breaking a window would lead to positive economic activity because the homeowner would have to either purchase the supplies to repair the window (making a shopkeeper more wealthy) or hire someone to fix it (giving the service provider a job, who in turn invests the money in his family.) Obviously a snowstorm puts some people to work who wouldn’t otherwise be needed – private contractors who plow out driveways and parking lots, for example.

Of course, the problem with that theory is that the destruction of the window and repairs needed prevents the homeowner from addressing other needs with his money – instead of the cash going toward a new, more energy-efficient refrigerator or another item he would like to purchase, he’s simply replacing the investment to restore its full value.

In other words, like the ‘benefit’ to local snowplow operators measured against the lost productivity that the unexpected closing of school tomorrow due to the storm will present, the positive of the homeowner’s investment in fixing the window is only – at best – equal to the negative of having to make the repair. It would be like telling the man who just had the tornado blow through and destroy his farm he’s lucky because he now has the opportunity to build a better one; the problem is that everything he had of worth is gone with the storm.

All this reminds me of the specious argument about extending unemployment benefits as a boost to the economy. We are told that these benefits are good because they enable those who aren’t working to spend that money on their necessities and boost their local economy. On the surface this is true, but there’s nothing of value being created by those who are unemployed. Listen, we get angry when we hear about the auto workers who were paid by their employer to sit home during the occasional necessary shutdowns so why shouldn’t we get angry with this argument as well?

While I’ve been in the working field for most of the last 25 years, there have been three occasions where I was laid off long enough to collect unemployment. Still, I would wager that the premiums my employers paid have more than offset the few thousand dollars I’ve collected. And the system was designed as an insurance policy, with premiums and benefits calibrated to limited and infrequent stretches of joblessness. With me, it worked as it was supposed to.

But states had no expectation of keeping people on the unemployment rolls for nearly two years (and counting), so it’s no surprise their systems have all but failed. Now Uncle Sam is the one stepping in to pay, and it’s yet another case of the federal government bullying their way into state-level affairs. Last year Maryland accepted an infusion of federal cash to its unemployment fund in return for making the changes to their rules desired by the federal government.

To be gainfully employed, whatever your profession, generally means you are a net asset to the economy. The problem with the statist’s approach, embodied by their continual call for extending unemployment benefits, is that nothing being “added” to the economy comes from value – either the money is being borrowed or printed. Aside from a few people operating a printing press and the pencil-pushers needed to make sure the unemployed jump through all the hoops necessary to keep collecting checks ad infinitum, there’s nothing of value being produced.

As a society, it appears we are happy to break windows in order to put people to work. Personally, I’d rather allow those who produce to put their money to work as they see fit and not throw it down the rathole.

But then I’m the guy sitting here watching the snow fall – what do I know?

Another falls for the ‘green energy’ scam

And to think, if I didn’t have Martin O’Malley as a Facebook friend I wouldn’t have noticed this. We’ll see how long that lasts before I’m defriended! Then again, just because I didn’t vote for him either time doesn’t mean I shouldn’t have a say in state affairs, particularly when a dose of common sense is needed.

It all stems from an article by Erin Cunningham in the Gazette detailing a Montgomery County resolution on wind turbines. The Montgomery County Council (all Democrats, of course) unanimously approved a measure calling on the Maryland General Assembly to “pass legislation requiring the state’s Public Service Commission to direct public utilities to enter into long-term contracts for offshore wind power.”

Gee, a little more government interference in business – just what the state needs! </sarc>

Needless to say, Governor O’Malley was thrilled about the news and asked a question on his Facebook page:

I believe that wind power and other alternative energy sources will help our state move forward in a sustainable way. Do you think it is important that we invest in clean, green sources of energy?

After reading about 50 or so mostly deluded sycophants and hangers-on, it was time to set them straight as I often like to do.

Sure, the wind blows a nice, steady speed all the time and the sun comes out 12 hours each and every day. Wait, you’re telling me that’s not true?

There’s a reason we depend on coal and natural gas to create the electricity we need – they are both RELIABLE sources. And, contrary to popular belief created by those with an agenda in both the press and in government, both are in plentiful supply. In fact, there’s a nice supply of natural gas locked under the hills of far western Maryland.

