Last year was a busy one for public giveaways to the National Football League. In Virginia, Republican Governor Bob McDonnell, who styles himself as a budget-slashing conservative crusader, took $4 million from taxpayers’ pockets and handed the money to the Washington Redskins, for the team to upgrade a workout facility. Hoping to avoid scrutiny, McDonnell approved the gift while the state legislature was out of session. The Redskins’ owner, Dan Snyder, has a net worth estimated by Forbes at $1 billion. But even billionaires like to receive expensive gifts.
Taxpayers in Hamilton County, Ohio, which includes Cincinnati, were hit with a bill for $26 million in debt service for the stadiums where the NFL’s Bengals and Major League Baseball’s Reds play, plus another $7 million to cover the direct operating costs for the Bengals’ field. Pro-sports subsidies exceeded the $23.6 million that the county cut from health-and-human-services spending in the current two-year budget (and represent a sizable chunk of the $119 million cut from Hamilton County schools). Press materials distributed by the Bengals declare that the team gives back about $1 million annually to Ohio community groups. Sound generous? That’s about 4 percent of the public subsidy the Bengals receive annually from Ohio taxpayers.
In Minnesota, the Vikings wanted a new stadium, and were vaguely threatening to decamp to another state if they didn’t get it. The Minnesota legislature, facing a $1.1 billion budget deficit, extracted $506 million from taxpayers as a gift to the team, covering roughly half the cost of the new facility. Some legislators argued that the Vikings should reveal their finances: privately held, the team is not required to disclose operating data, despite the public subsidies it receives. In the end, the Minnesota legislature folded, giving away public money without the Vikings’ disclosing information in return. The team’s principal owner, Zygmunt Wilf, had a 2011 net worth estimated at $322 million; with the new stadium deal, the Vikings’ value rose about $200 million, by Forbes’s estimate, further enriching Wilf and his family. They will make a token annual payment of $13 million to use the stadium, keeping the lion’s share of all NFL ticket, concession, parking, and, most important, television revenues.
After approving the $506 million handout, Minnesota Governor Mark Dayton said, “I’m not one to defend the economics of professional sports … Any deal you make in that world doesn’t make sense from the way the rest of us look at it.” Even by the standards of political pandering, Dayton’s irresponsibility was breathtaking.
In California, the City of Santa Clara broke ground on a $1.3 billion stadium for the 49ers. Officially, the deal includes $116 million in public funding, with private capital making up the rest. At least, that’s the way the deal was announced. A new government entity, the Santa Clara Stadium Authority, is borrowing $950 million, largely from a consortium led by Goldman Sachs, to provide the majority of the “private” financing. Who are the board members of the Santa Clara Stadium Authority? The members of the Santa Clara City Council. In effect, the city of Santa Clara is providing most of the “private” funding. Should something go wrong, taxpayers will likely take the hit.
The 49ers will pay Santa Clara $24.5 million annually in rent for four decades, which makes the deal, from the team’s standpoint, a 40-year loan amortized at less than 1 percent interest. At the time of the agreement, 30-year Treasury bonds were selling for 3 percent, meaning the Santa Clara contract values the NFL as a better risk than the United States government.
Although most of the capital for the new stadium is being underwritten by the public, most football revenue generated within the facility will be pocketed by Denise DeBartolo York, whose net worth is estimated at $1.1 billion, and members of her family. York took control of the team in 2000 from her brother, Edward DeBartolo Jr., after he pleaded guilty to concealing an extortion plot by a former governor of Louisiana. Brother and sister inherited their money from their father, Edward DeBartolo Sr., a shopping-mall developer who became one of the nation’s richest men before his death in 1994. A generation ago, the DeBartolos made their money the old-fashioned way, by hard work in the free market. Today, the family’s wealth rests on political influence and California tax subsidies. Nearly all NFL franchises are family-owned, converting public subsidies and tax favors into high living for a modern-day feudal elite.
