Oakland’s “Pothole Vigilantes”

Oakland, California is in the midst of some tough financial times.  The city is facing a $25 million operating deficit this year, and providing all of the basic services that those of us living in better-managed cities take for granted — like parks, street lights, and adequately maintained roads — just aren’t within Oakland’s current budgetary capabilities.

Right now, Oakland has 7,700 unaddressed service requests to fix potholes on Oakland city streets.  The quality of streets in Oakland has been found by a recent study to be among the worst in the country, with bone-jarring potholes and other street-quality issues estimated to cost Oakland drivers an extra $1,000 a year in car repair and maintenance costs.  And to add insult to injury for hapless Oakland drivers, Oakland officials have decided that $2.9 million in money that has been generated by California’s high state gas taxes — money that is supposed to be used for road repair — will be used for street lights and parks instead.  Rather than providing some immediate pothole relief with the money earmarked for that purpose, Oakland is promising that it will move forward with a project to spend $100 million on street repairs over the next three years.

So what’s a frustrated Oakland driver who is tired of having to pay hundreds of dollars in car repair costs out of pocket because city fathers aren’t providing basic services to do?  Two Oakland residents have decided to take matters into their own hands.  They call themselves the “Pothole Vigilantes,” and at night they’ve gone out to tackle potholes in certain Oakland neighborhoods.  After they’ve made their repairs, they post videos of their work on Instagram, where they also solicit suggestions for new pothole projects, and donations.

Oakland city administrators asked about the work of the “Pothole Vigilantes” say that they sympathize with the frustration about unrepaired potholes, but they “can’t recommend anyone do this work themselves, not least because it raises safety issues while people are working in the streets.”  No kidding!  People pay taxes so their cities will do the work in a way that is safe, planned, and handled by people who know what they’re doing — but if cities fail to deliver on basic services, they shouldn’t be surprised that some people will take matters into their own hands.

If you had to drive every day on a street with a monster chuckhole that was never fixed and growing ever larger, wouldn’t you be tempted to try to fix it yourself?  And while the safety issues involved in citizens going out to do road repair under cover of darkness are obvious, there’s also something admirable about people who aren’t content to sit back and wait forever for an inept city government and its budgetary shell game to complete repairs, and instead have decided that some self-help is in order.  Don’t blame the fed-up “Pothole Vigilantes,” blame the city government whose failures produced the conditions that gave rise to their vigilantism in the first place.

A Year Without Spending

Some people celebrate “Buy Nothing Day” — which aptly falls on Black Friday — as a protest against the rampant consumerism in modern culture.  The idea is to avoid buying unnecessary items and, instead, to spend more time with family and friends, and, literally, “live freely.”

A British woman took the concept more than a few steps farther, and decided to go for a year without buying anything beyond the basics.  That meant that she paid her mortgage and utilities and not much else, bought food in bulk and cooked her own meals, and rode her bike to work rather than taking the subway.  No dining out or drinks at the pub, no trips to the movies, no new clothes, no travel or vacations, and no luxury items like fancy foods.  She also turned down friends and family who wanted to buy her gifts.

To her surprise, she made it through the year, with the winter months being the toughest.  She saved a lot of money — about $27,000, all told — and found that she had come to enjoy simple things, like a picnic in the park or a walk through a museum that didn’t charge admission.  She also feels that she became closer to her family and friends.  In short, she says she learned that money didn’t buy happiness.

The most instructive part of the woman’s story of consumerist self-deprivation is this admission:  “I’d set myself budgets and spending plans in the past and they’d always fallen by the wayside on my next night out.”  People spend themselves into oblivion because they don’t have the self-discipline to control their behavior, whether it’s sticking to a budget or simply exercising good judgment on spending and refraining from making impulse purchases.  And then, at some point, they look around at a place cluttered with stuff they don’t use and clothes they don’t wear, and wonder where all the money went.

I wouldn’t want to go for a year without traveling, or enjoying a drink out with friends, or savoring a good meal on a special occasion.  Those are some of the things that make like special.  But avoiding unnecessary spending, living a more minimalist, possession-free life, and feeling a certain sense of pride that you’ve got your finances under control affords its own satisfaction, too.

“Waste, Fraud, And Abuse” And The New Jersey Turnpike

Come election time we hear politicians say they plan to balance governmental budgets by getting rid of waste, fraud, and abuse.  That comment always seems like a dodge to allow the candidate to avoid talking about tough budget choices — and then you run across a story like this.

