The Futility of Tax Abatements

Two local events have brought attention to the ineffectiveness of certain types of business property tax abatements.

In the case of the Air Park, millions of dollars worth of seven year, 100% real property tax abatements were extended to Airborne Express by Clinton County taxpayers. Most of the abatements began in the late nineties and have recently expired. Wilmington Schools and the county treasury bore the brunt of that tax giveaway. Even with these expensive breaks Airborne felt that they needed to sell out to DHL in order to protect their shareholders in a declining airfreight market.

Enter DHL with their fatally flawed business plan. The county offered the newcomers a seven-year, 100%, real property tax abatement on new construction projects as an incentive to locate at the Air Park. As a result of the tax abatements on 42 million dollars worth of projects, I estimate that the property tax revenue losses for the following local treasuries will be: Clinton county, $2,100,000; Wilmington schools, $2,400,000; Wilmington city, $700,000; Laurel Oaks, $280,000 and Union Township, $115,000.

As a reward for these revenue losses coupled with the departure of DHL, ASTAR and ABX the city will not receive the expected income tax windfall, the schools will have to drastically scale back their budget expectations for the coming years and the county will see sales tax and property tax fall far short of expectations, There is faint hope that some other use can be found for a 15 million dollar package sort building,

I conclude from the above example and from related research, that if a commercial enterprise cannot stay in business without tax giveaways they cannot make it anyway. The long departed Crysteco and Micro-Warehouse both received 100% property tax abatements.

Another example of the rewards, or the lack thereof, from tax abatement is the case of R&L trucking. The taxpayers of the county subsidized the construction of the depot at I-71 and Rt.68 with a million dollar real property tax abatement. In another gift, the county taxpayers took a $100,000 hit when R&L cut a deal with Wilmington Schools so that the schools would not oppose a property valuation appeal.

How did R&L repay the people of Clinton County for their generosity? As most of you know the company recently took almost two million dollars per year from local, street and road budgets by registering their fleet of trucks in Indiana. instead of Ohio. The reason for this example of corporate citizenship is unclear other than an unsupported claim of significant savings in time and money or rumors of political intrigue. In any case the taxpayer took it on the chin.

Did the past sacrifice of millions of dollars of tax revenues change anything? Will the current abatement at the Air Park, which ends in 2014, that totals millions more alter the eventual outcome?

Paul Hunter

Good Corporate Citizen?

You be the judge.

(reprint)

Fact: In 2008 R&L Carriers, a major Clinton County, Ohio trucking company, decided to transfer its vehicle registration from Ohio to Indiana. Among the reasons given by the company for the change was that Ohio did not provide either competitive pricing or electronic registration for its commercial vehicles. A price comparison research by this poster at the time indicated that, for most vehicle categories, Indiana’s registration costs were more or less the same as Ohio’s.

One result of this change was that the Wilmington street maintenance fund that had been completely financed by vehicle registration dollars. For example in the 2007 and 2008 city budgets, no city taxpayer money was allocated to the street fund. After the 2008 R&L action, the 2009 budget required nearly $700,000 of taxpayer money to be transferred to the Streets fund. The county took an even greater hit on its Roads and Bridges budget. Does this information indicate a cause and effect relationship?

A statement issued by R&L on July 3, 2008 rightly claimed that most of the fees collected by Indiana were returned to Ohio but what they did not say was that, according to the BMV, this money was divided into 2,300 Ohio political subdivision shares.

This conclusion was also included in the statement: “If Ohio is someday able to provide the same ease of use [electronic filing] and cost savings as Indiana, R&L is happy to return it’s truck registration to the State of Ohio.

Fast forward to March 30, 2011: “Kasich Signs House Bill 114…..Simplifies the commercial vehicle registration process and increases commerce by allowing companies to renew registration online with a credit card rather than spending a day at the Bureau of Motor Vehicles (BMV).”

The bill became effective in January of 2012 and was implemented in July of that year.

To date there has not been any notification to local government officials indicating that R&L is changing registration back to Ohio.

Note: Due to past BMV errors Wilmington was not a legal recipient of R&L fees and will not benefit from the return of registration to Ohio if and when it occurs. The funds the city had received would now go to the county.

Paul Hunter

Our Man in Columbus

News concerning our man in Columbus who is working hard for? 

What, Me Worry? I have no opposition at home.

COLUMBUS The presumed Republican frontrunners to be Ohio's next House speaker -- a young lawmaker from Southwest Ohio and a Northeast Ohio veteran -- plan to meet Monday to determine who has enough support to become one of Ohio's three most powerful officials. Rep. Cliff Rosenberger, R-Clarksville, and Rep. Ron Amstutz, R-Wooster, have spent a year jockeying for the lead in the race to head the Republican caucus.

http://www.cincinnati.com/story/news/politics/2014/06/24/gop-leaders-set-monday-for-ohio-speaker-negotiation/11339877/

Meanwhile back at the legislative ranch.

