Meet Me At (Bud &) Mary's Place

It turns out April 20th on the calendar is a day of infamy in many ways.  In 2010 it marked the day of an explosion on the Deepwater Horizon oil rig that led to the largest oil spill in history.  In 1999 it was the day two stupid and heavily armed students murdered 13 people at Columbine high school -- one of the first notorious school shootings, which have since become almost commonplace.  And if you really want to go down a hole, apparently April 20th was also the day Hitler was born.

But let’s face it, April 20th is really a national day to celebrate marijuana.  You know, that federally illegal substance which is less addictive and probably less mind-altering than federally legal alcohol or prescription drugs.  Because America is repressed like that.

More states continue to authorize regulated, recreational cannabis use. Recent ones include the more liberal state of New York and the more conservative state of Missouri.  That latter one means Iowa now has neighbors bordering on two sides (Illinois being the other) that will suck up tax money for recreational sales.

Iowa still remains in the dark ages with only a limited medical marijuana program. Recently, however, I looked more closely at Iowa’s medical marijuana program, and I’m glad to say it isn't quite as draconian as I thought.  

Iowa's main retailer of medical cannabis has recently changed its name to Bud & Mary‘s, and has started a subtle yet effective marketing campaign to make sure people are aware of its availability. They even had a booth at last year’s state fair.

Based on direct knowledge I have from someone with an Iowa medical cannabis card, they aren't that difficult to get, thanks to willing physicians who sign off, many of whom are recommended by Bud & Mary's.  And while the maximum amount that can be obtained in a 90-day period is limited, one would have to be daily user to be affected by it.

Knowing that Iowa's conservative Republican legislative majority and governor have gone out of their way for years to keep recreational sales illegal, and minimize that availability of medical marijuana, it gives me great pleasure to hear that out more informed Iowa citizens have done what they can to 'stick it to the man' when it comes to access.

Now that's something to celebrate.

All Fo(u)r Twenty

Today is 4/20, making it a perfect time to again comment on the movement to decriminalize and expand the availability of cannabis in America.  You know, marijuana, the drug that is safer than alcohol but treated like cocaine.

We're up to ten states now that have legalized marijuana in some non-medical way.  Ten now, but what will it take to get to twenty and beyond?

Unfortunately, while the polls continue to show an increasing majority of Americans support marijuana legalization, the federal government and most states still don't allow it.  They don't even allow medical marijuana usage, which has an even larger majority of American support.

So, what gives?  Let's just use my home (red) state of Iowa as an example.  It has a Republican governor and legislature, so even though legalization is popular overall, it isn't so popular inside their conservative constituencies.  The Rs basically have a bend-but-don't-break attitude, where they act like they're doing something without actually doing anything.

For example, Iowa does some medical cannabis usage through a few approved dispensaries, but prescriptions can only be filled with minimal amounts of THC.  It's so little, in fact, Iowa isn't even considered a medical marijuana state.  This in spite of calls by doctors and pharmacists to increase the maximum THC dosage.

This is the worst, dumbest way to do things, because lots of effort produces zero positive results.  People / patients aren't getting better, and the state gets no tax revenue.  The fact that a neighboring state (Illinois) this year legalized cannabis just makes it even worse / dumber, since motivated Iowans simply drive across the border.  The result is, the people get what they want, but another state benefits from the commerce.

In the end, Iowa and other non-cannabis states would be better off financially just not allowing any marijuana usage, rather than limiting it the way they are.  Of course, if they legalized it, those states would see a multi-million dollar tax revenue bonanza -- but since the Rs don't want to look so bad politically, they do things one drip at a time, showcasing the insanity of their ways

One small irony in all of this is that Iowa does consider its dispensaries to be essential businesses, so they remain open during the COVID-19 pandemic.  Wouldn't it be nice if there was an effective, natural drug that could help everyone through the pandemic, not only physically but mentally?  And regulated selling of that same drug could create millions in tax revenue being lost by the state due to the same pandemic?

Maybe by next 4/20.

A Taxing Occupation

It’s tax time, meaning more work for me both personally and professionally.  This year more than ever, I find myself talking to – and about -- tax preparers.