Instead, your administration would rather shake down energy producers and distributors with a phony carbon-trading scheme (RGGI) that simply serves as a device for wealth redistribution while propping up the ‘green’ energy industries with a subsidy to artificially make these other sources come to a competitive price point.

In a time where our budget needs to be prioritized and the burden on job producers needs to be lightened, these so-called ‘investments’ probably aren’t the best use of tax dollars. If the person from Dorchester County thinks wind power is that important and would be such a good investment they should be happy to pony up $40,000 and not rely on the state for a handout.

It’s also worthy to note that Cunningham’s article says Montgomery County gets 25 percent of its electricity from wind power. Perhaps someone should compare price and verify if that’s a prudent use of tax dollars?

I have little objection to the state making an effort to assist local property owners who wish to use alternative sources of energy (although I wouldn’t consider it a funding priority in these lean budgetary times) but I recall one expert in the field who would prefer to streamline the process and invested his own funding before getting a dime back from the state of Maryland. The state is in the position to make it easier and less expensive if they so desire.

My larger objection comes from the state mandating how the energy required to produce electricity needs to be harnessed. There are two good reasons we rely on burning coal and natural gas, as I alluded to in my comment: they are relatively inexpensive, quite efficient, and sources are fairly reliable. (They would be moreso if Washington scrapped its wrongheaded approach to energy exploration.)

Seems to me the usage of windmills as power providers in rural areas ended over a half-century ago once the government decided to force utilities to bring electricity to sparsely populated areas and farmers found being wired into the grid to be much a more reliable means of power – so the government getting its nose under the camel’s tent is nothing new! Where were the environmentalists objecting then?

I guess everything old is new again. In the meantime, how about terminating the program of wealth transfer and allowing instead utilities to invest in stupid stuff like improving infrastructure and building new power plants? Now THAT would be moving Maryland forward!

The fate of Salisbury’s old Station 16

I figured it would shake down this way: another 3-2 vote to approve – Comegys, Shields, and Smith approve while Campbell and Cohen oppose.

Tonight Salisbury City Council will discuss the question of what to do with their former downtown fire station. It’s a conundrum which would try the patience of Job, and the discussion is heated due to a number of vested interests at stake.

The city only has to consider one proposal, since a second one for the property fell through. It’s from an investor group known as Coastal Venture Properties LLC, and they are offering the city $100,000 for the property – according to land records, the building is 7,680 square feet on a piece of property roughly 2/5 of an acre, assessed for taxation purposes at just over $400,000.

Coastal Venture is planning to use the lowest floor for a restaurant, with four or five apartments above. Speaking on their behalf via a letter to the Daily Times, Bradley Gillis states the case that “(o)ur offer of $100,000 reflects only the accusation cost; we will spend hundreds of thousands of dollars and completely redevelop the property into a historical, significant downtown destination.” In addition, Gillis points out, this will be a “regional self-supporting hospitality destination” and place a property back on the tax rolls.

But another group of business owners contend “(t)he buyers have failed to provide a clear picture of what they are going to do with this landmark structure.” The Local Owner Restaurant Association (LORA) objects to what they call a giveaway.

In an e-mail to supporters they claim that much of the study information used by Coastal Ventures is over thirty years old and lacks a current appraisal to reflect declining real estate values, nor have the city’s taxpayers been asked through a referendum. They suggest a better use of the property would be as “a firehouse museum, city historical site, or in the future, perhaps a part of the Eastern Shore Regional Library.” But their true objection?

We would not like to see the city of Salisbury become involved in enabling a venture group to buy a piece of property at far below its market value in order to assist that group to create a facility designed to undercut existing businesses within the city. Unfair business competition subsidized and assisted by the city cannot be tolerated by LORA, and the concept or execution of such activity should not be tolerated by any citizen of the city.

In addition, the restaurant Coastal Venture envisions would serve as a training ground for the University of Maryland – Eastern Shore’s culinary program, giving these trainees real-life experience but likely undercutting the costs incurred by LORA members. Whether that would be subsidized by the city remains to be seen, but LORA may have a case regarding unfair competition.

Complicating matters still farther is the renewed bid by Delmar blogger and political gadfly Joe Albero, who believes the property could be a office suite atop a fire museum. Purportedly he offered $250,000 cash for the building prior to the city declaring it a surplus property, but today he renewed his offer at the price of $110,000 and threatened to sue if the city accepts the Coastal Venture Properties bid. Albero already owns a building in the downtown area.