Pro-football coaches talk about accountability and self-reliance, yet pro-football owners routinely binge on giveaways and handouts. A year after Hurricane Katrina hit New Orleans, the Saints resumed hosting NFL games: justifiably, a national feel-good story. The finances were another matter. Taxpayers have, in stages, provided about $1 billion to build and later renovate what is now known as the Mercedes-Benz Superdome. (All monetary figures in this article have been converted to 2013 dollars.) The Saints’ owner, Tom Benson, whose net worth Forbes estimates at $1.2 billion, keeps nearly all revenue from ticket sales, concessions, parking, and broadcast rights. Taxpayers even footed the bill for the addition of leather stadium seats with cup holders to cradle the drinks they are charged for at concession stands. And corporate welfare for the Saints doesn’t stop at stadium construction and renovation costs. Though Louisiana Governor Bobby Jindal claims to be an anti-spending conservative, each year the state of Louisiana forcibly extracts up to $6 million from its residents’ pockets and gives the cash to Benson as an “inducement payment”—the actual term used—to keep Benson from developing a wandering eye.
In NFL city after NFL city, this pattern is repeated. CenturyLink Field, where the Seattle Seahawks play, opened in 2002, with Washington State taxpayers providing $390 million of the $560 million construction cost. The Seahawks, owned by Paul Allen, one of the richest people in the world, pay the state about $1 million annually in rent in return for most of the revenue from ticket sales, concessions, parking, and broadcasting (all told, perhaps $200 million a year). Average people are taxed to fund Allen’s private-jet lifestyle.
The Pittsburgh Steelers, winners of six Super Bowls, the most of any franchise, play at Heinz Field, a glorious stadium that opens to a view of the serenely flowing Ohio and Allegheny Rivers. Pennsylvania taxpayers contributed about $260 million to help build Heinz Field—and to retire debt from the Steelers’ previous stadium. Most game-day revenues (including television fees) go to the Rooney family, the majority owner of the team. The team’s owners also kept the $75 million that Heinz paid to name the facility.
Judith Grant Long, a Harvard University professor of urban planning, calculates that league-wide, 70 percent of the capital cost of NFL stadiums has been provided by taxpayers, not NFL owners. Many cities, counties, and states also pay the stadiums’ ongoing costs, by providing power, sewer services, other infrastructure, and stadium improvements. When ongoing costs are added, Long’s research finds, the Buffalo Bills, Cincinnati Bengals, Cleveland Browns, Houston Texans, Indianapolis Colts, Jacksonville Jaguars, Kansas City Chiefs, New Orleans Saints, San Diego Chargers, St. Louis Rams, Tampa Bay Buccaneers, and Tennessee Titans have turned a profit on stadium subsidies alone—receiving more money from the public than they needed to build their facilities. Long’s estimates show that just three NFL franchises—the New England Patriots, New York Giants, and New York Jets—have paid three-quarters or more of their stadium capital costs.
Many NFL teams have also cut sweetheart deals to avoid taxes. The futuristic new field where the Dallas Cowboys play, with its 80,000 seats, go-go dancers on upper decks, and built-in nightclubs, has been appraised at nearly $1 billion. At the basic property-tax rate of Arlington, Texas, where the stadium is located, Cowboys owner Jerry Jones would owe at least $6 million a year in property taxes. Instead he receives no property-tax bill, so Tarrant County taxes the property of average people more than it otherwise would.
In his office at 345 Park Avenue in Manhattan, NFL Commissioner Roger Goodell must smile when Texas exempts the Cowboys’ stadium from taxes, or the governor of Minnesota bows low to kiss the feet of the NFL. The National Football League is about two things: producing high-quality sports entertainment, which it does very well, and exploiting taxpayers, which it also does very well. Goodell should know—his pay, about $30 million in 2011, flows from an organization that does not pay corporate taxes.
That’s right—extremely profitable and one of the most subsidized organizations in American history, the NFL also enjoys tax-exempt status. On paper, it is the Nonprofit Football League.
This situation came into being in the 1960s, when Congress granted antitrust waivers to what were then the National Football League and the American Football League, allowing them to merge, conduct a common draft, and jointly auction television rights. The merger was good for the sport, stabilizing pro football while ensuring quality of competition. But Congress gave away the store to the NFL while getting almost nothing for the public in return.
