Arizona's First Political Blog

E-mail Anonymous Mike at zonitics4-at-yahoo.com

By Anonymous Mike, pseudonymously.

 
Critical Condition

The last 2 state budgets bled red ink all over the floor and the Governor closed it with borrowing, accounting tricks, and by sweeping cash reserves. Right now I'm projecting a starting point of a $1.3 billion deficit for FY2010

Earlier in the year, Senate Appropriations Chairman Bob Burns wrote a piece in the Arizona Republic about the fact that the state budget increases automatically $500 to $600 million per year without any legislative action. You combine those spending pressures with the facts that the Legislature needs a 2/3 majority to raise taxes and that about half the general fund is off-limits to budget cuts and you have a recipe for fiscal meltdown.

How did it get to this point, well you combine 1 part AHCCCS with 1 part ballot initiative, and a dash of political fly-trap made with cheap federal money. A paper from the American Enterprise Institute has the details.

So what does the future hold for the next budget?

Leave aside the poor economy and the very real prospect that the Legislature will have to come back and re-do the current budget. Even with a fairly normal economy, the long-term budgetary outlook for the State of Arizona is dire. State spending automatically (without any legislative action) increases at about a 7.5% clip. On the last budget, the State spent about $10.6 billion; due to various ballot initiatives, the Legislature has the ability to curtail spending on little more than half of that.

What you have is the triple of convergence of building spending pressures, tight or declining revenues, and the inability of the Legislature due to changes to the state constitution to balance the previous 2. In short, the State is on auto-pilot to the fiscal abyss.


I know people meant well, but you know what the road to Hell is paved with...
posted by Anonymous Mike at 10:38 AM

 
Please Go Away...

...Brett Favre

I have no problem with a star athlete who wants to continue his career through the downward arc. I was too young to remember Willie Mays with Mets, but I certainly could remember Steve Carlton as he bounced from team to team trying to prolong a career. Athletes die young and once your time passes, you're done. So if someone is willing to keep playing when he's no longer a star, trying to eek out another year playing the same sport he's been suiting up since elementary school, I say good for him. There will always be another day to make your exit.

Of course if you are Barry Zito, you can ease your way through the downside of your career with the knowledge that you are only 30 and in the second year of an $127 million contract.

As for Mr. Favre...

I'm not a Packer fan or hater, but I am a Brett Favre fan. I enjoyed his enthusiasm, I enjoyed his grittiness, and I enjoyed the fact that whenever my team played against the Packers him he would try to force the ball into triple coverage. I could forgive the perrnial soap opera of the past few years of will or will he not retire. He was getting up in age, the team around him was weak, and he could feel the end was near. As for the people who wanted him to go out early before he became an "embarrassment," that was his decision not theirs. One should never go gently into the good night and certainly should never go for the convenience of others.

So after several years of this, when he finally decided to call it quits, I felt that he was finally at peace with himself and moving on. We could close the book on the career and celebrate both the man and what he meant to football. A eulogy or a memorial if you will. We the fans, after his carefully made decision, could let ourselves go and place Mr. Favre into the golden age of proud sports memories that we pass on from generation to generation.

Then the darn guy wanted to claw out of his coffin.

Look Favre. We watched you play for 17 years. We followed yours up and downs. We endured your stupid emotional roller coaster after the last several season on whether you would retire or not. You had alot of practice trying to make this decision so we all figured that when you decided to go, that you knew what you were doing. That you knew when July rolled around and training camp neared, that you would feel the pull of the gridiron but that you would be able to resist. That you knew that when you announced your retirement, that the Packers would move on and hand the starting job to your heir apparent. That you were mature enough to know that the next time you would step onto Lambeau Field, that it would be last and it would be only to retire your number.

We thought you knew this so when you gave us the word we enshrined you as one of the football immortals.

But no, you hadn't thought it through.

You bastard.

Please go away.
posted by Anonymous Mike at 6:27 PM

 
Sinema(tic) Spit Take

From John Fund's latest in the Wall Street Journal, this dealing with By Any Means Necessary (BAMN) and the Ward Connerly and his anti-affirmative action initiative (ACRI):

Other opponents of Mr. Connerly deplore the blocking and name-calling. Arizona State Rep. Kyrsten Sinema told me that initiatives have been used to pass ideas such as campaign finance and redistricting reform often opposed by entrenched legislators. "People have a right to sign a petition, hear the arguments and then vote," she says. Ms. Sinema thinks Arizonans can be persuaded to vote down ACRI's measure, much as they voted down a ban on gay marriage in 2006.

