Wednesday, January 10, 2007

Should JOBZ include a Health Care Insurance Requirement ?

Gov. Tim Pawlenty has described the Health Care Crisis as “the most pressing domestic policy issue in the country. We have healthcare costs going up so quickly, so rapidly, that they are suffocating the abilities of individuals, family, businesses and governments from advancing other priorities.”

While Pawlenty recognizes dilemma of Health Care, he also proudly points to the success of the Job Opportunity Building Zones program (JOBZ). Pawlenty describes JOBZ as “the mother of all tax incentives to grow or establish businesses in parts of rural Minnesota. In a JOBZ area there are no corporate income taxes, no property taxes, no taxes on goods purchased and used in the zones, and no taxes on investments made in the zone for a period of up to twelve years[2016].”

Since the JOBZ program is over two years old, Center for Rural Policy and Development has reviewed the data and issued its findings last month. As indicated below, most of the projects were expansions from companies that were already in the community, but the encouraging finding was that the jobs created were in greater number and at a higher wage than pledged. In the data pool, there were 1,985 jobs pledged at a wage of $12.37 but the actual data indicates that 2,601 jobs were created at a wage of $14.86 with 69% of the companies achieving their wage target. The other interesting aspect is where some of these jobs were located … many in counties that border other states … with Fairborn County showing 418 jobs created, 270 in Lyon County, 236 in Chisago County, 177 in Olmstead County, 175 in Jackson County, etc.

What we don’t know is true influence of the JOBZ tax-benefit program in attracting jobs. Would these companies have expanded due to the overall economy? Did some of these companies build for other logical business reasons (i.e. there are a number of ethanol facilities included on the list and aligning processing facilities to where the soybeans, or corn, are grown make sense)? How do eliminating corporate income taxes help small business when most small business owners are not incorporated?

In an editorial, The Star-Tribune asked the question “the more the tax forgiveness program succeeds, the more it poses a fairness question: Is it right for only some employers to be excused from the obligation to pay for government services -- especially when excusing them causes taxes to increase for a community's other employers, not to mention its homeowners?”

Pawlenty is correct to encourage business to create new jobs, but the major problem for all business (and families for that matter) is health care. Although jobs are being created, is the health care problem being exasperated? If the JOBZ legislation has a wage requirement that the wage be at least 110% of the Federal Poverty Rate for a family of four – or $10.23, then why not a program to require minimum health care?

Senator David Durenberger, who was selected by Pawlenty to lead the Minnesota Citizens Panel on Health Care Costs, has stated that the resolution of the health care crisis is universal participation. In other words, everyone must pay in. With the creation of JOBZ, universal participation should be a requirement of any deal.

If a business has an existing health care benefit, it would be exempt from this requirement. If not, the State should create a pool, whereby using bulk purchasing power, it can provide minimum coverage for affected employees and their families. The cost would be a separate tax based on the number of full-time employees. NOTE : Massachusetts used a rate of $295 per year (or less than fifteen cents per hour) to establish its Universal Health Care Coverage. California is now considering a 4% tax on wages to create a program that would provide medical coverage for all residents.

Failure to address the Health Care problem will just create additional burdens on hospitals to provide Uncompensated Care which in the end is paid by all other users.


BACKGROUND on JOBZ
Since the program’s inception in 2003, there have been 282 deals completed by cities, counties and other governmental agencies. The committed number of new jobs is 4,147 and anticipates retaining 9,080 jobs with an overall wage of $11.37.
The state’s website lists the projects approved.
There are nine deals that involve retaining more than two hundred employees :
Polaris Industries in Roseau is an expansion project to retain 2,000 jobs and create 4 new jobs.
Benchmark Electronics in Rochester is an expansion project to retain 937 jobs and create 56 new jobs.
Mayo Collaborative Services in Rochester is expansion project to retain 459 jobs and create 92 new jobs.
ITRON in Waseca is an expansion project to retain 450 jobs and create 50 new jobs.
Innovance Inc. in Albert Leas is an expansion project to retain 386 jobs and create 10 new jobs.
DB Industries Inc. in Red Wing is an expansion project to retain 322 jobs and create 10 new jobs.
Columbia Gear in Avon is an expansion project to retain 234 jobs and create 38 new jobs.
Lexington Mfg. in Brainerd is an expansion project to retain 223 jobs and create 15 new jobs.
DB Industries Inc. in Red Wing also has a relocation project to retain 210 jobs and create 50 new jobs.