Tax preparers are a little bit like financial advisors, in that some are better than others, and credentials matter.   If you need help doing taxes, you probably get what you pay for.

Alternatively, though, most tax preparers are alike in one major way.  That is, they are concerned with minimizing their clients’ taxes in the current year.  Seems like a good idea for everyone, right?

The thing is, not everyone should be worried about minimizing taxes now; they ought to be worried about minimizing taxes later.  While always subject to change, it’s a fact that the current tax law expires in 2026.  Without changes, this means tax rates will go back to the higher 2017 brackets.

In this environment, tools like a Roth IRA can be of great use, where you pay taxes now in return for not paying taxes later.  Unfortunately, when tax preparers do suggest an IRA, it’s almost always a traditional IRA, since they want the immediate tax deduction.

Part of this is that some tax preparers are compensated in part by the amount of refund they generate.  Gosh, imagine that, doing something that’s better for them than for the client.

This is why many people would be better served by a credentialed, fiduciary, financial / tax planner instead of the run-of the-mill tax preparer. 

High Time

It's been almost a year since I've blogged about legalization of marijuana, and I'm glad to report that more (slow) progress is being made.  Let’s recap.

Internationally, Canada legalized marijuana this year, leaving the U.S. in their socially progressive dust.

Nationally, after some additional November ballot approvals, eleven U.S. states have now legalized recreational marijuana use.  It isn’t just ‘liberal’ western states either; states like Michigan and Vermont have joined the enlightened minority that allow cannabis with the pleasant side effect of…..tax revenue.  (You thought I was going to say the pleasant side effect of sensitivity and relaxation?)

Meanwhile, at least 20 other states now broadly offer legal medical marijuana.  This should be the bare minimum allowance of any state.   So the good news is, over half of America gets it.

Unfortunately, the rest of America is still in a race to see which state can be the slowest and dumbest when it comes to legalizing pot.  A few of these states, including Iowa, now allow an extremely limited and convoluted way for medically-eligible people to obtain small doses of cannabis product.  It’s so limited, in fact, that it can’t even be considered a legalization of medical marijuana.

The hypocrisy on these non-legalization states gets worse by the day.  We still have a virtually unregulated opioid epidemic in the country, but people can still get prescriptions in those states for opioids with no problem.  And do I even need to make the point about legal alcohol consumption?  For example in Iowa, the regulators have gone out of their way to encourage home-based production and sale of beer and liquor – as if that’s not a mind-altering substance.

Today there is little doubt that most Americans at least want 1) medical marijuana to be legal, and 2) marijuana possession to be decriminalized.  In states that allow the public to vote on ballot initiatives, it’s now also become clear that most people believe in limited recreational sales and usage.

It’s only a matter of time before America legalizes marijuana, like its Canadian counterpart.  The only question is which state(s) will be the last, foolish ones not to do something before then.

The LOST Loss

I’m a big believer in behavioral science / economics, which is essentially the idea that people are motivated in all facets of life by potential gains or losses, and their calculation of the underlying risk in achieving / suffering those gains and losses.  The gains and losses are often related to money, but can also be based on things like religion, politics, or relationships.

Unfortunately, many times humans do not properly calculate the underlying risk, leading to bad decisions / behavior.   I thought about this again this week, when the residents of my county were asked to vote in favor of voluntarily and regressively taxing themselves via a sales tax increase.

The local option sales tax (LOST) has been around for a while in Iowa, as a way for county localities to raise additional tax revenue by tacking on another 1% to the statewide sales tax.  When it was first introduced around 15 years ago, the idea was to allow counties to use the money solely for school infrastructure improvements over a 10-years taxing period.  As with most new tax ideas, I've hated it from the beginning.

Over several years, every county in Iowa passed a LOST, increasing the total sales tax from 5% to 6%.  And as a result, we have the nicest school infrastructure in the United States.  For real.  I’ve been to most other states, and their school building suck compared to Iowa.  (Of course, there’s absolutely no evidence that nicer bricks and mortar mean smarter kids, but that’s another story.)

