Posted by: bkivey | 16 April 2015

Tax Day 2015

Today is Tax Day in the US, the day Q1, Federal, State, and local taxes are due, As a business owner, I have more control over my tax outlay than an employee. This year I only overpaid my Federal taxes by a little bit, meaning I didn’t send more money to the Feds than I had to. My State overpayment was significant, so I’ll be revisiting that area this year. The only local tax I’m responsible for is to the local transit agency, and there’s no provision for quarterly payments there; it’s all got to be paid annually. It’s not much, bur paying is a privilege reserved for business.

Although taxes are due today, Tax Freedom day has not yet arrived. According to the Tax Foundation, Americans won’t start working for themselves until 24 April. If the Federal borrowing liability is included, the date stretches out to 8 May.  We’re working 30% of the year to pay The Man before we get to pay ourselves.

But we do get a lot of infrastructure, a reasonably secure place to live, wholesome food and water, safe workplaces, and the best damn military money can buy. It’s not like our money is being frivolously pissed away . . . oh, wait.

Former Oklahoma Senator Tom Coburn has published his “Wastebook’ annually for the past five years in an effort to highlight egregious use of public funds. The 2014 edition highlights 100 Wall of Shame projects and fiascos. A large portion of the waste comes from pork barrel projects, while smaller percentages stem from ill-conceived or misguided projects, and cases of government employees straight up using public money for personal gain. Some examples appear to be funded just because some agency can. If you ever hear a government employee complain that budgets can’t be cut, refer them to the Wastebook.

Florida Congressman maintains a page on his official website detailing government excess, and it’s a long list. I would hope that because the House of Representatives is responsible for funding Federal programs, the Congressman is taking an active role in reducing spending.

Closer to home, the State of Oregon is no stranger to wasteful spending. Some examples I’ve posted on:

Columbia River Crossing

In 2001 the states of Oregon and Washington determined that the I-5 Columbia River crossing needed to be replaced. The crossing consists of two truss bridges side-by-side, with the original span built in 1917, and it’s sister span completed in 1958. Total project cost was about $150 million in today’s money. Concerns over traffic density and the bridge’s inability to withstand a major earthquake were the motivations behind the $4 billion (with a ‘b’) replacement. 13 years and $175 million later, we have warehouses full of paper, and nothing else. The project was terminated in 2013.

The bridge and approaches are a traffic nightmare, site of a more-or-less constant traffic jam during business hours. It’s very likely the whole thing would fall into the river during a major earthquake, but that type of temblor is a once-in-500-year event, with the last one occurring in the 1700’s. Even a new bridge would suffer significant damage in the predicted 9.o quake. Why not wait until the event occurs, then replace the bridge outright? If experience from the 1989 Loma Prieta quake is any indication, a post-earthquake bridge would be built significantly faster than the projected 5 – 7 years of the CRC project.

Oregon Wireless Interoperability Network

In 2005 the Oregon Legislature decided to build a communications network to allow first-responders statewide to communicate with each other. Originally slated for a 2013 completion, the project carried a near $500 million price tag. By the time I wrote on it in 2010, very little work had been done, certainly not enough to achieve the original timeline. The Governor eventually nixed the project, deciding on a smaller system for ‘only’ $200 million.

Portland Water Bureau

The Portland City Council has something of a reputation for treating earmarked public money as a slush fund to enable pet projects. There has been no worse offender than the Water Bureau and its former head, Councilman Randy Leonard. During Mr. Leonard’s tenure, the Water Bureau engaged in a series of projects tenuously associated at best with the Bureau’s core functions. An entire new bureaucracy, the Office of Healthy Working Rivers, was created.

After a scathing report released by the City Auditor in 2011, and the emergence of Water Bureau irregularities as a campaign issue in 2012 and 2014, the Bureau appears to be more focused, or at least better at concealing corruption. Randy Leonard left office in December 2012, and the Office of Healthy Working Rivers has since been dismantled.

Columbia Biogas

In 2012 the Portland City Council decided it would be a good idea to fund a biomass plant in partnership with Columbia Biogas, claiming $8 million annually in ‘avoided costs’. Problems developed when Columbia Biogas pulled out of the project, and an independent audit revealed expected savings some $7.9 million less than claimed. The project was abandoned.

Convention Center Hotel

I haven’t written on this, but the MO is the same. For years regional government Metro has wanted to build a 600-room hotel next to the Convention Center. Proponents argue that a large hotel is necessary to secure national conventions, while opponents argue that there are a number of hotels in close proximity to the Center, and if there were a market for a large hotel, a private company would build it.

Metro has partnered with Hyatt Corp., and most of the legal obstacles have been cleared. Metro plans to issue taxpayer-backed bonds for $60 million of the $200 million project cost. If the hotel doesn’t perform as advertised, and national conventions fail to book the Center, then the new hotel is going to cannibalize existing business. It’s entirely possible Portland could see a net job loss in the hospitality industry. If the hotel closes, taxpayers are going to be stuck with $60 million in non-performing bonds, and a building that’s going to be almost impossible to sell.

An Unusual Commercial

I’ve lately heard a radio spot touting the benefits of nuclear power. This struck me as unusual for a couple of reasons. In the first place, no sponsor is mentioned. The spot is 30 seconds of extolling the virtues of nukes. In the second place, Oregon is probably one of the toughest places in the country to sell nuclear. This is a part of the country that successfully shut down the one nuke we had.

I’m a proponent of nuclear power. The fuel has a very high energy density, so you don’t need thousands of acres of bird blenders to produce a lot of power. Nuclear power is ‘baseline’ power, in that it works regardless of environmental conditions (save earthquakes and tsunamis). And nuclear produces no atmospheric carbon. In fact, the ad touches on all of these points.

A lot of people view nukes as time bombs waiting to spew radiation on a defenseless populace. The fact is that deadly accidents are extremely rare. The worst US disaster at Three Mile Island failed safe. The other concern is what to do with spent fuel rods. Well-meaning but ignorant people have really bolixed up what should be a straightforward process. India, for example, has developed effective methods of recycling spent fuel.

Oregon gets 40% of its power from hydro. Adding three or four mid-sized nukes would provide all the power the state needs, with capacity to spare. Given that the state’s only coal-fired plant is going to be forced to close in a few years, I wonder if the local electric utility is starting a propaganda campaign to prepare the population for the nuclear option.



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