I am still cleaning up my coffee from my computer screen.

To be fair, Rep. Sinema has worked to separate her anti-ACRI movement, Protect Arizona Freedom, from BAMN and its works. BAMN tactics include harassing ACRI petition circulators and signers through aggressive confrontations. However Sinema's depiction of herself as sort of a live-and-let-vote idea, that ideas have the right to circulate in the marketplace of democracy is disingenuous.

A piece last month by Arizona Republic political reporter Scott Wong on Sinema's efforts while the ACRI petition was still in the signature-gathering stage helps provide context:

Connerly's group has engaged in “fraud and deception” and recruited racists and white supremacists to gather signatures for similar measures in Oklahoma and Missouri. And PAF contends Connerly used out-of-state petition circulators in Colorado, something that is illegal in that state and Arizona.

“We can’t have criminals going door to door gathering signatures. We can’t have petition circulators lying to voters,” Sinema, D-Phoenix, said during a Capitol news conference where she was flanked by a dozen Democratic lawmakers and other supporters. “Arizona law must be followed. …The Ward Connerly path of lies, deception and division ends in Arizona.”

I call that a drive-by. Stage a press conference, back your opponent into a corner by throwing a kitchen sink of allegations at him, say that he has to follow Arizona law even though there is no evidence he hasn't, and demand that he forestall any future allegations by crippling his signature-gathering efforts. Get some media coverage and a favorable write-up and off you go.

Rep Sinema may be working overtime to operationally separate Protect Arizona Now from BAMN but in a more subtle way she acts like a pulling guard in football; creating holes for others to follow or in this case creating a poisoned environment in which even extreme characters such as BAMN have room to operate. Coincidental? I think not. Rep. Sinema operates in 2 political worlds. By day, she is a state representative adept at working within the legislative framework and rules on issues such as gay marriage. By night she is a former member of the Arizona Green Party, community organizer with tactics reminiscent of Saul Alinsky, and running such projects as the "Truth to Power Hour" on the old Air America affiliate. This is an experienced, well-trained politician who knows what she's doing.

To accuse Connerly of "fraud and deception," use of illegal campaign tactics, and the use of criminals and racists in operations to further a project that many of Sinema's ilk no doubt feel is
illegitimate to begin with is... the rhetorical equivalent of throwing gasoline on the fire. To accuse your opponents of the lowest of tactics to further the lowest of ends, well what is a good progressive supposed to do but stop ACRI by any means necessary?

So why does Sinema get a pass on this?
posted by Anonymous Mike at 8:07 AM

 
Arizonans for McCain

Hell is to be the NY Times reporter covering McCain's campaign this week. While your colleagues are covering Obama's global pre-victory, you are assigned to spend time in Phoenix during July. So what do you write about?

You write about how McCain is in such deep trouble that he has to campaign in his home state so he doesn't lose it. Well that's the lede you take anyway and you're going to stick with it. To top it off, some copy editor sticks a title on it that says "With Arizona Changing, McCain Focuses on Home "

Man that Obama character is great. While he's out celebrating his immient victory by setting up his foreign policy and organizing his transition, he's got his opponent stuck campaigning in his home state. This election may such a runaway that you Walter Mondale, may just get off the schneid.

( A friend of mine alerted me to this article because there's a picture of McCain shaking hands at the Eggery restaurant at Cambelback & Central. If you look carefully at curtains in the window you can just make out the stain caused when one of my kids accidentaly launched his ketchup across the room.)

Lots of butch talk about how McCain may be going down.

But a variety of factors have made Mr. McCain’s chances in Arizona less assured than they ordinarily would seem, which his campaign has acknowledged.

and

“John McCain has striking vulnerabilities here,” said Emily DeRose, spokeswoman for the Arizona Democratic Party. “We are going to take him to the mat. We are not giving him a pass in Arizona.”

and

On Super Tuesday, Mr. McCain captured 47 percent of his party’s voters, hardly the resounding victory that a candidate who has represented his state for over 25 years might expect.

