Wednesday, January 25, 2023

Do you want to know more about Metro's Financial Condition?

by Rod Williams, Jan. 25, 2023- If you want to have a better understanding of Metro's finances and the financial state of our city, you really need to read the Popular Annual Financial Report (PAFR) for the Metropolitan Government of Nashville and Davidson County (Metro) for Fiscal Year 2022

At only 20 pages long it is short and is a quick summary of Metro's finances. It covers the fiscal year of July 1, 2021, to June 30, 2022. This report, unlike the 500-page Annual Comprehensive Financial Report (ACFR), is easy to understand. This report makes Metro's finances comprehensible for the average person or reasonable intelligence.  You do not have to be an accountant to understand it. 

Be aware, however, that it is PR and makes everything sound rosy. It does not reveal the negatives. It tells you how much more we are spending on things like schools and sidewalks but does not tell you our schools, for the most part, are failing and that the city tries its best to stifle education excellence and innovation. Neither does it tell you that despite spending a lot on sidewalks, we get very few new sidewalks. 

It shows that our tax rate is lower than other large cities in Tennessee. It does not tell you that due to higher property values in Nashville, the person living in Nashville pays more in property taxes than the person living in one of Tennessee's other large cities living in a comparable neighborhood in a comparable house.  Read the report but don't be snowed.

Anyone who is thinking about running for Metro Council really needs to read this report. 

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Nashville has been growing by leaps and bounds, actually ....

 ... actually, in the last ten years, the population of Nashville has increased by about 10.43%

I thought it would have been more than this. I bet some people would have guessed it would have doubled in the last ten years. Sometimes, the things people believe are simply not true. For more fun Nashville facts see the Popular Annual Financial Report (PAFR) for the Metropolitan Government of Nashville and Davidson County (Metro) for Fiscal Year 2022.

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Tuesday, January 24, 2023

"Balance the Budget" or "Tax the Rich" are not solutions to the current budget crisis.

by Rod Williams, Jan. 22, 2022-  Fiscal responsibility, lower taxes, and smaller government are core tenets of the modern conservative movement. "Balance the budget," is a conservative battle cry. However, we have waited so late to balance the budget, that it is an almost impossible task, at least in the short run. One major problem is that interest on the debt and entitlements take a greater and greater share of the revenues. To see the difficulty in balancing the budget, look at the following chart prepared by Committee for a Responsible Federal Budget

Almost no one would advocate cutting, veterans benefits, social security, or medicare. Those are almost sacrosanct. People want their benefits.  

Does anyone think it is possible to cut social security? Social Security is the ultimate entitlement. People feel entitled to it. Many view it as a retirement plan rather than a Ponzi scheme transfer payment. Like a  Ponzi scheme, current beneficiaries are receiving funds from money being paid in by current investors. There is a trust fund that pays a portion of the money current recipients receive, but the trust fund is being drawn down. In 2034 the trust fund will run dry and unless Congress does not do something, retirees will start receiving a reduced benefit of 77% of their full benefit. 

While there are some who believe the world would be nice to us if we would just disarm and mind our own business, most realize the world is a dangerous place and we must have a strong military to protect our interests and insure our survival. Some believe we can retreat into fortress America and not meddle in foreign affairs. I am of the view we should be spending more on the military, not less. Russia wants to reestablish the Soviet empire. It is in our interest that Russia does not succeed in capturing Ukraine. 

China is threatening Taiwan and is building military bases on small rock outcroppings across the South China Sea. In addition, China's Belt and Road Initiative is developing ports and bases and railroads, and other infrastructure in over 60 countries around the world. 

We are also witnessing a turn toward authoritarianism, of both the right and the left, across the world. We cannot remain free and independent in a hostile world.  In my view, we should be modernizing and upgrading our military and doing more to give our allies the means to protect themselves. 

So, to balance the budget by the year 2032, if we exclude defense, veterans benefits, social security, and medicare, we would have to cut by 85% all other spending.  That is not going to happen. 

Some liberals would argue that we should simply raise taxes. They will usually advocate raising taxes "on the rich." Raising taxes could actually cause less growth and less future tax revenue.  It is not as if rich people are hiding their money under their mattresses. It is put to productive use by buildings new businesses, and new technologies, and new houses, and creating new jobs. Most informed liberals know this. When President Obama came into office he inherited a 35 percent marginal income tax for the top income bracket and a 15 percent capital gains income tax. He did not attempt to raise it. 

There is no easy solution. We cannot tax ourselves out of the current mess and we cannot cut spending sufficiently to balance the budget. Refusing to raise the debt limit would not solve the problem. That would cause the US to default on its debt. Raising the debt limit allows the government to borrow money to pay for the spending that has already been approved. I understand the desire to make a statement, but if the Republican House causes a government shutdown or a US credit default, it will end up costing more in the future and Republicans will pay at the ballot box. 

So what should be done? The solution does not fit on a bumper sticker or Facebook meme the way "Tax the Rich," or "Balance the Budget" does.  The Committee for a Responsible Federal Budget calls on Congress to adopt aggressive but achievable fiscal goals in its budgets and any fiscal deals. 

Too often, when fiscal reform is attempted it involves smoke and mirrors of fanciful projections of future savings. Congress needs to admit that there is clearly a problem. We have kicked the can down the road and for too long have allowed the budget to grow by borrowing money to pay for current expenditures. We may have reached the point to where that it is no longer sustainable. 

Our politics may be at a point to where only advocates of "Balance the Budget" or "Tax the Rich" can be elected. We may be, as Meryle Haggard sang, "rolling downhill like a snowball headed for hell."  I hope not. 

To read the Committee for a Responsible Federal Budget's analysis, follow the link.