The 1961 Sports Broadcasting Act was the first piece of gift-wrapped legislation, granting the leagues legal permission to conduct television-broadcast negotiations in a way that otherwise would have been price collusion. Then, in 1966, Congress enacted Public Law 89‑800, which broadened the limited antitrust exemptions of the 1961 law. Essentially, the 1966 statute said that if the two pro-football leagues of that era merged—they would complete such a merger four years later, forming the current NFL—the new entity could act as a monopoly regarding television rights. Apple or ExxonMobil can only dream of legal permission to function as a monopoly: the 1966 law was effectively a license for NFL owners to print money. Yet this sweetheart deal was offered to the NFL in exchange only for its promise not to schedule games on Friday nights or Saturdays in autumn, when many high schools and colleges play football.
Public Law 89-800 had no name—unlike, say, the catchy USA Patriot Act or the Patient Protection and Affordable Care Act. Congress presumably wanted the bill to be low-profile, given that its effect was to increase NFL owners’ wealth at the expense of average people.
While Public Law 89-800 was being negotiated with congressional leaders, NFL lobbyists tossed in the sort of obscure provision that is the essence of the lobbyist’s art. The phrase or professional football leagues was added to Section 501(c)6 of 26 U.S.C., the Internal Revenue Code. Previously, a sentence in Section 501(c)6 had granted not-for-profit status to “business leagues, chambers of commerce, real-estate boards, or boards of trade.” Since 1966, the code has read: “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.”
The insertion of professional football leagues into the definition of not-for-profit organizations was a transparent sellout of public interest. This decision has saved the NFL uncounted millions in tax obligations, which means that ordinary people must pay higher taxes, public spending must decline, or the national debt must increase to make up for the shortfall. Nonprofit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.
You know because this isn’t important at all. They can’t find the $80 million to fund a program that could save billions and thousands of lives.
The delay here is, in one sense, testimony to human nature. It has been 19 years since the last significant quake rolled through California — the magnitude 6.7 earthquake in Northridge in a corner of the San Fernando Valley in 1994 — and memories of its damage and psychological trauma (some people moved away) have softened with the passage of time.
“We are in a long period of what I call seismic peace in California,” said Thomas H. Heaton, the director of the Earthquake Engineering Research Laboratory at Caltech. “But you can go for a long period when things are calm, and then instantly things are transformed into chaos. When you are in peacetime, it’s hard to get people’s attention and remind them what a big problem it is.”
Alex Padilla, a Democratic state senator who studied mechanical engineering at the Massachusetts Institute of Technology and is sponsoring the earthquake alert bill, said the central hurdle was finding a source for the money that university scientists and their partners at the United States Geological Survey say is needed to finish the project. California has been struggling with a financial retrenchment, the federal government is cutting back spending, and private industry is wary of putting so much money into what many people argue is a public responsibility.
“I haven’t come across anybody who thinks we shouldn’t do it,” Mr. Padilla said. “The only question I get is ‘Where is the money going to come from?’”
“I don’t think it’s a huge amount of money, particularly when compared to the billions of dollars in damage that we associate with every major earthquake,” Mr. Padilla said, adding, “I really don’t think any state official wants to answer the question ‘Why didn’t we?’ after the Big One hits and we haven’t deployed the system.”
Over at the amazing BLDGBlog, Geoff Manaugh has some photos of optical calibration targets in the California desert.
“There are dozens of aerial photo calibration targets across the USA,” the Center for Land Use Interpretation reports, “curious land-based two-dimensional optical artifacts used for the development of aerial photography and aircraft. They were made mostly in the 1950s and 1960s, though some apparently later than that, and many are still in use, though their history is obscure.”
These symbols—like I-Ching trigrams for machines—are used as “a platform to test, calibrate, and focus aerial cameras traveling at different speeds and altitudes,” CLUI explains, similar to “an eye chart at the optometrist, where the smallest group of bars that can be resolved marks the limit of the resolution for the optical instrument that is being used.”