But then something happened that was only predictable to those of us with common sense:   The LOST never went away.  In fact, after the school districts mismanaged their budgeted improvements to the tune of millions of dollars, the state decided to simply make the statewide sales tax 6%, and allow another, new LOST for counties to use as they wish.

97 Iowa counties have piled on to this regrettable legislation, leaving only two that have not voted for a new LOST that increased sales taxes from 6% to 7%.  (Note:  That isn't a 1% increase, that’s a 19% increase, a math computation the LOST supporters don’t want anyone to know about.)  My county is one of the remaining two, and this week, after an affluent neighboring suburb passed a LOST a few months ago, my county decided to have another vote.

Which brings me back to behavioral economics.  Why would anyone vote to tax themselves, especially with no explicit guarantee that local government would spend the money on non-essential services?  Yet, it happens quite often – as I mentioned, it recently happened in 97 out of 99 other instances in Iowa.   It’s usually backed with nothing more than a promise that the sales tax it would help to offset some other tax burden (this time it was property taxes) or that it would not be permanent (see above).

My answer is, it’s another matter of not properly calculating the risk.  Many people don’t recognize the cumulative impact of a regressive tax.  They think of it in terms of ‘just an extra penny on the dollar’ rather than a whopping 19% increase on every Average Joe that will probably cost hundreds of dollars a year, and many thousands of dollars over many years.

As in past LOST votes, I voted no, and I’m pleased to day this time it failed (barely).  I’m not against paying for essential government services, but I’m totally against voting to tax myself for undisclosed services I may not need, to be administered by government bureaucrats that haven’t been truthful, and who aren’t good stewards to begin with.

In other words, I’m for properly assessing risk and behaving appropriately. 

Yes We Cannabis

It’s time to catch up on the good news in world of cannabis!

In sum, the news is positive enough that I’m almost ready to declare that January 2018 will one day be considered the ‘tipping point’ in time for full decriminalization of marijuana in America.  (There’s only one thing standing in the way of that right now, more on that in a few paragraphs.)

The thing getting the most attention now is the legalization of recreation marijuana in the state of California.  That became effective on January 1, 2018, and now like several other (mostly western) states, they allow anyone at least age 21 to buy a limited amount of cannabis daily.

The difference here is, California is the most populous state in the country.  As such, the implications are more profound.  One of these implications is the amount of tax revenue this law will bring to a state that sorely needs it.

Make no mistake, money (i.e. tax revenue) is why cannabis will ultimately be legalized in all 50 states.   That isn’t the only reason, nor the best reason, but it’s the main reason.

[This would normally be where I go on a rant about how marijuana should be no more controlled than alcohol, and probably less controlled than prescription drugs.  But I’ve covered society’s asinine attitude about that more than once before, and specifically in regard to medical marijuana.]

One lesser but still important pot-related action happened just this week in Vermont (Vermont!), where the governor signed a bill making it the ninth state to legalize marijuana effective July 1, 2018.  The difference is that Vermont was the first state to do it via legislation, rather than by a voter-approved ballot initiative.  That is a big deal, and the first admission that states want to grab the tax revenue.

Regarding that one thing standing in the way of ‘tipping point’ actualization…..we currently have an old white male dominated (Republican) party in charge of the executive and legislative branches of the U.S. government, along with an old white guy U.S. attorney general that thinks marijuana is evil.  That means marijuana, for now, will likely maintain its federal designation as a Schedule I drug along with things like heroine and LSD – good grief.

These will all need to be changed before the pro-cannabis world can truly take over.  It’s only a matter of time, however, and that time is much shorter than it seemed only a few weeks ago.

Insurance = Bad Investment, Redux

I've covered this before:  Generally speaking, insurance is a bad investment.