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Beacon Center report looks at impact of certificate of need rules in Tennessee

 By Jon Styf,  The Center Square, Jan 19, 2023  – Certificate of Need applications have dropped considerably since a peak in 2004 despite Tennessee population growth, according to a report from Beacon Center of Tennessee.

There were 122 applications in 2004 as opposed to just 36 in 2021 and 18 in 2022, according to the report.

Certificate of need laws were mandated by the federal government in 1974 and regulate how many medical facilities are available in an area and what services they provide in an effort to reduce consumer costs. Even though Congress later eliminated the CON requirement in 1987, many states retained them.

The report showed that around one in five CON applications over the past 20 years did not receive approval.

“Many facilities have never opened their doors or expanded to serve some of the state’s most vulnerable communities,” Beacon Center’s report said. “They were outright rejected, their permits expired, or they never risked the enormous investments of time and money to navigate this onerous and risky application process. In fact, if we repealed all of Tennessee’s current hospital CON laws, there could be up to 63 more hospitals in the state, with 25 located in rural areas.”

Of the areas where CON requests have been denied since 2000, 16% have been in the Chattanooga/Cleveland area, 11% were in the Knoxville/Morristown/Sevierville region and 10% were in Johnson City/Kingsport.

Meanwhile, 8% each were in Memphis and Jackson/Brownsville while 9% of the denied applications were in Nashville/Davidson/Murfreesboro/Franklin.

“Based on the proposed project’s home county, more than 5.5 million Tennesseans were denied increased access to healthcare services,” the report said. “These projects represented more than $733.6 million in direct investment into Tenneessee’s local communities.”

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Tennessee ranks low as state to raise a family according to WalletHub.

By J.D. Davidson, The Center Square, Jan 16, 2023 -  Tennessee ranks in the bottom half of states in terms of best places to raise a family, according to a recently released report.

WalletHub, a personal finance website, put together the state rankings based on 51 indicators of family-friendliness, ranging from median annual family income to housing affordability and unemployment rates Its report said the ideal city is one that’s affordable to live in during this time of high inflation but also offers quality schools, healthcare and entertainment.

Tennessee fell short, ranking 33rd overall.

The Volunteer State did rank higher in family fun (20th) but fell short in affordability (30th), health and safety (40th) and education and child care (26th).

“Tennessee has a lot of family fun opportunities and ranks in the top half in terms of socioeconomics," WalletHub analyst Jill Gonzalez said. "One of its weaker points is the fact that it has a low share of children who live in neighborhoods with a park or a playground. The state also has low quality public hospitals and low life expectancy at birth. Other factors that might make people avoid Tennessee when choosing to relocate include the large number of climate disasters and high crime rate. For families with small children, the low number of child day-care services per capita can be a deterrent. Lastly, Tennessee has a large share of families living in poverty and low job security, which are not attractive for people looking to move."

The report ranked Massachusetts, Minnesota, New York, North Dakota and Vermont as the top five states to raise a family. The bottom five included Mississippi, New Mexico, West Virginia, Louisiana and South Carolina.

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Marsha Blackburn's eggtravagant claim

Jan 24, 2023- This from National Review:

On a lighter note: 

  • A little egg-stra? Tennessee's senior U.S. Sen. Marsha Blackburn made an egg-stravagant claim on Twitter Monday, alleging that "Americans are going to Mexico to buy eggs because they are cheaper."
  • Hey, look: We like a fried egg sandwich as well as anyone, but Senator — come on. We think it's better to pay $8 for a dozen eggs at the Kroger than to buy a Southwest Air ticket to the border, hope Southwest is flying, rent a car, negotiate for Mexican eggs . . . before you know it, that egg sandwich is going to cost you about $500 and a whole lot of time. It's clucking ridiculous.
Rod's Comment: Marsha, Marsha, Marsha. (with a roll of the eyes, a half smile, and a shaking of the head from side to side.)

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Nashville council, sports authority awaiting final documents on $2.2B new Titans stadium

 By Jon Styf, The Center Square, Jan. 24, 2023 – The Metro Nashville Mayor’s Office is completing what it is calling the definitive documents for a new deal on a $2.2 billion Tennessee Titans stadium and plan to present the final documents to Metro’s council by March.

Before that begins, East Bank Stadium Committee Chair Bob Mendes sent a list of three questions to the mayor’s office following last week’s committee meeting asking for specifics on when the legislation will be filed, if legislation to rebuild Nashville’s Fairgrounds Speedway into a NASCAR cup-worthy track would come at the same time and specifics of when the capital spending on the Titans stadium project will occur.

The list of stadium legislation needed to be approved is lengthy, including amendments to the current stadium lease, Tennessee State football lease and state agreement for Nissan Stadium.

Both the council and the Nashville Sports Authority will be asked to approve a development agreement, lease, Titans non-relocation agreement, team guaranty, TSU lease, state funding agreement and campus coordination/parking agreement.

The council will also have to approve a 130-acre boundary near the stadium where 50% of the state and local taxes will go to a fund estimated to collect a total of $2.9 billion to go toward paying off revenue bonds and paying for future capital expenses and stadium repairs.

The council will also have to approve the sports authority issuing bonds and an intergovernmental agreement while the sports authority will need to also approve the intergovernmental agreement along with a bond indenture, construction funding trust and disbursing agreements and a personal seat license administration agreement.

Council member Emily Benedict has asked the council have at least six weeks to review the documents once they are received and put them in front of the public at public meetings along with offering amendments that will have time to be heard.

The sports authority also heard an overview of the Fairgrounds Speedway project, which is awaiting a full cost estimate, at its meeting last week. The Fair Board has been asked to approve the deal before a final price, expected to be more than $100 million, is reached.

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