Generally I’m in favor of shifting property off the non-taxable rolls and putting it to productive private use. And while I’d prefer the price be a little bit higher and that the purchaser assumes a little bit more of the risk, they are taking some significant chances here. While LORA sees this as competition, this new venture would actually face a number of competitors already in the downtown area including Escape, Market Street Inn, Flavors, and Brew River, among others.

Unfortunately, as we saw with the Civic Center parking lot controversy earlier this year, government has a penchant to buy high and sell low. But rather than the building sit idle and use taxpayer money, on balance this is probably as good as the city will get for the property. Certainly I don’t like the idea of giving this enterprise an unfair advantage of using UMES as inexpensive labor, but on the other hand the expertise these students gain could benefit LORA members in the longer term. Meanwhile, the remining downtown restaurants will now at least have the luxury of knowing they have competition coming so they can work to improve their facilities, menus, and service.

As for Joe Albero, all he had to do was put together his proposal for consideration. I don’t think the city of Salisbury wants the building to simply go to the highest bidder – there should be a development plan and strategy for investing in the facility. Waving around a check for $110,000 or even $250,000 is great for now, but what if the building sits empty for another half-decade because his dreams of an internet empire don’t come to fruition? If there’s a more competitive arena than the restaurant business, the internet may be the one.

So we will see what happens tonight – chances are the Coastal Venture proposal will be accepted, LORA will be left fuming, and Albero will run to the nearest courtroom to plead his case. All this to divest itself of a small parcel of land with a building.

Postscript: I have been told that this deal would include a pair of city-owned lots on the river side of East Market Street. While the assessment figure is correct for the 115 South Division Street lot (Map 107, Parcel 882, 16,640 square feet with a 7,680 square foot building) it doesn’t take into account the vacant lots known as 201 South Division (Parcel 883, a 14,365 square foot lot assessed at $172,300) or 300 East Market (Parcel 884, a 4,761 square foot lot assessed at $57,100.) But the question would be whether these are buildable lots anyway given Maryland’s highly restrictive coastal regulations – for example, a 100 foot waterfront setback would render these lots essentially useless.

A scam raising your bills

It’s been about two years since Maryland utilities were forced to participate in the scam better known as the Regional Greenhouse Gas Initiative. It’s a scheme which has transferred over $139 million away from the utilities and, to some extent, into state coffers for redistribution to low-income Marylanders.

But, as an investigation by Mark Langerkvist at the New Jersey Watchdog website reveals, while progress has been made toward the stated goal of reducing carbon emissions the auction and carbon market has had little to do with it! Instead, their internal probe revealed that the carbon cap is much higher than actual usage; thus, it’s projected that the per-ton price will be far less than thought and has already plummeted to half its 2009 peak.

So why is the carbon market in a tizzy? For one thing, utilities have been relying more and more on natural gas to generate electricity. Not only did the price for natural gas become much more favorable, but natural gas is a cleaner burning fuel than coal as well – thus, lower emissions. Moreover, general demand for electricity has dropped 7% since the calculations were made. The market demanded more efficiency and businesses made do with less as a cost-saving measure.

All this seems to come as a shock to everyone except those of us with common sense. Yet I don’t see the state of Maryland saying to the utilities and other carbon allowance purchasers, “oops, sorry, you’re reaching these (artifically based) goals without our help so here’s your $139,117,061.91 back.” Instead they’re saying, “suckers!”

And since the Democrats were handily re-elected earlier this month, even that realization won’t end the open season on utilities and their ratepayers. They’ll still insist that we as a state would be better off depending on more expensive (and less reliable) ‘alternative’ sources like wind and solar power – both great ideas except the sun only shines an average of 12 hours a day (when it’s not obscured by clouds) and those days you really want to crank up the air conditioning in the summer tend to be those days where the wind’s not blowing!

(Nor need I mention that the infrastructure to move that juice around isn’t exactly handy, and we’re already staring at an issue with that over the next few years on land, not to mention underwater.)

There has been talk in the past (particularly from New Jersey) about dropping out of RGGI, and Chris Christie would likely be the only governor of the ten involved with the cajones to do so – assuming such legislation could pass since his state likes the cash just as Maryland does. (Maine and Pennsylvania have both elected Republican governors and legislatures, so they could follow suit.)

