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Californians Continue to Flee as Public Pensions Eat Up 20 Percent of City Budgets

in Economic Liberty, Economics, Liberator Online, News You Can Use, Taxes by Alice Salles Comments are off

Californians Continue to Flee as Public Pensions Eat Up 20 Percent of City Budgets

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

California has, for a long period in American history, been the go-to place for entrepreneurs and seekers of fortune and fame. But as the regulatory burden grows, making it difficult for business owners to stay, they simply pack and move somewhere where the cost of doing business won’t be as overwhelming.

LuggageThat is a reality and it has been bad for quite some time.

According to CoreLogic’s recent analysis, for every home buyer coming into the Golden State, there are three Californians selling their property and flocking elsewhere.

What the study concluded, deputy chief economist at CoreLogic Sam Khater told reporters, is that the the current state of the California housing market shows that there’s a clear connection “between migration patterns and home prices.”

Since property costs in California have risen 71 percent since 2011, members of the middle and lower classes simply cannot afford to stay so they flee, taking their taxes with them. With local government’s worker pensions growing at a staggering rate — even after reforms were implemented — it isn’t farfetched to believe that, as young, hard-working people leave the state, local governments begin to face tough times, much like what happened in places like Detroit, Michigan.

In a state where the median home price is at $480,000 statewide due to the local and state government’s heavy-handed intervention in the real estate market, incomes aren’t keeping up with the home price increases, making it hard for young families to keep up with their expenses. Instead of opting for paying bills and taxes instead of spending on themselves, people are choosing to leave.

In cities like Los Angeles, taxpayers foot billionaire pension bills, which eventually added up to $1.04 billion in 2015, a sum that represents 20 percent of the city’s general fund. And despite the changes to the laws, city officials will continue to use up to 20 percent of the Los Angeles city budget just to cover pensions and retiree healthcare in the future.

But what about the tech industry? You might ask. Isn’t it making Californians rich?

While the tech industry in is, indeed, thriving, the wealth it creates helps to play into the hands of crony capitalism.

As wealthier tech giants become even more prosperous, they also become more influential among California and Washington politicians. But that’s not all. They also raise the overall cost of living for those around them.

With local governments eating into locals’ paychecks, only those who are powerful enough to influence policy will remain in California. And as history teaches us, this is bound to have a very bad ending.

Small CA City Employees Living Large, Making More Than Governors

in Economic Liberty, Liberator Online, News You Can Use by Alice Salles Comments are off

Small CA City Employees Living Large, Making More Than Governors

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Governments lack knowledge. And it’s what that axiom in mind that we can safely say that acting without knowledge is, even in the short run, a waste.

SantaMonicaIn the city of Santa Monica, California, local bureaucrats are making more than $300,000 a year. That’s $187,000 more than current Vice President elect Mike Pence made as Governor of Indiana the past year.

According to a local investigation, at least 105 Santa Monica employees make more than $300,000 a year, including Santa Monica Police Chief Jacqueline Brooks, who makes $480,000 a year while public records show her base salary is at $306,000.

Overseeing 200 officers, Chief Brooks’ salary seems a bit unusual, especially when you compare it with next door’s Los Angeles Police Chief Charlie Beck, who makes $344,000 while overseeing more than 9,000 officers.

Still in Santa Monica, an unnamed police sergeant raked in nearly $500,000 last year while his base pay was only $137,000. With overtime alone, he was paid about $179,000 extra but unused sick and vacation time were also added to the total, bringing the sergeant’s pay to the total of $475,000.

Others in the local force such as lieutenants, other sergeants, fire captains, and even a marshal made up to six figures by working overtime. According to the Santa Monica city manager, the high number of city employees working overtime is due to the fact that several positions are still unfilled. Currently, however, 18 new firefighters are training in the local academy. Other 18 positions are still waiting to be filled within the local Police Department.

As local transparency groups ask officials why they are having such a hard time filling positions while offering such good pay rates, they want more answers. And if public pressure grows, they may even be able to push for an audit.

As the taxpayer is forced to foot the bill, these watchdogs want city officials to be able to explain in detail why so many of its employees are making more than governors and, sometimes, even as much as the president.

Currently, Santa Monica has some of the highest taxes in the region. With the imminent increase in sales taxes projected to pass by popular vote, they will become even higher.

In other local cities such as Long Beach, watchdogs found 13 city employees making more than $300,000. The same number of overpaid employees was found in Newport Beach, but both cities have populations that are about five times that of Santa Monica.

While the figures are exorbitant, the real problem in this case is not only that government officials are clueless about what the labor market looks from outside of their offices. The bottom line is: When the money doesn’t come out of your own pocket, you do not have to be careful about how you spend it.

Seeing taxpayers as a bottomless pit of money, governments have enough incentives to keep on spending without being held accountable for how they are spending this money. In a free market where the price system is in place, the cost of labor is varied and competitive. Without the pricing mechanism, service providers are not aware of the demand, making them incapable of determining real value.

