Archive for December, 2010

City council fears the political ramifications of lowering property taxes

Posted by ameister on Friday, December 31st, 2010

All of you need to read this excellent article about lowering Baltimore’s property taxes to to 1% by Dr. Stephen Walters and Louis Miserendino. I have written about this subject numerous times in the past, but the Walters/Miserendino article really fleshes out some of the very important details behind the theory. It is a shame that we have been talking about lower property taxes since late 2007 and nothing has happened. Had we adopted the Walters/Miserendino solution 3 years ago then we would be well on our way to a miraculous Baltimore housing recovery.

The major obstacles holding us back from adopting this type of logical property tax initiative are most of the members of Baltimore’s city council. Our leaders care more about their elected positions than they do about the future of Baltimore. They would rather continue bribing ignorant voters with government jobs and wasteful entitlements than rein in spending in preparation for a drastic decrease in property taxes for every home owner in Baltimore.

If entitlements and government jobs are suddenly slashed then in theory there will be a backlash from certain segments of Baltimore that many council-members are not skilled enough to handle.  An intelligent councilperson would ally himself with a voter base that would not give a darn if wasteful entitlements and useless jobs were suddenly eliminated. ALL voters need to be taught that the positive long term ramifications far outweigh the possible short term pain from the loss of some programs and jobs.  Lower taxes can easily be marketed to the voters by council-people with an ounce of creativity.

We can not let the political greed of certain council-people stand in the way of progress. In 2011 every incumbent who does not support a drastic cut in property taxes should be vigorously campaigned against.

I give the Maryland Public Policy Institute a lot of credit for publishing the the Walters/Miserendino article. You should check out the Maryland Public Policy Institute‘s site.

Tags: , , ,
Posted in Uncategorized | 2 Comments »

Video of Agnes Welch’s 9th District and why her son should not be given her council seat

Posted by ameister on Wednesday, December 29th, 2010

Last week I decided to record video footage on the streets of Baltimore’s 9th district.

YouTube Preview Image

Agnes Welch has represented this section of Baltimore since 1983. The 9th district is not in good shape. I am willing to bet that most of the members of the City Council would not walk alone around many sections of the 9th district like I did in the video. What does that say about the job their colleague did and what does it say about the council-people who have the audacity to vote for her son to take her place?

Many Baltimore leaders do not want you to know what is about to happen on January 4, 2011, they do not want to be held accountable for the further deterioration of the 9th district. The City Council will conduct a hearing that day that will help them decide who will take over the 9th District City Council seat vacated by Agnes Welch. Agnes Welch wants her son William A. “Pete” Welch to take over her seat since he is her son. William A. “Pete” Welch once fired a handgun during a “post-election dispute”. Welch has gotten into campaign-related trouble during his mother’s campaigns.

Every City Council member knows that Pete Welch should not be given the seat, but since they are friends with his mother they will do what she wants. If they choose to support Mr. Welch simply because of  his mother, then it is obvious that they could care less about the people of the 9th District. The filling of a vacant city council seat should not be done out of loyalty to a friend or political supporter. The City Council is spitting in the face of the voters of Baltimore if they select the son of a councilperson just because of familial connections. No member of the City Council deserves to be reelected in 2011 if they corruptly establish a hereditary monarchy in the already impoverished and downtrodden 9th District.

You can find your councilperson’s email address here.  Email your councilperson and Council President Jack Young and tell them they will not have your vote in 2011 if they commit this “old boy network” maneuver. Tell them that you will vigorously campaign against them and donate generously to opponents’ campaigns. Will Baltimore leaders continue to do things the “old way” or will they do the right thing and establish a new uncorrupted precedent? The fate of the 9th District is in the hands of the City Council, but you can influence matters by playing hardball with your representative and emailing them your firm thoughts.

It would be interesting if Pete Welch is selected by the City Council and if an organized group of people randomly selected one of the council-members who voted for him and made it their main goal in 2011 to make sure this council-member lost his election. Accountability can hurt, but it is something with which the current council is very unfamiliar with.  It is finally time for the City Council to be held accountable for its actions.

I will email every member of the City Council a link to this article.

Tags: , , , , ,
Posted in Uncategorized | 3 Comments »

Government spending at every level is unsustainable

Posted by ameister on Monday, December 27th, 2010

The truth is slowly filtering into the mainstream media. Watch this 60 Minutes piece from last week.

