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Monthly Archives: September 2015


Your grandma always told you to save money for a rainy day.  She wasn’t really talking about rainy days, but days when you had less or no income.  The press talks about the huge percentage of Americans that have little or no savings, and how compared to other countries, we are at a disadvantage during economic times.  A huge problem is that the same argument can be translated to governments, which must provide services, and often more services during economic downturns.  But if they have no savings, how are they to accomplish this?  They do not want to raise taxes and fees in down situations, so won’t the loss of services just make things worse?

A recent PEW reports suggests that states “had about half the reserves necessary to address budget gaps during the first year of the Great Recession.  The 50 states had about $60 billion set aside in the summer of 2008, but in fiscal 2009, budget gaps across the country totaled $117 billion, about twice what states had in reserve. The budget gaps continued to grow in 2010 and many states struggled with shortfalls for years afterward.  Bad news, but the news really does not improve.  They report that 37 states have legal caps that prevent them from saving enough to weather recessions or even enough to substantially offset revenue losses, and most of those are based on some percentage of the prior year’s revenues.  Why?  Short-term views?  Most governments figure on keeping enough cash on hand to pay bills during tax seasons. That accounts for 60-90 days of funds.  Far too little for dealing with economic impacts.  Far too few state governments recognize the importance of saving, figuring that cutting taxes during time of plenty and giving back to taxpayers is a better use of funds.  Then it is someone else’s issue when the next economic hiccup occurs – and it will.  Unless you raise your cap now as Minnesota and Virginia have recently done.

But the issue is not just a state issue.  It is a local and a utility issue as well.  Local governments are closer to the ground, have less leeway in their budgets and often have far too little funding as a result of resistance to raising property taxes, user fees and over-dependence on state shared sales tax, which often drops precipitously during a recession.  Same goes for sin and gas tax dependence.  When people slow smoking, or as oil prices drop, so do revenues.  Ask Alaska, Louisiana, Kansas, Texas, North Dakota and others that are oil rich states about their budget this past year.  The legislatures were begging Grover Norquist to let them out of their no tax increase pledges.  He said no of course, because he doesn’t want government to function properly.  So those legislators were stuck in the either “do the right thing” or “get whacked by Grover in the next election” conundrum.  You know what they did because they want to get re-elected  That doesn’t help the citizens of those states.  Standard & Poor’s revised its outlook on Alaska’s general obligation and appropriation-backed debt from stable to negative. That will cost them in the future. St. Louis, Moody’s downgraded the city’s credit rating one step to A1, citing “the city’s weak socioeconomic profile; reliance on earnings taxes which are due for voter reauthorization in 2016.”  Diversity in industry and taxes is beneficial.  Too often this gets lost in the desire to do more with less, but doing more means you need more funding!  And you need to collect those savings as grandma counselled!

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Teddy Roosevelt would be unhappy if he were alive today.  As our initial conservationist, conserving wildlife seems to have been left out.  And it’s not just hunters and developers who may not being conservative.  Wildlife Services, an agency within the U.S. Agriculture Department, killed more than 2.7 million animals during fiscal year 2014, including 15,698 black-tailed prairie dogs, 3 bald eagles, 2,930 foxes, 796 bobcats, 454 river otters, 322 gray wolves, 305 mountain lions, five golden eagles, 22,496 beavers, 580 black bears, 61,702 coyotes and scores of other animals including badgers, jackrabbits, muskrats, raccoons, skunks, opossums, porcupines and 16 pet dogs deemed pests by powerful agricultural, livestock and other special interests.  Umm, aren’t some of those threatened or endangered animals? And rabbits?  Really?  Scary attack rabbits on public property?  Or maybe zombie rabbits?  Wolves, coyotes and prairie dogs – were targeted and killed on behalf of livestock grazers ,but haven’t we learned that certain dogs will keep wolves away from livestock?  I think Oregon has a program that provides the dogs and will reimburse ranchers if a wolf gets to the livestock.  Didn’t we also learn that the ecosystem is damaged when the top predators are removed from the ecosystem?  The return of wolves to Yellowstone demonstrated that the loss of wetlands and beavers was attributable to the loss of wolves, not just hunting.  Haven’t we figured out the expansion of coyotes coast to coast is due to the loss of wolves and lions?  Perhaps there is a better way that doesn’t just involve bullets?  Just asking.


Over Labor Day I took my wife to Las Vegas for her birthday to see the Cirque du Soliel show “O”, the Hoover dam and experience Vegas.  She’d never been before.  And it is a milestone birthday.  We had a nice trip.  The “O” show is all it is said to be.  Another spectacular event!  The hoover dam is an amazing 80 year old structure, designed to hold water for Arizona, California and Nevada, as well as make some power.  Of course all three have long outgrown the reservoir.  And the level drops each year to where it is 300 feet below its height less than 15 years back.  A colossal feat of engineering that led to huge development in the arid west.  The nearby Boulder City was created to build the dam.  Las Vegas would not exist without its water. Water in the desert!  The Anasazi’s would be amazed.

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It’s hard to believe it has been 14 years since the twin towers fell!  I vividly remember walking into a conference room for a meeting and seeing the second plane hit.  And work just stopped after that.  It took a while for us to understand what happened.  The why problem still sits out there.    But we should never forget those lost, or the efforts of those who tried to help

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I have a friend in south Florida who is a lawyer who is starting the conversation about farmland for sale.  Ok, in south Florida is might be about 40 years too late, but he has a great argument to make, even here, now.  Developers have paid handsomely for agricultural land near urban areas, especially in areas with nice weather (see Florida).  The problem is that many of those lands have been productive and because they are close to urban areas, convenient for the movement or produce to feed those communities or export the food to other areas.  It would seem obvious that buying food locally would be preferred to buying food from far away, unless you are an Agribusiness or developer that is.  And most family farms have been handed down to generations that, well, just don’t want to work farms, given the amount of money that the land can be sold for.  So it is an easy economic argument to make – sell your farm to developers and live happily ever after.  Except that means farmland that is no longer producing.  And as my friend notes, there is a finite amount of farmland out there and we are decreasing that acreage in the US every year.

Now true, some will argue than development is less water intensive than farms, but much of that argument is due to the traditional practices used for farm watering, as opposed to newer, less wasteful means.  So they argue, development is preferable to farming, but that argument may be limited to areas that are a) water poor  b) bring water in from elsewhere, c) extensively use groundwater which may not recharge, or d) should probably have neither farming or development.  But is Florida, we see fewer oranges, fewer row crops and less ranching than 20 or 40 years ago.  All that land is condos and houses, and our food gets trucked or shipped in from many places, a lot of them not Florida and few local.  He suggests that might not be a good thing for the long term.

Of course Florida is going to be faced with another of these land dilemmas.  When Crist was governor, he negotiated a deal to buy land from US Sugar to help restore water from Lake Okeechobee to the Everglades.  Now the powers say they can’t afford to maintain the land, so US Sugar can keep it.  Of course US Sugar has plans for 100,000 houses in the Everglades Agricultural Area, or more, once farming stops.  I see my friend cringing.  That land, while not beneficial as farmland, surely would be less beneficial and farm more vulnerable as development.  Maybe we should rethink that land purchase?  Worth thinking about anyway.

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