Get the picture? It takes about 1/4 of the way through the article for the truth to come out

The Democratic ambitions may be largely bluster. Neither Mr. McCain nor Senator Barack Obama, his presumed rival this fall, appears to be spending money in the state. There are no advertisements, and the Obama campaign has no paid staff here.

Yep... and in the last 2 lines of the article we find out what that means.

Ms. Simmons, the McCain staff member, said the lack of resources being shown by both campaigns was an indicator that there was no real race in Arizona.

“I think it would be a real stretch to say Arizona is a battleground state for us,” she said, “just as it would be a stretch to say Illinois is a battleground state for Obama.”

That's not only some brilliant reporting but also fine making-a-mountain-out-of-a-molehill, stuff that only someone working for one of the greatest newspapers in the world or some anonymous blogger could write.
posted by Anonymous Mike at 6:44 PM

 
I Bet 1000 Quatloos...

...that this editorial was written by that lover of religious freedom, Linda Valdez.
posted by Anonymous Mike at 7:33 PM

 
Home is Where the Financial Hell Resides

Article on front page of the AZ Republic regarding the increasing number of foreclosures.

Key graph:

"It has become more of an equity problem than a subprime problem," said Tom Ruff, a real-estate analyst with Information Market.

Some thoughts...

Two years ago, a couple bought the house down my street for $575,000. The house is back on the market for $399,000. That means that given closing costs in the neighborhood of $30,000 or so that the couple in question is around $200,000 underwater.

I am a big fan of honoring one's financial responsibilities, but that couple isn't seeing positive equity in that house until well after the end of the second Obama Administration. They also put little money down. So why not hand the keys back to the bank and walk away? Why not give into foreclosure?

In fact there are several houses in my immediate neighborhood where the resident families are facing similar situations of negative equity. Why shouldn't there be a mass default on mortgages?

A bunch of economists from the Federal Reserve Bank of Boston say that based on past evidence, that they don't expect such a mass default. Looking at the history of similar drop in housing value in Massachusetts in the 1990s, they state that negative equity must be accompanied by cash-flow problems significant enough to impact the family's ability to pay the mortgage. Otherwise they contend that the family will stay put due to other factors such as desire to remain in the community and keep their kids in the same school.

A piece last year from the W.P. Carey School of Business at ASU wondered by the high rate of foreclosure wasn't accompanied by a similar rise in bankruptcies. One possible reason? Houses aren't owned by the same people who reside there...

W. P. Carey School Research Economist Dawn McLaren said that in the bubble areas, where housing appreciation -- and, now, depreciation and foreclosures -- was highest, 20 to 30 percent of homes were owned by investors.

And now, a lot of the homes that are being foreclosed on are owned by investors, said Haines.

So here's my question... with foreclosures hitting record levels in the Valley how many of the properties are owned by investors and how many are because of negative equity instead of cash flow issues?
posted by Anonymous Mike at 3:11 PM

 
Holy GPLETS Batman!

Following up on my post from last week concerning downtown development...

Espresso Pundit and Laurie Roberts have both written on GPLETS, the Government Property Lease Excise Tax. As the name suggests, GPLET involves a private party leasing government property and then paying a tax on the lease with the amount dependent on the type and size of the property.

Sound pretty innocuous you say? Well sure but it is how it's primarially used, that is as a incentive offered by local governments in the act of urban redevelopment, that is of primary interest.

The City of Phoenix has used GPLETS to attract new construction to downtown and is used in projects such as the Phelps Dodge Tower, Collier Center, and Renassiance Square. The law passed in 1996 replaced a similar law the previous year and allow the City to take possession of land and building and then lease it to a private entity. Sounds sort of like condemntation for urban blight? Well no because the act of taking poession is done in agreement with the private entity in question in order to benefit the entity.

Let's take a look at one such deal, though with the caveat that not all deals are exactly alike. Earlier this year, a developer cut a deal with the City under a GPLET/development lease to build a 107 room boutique hotel at the southeast corner of Adams and Central. Here's what the agreement states:

1) The developer would give, yes give as in "free", the City a parcel of land at 3rd St. & Fillmore.

2) The developer would then build a hotel on City land at Central and Adams

3) After the hotel was built and the Certificate of Occupancy issued, the whole brand-new hotel would then become City property.