There are five deals that involve creating more than fifty jobs.
Iowa Turkey Products in Marshall is classified as a Move In project and pledges to create 200 jobs.
Total Card Inc. in Luverne is classified as a Move In project and pledges to create 150 jobs.
Polaris Industries in Wyoming has a relocation project and pledges to create 143 jobs while retaining 39.
Anderson Corp. in North Branch has a relocation project and pledges to create 135 jobs while retaining 33.
AMPI in New Ulm has an expansion project and pledges to create 122 jobs while retaining 118. NOTE : AMPI had a fire that forced a shutdown of the facility, so I do not know it this deal was as a result of that fire.

The remaining projects involve a lower number of jobs … with more than a few that only involve one job.

Tuesday, January 09, 2007

Is Norm Coleman Using Soldier’s Families while Pawlenty & DFL Propose Real Assistance?

Maybe I’m being too cynical, but is Norm Coleman resorting to gimmickry in his proposal to address the financial plight of our soldier’s families ?

Coleman’s Press Release of January 5, 2007 identifies the problem :
“All too often, the families of reservists and National Guard members must contend not only with the physical absence of a loved one but also with the loss of income that makes meeting house payments, car insurance, medical and other bills too great of a burden to bear without help. Some 55 percent of married Guard members and reservists have experienced a loss in income, with nearly 50 percent experiencing a loss of $1,000 in pay per month and 15 percent experiencing a loss of $30,000 or more in pay a year. With our Guard and reservists putting their lives on the line, they should not also have to put their families' financial lives on the line due to their service.”

In a previous commentary, I stated that the best book I read last year was David Kuo’s Tempting Faith – An Inside Story of Political Seduction. Kuo was Special Assistant to President George W. Bush and Deputy Director of the Office of Faith-Based and Community Initiatives. He was drawn to Governor Bush as a Christian who cared about the issue of poverty and his fellow man, but after serving in the White House, he came to realize that many issues were just window dressing to entice religious groups of voters to support him.

Kuo’s essential thesis is that politicians understand the benefits of talking up issues in terms of legislative proposals, funding goals and methods yet realizing that Congress, or the Administration, will never agree to the funding levels. Want proof, read any State of the Union address.

So Coleman has identified a real problem … one that most citizens realized much earlier when Reservists were put on active duty, not years later. His solution is not a Government Funded Program … but a Voluntary Donation Program. Specifically, Coleman plans to propose legislation entitled the Voluntary Support for Reservists and National Guard Members Act which would provide taxpayers the option of contributing part of their tax refund to an income support fund that will help those families who have experienced an income loss due to a call-up to active duty.

Does the Coleman solution, of asking citizens to donate money to the government which would coordinate spending for a specific needs, sounds familiar?
Do you remember in June of 1999 when Governor Ventura proposed to set up a state-run gift fund for new sports stadiums? Taxpayers were given the option to donate their rebate checks – and/or make a cash contribution – so that baseball and/or football stadiums could be built. Ventura kicked in $1,000 to the fund. While Ventura described the proposal as "democracy at its finest," others responded that it was “laughable.” When asked by reporters then St. Paul Mayor Norm Coleman did not comment on Ventura’s proposal. We know now that voluntary stadium fund did not work.

Bush campaigned for the US Government to send government funds to faith-based groups and according to Kuo, the program has not been supported by Congress. If charities could obtain ample donations, they wouldn’t have needed government involvement.

Voluntary contributions are at the whim and financial capablities of the donors. When 9/11 happened, many people shifted their donations to 9/11 funds in lieu of their regular sponsored charities. Income tax check-offs may be a simple way to designate a few dollars to a government election campaign fund (or monies to support Wildlife) but there is no guarantee that citizens will contribute the monies that are needed.

Coleman’s proposal is weak in that it does not address how many families could receive assistance. Nor, how much would be available. Nor, who would administer the program. Nor, the requirements that families would have to meet to receive the aid. Since Minnesota already has a program Comfort For Courage that assists families, would there be an overlap such that some of the 2,981 Minnesota National Guard troops currently deployed, may not receive any benefits.

At the same time Coleman is offering his limited proposal, Governor Tim Pawlenty and Minnesota DFL members
are proposing real changes that could impact military families significantly. The key elements of the proposed legislation are : a 100 percent exemption from state income taxes for military pay and pensions; and a state version of the GI Bill, providing additional financial benefits to veterans and some dependents who attend college. It would affect 33,000 National Guard members, reservists and retirees and an unknown number of Minnesotans serving in the Army, Navy, Air Force and Marines. There is a cost of $75million funded by the State’s taxpayers.