The only solution to this problem is to shrink the government. Even local ones.

In the Nation’s Capital, Drinking in Large Groups Can Get You Fined

in Drugs, Liberator Online, News You Can Use, Personal Liberty by Alice Salles Comments are off

In the Nation’s Capital, Drinking in Large Groups Can Get You Fined

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Busybodies are always trying to figure out a way to control our lives in ways never seen before. In Washington, DC, the obsession is turning into a mental health epidemic—among bureaucrats and their supporters only.

DrinkingAccording to Watchdog.org, DC has decided to target groups that organize pub crawls. Because drinking in large groups is apparently dangerous.

Claiming to have safety in mind following a host of different pub crawls organized in the city this past year, DC officials are targeting these same pub crawl organizations, saying that bringing large groups of tourists to local restaurants and pubs to boost the local economy is just too much.

Instead of letting the community benefit from tourism, DC officials want fewer groups to organize pub crawls in the region, forcing gatherings of over 200 people to register with the city before hitting the town. These groups have to pay officials $500 for the privilege of getting an OK from the local government to operate, and organizers must also have a security plan set up. Oh, and never mind the holidays! DC will not give you an OK to operate for those sacred drinking dates.

According to Reason, the new rules also dictate ho pub crawls can be advertised, forcing organizers to add a warning saying “you must be 21 or older to participate” on every piece of pub crawl marketing material. Organizers must also add a line encouraging the use of public transportation.

But before this debacle took place and the city decided to “take action,” organizers were simply required to submit a registration. With the new requirements in place, the number of organized pub crawls in the nation’s capital is already starting to drop.

But despite the criticism, DC officials seem focused on letting this new set of rules stay in place. Even if that means local businesses will hurt as a result.

According to Watchdog.org, new impositions have created another set of problems, especially if government officials find an issue with you and your buddies participating in unregulated or unlawful pub crawls. Restaurants and pubs that aid unregulated groups under the new rules could be fined.

To Jon Gabel, an executive with event organizing company Joonbug Productions, the city’s new rules could hurt local businesses by both keeping people away and forcing restaurants to turn down customers.

He told the Washington City Paper that his pub crawls saved their lives in several occasions. A local restaurant manager agreed, saying that the new rules are “definitely going to impact a lot of businesses.”

In DC, large pub crawls have been part of the scene for several years, but it was only during 2015’s Halloween pub crawl that residents and law enforcement began to push for different rules. Nevertheless, Watchdog.org reports that incidents or arrests were too few or unimportant.

With the new rules in place, local business owners are afraid of the future, especially considering that since its implementation, at least four events were canceled.

New Jersey’s Takeover of Camden Proves Freedom is Better Than Taxpayer-Backed Revitalization Projects

in Economic Liberty, Liberator Online, News You Can Use, Personal Liberty, Taxes by Alice Salles Comments are off

New Jersey’s Takeover of Camden Proves Freedom is Better Than Taxpayer-Backed Revitalization Projects

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Governor Chris Christie has recently announced that the state will take control of Atlantic City’s finances. As the city’s huge debt looms over its residents and the state vows to take over, critics and experts take a closer look at a previous major takeover of the city of Camden. And since many argue that state intervention ended up failing some of Camden’s most vulnerable residents, the promise of a better Atlantic City after intervention seems somewhat unrealistic.

In 2002, the state of New Jersey poured millions of taxpayer dollars into one of the largest takeover projects in US history. At least one law school, an aquarium, and a hospital were updated. But despite the taxpayer-backed incentives, the lives of residents did not improve. Instead, poverty and crime rates in the city remain high.

Camden

Despite the interventionist failures since 2002, the state announced in 2013 that it had decided to take over the education in Camden. As you will see, the results were equally disappointing.

According to a report from 2009, the initial revitalization campaign in the city counted with $175 million in bonds and loans and a one-time $7.5 million appropriation from the state budget. Shortly after, the then-Governor Jim McGreevey appointed a chief operating officer to take over the local government and the school board. The plan was to create jobs, bring in new businesses, fix the schools and the sewers, and demolish unsafe vacant businesses.

But as the takeover came to an end in 2010, Camden remained one of the most dangerous cities in New Jersey. And despite the state’s repeating efforts to reform the education system in the city, Camden school districts remain problematic.

The New Jersey government has been responsible for running the Paterson, Newark, and Jersey City school districts for more than 20 years. In 2013, it took over Camden’s as well. During the first years under state control, Camden failed to meet performance requirements in at least five areas.

While Paterson, Newark, and Jersey City report that their graduation rates had improved, local educational leaders claim that the improvement is due to the work members of the community have been doing in partnership with educational groups.

According to Paterson Education Fund’s executive director Rosie Grant, the state takeover meant little to the community.

“The gains that we have made,” she told The Record, “have been for the most part despite the state takeover.” Instead, Grant believes that the city’s decision to break the region’s largest high schools to form smaller academies is what made Paterson great.