Municipalities all across the USA will have to declare bankruptcy in the next year if the federal government does not come up with a bailout plan to save them. Many citizens are tired of bailouts so I hope that no bailout (printing of money that devalues the dollar) takes place.

If municipalities want to avoid insolvency then they need to start to cut expenses drastically. The 60 Minutes piece touches on some of the things that need to be cut. Public unions have wrangled incredible pension plans for their members out of our leaders. While many private sector employees have no pensions they (as tax payers) have to fund the benefits of public sector employees. The time has come to eliminate tax payer funded pensions for public employees at every level of government.

While the truth (impending municipal bankruptcies) lurks in the background, our thieving leaders try to distract us and say that we can afford to build a billion dollar arena in Baltimore. This is like saying that an unemployed mother of six can afford to purchase a Lamborghini.

Here is a tweet from a new State Senator Bill Ferguson that shows the unsustainable situation that we are in:

“MD Secretary of Transportation says MD will need to increase tolls soon to have any chance at funding transportation effectively”

Even if we foolishly continue to increase taxes and fees this problem is not going to be solved. The state and city need to stop spending like drunken sailors. Do you want higher taxes or the end of extravagant pensions and benefits for public servants?

Tags: , , , ,
Posted in Uncategorized | 2 Comments »

Baltimore home assessments should decrease in 2011 so we must lower property taxes now

Posted by ameister on Friday, December 24th, 2010

In 2010 property assessments decreased all over Maryland . One third of home owners should be receiving new 2011 assessments in the mail this week or next. These assessments should follow the decreasing trend that was first noticed in 2010. This is temporary good news for long time landlords and other non-homeowner occupants who are not protected by homestead tax credits.  In Baltimore the 2010 assessments decreased by 5.5%.  There is a very slim chance that in 2011 the city may be faced with a situation where they will have to RAISE property taxes to make up for a decrease in assessments. It is highly likely that such a situation will occur in 2012. We could have avoided this nightmare scenario if we understood and implemented the constant yield tax rate in 2010. Most likely it is still possible to avoid this scenario if we implement the constant yield tax rate in 2011.

“The Constant Yield Tax Rate is simply a property tax rate that, when applied to new assessments, will result in the taxing authority receiving the same revenue in the coming taxable year that was produced in the prior taxable year.”

For at least the last 6 years the city of Baltimore has used a property tax rate that is higher than the constant yield tax rate and thus produced a larger amount of property tax revenue for the city. If the city were to actually manage itself correctly then we would have lower property tax rates every year. When Baltimore sees the potential for more revenue at the expense of the property tax payer they suck up the money and create new programs to fund (while still hardly maintaining the older programs). If we do not stop this madness this year then property tax payers will end up paying far more for it than they ever imagined in 2012. Below are some easy to follow numbers that I came up with in 2009 that help explain my scenario.  These numbers are not exact but they show the direction that I feel we are going in because of decreased property values and the popping of the real estate bubble.

Let’s say that in year 1 Baltimore collected $100,000 in property tax revenue. In year 2, one third of the assessments decreased by 5.5%, but because of past housing bubbles two thirds of the assessments are being phased in from the past and are still rising. In order for the city to collect $100,000 in year 2 the city would use a constant yield tax rate (CYTR) that was lower than the current property tax rate. The city chooses not to use the CYTR. They stick with the old rate and they collect $105,000 in property tax revenue in year 2.

In year 3 the next third of properties gets reassessed. Assessments drop on these properties, but one third of the properties’ assessments are being phased in from the past and are still going up because of past housing bubbles. In order for the city to collect $105,000 in year 3 (like it did in year 2) the city would use a slightly lower CYTR than the current property tax rare. The city opts to keep the current tax rate and it collects $107,000 in property tax revenue.

In year 4 the final third of properties gets reassessed. Assessments drop on these properties. Phased in assessments are no longer significantly increasing anywhere. Over the last 3 years an incredible amount of houses have lost assessed value. If the current property tax rate is used, only $100,000 in property tax revenue is generated. In order for the city to collect the $107,000 it collected last year it must use a CYTR that is HIGHER THAN THE CURRENT PROPERTY TAX RATE! Property tax rates are increased in order to hit the CYTR requirement. Welcome to 2012! Had the city used the CYTR in year 2 it never would end up in this situation. This is why we must cut government programs, fire government workers, and lower the property tax rate to the CYTR in 2011. If we manage our expenses correctly now, then lower assessment will not be a major issue in the future.