Pelosi Gets Black Eye for Football

When Speaker Pelosi announced the end of the Speaker Hastert-ThreeDayWorkweek, some squawking came from Republicans that it was anti-family if they had to be available for votes from Monday evening until Friday afternoon.

Well, on Monday, when the House was not in session, Rush Limbaugh scoffed on his radio program that this was due to The Ohio State University versus The University of Florida football game to be played that evening. Quickly, Jay Leno included a zinger in his monologue Monday evening.

So Mouths-that-Roar will chastise the Democrats, but the Internet site Raw Story reported that the request was initiated to the Democratic Leadership by Rep. John Boehner, the Republican Minority Leader in the House of Representatives.
"Mr. Boehner made this request, and in the interest of comity, Democrats granted it," a senior Democratic aide stated.

Since Boehner is from Ohio that would not be a surprise that he may have some interest in the game.

A word of advice to Speaker Pelosi : Next time little Johnny wants to go to a football game, use your Mother-of-five voice and tell him that he is excused, but that the other 433 members must join her to work on the country’s problems. Also, watch your back, those Republicans may seek comity with you in person, but then let their lackeys attack.

An aside to any of you that do not know the outcome of the football game, to use President Bush's parlance ... “It was a thumping” … Congressman Boehner probably would have enjoyed negotiating a minimum wage bill with the Democrats better than watching that game.

Monday, January 08, 2007

Pelosi bungles opening of Congress

The 110th session of Congress opened last week and Speaker Nancy Pelosi made the mistake of not challenging the integrity of the voting process.

Unlike the previous Congress when House Democrats voiced concern of the election process, this time the Democratic Party leadership was remarkably silent.

Let’s roll back in time to one of the first assignments of the 109th Congress which was to certify the vote of the Electoral College. Congresswoman Stephanie Tubbs Jones and Senator Barbara Boxer spoke eloquently about the problems that voters had in Ohio. George Bush had won Ohio by over 118,000 votes and John Kerry had conceded that whatever irregularities existed may have not been to affect the overall outcome. In the end, the Senate voted 74-1 and the House 267-31 to reject an objection to the certification of Ohio's 20 Electoral College votes and select Bush as President. The point was that Democrats saw problems and voiced their concerns.

This past November had a number of close elections. But at the start of the 110th Congress, Democrats were notably silent on the issue of voting irregularity. The lone exception was Representative Rush Holt who made a Parliamentary Inquiry by stating that “there are nonpartisan and partisan lawsuits under way with regard to Florida's 13th Congressional District and that the votes of 18,000 voters were not recorded on the paperless electronic voting machines in an election decided by only 369 votes.” Aside from this Parliamentary Inquiry, there was no other comments ... just let's get the session started.

That’s correct -- Congress has given the Oath of Office to Vernon Buchanan despite the questionable election results. Meanwhile, Democrat challenger, Christine Jennings has filed suite asking a judge to order a new election because of problems in Sarasota County, where more than 18,000 voters who cast ballots in other races Nov. 7 failed to vote in the congressional contest. That rate is nearly six times higher than in the other counties in the congressional district.

Democrats need to lead to ensure the integrity of the election process. The Help America Vote Act gave States monies to update their election equipment and Congress has the responsibility to review the processes to insure that every vote is counted. Under the Federal Contested Elections Act, the House Administration Committee should hold hearings on the Florida selection … err election.

Why should you care? Think about it, if 18,000 votes were not recorded in Minnesota’s First District, Gil Gutknecht could still be the Congressman. In fact, there were a number of close elections with 15 Republicans and 2 Democrats winning by less than 3% -- well within the margin where voting irregularity could create an undeserving winner.

Thursday, January 04, 2007

Good Construction Project ?

Government spending is always a concern, so politicians use phrases such as “Investing in the Future.” Hence, government officials like to invest in infrastructure since it creates jobs, provides visible accomplishment, and shows government responding to citizens and businesses needs.

Sounds good doesn’t it. Well if it can work here … why not in Iraq ?

Some politicians have stated the case that creating jobs for Iraqis will encourage out-of-work males to reject the opportunity to become insurgents and put down there weapons. Newsweek reports :
“The White House insists it knows that simply adding more troops isn't the answer. The plan being considered is far more nuanced than what has been reported in the media, a senior aide to Bush, who would only discuss the talks in Crawford anonymously, told NEWSWEEK. He said it includes money for new jobs programs and reconstruction aid for Prime Minister Nuri al-Maliki, as well as efforts to further shore up his political base.”

