Government Spending Archives - Page 23 of 27

Unaware of the Laws of Economics, NJ Transit to “Fix” Declining Ridership by Increasing Fares 25% & Cutting Service

Pretend you are on the board of directors of a government owned transit system called NJT. Times are tough and money is tight. The board must make some hard decisions that are in the best interest of NJT and the public it serves to deal with the shortage of money. The governor just reduced NJT’s annual state subsidy of $296 million by $33 million. The number of people riding on your bus and train systems is down four percent this year. Which of the following hard choices do you make:

reduce the pay of all rank and file employees
increase all fares by 25 percent
Cut 33 daily trains.
Eliminate 3 bus routes
increase the amount of time between buses and trains
cut 200 jobs
reduce contributions to employees’ retirement plans
reduce executives’ pay by 5 percent
eliminate some discounts and cap other discounts

Faced with the above facts, the New Jersey Transit decided to all of the above except the single one that would have had the biggest affect. The NJT did not reduce the salary of its rank and file employees. Are these employees union members? If so, it would explain why their pay wasn’t reduced, which is what many for profit businesses would do when faced with a huge deficit problem. Instead, the NJT brain power decided to ignore the laws of economics (higher price means reduced sales volume) and give NJT riders the largest fare hike in the history of the NJT.

This reminds me of what the Arizona Diamondbacks did to its fans before the 2009 season. Up until 2009, I had been a season ticket holder since opening day of the franchise’s first year. I had four great seats on the bottom level thirteen rows up just beyond first base. Each seat was $1,743 for the 2008 82 home game season. For 2009, the Dbacks billed me $2,905, which was just over a 66 percent increase. Instead of making a small price increase and collecting almost $7,000 from me and my group, we declined to renew the tickets we had held for ten years and the Diamondbacks got nothing from us. Dbacks attendance was down in 2009 from 2008. I know probably more than 20 people who were original Diamondback season ticket holders who no longer have season tickets.

New York Times Upset Arizona Closed Highway Rest Stops Due to No Money

They say never pick a fight with somebody that buys ink by the barrel. Whoa Nelly, watch out because the New York Times is mad that the $100 million in the red Arizona Department of Transportation closed thirteen of eighteen highway rest stops in Arizona. Recently more that $500 million was diverted from ADOT to the State of Arizona’s general fund to help with Arizona’s fiscal crisis. In addition to the government not understanding economics, the people have the same problem. One resident thinks ADOT closed the rest stops because the ADOT lackeys of the state legislature are laying the road for the legislature to increase taxes. The NYT article contains this sobering statement:

“Arizona has the largest budget gap in the country when measured as a percentage of its overall budget”

The cost to operate each rest stop is approximately $300,000 a year, which is $822 a day. One member of the Arizona legislature says the legislature is considering licensing each rest stop to businesses that will maintain the stops in return for being allowed to sell products to the public. You’d think that a convenience store would jump at the opportunity to be the sole source of food, beverages and other grab and go items at each rest stop.

The Church Bell Tolls for Phoenix

In 2009 Rick Painter, Bishop of the Phoenix, Cathedral of Christ the King was charged with disturbing the peace and given a 10-day suspended jail sentence and three years probation for two counts. His crime – he caused the church’s bells to ring 13 times a day. St. Mark Roman Catholic Parish of Phoenix and First Christian Church of Phoenix joined Christ the King and sued in federal court to over turn the ruling. Last week Judge Susan Bolton ruled that Phoenix could not prevent the church from tolling its bells because the bell ringing is “sound generated in the course of religious expression.” Translation: when the church rings it’s bells it is a form of free speech protected by the First Amendment to the United States Constitution.

Given the severe budget deficit Phoenix now has, I wonder how much time and money the Phoenix sound police has spent to date protecting the public from church bells? Will Phoenix waste more precious resources by appealing the decision?

California Pays $486 Million from 2006 – mid 2009 to 52,000 Employees for Time-off Benefits

It’s good work if you can get it, i.e., being employed by the State of California that is. The pay is great, retirement at an early age is fabulous, amazing benefits and the State pays a ton for not taking time off. Consider the following real case examples from the Golden State:

California paid an employee vacation and compensatory time to quit and leave with more $800,000.
The former president of the State Compensation Insurance Fund, a man named James C. Tudor Jr., allegedly got six times more vacation time than allowed and he made more than $550,000 after being fired as the result of an internal probe that “uncovered serious abuses at the highest levels . . . .”
Another state employee got $815,000 when he quit because of accumulated comp time and unused vacation days.
A doctor who worked at the prison substance abuse facility got more than twice the allowable amount of vacation time and nearly 10 times the limit of comp time for physicians.

See the story in the Ventura County Star, which says,

“In the past four years, nearly 500 government workers earned six-figure paychecks mostly for unused vacation. In total, the state spent $486 million from 2006 to mid-2009 to pay more than 52,000 employees for time-off benefits, which include a small percentage of unused comp time and holidays that weren’t taken. Many of those cash payments appeared to violate rules designed to limit how much vacation time state workers can accumulate during their careers.”

States May Tax Charities to Pay for Out of Control Spending

As the red ink gets deeper and thicker, some states are considering raising additional revenue by imposing taxes on tax-exempt charities. New taxes on charities are being considered by Hawaii (1% franchise tax), Pennsylvania (property tax), Kansas (sales tax and property tax). Nonprofit organizations say that taxing them reduces money that would otherwise be used to pay for goods and services that supplement what government provides with the result that the public suffers in the long run. See the New York Times story called “States Move to Revoke Charities’ Tax Exemptions.”

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