Further, “the largest concentration of calibration targets in one place is on the grounds of Edwards Air Force Base” in California, “in an area referred to as the photo resolution range, where 15 calibration targets run for 20 miles across the southeast side of the base in a line, so multiple targets can be photographed in one pass. There is some variation in the size and shape of the targets at Edwards, suggesting updates and modifications for specific programs. A number of the targets there also have aircraft hulks next to them, added to provide additional, realistic subjects for testing cameras.”
Some are taking the law into their own hands.
Which is crazy but you kind of understand it when you think of the violence that happens in those border communities because of the drugs and gangs that are flooding across the border. Either way, after looking at the infographic you kind of get the idea that Stephen Harper was right when he said that the War on Drugs has failed.
DL Skateboards is a custom handmade Brooklyn, NY skate shop operating out of a box truck outside of co-founding couple Lauren Andino and Derek Mabra‘s Greenpoint apartment building. The couple have been skateboarding most of their lives and started their small business producing 60′s-style cruisers on a whim. Check out this video from Cool Hunting of the couple out on their street, shaping one of the last decks before taking their business out to California and click through the screenshots above for a look at their operation.
How cool is it that the business is run out of a truck. My question is would a business like this even be allowed to operate in Saskatoon?
Here is another artisan skateboard shop operating out of it’s community.
I love it.
I didn’t think so. You can read more about Godspeed Courier on their website.
The Crystal Cathedral is for sale. Seriously. According to the L.A. Times
The Garden Grove church, which said it owed more than $50 million to creditors and vendors when it filed for Chapter 11 bankruptcy protection in October, will file a reorganization plan with a Santa Ana court as soon as Friday. The plan includes the sale of the 40-acre campus to a real estate investment group, alleviating financial pressure from a $36-million mortgage, Charles said. The church has a guaranteed option of leasing the campus for 15 years. After four years, the church could buy back the core buildings, which include the 10,000-pane Crystal Cathedral, the 13-story Tower of Hope, the welcome center and the cemetery.
I am not too heart broken by the news. Wendy and I took a tour of it a decade ago and it had already become a parody of itself then. The highlight was a women’s washroom that cost a million dollars to build. I know things like this are contextual but c’mon, a million dollars for a women’s washroom. Yeah.
Growing up on a river, you never really think about water consumption outside of your water bill. That started to change when we bought our house twelve years ago. It has a boulevard out front but since we are on a corner lot, it also has a large one along the side of the house that is unbroken by a sidewalk. The entire yard was a mess and by the time I got to the boulevard, it was a couple of years later. We had fertilized it and watered but the problem was that the grass (basically a quack grass) was growing on clay which meant no top soil, shallow roots, and zero water absorption. I bet 90% to 95% of the water ran off the boulevard and went straight down the drain.
What I should have done was rotor till the entire boulevard, bring in top soil, organic matter and reseed but I didn’t have the money to do so and I am not sure you can do that to a city boulevard anyways. I took another approach in that I stopped bagging my grass with the hope that it would stop some of the evaporation of the 5% of water that was being absorbed and eventually break down and decompose to provide some organic matter. In addition to this I started to spread both some peat moss and compost down on the lawn. Finally I started to aerate the lawn and boulevard which helped out a lot. Over the next five years the well beaten path of people cutting through the lawn came back (we did over seed with a hearty mixtures from Early’s Farm and Garden) and the boulevard started to transition from rock hard to developing a spongy feel like there was actual soil underneath. Now the lawn isn’t healthy enough to be organic and I do have a vacant weed infested lot behind be which causes all sorts of problems with noxious weeds which means that I tend to use a lot of weed and feed on the boulevard on the back half of our lot but we have made a lot of progress. Last year for the first time I spread out a mixture of home brewed compost tea (recipe and instructions) after seeing how it has made a difference at Harvard (less mowing, less water, deeper roots and it absorbs wear and tear of students better). The end result of all this has been our water consumption is way down the last several years.
Now it looks like a lot of work but it was actually less work than you think. First of all, not picking up the grass after we mow saved a lot of time. There are some times when a combination of rain and schedule that I do bag up our grass, plus, I do need some grass for the compost container once in a while but most of the time, it’s a big time saver and the rest of the work needs to be done anyways. The big change has been to go to the compost tea and I am hoping that it will make a big difference over the next couple of years.