Last week, I got into a prolonged, disagreeable phone conversation about a mutual client with what I consider to be the lowest form of 'financial advisor' on the planet:  A career life insurance agent.  Here's my open letter to him:

What gives you the right to call yourself a financial advisor?  You have one strategy -- convince everyone that their financial situation can be helped with some type of life insurance product, including (and especially) variable and indexed annuities.  Isn't it interesting that these these products generate big commission payments to you?  Never mind that your client pays well over 2% and probably closer to 3% of their 'invested' money every year in expenses to help pay those commissions, a fact you don't audibly disclose.  Never mind that you have little or no expertise in retirement, investment, or tax planning.  Never mind that you don't live by a fiduciary standard, you live by making your insurance company quotas.  You either don't know, or don't care, that not everybody needs life insurance.  In fact, you want people to believe that it's perfectly normal to buy enough life insurance to cover all the income they might make in the future -- a 'future value' approach that makes absolutely no sense, and profits nobody except you and your company.  You are a self-serving loser, and you suck.

This letter doesn't apply to every career insurance agent, just most of them.  As a certified financial planner, I do everything in my power not to be closely associated with them.  Actually, that's a financial strategy that would help everyone!

Getting School-ed - Update

As expected, the JCSD bond referendum passed yesterday by a relatively narrow margin on its second try - needed 60%, got 66%.

Also as expected, today I haven't heard a single satisfied supporter profess that they will no longer complain about unnecessary government spending and taxing.

Hypocrites.

Getting School-ed

On June 25th, for the second time in nine months, voters in my school district, the Johnston Community School District (JCSD), will be voting on a $41 million bond referendum to primarily build a new $81 million high school.  Unlike the last time, it'll probably pass, and if not this time, then there will be another time.

That's still no reason to vote yes.

As with virtually all such tax increase proposals that require voter approval, I heartily oppose this one.  I'm not denying that there may be a current / future overcrowding issue in some school buildings, but I am denying that it should take $112 million of taxpayer money to solve that.

(There's one of the many head-fakes that voters get on deals like this - the bonding covers $41 million, but other taxpayer funds / levies will cover the other $71 million.  That equals $112 million of our money, and I tabulated that without needing a new school facility to help me do it.)

If you want to know all about the referendum, and how the money will purportedly be spent, and the estimated cost to property owners, there's plenty of electronic or print information available, of course paid for by us JCSD taxpayers.  But if you simply want to know about how ironic-to-borderline-dumb it would be for Johnston school district taxpayers to support it, just read this:

1) After failing to pass the referendum nine months ago, JCSD changed the bonding amount from $51 million to $41 million - but not by cutting anything, only by deferring the $10 million to other taxpayer funded pools.  In other words, they cut absolutely nothing.  They apparently take us taxpayers for fools.

2) The $112 million doesn't include some very large ancillary future expenditures that are admittedly part of the long-term plan, such as a new football stadium.  You know, for educational purposes.  Are we just supposed to forget about that little item?

3) Voting to increase your own taxes is never a good idea.  Let's face it, it's a little bit crazy.  It's a lot crazy when you consider.....

4) School districts are often poor stewards of our money.

5) Given the current and future age of technology, what sense does it make to build expensive, huge, new brick-and-mortar schools?  Shouldn't we be planning on ways to bring classrooms to students via on-line and digital means?

6) More than a decade ago, with the support of JCSD, our own Polk County passed a local option sales tax (LOST) to increase sales taxes from 5% to 6% for a 10-year period to fund new school infrastructure.  That was the deal, ten years only.  Liars!  Less than ten years later, they and every other school district were already lobbying to extend the time, and ultimately in 2008, the state of Iowa simply went to a permanent 6% sales tax.  Why should we believe anything the JCSD tells us now about taxes, when they had no problem lying to us taxpayers a few years ago?

7) Did I mention that school districts are often poor stewards of our money?

Here's a final thing that gets to me about this goofy referendum - it's being largely supported by a very Republican-leaning district.  These folks want to tax others to benefit them and or their school children, regardless of whether those taxpayers will receive any direct benefit from the school.  In other words, thousands of folks who claim to hate the so-called socialistic ideology of the Obama administration, seem perfectly willing to support this socialistic measure.  It's another example of how some people only oppose taxes and government spending unless it's good for them, and they ought to be required to forfeit their Obama-bashing cards.