It turns out that a recent audit of the New Jersey Turnpike Authority identified $43 million in wasteful payments for employee perks and bonuses.  The payments included $30 million in unjustified bonuses to management and employees without regard to performance, an employee bowling league, employee bonuses for working on their birthdays, and free E-Z pass transponders, and cash out payments for unused sick days and vacation days.  One employee with a base salary of $73,469 earned $321,985 when all payouts and bonuses were included.  All of this happened as tolls were being increased.

These kinds of stories are maddening.  They confirm our belief that some of our hard-earned tax dollars are being wasted, but they also indicate that agency administrators and legislators are abysmal failures in exercising appropriate oversight.  That result shouldn’t be surprising.  Digging into the actual uses to which tax dollars are being put is hard work, and most of our legislators aren’t nose-to-the-grindstone types who have any interest in getting into the details.  Perhaps it is time to change that?

No To More State Government Bailouts! (Exhibit B)

For those of us who are opposed any more federal government bailouts of state and local governments, California is Exhibit A.  As today’s story in the New York Times demonstrates, however, if California is Exhibit A, Illinois is Exhibit B.

The article chronicles how Illinois is unable to pay its bills even for essential services, has chronically underfunded its bloated state employee pension plan, and has already borrowed billions of dollars to pay its obligations — which just worsens the long-term budget outlook.  Illinois voters, meanwhile, have elected corrupt incompetents like Rod Blagojevich and state legislators who have made careers out of ducking tough choices on pension and budget issues.  No one seems to have been held accountable for the current mess.

Why should the voters of Ohio, or other states, see their tax dollars go to help Illinois when Illinois voters and Illinois legislators have done nothing to help themselves?  Although some states, like Ohio, have reacted to the recession and out-of-balance budgets by engaging in legitimate belt-tightening, Illinois and others have responded with still more irresponsibility and profligate spending.  How Illinois extricates itself from serious problems of its own making is Illinois’ problem — and only Illinois’ problem.

Pruning Spending In The Garden State

Here’s an interesting report from New Jersey, where a newly elected governor is trying to tackle some of the nation’s worst state budget problems.  The governor, Republican Chris Christie, has concluded that new taxes are not the answer — and no wonder, because the article reports that taxes in New Jersey are the highest in the nation after being raised repeatedly in the recent years. So, the governor is proposing substantial spending cuts, including cuts in the public payroll.  Teachers unions predictably are balking.

We’ll find out the outcome of this budget contest soon, because in New Jersey a new budget has to be approved by June 30.

Motivated Consumers And Health Care Cost Containment

Virtually every American, at some point in their lives, has had to cut back and adjust their spending habits.  It may have been when they were saving for a honeymoon or a special gift for a loved one, or it may have been when they scrimped to put a child through college.  Sometimes the decision is forced on us, such when we are laid off or find ourselves dealing with unexpected expenses, like an unanticipated home repair.  For many people who have lost their jobs in the current recession, the time for careful personal budgeting is right now.

In my experience, consumers who are personally focused on cost containment can, and do, contain costs.  They eat out less or buy the “un-brand” alternative at the grocery store; they decide to drop a magazine subscription or two, drive instead of fly on a trip, or forgo a vacation altogether.  As the sacrifices mount, so do the savings.

That is why this article by Indiana Governor Mitch Daniels seemed sensible to me.  He reports on the Health Savings Account option offered to Indiana state employees and the significant cost savings it has achieved.  Under that system, the state deposits a set amount in an account for each employee for their health care costs for the year, and whatever the employee does not spend becomes their personal property.  The employee has an incentive to be a careful consumer — to think about what they really need, to hunt for a cheaper provider, to choose the generic alternative rather than the name brand, and so forth — and that is precisely what has happened.  The employees want to keep as much of the money in the accounts as they can manage, and as a result the State is realizing substantial savings in its health care expenditures.

I think one significant step toward bringing our health care costs under control would be to introduce the concept of naked financial self-interest to the health care choice equation.  Currently, individuals whose care is paid for by third parties, whether a government-sponsored plan or an employer-sponsored plan, have no incentive to engage in penny-pinching.  They don’t look for the cheapest alternative or consider whether they can reasonably forgo the service because someone else is footing the bill.  I think if they saw an impact on their pocketbook they would make those kinds of careful judgments, and the federal and state governments — and ultimately taxpayers — would benefit as a result.