While the new state budget increases the General Revenue Fund by $4.5 billion over two years, it did not restore key investments to 2010-11 levels. The budget also cut taxes by $1.9 billion, shifting taxation from the affluent to those with less income and making it harder to adequately fund critical services.

The state's local government funding for Clinton County and subdivisions has declined by$4,500,000. Local schools have been put on starvation diets and are being forced to go to the voters to replace funds normally supplied from our state sales and income tax payments.

Paul Hunter

Clinton County Air Force Base History

UFO Story 

On 07 January 1948 newspapers across the U.S. carried headlines similar to theLouisville Courier: "F-51 and Capt. Mantell Destroyed Chasing Flying Saucer." The "Mantell Incident" was the most thoroughly investigated sighting of that time. Captain Thomas Mantell died trying to reach a Skyhook balloon, launched from Clinton County AFB. He didn't know that he was chasing a balloon because he had never heard of the huge, 100-foot-diameter skyhook balloons, let alone seen one. Mantell's death was ultimately caused by the hype over UFOs, which no doubt caused him to chase after it at all costs.

http://www.globalsecurity.org/wmd/facility/clinton_county.htm

Kids Killing Kids Again

http://www.10tv.com/content/stories/2014/06/17/frazeysburg-shooting-investigation-west-first-street.html

FRAZEYSBURG, Ohio - A 11-year-old was shot and killed in Frazeysburg on Tuesday afternoon on West 1st Street.

Family identified the victim as Lucas Templin.  They said he was at a friend's house when he was shot.

Lucas Templin's bicycle still leans against the porch of his best friend's home.

"He just had a birthday. He's been wanting a bike forever ever and he finally got it," said Templin's grandmother Cindy Swartz.

It was a summer day like any other for the 11-year-olds.  Templin had just come home from his grandmother's and headed down the street to this familiar house.

"If he's not up here then he's down at his house.  That's how good of friends they was.  Just play, play, then this happens," said Swartz.

The other boy's mother was out mowing the lawn.  The kids were inside playing.  Then suddenly, a single gunshot ended Templin's life.................

In the meantime Wayne LaPierre, Mr. NRA gun selling shill, is quoted as saying “The only way to stop a bad guy with a gun is with a good guy with a gun.,”

Considering the results of the above story I would paraphrase ole Wayne by saying, “the only way to stop a good child with a gun is with a good child with a gun. That'l teach'm.

Paul Hunter

Clinton County Air Force Base History

GET HOMEITUS?

On a damp and cloudy Thursday morning in December of 1964 an Ohio Air National Guard KC-97G tanker 52-2920, of the 160 ARG [Air Refueling Group], departed Clinton County Air Force Base on what was planned as a routine local training mission.------

Several active-duty, enlisted crew members from the locally based navigation training unit were riding along in order to log flying hours to qualify for flight pay.

Prior to departure a request was made from the Governor’s office that the flight itinerary include a quick stop at Miami airport to pick up some civilian passenger seats for Governor Rhoads’C-47. The crew chief of the gooney bird accompanied us on the flight,

For reasons lost to time, the crew was augmented with additional crewmembers. The crew consisted of an air tech [civilian] Instructor pilot (IP), a Guardsman pilot who worked for the state highway department, a Guardsman co-pilot who was employed by Sears, a Guardsman navigator, an active duty air advisor boom operator and two air technician flight engineers.

The narrator of this report dead-headed on the Clinton County to Miami leg that ended with an uneventful landing, and take off for home base. As I recall we did not pick up any seats. The contact at Miami airport knew nothing about passenger seats, so are trip to Miami was in vain.

With the narrator at the engineers panel, the return leg was uneventful up to the point when, crossing the Ohio River, the crew contacted home base. Clinton County reported low cloud cover, fog, rain and 0/0 visibility. After confirming that there was no chance of the weather changing that day the IP decided to divert and spend the night in Memphis and try to return the following day.

After spending a long night in the transit quarters without even basic toiletries or a change of clothes the crew gathered at Base operations and checked the Clinton County weather. The forecast was for only a slight change of conditions from the previous day but some clearing was expected as the day progressed, however there was no guarantees. The IP decided to give it a try and see if we could get in. The rest of the crew, being anxious to get home, supported his decision.