One thing that strikes me is that we don’t do a lot of talking in the city about reducing water consumption. The average Canadian uses about 120,000 litres (26,396 gallons) of water per year which is why I was happy to see that in the full report that the Saskatoon Environmental Advisory Committee presented to the Administration and Finance Committee included five recommendations related to water conservation. Here are their recommendations in summary
- amend existing bylaws to require water efficient fixtures (low-flow toilets and shower heads) for new and existing building construction and renovations in residential, commercial, industrial, and institutional sectors,
- implement a low-flow toilet rebate program similar to other Western Canadian municipalities,
- enact a bylaw implementing an outdoor water schedule,
- report back on a strategy to implement a water monitoring program, and
- promote and develop new programs and incentives for water conservation.
Number 3 is the most interesting option to me. Okotoks’s schedule works like this
Due to the increase in water consumption in town, outdoor watering is now only permitted two days a week. One hour of watering per week is adequate for established lawns.
Odd numbered addresses may water lawns: (Addresses ending in 1,3,5,7,9)
Thursdays &/or Sundays
Even numbered addresses may water lawns: (Addresses ending in 0,2,4,6,8)
Wednesdays &/or Saturdays
Watering may only occur during the following hours:
6:00 am – 9:00 am
7:00 pm – 11:00 pm
Flowerbeds and vegetable gardens may be watered by hand at any time using a watering can or hose with a trigger spray nozzle.
Please respect the specified watering days and hours, as water is a limited resource. The fines for not obeying the water regulations range from $100—$2500.
Cambridge has a similar plan but will it work and be accepted here. It’s a big shift in behavior for Saskatoon, especially when much of our water consumption goes right back into the South Saskatchewan River (once treated). Mark and Oliver have grown up running through the sprinkler in the yard and Maggi takes a nap under the sprinkler on many days. To lose that or have that restricted would be a big change. It would also lead to conflicts among neighbors. Someone is always complaining about one neighbor on our street because they think his vehicles take up too much street parking (which makes no sense to me). Every summer someone from the city comes by because (probably the same neighbor that complains about the parking) is sure the maple firewood we have in the backyard is elm (and banned). Watching a recent show on Melbourne, Australia which has more severe water restrictions than what Okotoks has (Melbourne has had a drought since 1997), people put up signs saying that their gardens are being watered by excess shower water.
While we aren’t in a situation of drought, the South Saskatchewan River is under some pressure and this where I get upset. On one hand, I totally agree with the recommendations being made to Saskatoon City Council yet on the other hand, this isn’t a Saskatoon issue. Most of the water being taken from the South Saskatchewan River is from irrigation projects in Alberta.
“We know virtually nothing about actual use or consumption of water,” she says. “No one does.” Her assertion catches There are nearly 12,000 licensed users of river water and 80 percent of the water allocated under these licences is withdrawn in Alberta’s sprawling irrigation districts. Users typically meter their intake pipes, but the standards for reporting are lax, and withdrawal numbers alone cannot tell us actual water use. Some water is taken up by growing plants, some evaporates or is lost from leaking canals, and much simply flows back to the river. Since none of this is measured, actual consumption is just an estimate based on assumptions.
The article goes on to state
When it comes to water, getting the big picture is never easy. The truth can simply vanish in the details. Since the future of the river is, in the broadest sense, a supply-demand equation, I set off to the university’s department of economics to find Joel Bruneau, co-editor of a comprehensive technical report called “Climate Change and Water Resources in the South Saskatchewan River Basin.” The ponytailed professor does his part to avert a hotter, drier future climate by getting around Saskatoon by bicycle year-round. But his report suggests the challenges are here and now.
“The whole story is irrigation,” says Bruneau before I am quite seated in his office. His studies show there is sufficient river water to cope with regional population growth and worst-scenario climate change, but not if we keep irrigating at the present rate.