So the developer not only agrees to give the City free land but also a brand-new hotel. The developer seems to be out of land and a building with no compensation. Is the developer crazy or crazy like a fox?

4) The developer will then sign a 20-year lease for the hotel. The developer would pay the City $10,000 a year with the amount increasing by $5,000 ecvery 5th year. Yep, $10,000 for a brand-new hotel.

5) The lease would be subject to GPLET but that amount would be abated for the first 8 years since it is in a redevelopment zone.

6) At the end of the 30-year lease the developer would take title of both the land and hotel at no cost. In fact at any time during the lease period, the developer could title to the land and hotel for no cost.

So what you have here is a shell game where the developer builds a hotel as a private entity, operates it as a private entity, but is allowed to essentially wave a "government property" flag of convenience for the purposes of property taxes.

I don't have the inside numbers on what that hotel developer will pay in GPLET or how much the shell game will save it but let's look at 2 properties for comparison.

The Radisson Hotel uptown at 2nd Ave and Osborn was assessed in 2007 at a Full Cash Value (FCV) of $5,497,500. Based on that amount it had a propety tax bill of $126,714

Some 3 miles to the south lies the Collier Center which had a 2007 FCV of $48,019,946 or roughly 8x the assessed value of the Radisson. In 2007 it had a tax bill of... $81,440 or 2/3 of what the Radisson paid. The difference between the Radisson and Collier? The latter is owned by the City of Phoenix and leased back and the former is private property and fully taxed. The $81,440 is the GPLET.

Now the value to the developer is clear, it's tax bill is much lower than what it would if the property was still in its private hands. Even with the unknown lease amount it would still be cheaper; if the lease was any on anything similar to the fore-mentioned hotel developer, it is song. Also the GPLET is assessed on the square footage and type of facility, not on its assessed value. That means even as the Collier's tax abatement expires, it will continue to enjoy all of the benefits of increasing property values without having to pay for it.

So what does the City get out of GPLET deals? First it gets nice shiny buildings downtown. Second, the City gets revenue from more than just property taxes; it also gets tax revenue from the construction and later business activity.

So who gets the smelly end of the stick?

First is the other government sub-divisions who heavily depend on the property tax: the county, community college district, schools. Even though a percentage of the Collier's GPLET goes to those various government sub-divisions, the Radisson paid more in property taxes to local K-12 even though its property is worth 1/8 as much. The City by taking land out of property tax generation to build those shiny new buildings is nailing the schools in the very communities it proposes to help.

Second is you, I, and the average businessman in the street. The GPLET is about creating a charade of public ownership in order to allow selected private companies in selected areas to escape paying taxes. The argument for that type of action is that it promotes the development of an area, downtown, that will beneit all Phoenix residents. I don't buy that argument but I think it's a legitmate one. The real danger, beyond the missing property taxes, is the legitmization of public action taken to benefit private parties. Those benefits most directly accrue, not to the average taxpayer or small business but rather to those who have the financial muscle and the ability to seek political redress in ordet to borrow public pwoer to get private benefit.

I cannot think of a better breeding ground for corruption
posted by Anonymous Mike at 4:09 PM

 
The Secrets of the Library

My oldest boy lost his library card, it happens to the best of us, it also happens me. As the youngster was otherwise detained, I stopped by a local branch of the library to get a list of the books he had out.

I talked to the librarian at the front desk, told her my story, and she asked me how old was my boy. She then denied my request saying that once a patron turns 12, that his library records are considered private information and are restricted from even his parents.

So let's get this straight.

I can go down to the boy's school and pull his records any time I want. I can go to his doctor and do the same. However I have no right to know what books he is taking out from a library which is supported with my tax dollars. So the least significant dimension of privacy of the three examples I cited is held to be the most sacred. Perhaps the most meaningless dimension as well since odds are the library books he takes out, unlike his school or medical data, has to end up in my house anyway.

Now as a parent I believe in giving kids privacy, but privacy is ultimately a privilege earned and what is earned may also be taken away. Both children have taken to closing their bedroom doors; I allowed this up until the time when I walked into the older boy's room and found him building Legos instead of doing his homework. His door remained open for several weeks after that.