Tags: , ,
Posted in Uncategorized | No Comments »

Otis Rolley’s campaign is setting the pace in the race for mayor

Posted by ameister on Wednesday, December 22nd, 2010

Bill Cosby will be headlining a political fundraiser for Otis Rolley in January 2011. This event should raise a boatload of money and propel Rolley into the legitimate mayoral candidate category and make him the strongest challenger that the incumbent has to deal with.

In November I wrote an article about Rolley. At the time I recognized him as the smartest of the potential mayoral candidates, but I wondered if his lack of name recognition would doom him to second class candidate status. You might not be a Bill Cosby fan, but the man is going to bring Rolley a lot of name recognition and a lot of money that will help buy name recognition. This is a great strategic victory for the Rolley campaign and if they play their cards right they could use its momentum to make huge strides during the 2011 campaign season. I am sure the Mayor’s campaign people are taking this development very seriously. A huge cash infusion for Rolley could scare other potential candidates away.

News of the Cosby fundraiser is spreading through Baltimore on Facebook and Twitter and via ads on websites like BaltimoreSun.com.   The momentum generated by the Cosby announcement that is powering the Rolley campaign can clearly be seen on the Internet. Other candidates are suddenly jumping into the fray. I do no think it is a coincidence that Jody Landers basically announced his candidacy only a few days after the Cosby announcement. Fear of becoming irrelevant will force candidates to get their campaigns into gear sooner than they had originally planned. I believe that if Rolley raises a ton of money that Kweisi Mfume will forget any mayoral ambitions he may have had out of fear that a “political veteran” like him could be outfundraised by a political unknown like Rolley. In my opinion this would be a great thing for Baltimore.

YouTube Preview Image

Tags: , , ,
Posted in Uncategorized | 2 Comments »

Baltimore housing issues that should be addressed

Posted by ameister on Monday, December 20th, 2010

Housing is an issue that silently haunts Baltimore. Many leaders try to avoid it by distracting the public with wasteful “sexy” projects like billion dollar arena/convention center projects. Imagine instead of somehow coming up with a billion dollars if we gave city home owners a $50million property tax break by cutting their property tax rates by 16 cents. Lower property taxes will cause more fence sitters to invest in Baltimore real estate and make living in Baltimore more affordable for current residents. Property taxes are part of the cost of doing business when purchasing and owning a home and thus if you lower property taxes you make Baltimore homes more affordable. Something like this benefits every homeowner in Baltimore instead of benefiting developers, unions, politically connected people, and other non-city residents that would profit off of a pointless arena.

A friend of mine sent me this link that clearly explains how many city owned houses are worth less than $0!  The city of Baltimore needs to understand this before they price the property they currently are sitting on. At the end of the day every single “bad neighborhood” needs homeowner occupants to purchase homes within their borders if they ever hope to stabilize.

LiveBaltimore now has Youtube videos that promote specific Baltimore neighborhoods. They leave out a lot of important less than perfects details about these neighborhoods, but they are great tools for generating housing interest from Baltimore outsiders.

Tags: , , ,
Posted in Uncategorized | No Comments »

Downtown Baltimore property owners sue to stop State Center project

Posted by ameister on Saturday, December 18th, 2010

The following breaking news was sent to me in a press release on Friday.  This story has been percolating for a while, and today we finally see some action on the part of the downtown owners. This is a huge story:

“Downtown Baltimore City Property Owners Sue

To Stop No-Bid, $1.5 Billion State Center Project

That Circumvents Maryland’s Procurement Laws

A group of prominent downtown Baltimore commercial property owners, supported by the analysis of a highly regarded economist, filed suit today in Baltimore City Circuit Court to halt the heavily taxpayer-subsidized $1.5 billion State Center project on the grounds that competitive bidding laws have been ignored or circumvented.

The project improperly diverts business from the downtown area, with a devastating impact to the City, downtown commercial property owners, retailers and the taxpaying public.

First conceived during the Ehrlich Administration, the State Center redevelopment has evolved into a mammoth mixed-use construction and leasing project a mile north of the City’s downtown business center.  It now envisions over 1.5 million square feet of commercial office and retail space intended primarily for State use but that also will compete with downtown rental and retail businesses.

According to the lawsuit, the State Center project – one of the largest taxpayer-supported developments in City history – will siphon business away from Baltimore’s Central Business District (CBD), leaving the City’s core office and commercial area “blighted and decaying.”

Presently, there are over 2 million square feet of vacant space in the core CBD.  As the lawsuit states, adding “an enormous, commercially unsupportable supply of office space” outside of the core CBD, with favorable taxpayer-supported financing, will cause “long-term commercial vacancies, blight and business flight” from the CBD.