Making Hard Budget Choices: A No Doubt Boring Look At NHTSA

The President recently released his budget proposal for 2010.  It is a complex, difficult proposal to grasp, contemplating trillions of dollars in spending and trillion-dollar deficits extending, unbroken, into the foreseeable future.

One of the problems for American taxpayers is that the federal government is so large, so sprawling, and so unwieldy that it is virtually impossible to be an informed citizen.  There are too many agencies performing too many functions and producing too much information.  The recent Toyota safety problems, however, have brought NHTSA — the National Highway Traffic Safety Administration — into focus for me.  I therefore thought that NHTSA might be a good candidate for a closer look at the federal budget, on an individual agency level.

NHTSA is a federal agency that focuses on motor vehicle safety.  Its NHTSA Fiscal Year 2010 Budget Overview, in PDF form, is available here.  The Budget Overview indicates that the total proposed budget would be $867 million, of which $237 million would go to Operations and Research, $4 million would go for the National Driver Register, and the lion’s share — $626 million — would go to National Traffic Safety Grants.  In short, more than 70 percent of NHTSA’s budget doesn’t go to figuring out problems like those that have led to the Toyota recalls.  Instead, it serves as a fund transfer mechanism, where money comes in from the federal taxpayers and then is doled out to states and municipalities through grants.

For purposes of this posting I am going to assume that every cent allocated for Operations and Research and the National Driver Register is used for important federal government purposes.  (This is undoubtedly a generous assumption, because $96 million of the funds budgeted for Operations and Research and the National Driver Register are identified, in Exhibit II-2 of the Budget Overview, as being for “administrative expenses.”)  What about the grants, though?

It turns out that there are eight different grant programs, as well as administrative expenses for these programs, which in 2010 is budgeted for $25 million.  To get more information about the grant programs, you need to go to the NHTSA Fiscal Year 2010 Budget Estimates, which also are available in PDF form here.  According to page 48 of the document, some of the programs are designed to “encourage States to increase seat belt usage” and “child safety seat and child restraint programs.”  These programs include the Seat Belt Performance Grant Program, which is budgeted for $124.5 million, the Occupant Protection Incentive Grants, which is budgeted for $25 million, and the Child Safety and Booster Seat Grants, which is budgeted for $7 million.  In all, more than $150 million in grants go for seat belt-type programs.

Another $139 million is budgeted for Alcohol Incentive Formula Grants, which are designed, according to page 48 of the PDF’d document, to “to encourage States to adopt incentive grants to states for the implementation of effective programs to reduce impaired driving and its tragic consequences.”  The largest grant program, the Section 402 Formula Grants budgeted at $235 million, is intended, also according to page 48, to “support State highway safety programs designed to reduce traffic crashes and resulting deaths, injuries, and property damage,” and under that program “[a] State may use these grant funds only for highway safety purposes; at least 40 percent of these funds are to be expended by political subdivisions (i.e. communities) within the State.”

When you get to the listing of “Anticipated FY 2009 Accomplishments” for the NHTSA grant programs, at pages 51 and 52 of the PDF’d document, you see things like placing a “national media buy” for the “Click It or Ticket” seat belt program and the “Drunk Driving.  Over The Limit.  Under Arrest” program and the participation of all 50 States in those programs.

These NHTSA grant programs help to explain why cutting the federal budget seems to be so difficult for Members of Congress.  One could legitimately conclude that the federal government doesn’t really need to encourage States to have safer roads; one would think the States themselves could and would conclude that is an important goal.  One also could conclude that people really don’t need to be reminded to wear seat belts or that drunk driving is illegal and will be punished.  If individual States or local governments are having significant problems with drunk driving, for example, they can develop and fund their own programs, targeted specifically at the problem areas.

These NHTSA grant programs cost more than half a billion dollars, including the $25 million in administrative costs at the federal government end.  (There also will be costs, of course, at the state and local government end, as those entities hire government workers to design programs that comply with federal regulations, make grant applications, and then themselves administer whatever funds are received from the federal government.)  Yet if Members of Congress voted to eliminate these programs, in order to realize some significant savings, during their next campaign they risk being on the receiving end of attack ads that use those votes to argue that they are in favor of drunk driving, or against seat belt use or children using child restraint seats.  The malign images of those potential ads probably flash through their minds when the budget is discussed, and they take the path of least resistance and vote against any cuts in the grant programs.  The end result is that nothing gets done, federal spending never decreases, and our budget deficit and national debt holes get deeper.