The narrator, having flown the previous days leg became a passenger for the home bound flight. We passengers were engaged in a heated game of hearts as we crossed the Ohio River. The game was momentarily interrupted by the information from the cockpit that the weather at Clinton County was still marginal. The Control tower was reporting 200 feet and one half mile visibility, the legal limit for landing

With the IP in the pilots seat for the expected low visibility approach and landing Ground Control Approach (GCA) was contacted for a radar-controlled approach to landing. At this time another tanker crew on the ground, who was monitoring our approach on radio informed the IP that they were waiting for him to get on the ground so that he could go to Bermuda with them.

On the first approach attempt GCA informed the pilot that he was at GCA minimum altitude and if he did not have the runway in sight to initiate a missed approach and go around for another attempt.

On the second approach, again at GCA minimum altitude, the co-pilot shouted that he had the runway in sight and the pilot continued the approach to landing. As the aircraft broke out of the fog cover the pilot saw that he was misaligned with the runway and the plane was heading directly toward a C-119 on the right that was awaiting take off clearance from the control tower. The pilot then made a violent left bank just a few feet above the ground that resulted in the left wing contacting the ground. The pilot then over corrected and the aircraft veered off the right side of the runway missing the 119. The plane plowed through the soft turf between the runway and the adjoining taxiway and headed toward the hangar and control tower area. To the narrator the plane appeared to be following its own uncontrolled course.

During this wild ride the narrator was in the rear compartment of the aircraft crouching behind the left scanners seat. Aware that escape hatches tend to get stuck in the airframe the narrator, with the boom operator’s assistance managed to remove the left rear hatch prior to impact.

The aircraft next struck the taxiway and as a result veered away toward the fuel and oil truck parking area.

The plane was going so fast that when the left external wing tank impacted and sheared off in an oil truck it was hardy noticeable. Next the number one engine smashed into the side of a 10,000 gallon fuel truck and we still rolled on for a bit. The aircraft finally rolled to a stop a few feet short of the rapidly vacating control tower.

The narrator and the boom operator were preparing to exit the left rear escape hatch using the escape rope when but when we looked out we saw a stream of fire coming from behind number two engine and like a liquid fuse heading for the destroyed fuel truck. Going to plan B we noticed that the right over wing hatch had been opened by some one coming from the cockpit and since the wing flaps were partially down several people made a sliding departure from the now burning aircraft. One of the passengers attempting to exit at the right rear escape hatch panicked and froze in the opening only to be kicked in the back by another passenger and he fell about 20 feet to the ground, injuring his back.

After counting heads and dragging the injured passenger clear we all got away from the burning plane as fast as we could.

Image of a similar accident

Fortunately the rain had washed the fuel fuse away before it could reach the leaking fuel truck and a major explosion and secondary fire was avoided. The aircraft was consumed in flames but fire and rescue personnel were finally able to extinguish the flames but not before the aft section burned off and fell to the ground.

The only injuries were to the passenger and to a couple of crew who received rope burns on their hands due to not wearing gloves.

The narrative was written 43 years after the incident and memory fades a little in that time span. If readers find factual errors please feel free to send in correction or additions. This story is being published with the permission of the IP involved.

Paul Hunter

Wealth Distribution Matters

What do the proponents of Laissez-faire (" "let them do as they will," or "leave it alone.") economics expect from the system regarding the widening wealth distribution gap?

If they don't see the, now decades old, trend as a political/social problem there is no point in continuing.

On the other hand when one looks at the history of tectonic shifts in nations that have failed to attend to the wealth distribution problem it is replete with violent revolution.

The French, and Russian upheavals are but two samples of what desperate people can be persuaded to do in the face of extreme hardship.

A cause of the French Revolution: The economic crisis was compounded by years of bad harvests and resulted in urban and rural resentment of the wealth and privilege enjoyed by the nobility and clergy. In due course, the crisis led to the convocation of the Estates-General in May 1789 and, subsequently, as the revolution unfolded.

Inequality in Pre-Revolutionary Russia

http://www.slate.com/blogs/moneybox/2012/12/27/prerevolutionary_russian_income_inequality_russia_in_1904_was_less_unequal.html

Is the United States primed for Bolshevik revolution? Probably not. But Steven Nafziger and Peter Lindert report that the contemporary United States has a less egalitarian distribution of income than did Russia on the brink of the revolution of 1905.

In the U. S. today

http://www.forbes.com/sites/dalearcher/2013/09/04/could-americas-wealth-gap-lead-to-a-revolt/

The disparity between the nation’s top earners and the bottom 80 percent has grown exponentially over the past three decades, and it’s been exacerbated by the Great Recession.

For all the employment growth and claims by many that our economy is in recovery, most of those new jobs – six out of ten according to the Labor Department – are on the low end of the pay scale, which is already much lower than other first world countries. Meanwhile, the top executives of the fast food companies at the center of this storm are among the highest paid in the nation.

Paul Hunter