In addition, the state currently leases over 700,000 square feet in the CBD which, according to the Developer’s consultant would need to be largely diverted to State Center for the project to be viable – thus further draining the downtown commercial district.

The suit alleges that the project will have “an immediate, devastating financial impact on the CBD and Commercial Property Owners” who are private entrepreneurs operating without taxpayer support. The result “will be catastrophic, immediate and will impact negatively the CBD for decades” – and will damage the city’s tax base.

According to the lawsuit, “the CBD cannot remain viable under these circumstances.”

The General Assembly’s own Department of Legislative Services, in a May 2009 analysis, noted “high commercial office vacancy rates and a high inventory of housing in Baltimore City raise questions about the viability of this undertaking.”

Indeed, DLS found “there is no compelling reason why the State agencies need to be grouped together at State Center” given the over-abundance of far less expensive, comparable office space downtown.

“The current State Center proposal is not in the best interest of the State,” DLS concluded.

The commercial property owners maintain the entire State Center project is legally flawed because of its failure to comply with State competitive bidding laws and procedures.

According to the lawsuit, the State’s procurement laws, “intended to protect taxpayers,” and prevent “government giveaways” have been “ignored and violated.”

The lawsuit alleges the development and the lease-back deal with the private Developer – selected without competitive bidding – “circumvent[s] the State’s mandatory procurement laws,” providing the Developer and other private parties with “windfalls” worth hundreds of millions – if not billions – of dollars.

At its inception in 2005, the original Developer was given the Project, including exclusive negotiating rights, without competitive bidding.  Thereafter, on multiple occasions, State agencies have altered the scope of the Project without competitive bidding.

On July 28, 2010, State agencies submitted the First Amendment to the Master Development Agreement. This document extensively changed terms and conditions of the original contract;  substituted new individuals in the Developer group; reassigned multi-million dollar obligations from the Developer to the State, and set in motion up to $314 million in City taxpayer subsidies, known as a Tax Increment Financing plan (“TIF”).  All of this was done without competitive bidding.

Under the proposed TIF, City taxpayers will forego up to $314 million in future property taxes on the office and residential buildings – $10 to $20 million in Phase One alone – funds that are badly needed to support vital City services.

In addition, the State agreed to sign long-term leases with the Developer, thus filling most of the project’s commercial space at prices “substantially above” market rates for “similar” commercial space presently vacant in the CBD.

In the First Amendment to the Master Development Agreement, the State also agreed to assume the Developer’s initial obligation to construct a parking garage at State Center – saddling taxpayers with an additional $28 million debt obligation on a structure the Developer deemed too financially risky to build. On Dec. 15, 2010, the Board of Public Works authorized an increase in the amount of taxpayer-funded, MEDCO garage bonds to $33 million.

According to Dr. Anirban Basu, a noted economist with the Sage Policy Group, Inc., “adding almost a million and a half square feet of new commercial space outside the City’s Central Business District will likely have irreversible, adverse consequences, including blight and commercial flight from the downtown area and an increased tax burden on City businesses and residents.”

David E. Johnson, senior vice president of Lexington Charles Limited Partnership, which is a plaintiff in the lawsuit, said, “Commercial property owners have invested tens of millions in revitalizing downtown buildings as part of the vision of Baltimore’s renaissance. It is sad to see there’s so little regard for the future of the Central Business District.

“Those promoting the State Center project don’t understand the devastating impact this will have on the City of Baltimore and its downtown commercial hub, which already is struggling. No city can thrive without a vibrant Central Business District. And it’s not just the property owners who will be devastated. It’s also the downtown shops and restaurants that depend on a high concentration of office workers.”

The downtown commercial property owners are asking the Circuit Court to find this deal “was entered into in violation of State procurement laws” and thus must be declared invalid.

“The State’s procurement laws are intended to protect taxpayers by ensuring that government projects are competitively bid – that’s especially important when taxpayer funds are used to lease and construct State facilities,” said Alan M. Rifkin, lead counsel.

“It is regrettable that we are at this juncture,” Rifkin said. “Compliance with the competitive bidding laws is not optional or discretionary.”