In a saner legislature, Maryland would follow suit and withdraw from this group which only seems to be effective at wealth transfer and worsening an already poor business climate. Instead, conservatives have far too few seats in the General Assembly so we know the fate of such a bill before it’s even written.

However, that doesn’t mean Maryland Republicans shouldn’t try to overturn legislation which was based on the faulty premise of so-called ‘global warming’ to begin with and which amounts to a hidden tax on utility ratepayers – even if the committee chairs lock the bill in their desk drawers. (Just get a hearing and committee vote out of it, or better yet make withdrawal a floor amendment the next time there’s an energy-related bill. Putting the Democrats on record is what counts here.)

It’s part of the truly needed reforms the state has to undertake to make it a job-friendly zone, and right now the top three issues are jobs, jobs, and jobs. Perhaps the state won’t ever cash in on the possibility of offshore oil or the natural gas that’s likely sitting below its western panhandle, but it can reverse its most egregious laws and make life a little easier for working families.

Postscript: This American Thinker piece by Jeffrey Folks is well worth the read. It nationalizes what we have done as a state.

O’Malley under pressure to drive jobs out of Maryland

I don’t need to be as shrill as the people at Progressive Regressive Maryland who want to drive more jobs out of the state by adopting combined reporting for business taxation purposes.

In the category of it’s always advantageous to see what your enemy is up to, I got this advisory from them last night regarding today’s meeting of the Maryland Business Tax Reform Commission:

Gov. O’Malley’s Under Pressure from Out-of-State Corporations to Save Their Loophole to Pay NO TAX…CALL HIM NOW…to “Save, Don’t Cave on Combined Reporting; Md. Needs the Hundreds of Millions!”

Tuesday 2:00 pm, The Maryland Business Tax Reform Commission meets to decide the fate of combined reporting, a vital tax-fairness reform Progressive Maryland has fought for as a high priority for years.

Two weeks after Maryland voters re-elected Gov. Martin O’Malley, with significant help from progressive Maryland and allies, he is under great pressure from politically powerful corporations based out-of-state, who pay NO STATE INCOME TAX, to kill the one vital reform that would close the unfair loophole that lets them get off free.

Call…and leave a message – “Don’t cave to corporate lobbyists.”

In the past, Governor O’Malley has been a vocal supporter of combined reporting, a reform that would help create a level playing field for Maryland businesses trying to compete with big multi-state corporations and bring in hundreds of millions in lost revenue for our schools, health care, and other vital services.

But right now, corporate lobbyists are trying to get Governor O’Malley to do their bidding and stop this reform…and we hear that it might be working. O’Malley’s appointees on the commission will decide whether to follow the lead of 23 other states and recommend combined reporting to our legislature, or to cave in to corporate pressure and let it die in committee.

Taken another way, we can follow the lead of 26 other states (most of which are probably employing a much higher percentage of residents in the private sector than Maryland is) and scrap the idea of combined reporting.

It’s also worthy of note that the Progressive Regressive Maryland says O’Malley favors this idea. Yet he’s politically savvy enough to figure out that it’s a loser if he pushes strongly for it himself, so he has his own version of a “blue-ribbon commission” to push the blame to if they recommend the tax code change (which they will) and it passes the Democratic-controlled Maryland General Assembly (which it probably will since the next election is a safe distance away.)

And it’s a funny thing about the projected “hundreds of millions” in revenues the group claims is waiting to happen if combined reporting comes to pass. Seems like every time the state counts on revenue magically appearing thanks to a tax increase, the number comes up short – imagine that! How much of that revenue will be spent on additional unemployment benefits to help the workers tossed out of work by increasing the tax burden on certain employers?

Nor is it pointed out by our liberal friends that businesses do not pay taxes – consumers do. They’ll pass along the increased costs to their customers, making our state that much less competitive at the retail level. All around, this isn’t a smart idea to embark on such a course in a time of recession (and pretty dumb during times of plenty as well.)

So go ahead and call (410) 974-3901 – apparently it’s a line into the Governor’s office. Tell him combined reporting is a bad idea and a killer of Maryland jobs. Remind him the unemployment rate has doubled on his watch, so just because he made sure his voter base turned out doesn’t mean we the people of Maryland support making the state even more business-unfriendly.