No one supports drunk driving, unsafe roads, or reckless child-rearing activities.  But if we are going to get our federal budget under control, hard choices have to be made.  I think a good start would be to get the federal government out of the grant-making and TV ad-buying game and let States and local governments make their own decisions about how best to enforce existing laws on traffic safety, seat belt use, and punishing drunk driving.  $626 million in savings may not seem like a lot of money — at least, not to a Member of Congress faced with trillions in federal spending — but it is a start, and every little bit of savings is needed if we are going to turn around our deeply troubling budget predicament.

It Takes Crust

Whenever someone would do or say something that was outlandish and grossly overreaching, my grandmother would say: “That takes crust.” I think she would have used that phrase to characterize the latest scheme developed by California lawmakers to try to close a huge budget shortfall. They have announced that they will increase, by 10 percent, the state income tax withholding from the paychecks of California workers. They won’t increase the underlying taxes, mind you — they know that to do so would be political suicide — so they will just keep more of the taxpayers’ money and then repay it later, without paying any interest, when refunds are distributed out next year. In effect, California lawmakers are taking an enormous, interest free loan from California workers during these very difficult economic times, when workers can least afford it.

The California Statehouse, where no man's property apparently is safe from confiscation

It is hard to imagine a more gutless gimmick to try to close a budget deficit while minimizing political risk. Rather than make the hard choices about cutting spending or raising taxes, California lawmakers have found a craven and weaselly solution that allows them to increase revenue while still being able to claim that they haven’t raised taxes. I certainly hope that California voters stand up for themselves at the next opportunity and throw out the legislators who concocted and supported such a duplicitous scheme. The lengths to which the California legislature will go to raid the pockets of taxpayers should cause any rational taxpayer to think of fleeing the state for a destination where the government has some modicum of respect for private property and the rule of law.

Not-So-Golden (II)

It’s actually kind of sad when a Californian writes that Californians need to get over themselves.

Fly Coach, Instead

I realize that $550 million is but a drop in the seemingly bottomless bucket that is the federal budget, but I am still irked at Members of Congress for spending that sum to buy new jets to ferry them around on their boondoggle “fact finding” trips. At a time of belt-tightening by average Americans, is it too much to ask Congress to engage in some self-restraint? Are our elected representatives so possessed of a sense of self-importance that they can’t even rub elbows with those of us who fly coach?

And speaking of boondoggle fact-finding missions, this Wall Street Journal article about rapidly growing congressional travel expenses is an eye-opener. One nice thing about global warming — it is such an elastic “issue” that virtually any trip to any location on Earth may be explained away as giving lawmakers first-hand information about climate change in that part of the world.

It is not surprising that both Republicans and Democrats are willing to spend tax dollars to take fine trips without apparently experiencing an ounce of embarrassment that they are taking advantage of their positions. It’s just another example of The D.C. Effect, where politicians who initially are elected as reformers or watchdogs or representatives of the common man end up being fundamentally corrupted by the money and perks thrown at Members of Congress.

The Step-Down Phenomenon: Foresaking Vanity

Some months ago I heard a report on NPR that described what I have come to call the “step-down phenomenon.” The phenomenon addresses what people do when times get tough, family budgets become leaner, and belts are tightened. In effect, people “step down” from more expensive items to less expensive items, rather than cutting out an item entirely. Since I’ve heard that report, I’ve noticed a number of examples of the phenomenon, which I’ll write about in the next few days.

A recent report on the sale of vanity license plates in Ohio is a good example. In Ohio, any special license plate costs an additional $35. In 2008, when the recession was just beginning to be felt, the number of “vanity” plates fell by 277, and my guess is that the numbers will fall even farther in 2009. Nobody “needs” a vanity plate, and it is easy to “step down” to a regular license plate and save that $35. Families make these kinds of judgments all the time, when they decide what is really important and might cut out some activities, or scrimp on others, in order to save up to pay for a child’s education or take a special trip. If only Congress had that same kind of decision-making ability!

The extra $35 is a painless way for Ohio to raise additional funds; last year vanity plate fees produced an extra $20 million in revenue.  Still, I wouldn’t mind seeing fewer of them on the road. Vanity is not an attractive quality, and vanity plates often seem to live up to their name by being annoyingly egotistical and narcissistic. Is it really necessary for the Prius driver to have a plate that says “GR8 MPG,” or the BMW driver to have one that reads “MY BEEMER”? And I’m sorry, but I doubt the plates that read “1 BUX FAN” or “TOP DOG” are accurate. This is an instance where the recession may be having some positive consequences by eliminating some of the irritations found on the morning drive.