Plaintiffs in the lawsuit include the following downtown properties: St. Paul Plaza Office Tower, LLC;  Lexington Charles Limited Partnership; 301 Charles Street, LLC; Park Charles Apartments Associates, LLC; Park Charles Office Associates, LLC; 501 St. Paul Street, LLC; St. Paul & Franklin, LLC; RoboPark, LLC; Charles Plaza, LLC; 39 W. Lexington, LLC; Baltimore Condo 2-8, LLC; Fayette Garage, LLC; Charles Towers, LLC; The Marlboro Classic, LP; and Redwood Square Apartments, LP.

Alan Rifkin is the managing partner of Rifkin, Livingston, Levitan & Silver, which has extensive experience in state contract and procurement matters. One of his partners, Scott Livingston, is the author of “Contracting with the State of Maryland” as well as many legal articles and a monthly newsletter on the state’s competitive bidding statutes.

For information about the legal aspects of the lawsuit, contact Alan Rifkin, 410-269-5066. “

Tags: , , , ,
Posted in Uncategorized | No Comments »

Door to door energy scams in poor Baltimore neighborhoods

Posted by ameister on Thursday, December 16th, 2010

In the middle of the day on Friday my doorbell rang and I decided to answer it. The woman standing on my porch said something about “Low rates” and “BGE”. She said some more energy related scripted nonsense and I told her I was not interested. She insisted though and kept talking. Her badge said she was from the company MXenergy. I had enough of her and told her that “You are a scam knocking on my door in the middle of the day. Have a nice day.”

I googled MXenergy and found this link. They do not save you money. Real energy companies do not have to knock on doors with fast talking salespeople blabbering about your current energy provider and nebulous low rates. Beware.

Tags: , ,
Posted in Uncategorized | No Comments »

City council members will be held accountable if they select William Welch to take his mother’s place

Posted by ameister on Monday, December 13th, 2010

I was shocked to read a Baltimore Sun article that makes it appear that William Welch will be easily given his mother’s old 9th district city council seat. I suggest that all of you read these two old articles of mine which show the insanity of this situation. We cannot allow the world to view Baltimore as a dynastic North Korean style dictatorship where political positions are handed down to family members with no qualifications. Baltimore should not be a place where the will of the people is ignored and shady individuals with connections are rewarded because of their last name.

I will list every single member of the city council who dares to vote for the son of the woman who has done nothing to stop the shocking third world-like deterioration of the 9th district.  If the city council selects this man to take his mother’s place, then it will be a slap in the face of every citizen of Baltimore. They will be telling us that this is a city where unqualified friends and family are rewarded with very important positions of power. It could be the spark that helps bring down some of the establishment members of the city council. I will aggressively work toward making sure that none of the council members who vote for the son of Agnes win their upcoming elections in 2011.

We have the power to make this a huge issue in the upcoming City Council Presidential election. If current president Jack Young votes for William Welch, then a council member who votes against Welch should run against Young and remind the public that his or her opponent supports a dynastic North Korean style dictatorship form of government for Baltimore.

I hope the mainstream media covers this story in an educated and unbiased way. The first lesson in your 9th district education should be about the man who came in second place in the last 9th district election. His name is Michael Johnson and since he did come in second place in 2007, the city council should seriously consider what the citizens of the 9th district were trying to say with that statement.

Here is a video of the 9th district under Agnes Welch.

Tags: , , , , ,
Posted in Uncategorized | No Comments »

The Charm City Circulator embodies some necessary deflationary changes

Posted by ameister on Friday, December 10th, 2010

This month’s Urbanite has an interesting article about the Charm City Circulator in it. Here is a quote from the article that reveals one aspect of running a successful public transportation system in the current economy:

“In fact, in Baltimore, Veolia’s Circulator operators earn considerably less than city-employed drivers and lack the pension benefits that city-employed operators enjoy. Neither Veolia nor the Teamsters, which represents some of the Circulator drivers, would offer details on salaries, but Veolia’s human resources office, which was recruiting new drivers, said a Veolia driver in training earns $10 an hour. An MTA driver in training earns more than $15 an hour. First-year Veolia operators earned about $12 an hour, with 50-cents-per-hour increase per annum. The top salary for an MTA operator is currently $22.57 an hour.”

A nonunion Circulator driver admits:
“…that driving the Circulator’s relatively calm route through downtown was “the gravy train.”

The Circulator is far from perfect. It needs to expand its hours to take advantage of the barhopping crowd. If this is truly not in the budget then they should charge riders a dollar during the expanded service time period. If you took it to your destination for free I am sure you would be willing to pay a dollar to get back home instead of paying for a cab.

Tags: , ,
Posted in Uncategorized | 1 Comment »