All jokes about my benign autocracy aside, I don't know where the public library gets off telling a parent that they cannot know what their 12 year-old has borrowed. Librarians seem to be a fairly onery lot. I remember after the Patriot Act was passed there seemed to be a mass hysteria among the keepers of the books concerning Section 215 and the government's ability to request patron library records. Perhaps that's what the developers of the library policy concerning parental access were after; that in the heart of every parent of a teenager that there is a John Ashcroft fighting to get out.

Is that so wrong?

I mean to be a John Ashcroft?
posted by Anonymous Mike at 8:53 PM

 
Don't Let Facts Get in the Way of a Good Story

Originally I was going to write a story about lawn mowing and the look of horror my 12-year old conveyed when he realized last night's rain would make the grass grow faster. You see, I have delegated the task of mowing the lawn to him and well he wasn't taking to it like I expected.

I was going to write about a heartwarming father/son moment about the necessity of doing mind-numbing chores but instead I decided to flog a dead horse and write about light rail. In this case how the Valley light rail project is presented to those outside the state.

Governing magazine did a piece on Sun Belt light rail projects with a special look at Phoenix. As you expect, it's all peaches and puppy dogs. Alot of pictures of well-shaded light rail stations, descriptions of how cold the water fountains will be, and how Phoenix is helping local businesses survive the construction. What interested me was the blurb at the beginning of the piece:

Like many Sun Belt cities, Phoenix is hoping that it's major investment in a new light-rail system will do a lot more than just reduce traffic congestion. The city is counting on its light-rail line — which opens in December -- to help drive denser development along certain corridors. The idea is to create more of a sense of place — a departure from Phoenix's sprawl-addicted past.

In fact the larger article about Sun Belt light rail is about just that, focusing systems on driving greater downtown development with moving large quantities of people as a secondary concern. I don't seem to remember that as the selling point when we in Maricopa County were asked to extend a transportation sales tax so the system mileage could be doubled.

I guessed I shouldn't be surpised. If you wanted to move people the most efficient means possible using mass transit, you would uses buses which could operate on existing city streets.

Here's the second deception, that light rail largely of its own merits drives development.

Phoenix's light-rail line doesn't open until December, but it's already driving development — including a large new downtown campus for Arizona State Univeristy. The school expects 8,000 students at its downtown location this fall — and an eventual enrollment of 15,000. University officials say the upcoming light-rail line, which easily connects with ASU's main campus in Tempe, was a huge factor in their decision to open downtown.

And...

The school is building classroom facilities, dorms and a library, and the hope is that students and faculty will use the train to shuttle between the downtown campus and the main campus, which has a stop on the line in Tempe. "ASU is the first success story of our light rail," says Phoenix deputy city manager Tom Callow, "and the system hasn't even opened yet."

I guess we're now getting into parsing language and what constitutes "huge" but the reason ASU is expanding into the downtown area is that Phoenix is building the university a brand new campus at city taxpayer expense. In fact nearly 1/3 of the proceeds from the 2006 Phoenix bond election with total costs including interest of upwards of half-billion dollars will go to ASU Downtown. So ASU Downtown only counts as a success for light rail if you mean to state that the taxpayers have to pay for both the light rail and the construction of the campus. The ASU administration would be criminally negilgent if it refused that hand-out.

I'm willing to bet that if you were going to ask Valley residents whether they would be willing to pay billions of dollars to construct light rail systems that would drive the development of a few municpal downtowns that they would say no. Downtown development is not how the project was sold to Phoenix taxpayers in 2000 or county taxpayers in 2004, but rather as part of larger packages that dealt with mass transit and/or roads.

However there is hope. Remember the starter line was seeded for hundreds of millions in federal dollars:

The biggest reason why this transit chapter may be coming to a close, however, is because the federal government isn't as keen on light rail as cities are. All federal money for light rail is approved through the Federal Transit Administration's New Starts program. Unlike road projects, light-rail systems seeking federal funds must compete against one another — and against other forms of transit that federal criteria have tended to favor, such as bus rapid transit. New Starts doesn't take into account development potential, creating a sense of place, or reducing harm to the environment. Rather, funding is based on the ability of a system to replace car trips with transit trips for the least amount of money....