But not all is lost in Camden.

When it comes to education, the real revolution arrived in the form of school choice.

According to a 2015 video by Jim Epstein, school choice gave local families in Camden the ability to choose. Instead of relying solely on state-run schools that continue to fail Camden’s children to this day, the implementation of charter schools has given residents the opportunity to enroll their children in institutions where children actually learn, despite their economic background.

If the state’s intervention in Camden has anything to teach other cities across the country is that pouring taxpayer money into an issue won’t make it better. Boosting choice—and freedom—on the other hand, usually works.

If the current administration is serious about saving Atlantic City, it will avoid pouring money into the problems the city is facing. Opening its doors for businesses and competition, however, may just do the trick.

What is a Libertarian Win? Part 1

in From Me To You, Liberator Online by Brett Bittner Comments are off

What is a Libertarian Win? Part 1

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

On Tuesday, many libertarians appeared on the ballot as candidates for office. Like them, when I ran for office both times, winning was pretty easy to define. It came down to whether we earned enough votes to serve in office. Unfortunately, there are not many wins for libertarians when you only use this metric.

Aside from winning the election, some smaller “wins” are possible:

  • winSeeing libertarian policy positions adopted by another candidate. Often, the biggest impact a candidate can have on an election they do not win at the polls is to have another candidate recognize the principled or popular position held by the libertarian candidate and adopt it as part of their platform or vision for the office they intend to hold. While not as big of a win for Liberty, it is a step toward a more libertarian society.
  • Awakening a desire for transparency. Many voters are unaware of the dealings of government, especially at the local level. There are times when a motivated candidate opens the electorate’s eyes about the cronyism and “shady” deals of their elected officials. Engaging voters and other community stakeholders in the political process to prevent the “business as usual” backroom deals that barely get an iota of public input or discussion in the board room.
  • Awareness of the existence of a differing opinion. We often recognize the similarities between candidates and parties that are supposedly so diametrically opposed to one another, yet find so much consensus when it comes to growing government and restricting liberty. Because of the posturing and theatrics, that is not the case for many Americans who applaud “crossing the aisle” to reach a bipartisan deal. With so many elected officials out of touch with the people they represent, their constituents are looking for something else. We often offer the common sense solution that promotes freedom and limits government power that they are looking for.

We discussed a division of labor for our efforts recently, and we’ll discuss how can we define a win for libertarianism outside of elections next week. What do you think of as a libertarian win?

Free the Hops: Sin Taxes Drive Up the Cost of Beer

in Economic Liberty, Liberator Online, News You Can Use, Personal Liberty, Taxes by Jackson Jones Comments are off

Free the Hops: Sin Taxes Drive Up the Cost of Beer

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Your favorite frothy adult beverage would be a little cheaper if sin taxes were not part of the equation, according to a new report from the Tax Foundation, a nonpartisan policy research center.

Each state taxes beer by the gallon, with the costs ranging from just 2 cents in Wyoming to $1.29 in Tennessee.

“State and local governments use a variety of formulas to tax beer,” Scott Drenkard writes at the Tax Foundation. “The rates can include fixed per-volume taxes; wholesale taxes that are often a percentage of a product’s wholesale price; distributor taxes (sometimes structured as license fees as a percentage of revenues); case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).”

There is a trend to be found in the rates, as well. States in the Southeast tend to have the highest beer taxes. Seven of the top 10 states with the highest beer taxes are located in the area of the country known as the “Bible belt.” Northeastern states tend to have lower beer taxes.

Beer Tax

Beer Tax

The Beer Institute estimates that consumers pay $5.6 billion in federal and state excise taxes annually. “Surprisingly, taxes are the single most expensive ingredient in beer,” the beer centric think tank notes, “costing more than the labor and raw materials combined.”

Although the Tax Foundation report does not touch on the cost of federal and state regulation of beer, which adds to the cost of production, particular of micro-breweries and small craft beer producers.

In a June 2014 editorial at US News, Matthew Mitchell and Christopher Koopman, both research fellows at the Mercatus Center, explained that the excessive regulations, which are just another form of taxation, create burdensome barrier to entry for small brewers looking to take their product to market.

“Once in business, brewers face more hurdles. Among the least efficient regulations are the ‘franchise laws’ that restrict their ability to sell beer directly to consumers, instead mandating that they sell through distributors. These rules can even dictate how brewers may contract with distributors,” wrote Mitchell and Koopman. “For example, some grant distributors exclusive territories, and others limit the ability of a brewer to choose to work with someone else. A recent survey found that in most cases, these rules make consumers worse off.”

Beer taxes may be an easy target for lawmakers looking to raise revenue for big government programs and regulation may be a convenient way to protect big beer brewers, but these policies are keeping Americans from the frothy goodness that is their favorite brew. Raise a glass and tell your lawmakers to “free the hops!”