The Machine

From our friends at Conservative Victory PAC

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The Broadside 5-20-13

We talked more about the IRS scandal with Amy Kremer from Tea Party Express, and Erik Telford, Vice President of Strategic Initiatives and Outreach at the Franklin Center for Government and Public Integrity. 

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Opening clip from Kentucky Fried Movie.

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The Broadside,Tonight 8pm

Tonight on The Broadside at 8pm.

We're talking more about the IRS scandal with Amy Kremer from Tea Party Express, and Erik Telford, Vice President of Strategic Initiatives and Outreach at the Franklin Center for Government and Public Integrity.

Click here to listen to The Broadside tonight at 8pm on The Red Maryland Network


You can support Red Maryland by shopping at Amazon.  Click the banner below or the link on the homepage to go directly to Amazon. There is no cost to you and we get the credit.

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Obama Visits Baltimore Firm Owned by Keystone XL Pipeline Supporter

President Obama will visit Ellicott Dredges today Baltimore today as part of his “Middle Class Jobs Opportunity Tour.”

Peter Bowe owns Ellicott Dredges and is a staunch advocate of building the Keystone Pipeline.  The Keystone XL Pipeline is a Canada-Nebraska oil pipeline, which would transport oil from extracted from the Alberta tar sands.

Yesterday, Bowe testified in favor of the pipeline before a House subcommittee on Small Business.  In his testimony, Bowe said building the Keystone XL Pipeline is all about jobs. 

So what does the Keystone pipeline have to do with us, and why do we care? For us, it’s all about jobs, not construction jobs for the pipeline itself, but ongoing jobs every year for decades to come, all related to the production of oil from the Alberta oil sands deposits…

 One way or the other, Canadians will eventually solve their distribution problems, with or without US governmental collaboration. To the extent this process is delayed, the producers will suffer economic loss, and their US suppliers, like Ellicott Dredges will suffer as well…including diminished employment.

Apparently the jobs created by the Keystone XL Pipeline are not high priority for President Obama’s agenda as he has punted on making a decision to approve or deny the project until late this year or early 2014.

Bowe urged approval of Keystone as soon as possible.

We urge you to approve the Keystone pipeline as expeditiously as possible. We should rely on the proposition that the Canadians are fully capable of acting as custodians of their own environment, and that Canadian oil is not only environmentally superior to that from say Venezuela, but certainly more secure politically compared to or other existing options.

Bowe also argued, contra to Obama’s negative rhetoric towards fossil fuels,

I think in terms of how to persuade the administration, for the foreseeable future the transportation industry in this country needs liquid petroleum products of one form or another. They can’t be displaced. They won’t be displaced. And that cost factors into everything that we consume whether you drive a car or not. If you consume any product, there’s transportation costs built into that. So I think we need to acknowledge – call it a ‘dependence’ on liquid fuels and say that’s not necessarily a bad thing. Energy is big part of our economy and our lifestyle.

Last year Bowe was a signatory to a letter to President Obama from the National Association of Manufacturers, which stated:

Dear Mr. President: The undersigned businesses and organizations, which together represent virtually every sector of the entire U.S. economy, share your continued goal of creating jobs and boosting the economy through manufacturing. However, there remains a piece of unfinished business that would harness the power of manufacturing to create jobs: final approval of the Keystone XL Pipeline.  As you and the Congress look to spur the economy and put people to work, there can be no stronger sign of a commitment to economic growth than approving Keystone XL.

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A Public-Private Pittance

Longtime readers know that I've long been crusading for privatization of state construction projects and transportation systems. So I was encouraged when I heard that the MTA was seeking input from private contractors on how to build the Purple Line in the DC suburbs.

That being said, what was reported from the meeting gives me a bit of pause:

Maryland officials are seeking ways to cover the state’s half of a Purple Line’s construction costs as they seek highly competitive federal aid for the other half. How much of the state’s $1 billion share the private sector would be asked to cover is still under consideration, officials said. Dormsjo said it could be about 5 to 10 percent of the construction costs. 

That puts the private investment roughly in the $50-$100 million range. Not a small sum when it comes to investing in transit, but also potentially leaving the state on the hook for most of the $1 billion estimated cost to construct the line. However, it isn't that significant an investment when compared to the fact that three companies are each pledging north of $700 million to build a casino in Prince George's County.

Why is the state seeking such a small amount of private investment? Follow the money:

In any Purple Line public-private partnership, Maryland officials said, the state would own the rail line and control fares. The joint venture of private companies could pay for some or all of the design and construction costs, which the state would pay back when certain milestones have been reached, officials said. 

The joint venture also would recoup its investment over an agreed-upon period as it operated or maintained the line. Because transit systems don’t make a profit, the state would make periodic payments based on whether the rail line met certain performance standards, such as keeping trains clean and on time. 

Such an arrangement would ensure that the rail line is well-run and maintained, and would free up some public money during the design and construction phase for other transportation projects, state officials said.

Emphasis mine.

Basically the system that the state has in place is not one that is operated by any particular profit margin, but instead based on small investment in a system in which the only metrics regulating performance and ensuring payment to the private vendors is meeting basic performance metrics.

I'm not entirely sure how this is supposed to save the taxpayers money however if the $100 million investment is being offset by future payments.