In fact, irrigation is still expanding. Even though Alberta stopped issuing new water licenses in the South Saskatchewan River Basin in 2006, room to grow comes from “efficiencies” — converting leaky, evaporation-prone canals to low-loss pipeworks. Trading in water allocations, which further maximizes Alberta consumption, is on the rise. The net result of such “savings” is less water in the river for downstream users.
“They are already overallocated on the Oldman and Bow rivers and borrowing from the Red Deer to pay the ‘bill’ to Saskatchewan,” says Bruneau, who can foresee a day when Alberta will want to buy some of Saskatchewan’s share. For years a poor cousin to its western neighbor, Saskatchewan has seen its economic fortunes rise meteorically, and some farmers have called on government to directly match Alberta’s irrigation investment.
Bruneau doubts new irrigation projects would make economic sense now, if they ever did, but he dismisses the idea on more fundamental grounds. “We are taking a third of the river for irrigation already,” he says. “There’s no way we can double that. The water would become warm, covered with algae. The fish would die.”
So Saskatoon gets to pay the bill because Alberta farmer’s want to grow crops that are more profitable then would be allowed by normal farm conditions. I remember seeing the dry river beds of California and the Colorado River and thinking, I am so lucky to have the South Saskatchewan River. Let’s hope enough people agree and we come up with ways to guarantee that it is always going to be there.
It’s been almost 10 years from the first Soularize in Seattle, and we’re exciting about hosting another learning party in 2011. As usual, this event will unite both traditional and non-traditional teachers, artists, theologians, thinkers, and social activists.
This year – sunny San Diego!
October 12-14, 2011
Save the date and plan to join us for one of the most unique experiences of your life. If you’ve been to a previous Soularize, don’t miss this 10 year reunion event. If you’ve never been before, you won’t want to miss it.
We’re partnering with an incredible church in the North Park neighborhood of San Diego to put on an incredible event that will cultivate a thought-provoking and spiritual experience while introducing a wide variety of ways to connect and grow with others on the journey.
Didn’t Soularize start a year earlier than that in in Los Angeles? Whatever the case, San Diego in October looks inviting. Update: I am planning to be there.
60 Minutes had a feature on the budget crisis’ that are happening at the state level. Stay with me on this one.
"The most alarming thing about the state issue is the level of complacency," Meredith Whitney, one of the most respected financial analysts on Wall Street and one of the most influential women in American business, told correspondent Steve Kroft
Whitney made her reputation by warning that the big banks were in big trouble long before the 2008 collapse. Now, she’s warning about a financial meltdown in state and local governments.
"It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States, and certainly the largest threat to the U.S. economy," she told Kroft.
Asked why people aren’t paying attention, Whitney said, "’Cause they don’t pay attention until they have to."
Whitney says it’s time to start.
California, which faces a $19 billion budget deficit next year, has a credit rating approaching junk status. It now spends more money on public employee pensions than it does on the state university system, which had to increase its tuition by 32 percent.
Arizona is so desperate it sold off the state capitol, Supreme Court building and legislative chambers to a group of investors and now leases the buildings from their new owner. The state also eliminated Medicaid funding for most organ transplants.
Then there’s New Jersey. It has the highest taxes in the country, a $10 billion deficit and a depressed economy when first-year Governor Chris Christie took office. But after looking at the books, he decided to walk away from a long-planned and much-needed project with New York and the federal government to build a rail tunnel into Manhattan. It would have helped the economy and given employment to 6,000 construction workers.
Gov. Christie acknowledged that’s a lot of jobs. "I cancelled it. I mean, listen, the bottom line is I don’t have the money. And you know what? I can’t pay people for those jobs if I don’t have the money to pay them. Where am I getting the money? I don’t have it. I literally don’t have it."
Asked if this is going on all over the country, Christie told Kroft, "Yes. Of course it is. It’s not like you can avoid it forever, ’cause it’s here now. And we all know it’s here. And the federal government doesn’t have the money to paper over it anymore, either, for the states. The day of reckoning has arrived. That’s it. And it’s gonna arrive everywhere. Timing will vary a little bit, depending upon which state you’re in, but it’s comin’."