.... For now, though, cities must rely very heavily on their own funds, and on asking voters for more money. It's a situation that Phoenix's Tom Callow says may threaten light rail's potential. "I do think there's a national moment, but I'm not sure the nation's ready to seize it. I think we should, but it's going to be hard."

I guess I would call it a feature though Mr. Callow no doubt calls it a bug. If the idea of residents of Laveen and Desert Ridge paying for a system which has the primary purpose of driving the development of downtown Phoenix is repulsive, then what about people in Iowa or Texas having their federal tax dollars going to to spur downtown development or create a "sense of place"?
posted by Anonymous Mike at 1:55 PM

 
Music in the Car

When I'm driving by myself I usually listen to audio books, mainly history (current book is Robert Massie's Nicholas and Alexandria.) However when the kids are in the car I play music.

One of the kids is in middle school and is just developing his taste in music and he will cut his own path. I do try to provide a nice assortment of 60's/70's rock, blues, and some older country western; the goal is at least to plant some seeds in the boy's mind.

Sadly I have had to modify this effort in recent weeks...

First my wife made me take Johnny Cash off the play list. It seems that while the younger boy was at a friend's birthday party he kept signing the Man in Black's lyrics including "I shot a man in Reno just to watch him die." Well that caused quite a scandal with the friend's mother

Second, I will periodically turn off the music so we can talk. During one of these discussions, the older boy asked what was "male enhancement" and why did they keep advertising it on the radio? Did it have something to do with the post office?

Sigh

So after those 2 strikes I went to Music Plan B... the radio dial is now permanently set to the classic music station.

Yeah kids, try corrupting yourselves on Tchaikovsky and his friends. If you don't like that, I'll snap in the audio book and you can learn the intricacies of court life in Imperial Russia.

Good times.
posted by Anonymous Mike at 9:11 PM

 
Paving the Streets with Gold

I know read the article before but it didn't register until Coyote Blog posted on the light rail project for NW Phoenix....

It will add another $9 million to the $297 million project. But by acting quickly to make these changes, there aren't expected to be delays in rail construction. Work is scheduled to start in early 2009 and be completed by 2012.

Opposition to the rail plan arose last fall in the last half mile of the 3.2-mile light rail line that extends from just south of Bethany Home Road to Dunlap Ave.

As Coyote Blog mentions that's almost $100 million a mile, well $95.6 million to be exact. So you can grumble that the cost of the project went up a few million but then you would be missing the bigger picture, that is how much the cost has increased in just a few years.

1) The 20 mile starter segment, the one that will open this December, is slated to cost $1.4 billion or about $70 million a mile. Keep in mind that cost includes one-time start-up costs and special projects that won't be replicated for the NW Phoenix project such as the bridge over the Salt River so the actual per-mile cost is less than $70 million. Anyway you look at it the capital cost of light rail on a per-mile basis is going up... 36% or so in just a few years.

2) I can already hear the counter-arguments to #1 above, comparing apples to oranges, the starter segment is different than the NW Phoenix extension.... blah, blah, blah.

Okay so let's do an apples-to-apples. Last year, Maricopa Association of Governments (MAG) released an updated version of its 2003 Regional Transportation Plan which covers transportation planning for the county over the next 20 years or so. The estimated capital cost in that document for constructing the NW Phoenix extension, "Northwest Link- Phase 1", is $246.6 million. That's about $77 million a mile. However now the cost, before the design changes in the Arizona Republic article I linked to above, is $297 million. That's a 20% increase in just 1 year and the project won't be completed until 2012.

3) The 3.2 mile segment is the first part of a 37 mile expansion of the system that won't be completed until around 2026. If construction costs have gone up 20% in just 1 year for 3.2 miles, what will the cost be in 18 years for 34 miles?
posted by Anonymous Mike at 7:45 PM

 
Happy Independence Day!

Fourth of July is a date on the calendar
posted by Anonymous Mike at 9:22 PM

 
Blogger Fest

Blogger fest has been rescheduled for Saturday, Jul 26th at the same location, Four Peak Brewery in Tempe. Time is from 3:00 till whenever...

Come out and meet some of coolest cats in the Arizona blogging community, especially the world famous Exurban League boys. If you blog please come, if you just read blogs please come, and if you hate everything I write then you definitely have to come.
posted by Anonymous Mike at 8:44 PM