Fellow citizens of the JCSD - don't be duped!  A 'no' vote doesn't mean you oppose education, it means you support not letting others unnecessarily spend your money.  The tax-and-spend monster that is JCSD doesn't need to be fed, it needs to be starved.  We can do far better with far less than over $100 million.

Post #200

Since July of 2009, I've been writing random thoughts out in this blog.  This is post #200, so just as I did with post #100, let's review some of what was covered in the last 100 posts, or basically the past two years.....

I spent a little time writing about the importance of certain singers and song lyrics.

I spent some time writing about finance and investing, which is the work I do for a living.

I spent a good deal of time writing about politics, particularly in 2012 as related to the presidential election.

I spent a bunch of time writing about people who are dishonest, how to identify them, and calling them out.

I spent too much time, but will probably spend more, writing about the moral hazards of religion.

I spent a lot of time, and will definitely spend more, writing about how taxpayers are being shafted by people in government who make selfish decisions.

Iowa Fund of Dummies

Over the past month, another taxpayer boondoggle in has been made public in Iowa.  It involves a state-created source of seed capital for companies interested in doing business in Iowa.

Called the Iowa Fund of Funds, it really just invests in other venture capital funds, using state tax credits to back its commitments.  However, there is no requirement for those funds to actually invest in companies doing business in Iowa.  (Huh?!)

Regardless, it's done a horrible job of getting any return on investment.  So horrible, in fact, the state had to negotiate a settlement that resulted in the loss of $26 million in tax credits.

I happen to personally know the chair of the board that manages the Iowa Fund of Funds.  He's a blowhard who has never worked in the private sector, and who loves to spend other people's money.  That board had a lengthy piece published in the Des Moines Register the other day, defending their actions.   I couldn't let it go, so I sent a letter to the editor about it.  Sadly, it wasn't published, but here it is:

In defending the Iowa Fund of Funds' current $26 million loss of tax credits (Read: taxpayer money) in his December 28th Iowa View article, administrative board member Tim Urban notes, "Since we began, our board of directors has never received one dime of compensation, taken no junkets at Fund of Funds expense and volunteered thousands of hours directing the Iowa Fund of Funds." So you see, fellow Iowa taxpayers, we're simply getting what we paid for - minus another $26 million.

The Taxpayer Warrior Strikes Again

On July 2nd, The Des Moines Register smartly published another letter to the editor I sent them.  It went like this:

So Polk County supervisors are going to start paying part of their health insurance for the first time ever, effective July 1? It sounds like a great victory for taxpayers – until you consider it’s expected to save less than $3,000 annually.

In fact, those affected will only being paying between $15 and $25 per month for insurance premiums. While that’s more than zero, it’s hundreds of dollars less per month than most private sector employees pay.

Regardless, Supervisors Chairwoman Angela Connolly crowed, “We all have to pay our fair share in terms of insurance costs.” This is just another example of how far out of touch elected officials are with their constituents, and with the economy.

This took me all of 15 minutes to write and email to them, but I can confirm that I got a lot more than 15 minutes of enjoyment out of embarrassing a bunch of wasteful politicians!

Taxpayer Funded iPads For Everyone - Update

The good news is, my Des Moines Register letter to the editor on this topic was published today.  The bad news is, they published it in the local 'Community' section of the paper rather than the statewide edition.  So instead of thousands reading it, only hundreds will.

Oh well, as long as it exposes the Johnston Community School District as out of touch with the taxpayer, like most governmental / nonprofit entities, it isn't all bad.

Profiting In The Nonprofit World

I've blogged before about the scandals in the nonprofit world, especially when it comes to wasting taxpayer money.  (In comparison, nonprofits like charities or membership organizations focus more narrowly on only fleecing those who contribute to them.)

But when is comes to school districts, this is getting ridiculous.

In this week's Des Moines Register, you would have counted no less than four different stories of scandals, waste, nepotism, and/or outright embezzlement at four different school districts.  From superintendents to clerks, everybody seems to be working it.