And nowhere has the reckoning been as bad as it is in Illinois, a state that spends twice much as it collects in taxes and is unable to pay its bills.
"This is the state of affairs in Illinois. Is not pretty," Illinois state Comptroller Dan Hynes told Kroft.
Hynes is the state’s paymaster. He currently has about $5 billion in outstanding bills in his office and not enough money in the state’s coffers to pay them. He says they’re six months behind.
"How many people do you have clamoring for money?" Kroft asked.
"It’s fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state," Hynes said.
Asked how these people are getting by considering they’re not getting paid by the state, Hynes said, "Well, that’s the tragedy. People borrow money. They borrow in order to get by until the state pays them."
"They’re subsidizing the state. They’re giving the state a float," Kroft remarked.
"Exactly," Hynes agreed.
"And who do you owe that money to?" Kroft asked.
"Pretty much anybody who has any interaction with state government, we owe money to," Hynes said.
That would include everyone from the University of Illinois, which is owed $400 million, to small businessmen like Mayur Shah, who owns a pharmacy in Chicago and has been waiting months for $200,000 in Medicaid payments. Then there are the 2,000 not-for-profit organizations that are owed a billion dollars by the state.
Lutheran Social Services of Illinois has been around since 1867 and provides critical services to 70,000 people, mostly the elderly, the disabled, and the mentally ill. The state owed them $9 million just before Thanksgiving, and they nearly had to close up shop.
Asked how long his organization can go on like this, Rev. Denver Bitner, the president of Lutheran Social Services of Illinois, told Kroft, "Well, we wonder that too because we really don’t know."
He says they were forced to tap their entire line of credit and all their cash reserves before the state would finally pay them as a hardship case.
"It has to be that you’ve sold off all your assets, you have borrowed from everybody that you can borrow from, and then, we’ll think about it," Rev. Bitner explained.
And according to Bitner, that’s even though the state owes his organization the money.
"The first words out of my mouth are usually an apology, because they have been you know put in this situation, that is really unacceptable. And you know there is very little I can do or say other than apologize," Comptroller Dan Hynes said.
It’s not just the social safety net that Hynes has to worry about: there have been Illinois legislators that have been evicted from their offices because the state didn’t pay their rent, and stories about state troopers being turned away from gas stations because the owners refused to take their state credit cards.
"The state’s a deadbeat," Kroft remarked.
"Yeah. I mean, the state of Illinois is known as a deadbeat state. This is a reputation that has taken us years to earn and we’ve reached, you know, the heights of, I think, becoming the worst in the country," Hynes said.
In the early 1990s, Saskatchewan was on the verge of bankruptcy because the Grant Devine governments of 1982-1991 would not curb government spending and the deficit for a province under a million people grew to over one billion dollars. The incoming NDP government of Roy Romanow was more pragmatist than idealistic and spent almost a decade trying to get the province on solid financial footings. That journey was documented in the book Minding the Public Purse by the Hon. Janice MacKinnon, who was the Finance Minister during the most of the cuts. Like I said, it was a decade of austerity. There was funding cuts to healthcare, almost no building on the University of Saskatchewan or University of Regina campuses, a higher number of students in classrooms, longer waiting lists, rural hospitals closing, decaying highways, and it was really a lost decade. Yes Saskatchewan did grow a bit during this time but with our financial house in disarray, growth was hard.
MacKinnon talks about how close Saskatchewan was to defaulting on it’s loans. With the precarious state of the Canadian economy (pre-Chretien and Martin), there was some legitimate concerns that this could lead to an IMF bailout and intervention. Luckily it never came to that but it did mean higher tuitions, higher taxes, more fees, a lot of lost opportunities that we are just now seeing as a province.
What’s scary is that the deficit numbers coming out of the U.S. states are worse and for all intents and purposes, the US economy is soon going to be in as bad or as worse shape as the Canadian economy was in the early 1990s. I keep looking at the debt crisis that is swamping the EU economies and I can’t help but wonder until how long it is that you see places like Michigan, Illinois, and California needing massive financial bailouts. Good grief, California has even looked at dissolving as a state and becoming a territory again (I don’t think it was a serious option).