There should be some concerns based on the US Government’s past performance. Previous rebuilding programs in Iraq, which, according to one expert, have been a "dismal failure" that have "left a legacy of half-built projects." One of the goals was to create jobs for 1.5 million Iraqis, but USAID said they've only managed to get to 77,000.

Further, last week, The Washington Post reported “inspector general audits that show the Defense Department ended up wasting of dollars when it paid the Department of the Interior to arrange some of its contracts. The purchases totaled $1.7 billion, and procurement officers failed to meet some of the most basic contracting rules.”

For discussion sake, let’s ignore the question of the Government’s competency to properly manage the program, and consider current projects that have been approved.

Last week, the Department of Defense awarded contracts including :

Watkinson L.L.C.*, Houston, Texas, was awarded on Dec. 21, 2006, a $13,251,442 firm-fixed-price contract for design and construction of a heavy aircraft parking apron and open cargo storage yard. Work will be performed in Al Asad, Iraq, and is expected to be completed by Sept. 17, 2007.

This project is not about improving sanitation, improving electricity availability, nor improving schools … the things that ordinary Iraqis want in their daily lives. This is about building aircraft bases in Iraq.

This project could further incite terrorism, since it might help to confirm theories that the United States plans to have a permanent presence in the country for economic reasons.

The other obvious concern is that it is a US based business. Are there are provisions in the DOD contract that require (or at least encourage) the use of Iraqi subcontractors ?

The last Congress was remiss in its oversight responsibilities … the 110th Congress need to make it a top priority. As the question of troop levels is being discussed, so should the question of permanent bases in Iraq.





Defense Contracts
http://www.defenselink.mil/Contracts/Contract.aspx?ContractID=3409


Newsweek article
http://www.msnbc.msn.com/id/16411558/site/newsweek/


Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/24/AR2006122400916.html

Wednesday, January 03, 2007

Military Poll : Send More Troops To …

There has been a lot of media attention and discussion concerning a “surge” (better defined as an escalation) of troop levels. Everyone is weighing in --- the Iraq Study Group, Senators who visited Iraq over the holidays (McCain : send more; Coleman : no more), and military leaders. But a poll of one group that has the most at stake has not received the media attention that it deserves.

Military Times commissioned a mail survey of its readers which generally are on average older, more experienced, more likely to be officers and more career-oriented than the overall military population. This is the fourth year of the survey and over time there have been results indicate an increasingly pessimistic chances for victory.

The results are most interesting to say the least.
First the question was posed as do you believe the war in Iraq to be part of the war on terrorism that began on September 11, 2001 or do you consider it to be an entirely separate military action? The answer was split down the middle – in other words, half the respondents could not make the connection of Iraq and the fight against al-Queda.
Second, questions were asked to about troop levels. The responses were reducing to zero, lower levels than current level, maintaining the current level and increase the troop levels. Separate questions were asked about Iraq and Afghanistan. The answers were similar that 38-39 % believed the troop levels should be increased. The most common level of increase was to increase troop levels in Iraq by 25 % while the increase in Afghanistan was to double the troop levels. 13% of the respondents did not believe that there should be any troops in Iraq while 8% did not believe that there should be any troops in Afghanistan. So, in other words, troops feel there is a greater threat in Afghanistan than Iraq and that America is understaffed for the mission significantly in Afghanistan.

Bush will make announcement in the next few weeks concerning Iraq … but why is Afghanistan being ignored ?

The news of 3,000 American deaths in Iraq was a milestone that was reported widely. But not mentioned is that there have also been more than 500 coalition deaths including 353 Americans (and 1,084 injuries) as of January 1st. Since there are only 18,000 American troops in Afghanistan that is a fairly high percentage.

Why should we care about Afghanistan? First, that is where al-Qaeda called home base prior to 9/11. Second, the Taliban is actively engaged trying to overthrow the President Hamid Karzai’s government. Third, the dependence of opium as a primary economic product will undermine all efforts in the War on Drugs. In fact, the White House’s Office of National Drug Policy states Afghanistan is now the largest illicit opium-producing country in the world acknowledging that it accounts for 87 % of the world’s production.