Haste Makes Waste

The Congressional Budget Office analysis of the massive cost of the health care proposals that are being considered by Congress deals a crushing blow to one of the most cited selling points for health care reform:  that it ultimately will save the taxpayers money.  Adding hundreds of billions of dollars of additional health care spending on top of the already staggering federal budget deficit should make even the most ardent proponent of health care reform a bit squeamish.  (I also believe that the ineffectiveness of the “stimulus package,” which is increasingly being exposed as classic pork-barrel spending that has done little except cause the federal deficit to balloon, has reduced the public’s willingness to trust Congress as they rush through another sprawling and expensive legislative proposal.)

The health care legislation is a good example of how political considerations often war with prudence.  Any legislation that attempts to fundamentally restructure a huge part of our economy — a part of our economy which also involves literal life and death issues — should be the product of careful consideration, thorough hearings, and input from all of the many potentially interested parties.  Because the Obama Administration believes that its political clout is waning, however, it has demanded that Congress produce legislation before the end of summer — a deadline which, if met, would guarantee a law that is not nearly as thoughtfully considered as it should be.

I recognize that, in the Clinton Administration, the deferral of health care reform meant the death of health care reform.  Many health care reform advocates are afraid that situation could happen again.  I’m willing to take that chance, however.  This time, Congress should act deliberately and responsibly before it commits the federal government to hundreds of billions of dollars of additional spending obligations at a time when the country already is drowning in debt.  Perhaps the sobering reality of the CBO analysis will help to bring that about.

Higher Revenue

The California Board of Equalization, which is charged with administrative authority over the State’s taxes, estimated that a legislative proposal to legalize the growth, sale, and consumption of marijuana as a means of bridging California’s budget gap would raise nearly $1.4 billion per year.  Such a sum would not, of course, cover the entire California budget deficit — which amounts to well over $20 billion — but it is not chicken feed, either.

One wonders whether the enormous budget pressures that states are facing will cause them to make choices they really hadn’t considered palatable before.  In Ohio, for example, the Governor retreated from long-standing opposition to legalized gambling to allow video slot machines at seven Ohio racetracks.  The proposal is supposed to raise $1 billion in revenues and thereby help to close a multi-billion dollar budget deficit.  (I’ve never understood, incidentally, how it is really possible to estimate, with any degree of accuracy, the likely revenues from legalized gambling, and it would be interesting to see whether such estimates, in retrospect, have even come close to what is actually achieved.)

From a political standpoint, the great thing about sin taxes is that the people who don’t engage in the sin can decry the sin, raise the tax, and enjoy the revenue, all at the same time.  Such activities are easier than raising taxes on the general population or cutting existing programs or governmental employees.  It may well be that the poor economy and budget problems, coupled with those political considerations, make more progress toward legalizing marijuana than NORML ever has.

Elevator Operators And Zoo Animals

Here’s an appalling variation on the approach to budget cutting discussed in the post The Elevator Operator At The Washington Monument:  New England zoo officials, when confronted with the prospect of budget cuts, raised the prospect of euthanizing zoo animals!  To his credit, the Governor of Massachusetts, Deval Patrick, called out the zoo officials for using obvious scare tactics and quashed any suggestion that animals would be killed as a result of budget cuts.  Did the New England Zoo really think people would believe that it has no more appropriate ways of coping with revenue shortfalls, such as cutting back advertising or reducing its administrative payroll?

I think it says a lot about the Zoo — and none of it good — that the Zoo administration would raise the prospect of slaughtering captive animals in what is obviously a cold and calculated effort to manipulate the emotions of children and their parents, to raise a hue and cry about the fate of the poor animals, and thereby to pressure the state government to restore all funding for the Zoo’s operation.

$1,000,000,000,000

The Congressional Budget Office says that the budget deficit for 2009 — through only the first six months of the year — has surpassed $1 trillion. That’s a lot of zeros for only six months.

How big is a trillion? The NASA website says that one trillion seconds equals 31,546 years.

The rate at which we are spending ourselves into a deep well of debt is frightening, and the long-term costs of financing that debt will be staggering. Every dollar in future federal budgets that will go toward paying interest on that debt — and which will largely be paid to foreign investors — will be a dollar that cannot be spent on schools, or roads, or other governmental projects or services.