How many lost decade will the United States go through to pay for wars in Afghanistan, Iraq, and the greed of the banks? It took over a decade to recover from Vietnam and the state and cities economies weren’t in such tough shape. This could either take decades or it could be the start of the long decline of the United States as a economic power.
The good news is that from Saskatchewan and Alberta’s experience is that as voters, we understood that it had to be done. Whether it was the right wing Ralph Klein in Alberta or the centre-left Roy Romanow in Saskatchewan, we knew it had to be done and as a whole, we stood by them as they did the heavy lifting and hard cutting. The bad news for many states is that Saskatchewan has a natural inclination to support the NDP and Alberta has a natural inclination to vote Progressive Conservative which means that during the tough times, the provinces returned (or in Alberta’s case, they only ever elect Conservatives) what they knew and trusted during rough times. If you don’t have you could have a series of one term administrations that moved from spend to cut to spend to cut for short term partisan advantage which could derail or destroy the entire process. Too make spending cuts that are needed, you need a really strong majority which is not a strength of the American system which features a lot more checks and balances.
I can’t see many states turning themselves around.
A cool video on Comet Skateboards and how they moved from Oakland, California to Ithaca, New York and made the transition into their new city and neighborhood by making a commitment to being good neighbors and giving back to the community. It’s a lesson many organizations and some churches could learn.
California has a special place in the American psyche. It is the Golden State: a playground of the rich and famous with perfect weather. It symbolizes a lifestyle of sunshine, swimming pools and the Hollywood dream factory.
But the state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kenneth Starr, who has written an acclaimed history of the state, recently declared: "California is on the verge of becoming the first failed state in America."
While the situation is bad now, it is starting to change for the better
Jones believes California will once more change itself, and then change the nation. "California remains a beacon of hope… This is a new time for a new direction to grow a new society and a new economy," Jones has said.
It is already happening. California may have sprawling development and awful smog, but it leads the way in environmental issues. Arnold Schwarzenegger was seen as a leading light, taking the state far ahead of the federal government on eco-issues. The number of solar panels in the state has risen from 500 a decade ago to more than 50,000 now. California generates twice as much energy from solar power as all the other US states combined. Its own government is starting to turn on the reckless sprawl that has marked the state’s development.
California’s attorney-general, Jerry Brown, recently sued one county government for not paying enough attention to global warming when it came to urban planning. Even those, like Kotkin, who are sceptical about the end of suburbia, think California will develop a new model for modern living: comfortable, yes, but more modest and eco-friendly. Kotkin, who is writing an eagerly anticipated book about what America will look like in 2050, thinks much of it will still resemble the bedrock of the Californian dream: sturdy, wholesome suburbs for all – just done more responsibly. "We will still live in suburbs. You work with the society you have got. The question is how we make them more sustainable," he says.
Even the way America eats is being changed in California. Every freeway may be lined with fast-food outlets, but California is also the state of Alice Waters, the guru of the slow-food movement, who inspired Michelle Obama to plant a vegetable garden in the White House. She thinks the state is changing its values. "The crisis is bringing us back to our senses. We had adopted a fast and easy way of living, but we are moving away from that now," she says.
There is hope in politics, too. There is a growing movement to call for a constitutional convention that could redraw the way the state is governed. It could change how the state passes budgets and make the political system more open, recreating the lost middle ground. Recently, the powerful mayor of Los Angeles, Antonio Villaraigosa, signed on to the idea. Gerrymandering, too, is set to take a hit. Next year Schwarzenegger will take steps to redraw some districts to make them more competitive, breaking the stranglehold of party politics. He wants district boundaries to be drawn up by impartial judges, not politicians. In previous times that would have been the equivalent of a turkey voting for Christmas. But now the bold move is seen for what it is: a necessary step to change things. And there is no denying that innovation is something that California does well.
Even in the most deprived corners of the state there is a sense that things can still turn around. California has always been able to reinvent itself, and some of its most hardcore critics still like the idea of it having a "dream".
"I believe in California. It pains me at the moment to see it where it is, but I still believe in it," said Michael Levine.