The "it" is the simple knowledge that there is very little accountability or oversight in the nonprofit organizational model.  The "it" is the lack of competition and incentive that would make employees and boards pay more attention to detail.  The "it" is understanding that no matter how bad its behavior, a nearly unlimited funding stream from taxpayers will keep the entity operating.

Let's turn public schooling over to the for-profit world.  It's a bad idea who's time has come.

Taxpayer-Funded iPads For Everyone!

The following is both the truth, and a letter to the editor I sent to the Des Moines Register this weekend:

In a recent 5-1 vote, the Johnston School Board agreed to spend $1.4 million to purchase 1,600 iPads, enough for each high school student and teacher.

As a Johnston school district taxpayer, I say why stop there?  If the board thinks iPads are that important to learning, let’s increase property taxes so we can equip every middle and elementary school student and teacher with an iPad.

And if they’re really serious about this learning thing, let’s increase taxes even more so we can get an iPad in the hands every parent of every Johnston Community School District student.  After all, parents need help with their lifelong learning, too!

It sure is good to know our school board isn’t concerned about there not being one shred of evidence that student achievement is correlated to using an iPad, a technology that’s only two years old.  Only silly people without iPads probably think that way.

Berky Meeting Nuggets 2012

Just made my annual trek to Omaha to attend the Berkshire Hathaway annual shareholders meeting.  It may sound crazy, listening to Warren Buffett and Charlie Munger answer questions for five hours, but for me it's a philosophical tune-up not only from an investment perspective, but also from an economic, political, intellectual, and social standpoint.

Similar to last year, here's a summary of what I consider a few highlights of this year's meeting:

On the company movie and celebrity sightings:  Board member Bill Gates was there, as was U2 lead singer Bono.  The movie included skits with Jimmy Buffett and the cast of Glee.

On Buffett's health:  Buffett said he feels terrific.  Munger jokingly (as usual) said he resents all of the attention Buffett has been getting after his recent Stage 1 prostate cancer diagnosis - Munger claimed he probably has as much prostate cancer, he just never gets tested for it!

On energy:  While natural gas prices are at historically now levels due to increased supply, Munger said it was idiotic to be extracting so much of that finite resource from the earth.  He said we should be using other sources that were more abundant.  He also said the energy independence is one of the stupidest things he'd ever heard of - we should be importing and using up other countries' resources and keeping ours as a reserve.  Had we adopted this philosophy decades ago we'd be a lot better off now.

On SuperPACs:  Buffett noted he could probably advance his political causes through SuperPAC donations, but he would never do that.  Both he and Munger agreed the Citizens United ruling was bad for the country, allowing a few wealthy folks to have undo influence.  And Buffett flat-out said he didn't want to see democracy go in that direction.

On the so-called Buffett Rule on taxing the very rich:  Buffett reminded everyone he proposal isn't an attempt to balance the budget, but simple a matter of tax fairness to make sure lower income people don't pay a rate higher than the rich.  He said the 400 highest income people in the U.S. averaged $250 million per year, and of those, 140 or so paid taxes of 15% or less.  So the Buffett Rule wouldn't even impact most of the super-rich, and those it would impact would be just fine.  And yes, it would also raise a few billion per year of tax revenue.

On the so-called Buffett Rule #2:  A question from a shareholder's claims his 84-year old father would invest in Berky if it were not for Buffett's tax philosophy. Among other things, Buffett said it sounded like the guy ought to invest in Fox!

Get A (Private Industry) Job!

A recent story on 60 Minutes covered the plight of former space shuttle employees in Breverd County, Florida, home of the Kennedy Space Center.  In short, the end of the shuttle program has led to severe unemployment and the subsequent closing of many local businesses.

The people interviewed are angry and feel betrayed because the government led them to believe a replacement space program, called Constellation, would allow them to keep jobs.  The economy and budget cuts kept that from happening.

There is one thing these folks are having trouble understanding - Americans like me don't care about their feelings!

Are you kidding me?  The 7,000 (yes, 7,000) people employed by NASA's shuttle program, and the businesses they patronized, have sucked at the taxpayers' teat for the better part of three decades.  They made good wages with fantastic federal benefits.  And yes, I'm sure most of them were good civil servants.