Pusey: ‘The Lower Shore needs jobs. We deserve jobs.’

So what is she going to do about it?

It’s needless to say that she’s in favor of lowering taxes, as most candidates are this year. Reducing the sales tax seems to be the weapon of choice, but Marty would also like a “clear cut reduction in corporate tax rates.”

So far so good; this is a basic and solid conservative approach to drawing business in. But given Maryland’s long border with Virginia, part of which borders her district, she’s come up with another idea I wholeheartedly support and the remainder of the state should embrace.

It is crucial to the citizens of this state to bring labor reform to Maryland. Through the “right to work” legislation, there would be no pre-set wages, breaks, benefits, no Union requirements for dues, and local contractors can participate in State contracts. States that have passed this have better economic conditions and more jobs; that’s why it needs to be a top priority in Maryland.

Yes, Virginia is a right-to-work state. Courtesy of the National Right to Work Legal Defense Foundation, this is Virginia’s law on the matter. Most right-to-work states are in the South, though there are a string from Texas to North Dakota and into many of the Rocky Mountain states.

It also cuts the union influence. Do you think that AFSCME Local 1081 would have $3,800 to donate to opponent Norm Conway if there were right-to-work legislation? Or would AFSCME Local 3478 push $500 his way? Even out-of-town unions like UFCW Local 1994 from Gaithersburg ($2,000) or the SEIU out of Baltimore ($1,000) might become more interested in selling their advantage to prospective members than buying politicians. Fellow Democrat Gee Williams seems to be more the favorite of teachers’ unions.

If we are to re-establish any sort of manufacturing capacity in the district, it’s going to be helpful to present a package that attracts businesses to our state and region. Government can be of assistance in doing things they are supposed to do, like infrastructure (how about upgrading the U.S. 13 corridor to interstate level northward from Salisbury to a connection to I-95 near Wilmington?) but they can also help by eliminating costly regulations and making it fiscally feasible to locate a business here.

That’s the sort of thinking we need in Annapolis; right now there’s a shortage.

Questions I’d love to ask

Tonight Wor-Wic Community College played host to a District 37 and District 38 Candidate Forum sponsored by the Coastal Association of Realtors and Salisbury Chamber of Commerce. Tomorrow I’ll have more on what the participants said, but a major weakness in the format was soliciting audience questions but only using one (that I was aware of.) It’s too bad, because I had two I thought were good (although one was to be asked of a specific candidate.)

The first question I had was for Jim Mathias and relates to the post I did yesterday. Once again I’ll restate the quote he made in a full-color campaign mailing that arrived at my house:

In the State Senate, (Jim will) push to cut wasteful government spending and reinvest the proceeds in small business jobs and the Eastern Shore.

What I wanted to know from Jim (and certainly other candidates could have added their two cents as well) was what specific programs he considers to be “wasteful spending.” See, it’s one thing to talk in generalities but certainly another to actually propose things to be cut. For all the talk about how communities around the area have to live with less, we haven’t seen all that much effort to do so at the state level.

(Yes, I know some will beg to differ and claim state spending has gone down – but in real terms the budget’s gone up over the last four years, with the federal share increasing.)

The other question I wanted to ask came about as part of the discussion about lowering the state sales tax by a penny on each dollar. I took the figures from memory, but as a ballpark it should be close. Besides, the actual figures matter less than the principle.

The total annual revenue from our state’s sales tax runs about $3.7 billion, and the Eastern Shore is roughly 1/10 of the state’s population, so it stands to reason that 1/10 of the sales tax revenue comes out of here.

Let’s say we could finally place our Eastern Shore merchants on par with Delaware and eliminate the sales tax entirely in the nine counties of the Eastern Shore. I’m curious to see if these candidates would support that, based on the dynamic economic analysis that suggests the additional economic oportunities and jobs created by such a move would end up filling state coffers by more than the $370 million “lost.” Remember, Bob Ehrlich said that increased economic activity and slot revenues would make up the difference from rescinding the penny per dollar sales tax increase, so why not use the same theory here?

So for all of you would-be interviewers and forum hosts, here’s a couple of questions you can ask of the candidates. Tomorrow I’ll discuss this forum, which was way longer than promised but rather interesting.