As Richard Clarke pointed out in the December 31st edition of The Washington Post Op-Ed piece entitled “While You Were At War" : for the Bush Administration “national security issues remain unattended, deteriorating and threatening, all while Washington's grown-up 7-year-olds play herd ball with Iraq. [snip] From relatively low levels of heroin production in 2001, Afghanistan's economy is now dependent upon the widespread cultivation of heroin that is flooding black markets in Europe and Asia. With most of the U.S. Army either in Iraq, heading to Iraq or returning from Iraq, insufficient U.S. forces were available to prevent the once-liberated Afghanistan from morphing into a narco-state. [snip] if there is a solution, it lies on the other side of the Khyber Pass where a sanctuary has emerged, a Taliban-like state within a state in western Pakistan. Dealing with that problem is more than Washington has been willing or able to handle.

When Senator Coleman, who sits on the Foreign Relations Committee and so quickly after two visits states the troop levels in Iraq should be lower, needs to respond to what are America’s responsibilities in Afghanistan. Coleman so quickly wanted to get his views out for the 2008 election that he called reporters from Iraq to tell them. Politicians need to define the mission and then give the military what they need ... the question of troop levels should not be made by someone whose exposure to the military was as a student protester in his college days and now has taken a whopping two trips to Iraq in five years ! Heck, hasn’t Al Franken been to Iraq and to Afghanistan at least four times? Admittedly, Franken is going on an USO tour, but why is that our elected politicians have not accepted the responsibility to see the situation first hand? It might be because every time, they go they come back questioning the mission (Gutknecht, Shay, Warner, Coleman, Collins, Wilson,…). Iraq is a quagmire and a civil war. Afghanistan is where the War on Terror originated and needs to be completed there.

Military Times Story and Poll
http://www.militarycity.com/polls/2006poll_iraq.php
http://www.militarycity.com/polls/2006_main.php

White House Office of National Drug Policy
http://www.whitehousedrugpolicy.gov/international/afghanistan.html

Clarke Op-Ed
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/29/AR2006122901238_pf.html

Republicans comment on “surge”
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/31/AR2006123100948.html?nav=rss_politics

Tuesday, January 02, 2007

MN AG Swanson IDs the problem

The first step in resolving a problem is to identify the problem.

Well, Minnesota’s new Attorney General Lori Swanson is off to an impressive start. Already she has announced her intentions to better protect the Minnesota’s citizens in the areas of :
Predatory lending;
Updating cyber crime laws specifically those related to child pornography;
Cell phone contract terms; and,
Tuition aid and financial support for Veterans.

Addressing these issues indicates that Swanson is listening to the citizens and seeking pro-active resolution.

Last week, she announced that she intends to extend the curbs on the business use of Social Security numbers.

Identity theft is too easy due to lackadaisical protection by companies and governmental agencies that have your information.

Social Security Numbers have a definitive purpose, but are used too often when they are not needed. Essentially, the Social Security Number should only be required for tax reporting purposes. Your employer, savings bank, mutual fund investment provider, mortgage lender, Medicare provider, etc. need the number, but many others do not. Yet, many ask for it. Why? Most likely because it’s a unique number that every citizen has … and that is not good enough of a reason. How many times last year did we hear about problems concerning missing personal data that contained Social Security Numbers? When an employee of the Veterans Administration laptop was stolen, it was a breakdown in protocol. Similar problems occurred at Visa, Wachovia, Equifax, ING, AIG, many colleges, and the U.S. Department of Agriculture. When MN Tax Revenue mail containing tax returns was misrouted, it was a harried time for the Department, but most likely human routing errors – yet scary none the less. Many of these intrusions were on agencies that had a rightful need for our SSN … but what about other companies that do not need that information but have it?

Recently, I wanted to update my Internet service to broadband. The company wanted my SSN. I explained that there were no tax implications and that I was willing to prepay for the service or commit to a long term contract. The clerk could not explain why it was required, so I asked for a contact name at their corporate offices. The clerk stated that they do not give out corporate contacts. As you can imagine, I promptly left the store … and placed a call the office of the Minnesota Attorney General. I expressed my displeasure of this unwarranted intrusion into my private records. The staff attorney stated that my complaint would be recorded, but advised that under current law, a company may “request” that information and I had the right to seek out another service.

At the Federal level, new regulations mandating tougher online financial security measures will took effect yesterday. Banks, credit unions, and other financial institutions must begin using enhanced technologies to protect customer data against identity theft. Some online services will use “fingerprint” technology to identify you and your computer. Laptops may be better secured by requiring a separate encrypted password stored on a USB device or smart card that is not attached to a laptop.

These provisions are steps in the right direction, but the best protection is to limit who has this information … and that is where Attorney General Swanson can lead. I am glad that she recognizes the opportunity and is being responsive to the citizens concerns.