Unfortunately, it didn't occur to those employees, nor to the businesses around them, that Uncle Sam might not always need them.  How did they not see this coming?  Everyone has known for years that the shuttle program was going to be shut down, and they made no contingency plans?

Yes I know, they were counting on the Constellation program.  Well, let me introduce you to a million other people who also lost their private employment jobs when the economy went south in 2008.  I don't see them sitting around hoping for the government to create other jobs in their county.  (Check that, thousands of them are sitting around collecting benefits from me.)

Just because these folks were denial doesn't mean anyone should feel sorry for them.  They had plenty of time to learn another trade, or revamp their business.  And if they didn't then, they do now.

I for one am glad to see that the flow of dollars from my pocket to theirs has stopped, during a time when the U.S. is so far in debt that it has rightfully contracted its space exploration program.

Taxpayers Win = Taxpayers Loss

Time for another story about taxpayers getting the shaft.

Last week the Iowa Supreme Court ruled in favor of the plantiff in a nearly 8-year old suit against the city of Des Moines.  In short, the court reaffirmed decisions previously made at lower judiciary level that the city had illegally charged citizens a franchise fee on their utility bills.

In the end, the city has been ordered to refund $9 million.  Case closed (after 8 years) right?

Um, maybe not.  Des Moines' city 'leaders' are considering spending even more money on their lost cause to appeal to the U.S. Supreme Court, which almost certainly will not hear the case because it doesn't have enough widespread application.

And regardless, the city council is making it clear that they will ultimately recoup the funds from taxpayers anyway, by using some other tax source to fund the $9 million from those same tax-ees.  So the taxpayers win the lawsuit after being screwed, and the reward is to get screwed a second time.

In other words, Des Moines' city 'leaders' aren't even going to make an effort to find a way to minimize the impact of their mistake by stopping their legal appeals, or god forbid, reducing expenses.  There is something so fundamentally wrong with this, it's no wonder fringe groups like the Tea Party can gain popular support.

At least props go to the district court judge who's original order was upheld by the Iowa Supreme Court.  When the city argued that the fee should be upheld because not doing so would have the same impact on taxholders, here's what he wrote in his ruling:

“The court disagrees with the City’s position that equity mandates there be no refund to the class. If the court was to accept the City’s position no refund under the City’s benefit/no detriment argument the court would be sending a message to all cities in Iowa that as long as cities use funds from the illegal taxation for the good and honorable purposes, the taxpayers don’t have anything to complain about and have no right to a refund of the funds illegally collected. The City’s position in this regard is not supported by any just, fair or equitable principle. The court should not and will not send such a message."

Along with the plaintiff, he's the warrior for the taxpayers.

Another Nonprofit Lie - Follow Up

A quick follow-up: The Des Moines Register did publish my letter to the editor mentioned in the last post, without edits. The on-line version allows for comments, of which there were only a few, and they all completely missed the point about how non-profits, especially taxpayer-funded ones, are poorly managed.

Those responses actually fit my profile of someone who would comment on-line to such letters - they must sit around a computer all day with nothing to do, thinking up new conspiracy theories and swatting away imaginary bugs.

Another Nonprofit Lie

Below is the text of a Letter to the Editor I sent today to The Des Moines Register:

By increasing room and board fees at state universities by 3-5% (April 29 article, "Regents OK Room, Board Increases for Fall"), the Board of Regents cited inflation as the main reason. A similar excuse was used only a month ago to justify tuition hikes for next year.

Yet using our country's most recent core measure of inflation, the March 2011 Consumer Price Index, inflation has actually risen less than 3% in the past twelve months. And excluding food and energy costs, the CPI has risen only 1.2% since March 2010.

The fact is, inflation doesn't justify increasing fees by as much as 5%. No for-profit services organization would be able to survive in this economy by raising prices like that, so why should it be OK for a non-profit, taxpayer-subsidized organization to do so?

If we want to keep higher education affordable in Iowa, we need more intellectual honesty - not to mention budget accountability - from our state academic institutions and their governing body.