The reason that three companies put up close to a billion each in order to operate a casino was one word: profit. These companies saw the risk of a large upfront investment offset by the ability to make huge profits on the backside. With the current Purple Line (and Red Line) public-private partnership proposal, there is no profit motivation at all. With the state maintaining ownership of the lines and control of the fares, how will this be any different than the state contracting out construction of the line? The only difference is that the state is getting somebody else to build the lines for them. Hardly a motivation for quality and cost savings.

When Virginia built their High Occupancy Toll lanes, they outsourced the entire construction and operation to Australian firm Transurban for 75-years. Those lanes were built quickly and so far have been operating smoothly. We can have the same thing with the Purple and Red Lines if we have the political will to do so. 

It behooves us, both as transportation consumers and taxpayers, to stop with these private-public partnerships that provide only a pittance of cost-savings to taxpayers. We must do better to be competitive as a state.

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Red Maryland Radio: 5/16/2013

Another big episode of Red Maryland Radio came at you tonight on the Red Maryland Network.

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On tonight's show:

• Delegate Don Dwyer plead guilty to a misdemeanor but was sentenced to 30 days in jail; what now?
• There's a proposal from the National Transportation Safety Board to drop the Blood Alcohol content required for a DUI to .05; the Litigator brings his expertise;
• Anne Arundel County Councilman John Grasso was ticketed for doing the same thing that made John Leopold's career;
• And Greg and I will spend some time discussing summer movies, television, and music.

This is why you can't afford to miss Red Maryland Radio each and every Thursday night at 8, on the Red Maryland Network.......and don't forget that you can subscribe to the Red Maryland Network on iTunes.

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HoCo Has a Rain Tax Calculator

Thanks to a new web-based impervious surface estimator created by Howard County’s Geographic Information Services, county residents and businesses can now calculate how much Maryland’s new storm water management fees or the “rain tax” as it is known, will cost them on their July property tax bills.  

Approved by the General Assembly in 2012 the Storm Water Management-Watershed Protection and Restoration Program implements a set of fees to fund watershed restoration and protection programs for the Chesapeake Bay as mandated by the U.S. Environmental Protection Agency.  

The law requires Maryland’s 10 largest jurisdictions to generate revenue to pay for the projects through collecting fees on “impervious surfaces” i.e., roofs, driveways and parking lots.  Legislative analysts pegged the cost of the law at $14.8 billion.  State and local government and volunteer fire company property are exempt from the law.

While the Howard County site gives the disclaimer that it provides only an estimate of the amount of impervious surface fee, it is illuminates just how significant the fees will be for not just for homeowners but for businesses of all sizes.   

Steve Kendall, owner of Kendall’s Hardware in Clarksville says the fees will add “roughly another 10 percent to my $43,000 property tax bill.”  In addition to assessing a fee on the roof of the 37,000 square foot building, which houses the hardware store, Kendall will also be assessed for the parking lot and driveway. In all, the county will assess the storm water fees for 114,000 square feet of impervious surface according to the impervious surface estimator. 

“Howard County is not the cheapest place to do business,” Kendall said, and the added cost of the rain tax certainly shaves his bottom line, which may force him to make price adjustments.

Kendall said that he was already taxed once in the form of incorporating storm water and sediment control when he originally constructed the building.  

For Robb Merritt, President of Merritt Properties, which has the largest privately owned commercial real estate portfolio in the region, the rain tax has created uncertainty.  “Somebody is going to bear the cost,” Merritt said. “We just don’t know who, we haven’t been able to calculate the cost yet.” 

In addition to its 28 properties in Howard County, Merritt owns another 121 properties in the 10 jurisdictions affected by the rain tax.  Each jurisdiction has implemented their own tax meaning Merritt has to account for different fee structures for its properties across several counties. 

Even large companies like General Growth Properties, which owns The Mall in Columbia, and six other malls throughout Maryland, would see a significant fee assessment.  The impervious surface calculator estimates an annual rain tax bill of $63,480 for the mall property.

Tom Ballentine, a lobbyist for the Maryland Chapter of NAIOP Commercial Real Estate Development Association, called the rain tax “the biggest impact fee in the state of Maryland,” and said the it has created “a good deal of uncertainty,” because not all of the jurisdictions have approved their fee structures, and there are complexities in calculating credits for existing storm water management practices.  

Also Ballentine said the rain tax has caused “difficult friction” in the commercial real estate industry between new developers and managers of existing properties.  “If the 10 counties fail to meet progress” Ballentine said.  “The consequences fall on new developers.”  That would have a significant impact on any new development in the Chesapeake watershed.

The Howard County Council approved the fee structure last March.  The county sets the fee at $15 per 500 square feet for three years, with increases in the fourth and fifth years.  The county must raise $130 million over the next five years to pay for mandated watershed and restoration projects.  Even though the fee will continue after five years, the county admits it cannot predict the cost of the fees after that. 

The fees will appear as a line item on county property tax bills.

Several state legislators from Howard County predicted the General Assembly would revisit the rain tax during the next legislative session in 2014.

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Red Maryland Radio Tonight

Join Greg Kline and I on this week's episode of Red Maryland Radio tonight at 8 .

On tonight's show:

• Delegate Don Dwyer plead guilty to a misdemeanor but was sentenced to 30 days in jail; what now?
• There's a proposal from the National Transportation Safety Board to drop the Blood Alcohol content required for a DUI to .05; the Litigator brings his expertise;
• Anne Arundel County Councilman John Grasso was ticketed for doing the same thing that made John Leopold's career;
• And Greg and I will spend some time discussing summer movies, television, and music.

All that and more tonight. Be sure to tune in tonight at 8, only on the Red Maryland Network.

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