The Center on Budget and Policy Priorities issued a lengthy, thorough report analyzing the impact of Duane Sand's risky, short-sighted tax measure -- Measure 2 -- this morning. Here's an excerpt:
Measure 2 would cost the state a very large amount of revenue — some $400 million per biennium, growing indefinitely into the future — that normally goes to K-12 schools, colleges, universities, public safety, health care, and other services. This amount matches or exceeds the entire increase in General Fund revenues that the state is now experiencing as a result of the energy- and commodity-price-induced economic boom. When the current economic boom ends, the loss of such a magnitude of revenue is likely to undermine funding for schools, infrastructure, and public services.
It's a very long, detailed report. The section that STILL interests me most is on page 8 in a section that says this:
Measure 2 would prevent needed improvements to bridges and roads: As North Dakota has experienced an oil boom and increased construction of wind turbines, use of state roads by heavy vehicles has increased, accelerating the need to repair, improve, and build new roads. The North Dakota Department of Transportation says it needs some $256 million per year just to maintain North Dakota roadways in light of these new burdens on roads and rising road construction costs. Major repairs are also needed to the nearly 1,000 bridges in North Dakota that are considered structurally deficient or functionally obsolete, at a potential additional cost of several hundred million dollars.12 By investing in these improvements now instead of spreading repairs and maintenance over decades, North Dakota could be better poised to deal with the increase in demand on the roads that the oil boom and strong agricultural growth are spurring. Measure 2 would take such investments off the table.
This is what I have been talking and writing about for a long, long time. But it's actually worse than this. As I have repeatedly pointed out -- here and elsewhere -- it isn't just the $1.4 BILLION North Dakota has in deferred maintenance bills for roads and bridges; it's also $119 million (as of about a year ago) on bills to patch our crumbling university infrastructure. I know this isn't as sexy as talking about who Lindsey Lohan is supporting for president, but still... What continues to frustrate me is that nobody has taken the time to put together a comprehensive report on what all of the State's deferred maintenance and other bills -- and I'm talking about debt incurred while this so-called "surplus" has been amassed -- amount to.
What we, as citizens, need to be concerned about is the Enron-esque (or AIG-esqe) (or Bear Stearns-esque) bookkeeping that Governor Hoeven and other Republican politicians are engaging in. Someone should ask Hoeven, "Why did the state take on millions of dollars in new debt over the past 2 years if the state has hundreds of millions in "surplus"? And "Why aren't you paying to maintain the collapsing infrastructure -- roads, bridges, state-owned buildings -- if we've got the cash to do it?" In order to intelligently analyze whether the state can afford these risky, short-sighted "tax cuts" and "oil trust funds," we need to know what the debt is, right? (You'd never sock all your money away in a long-term investment or volunteer for a pay cut at work if you knew you needed the money yesterday or today to replace the flat tires on your car and knew you needed to put a new roof on your house because it was leaking, would you?)
Why isn't anybody doing anything to educate the voters? Why is Hoeven hiding this information? One phone call and he could have it within a few days or a week. The legislators -- in both parties -- should be demanding an accounting. This isn't a partisan issue. I don't care who's calling for tax cuts or trust funds; the citizens should reject all of it until we get the information we need.
As State Treasurer, Kelly Schmidt is entrusted with millions of dollars which she is statutorily authorized to invest on behalf of certain groups. In a recent letter to the editor she even gloated about that authority:
Just one of the ways we are doing that is through the implementation of BidND. BidND places custodial funds from the treasurer's office such as the Veterans Postwar Trust Fund, Wheat Commission and the Soybean Council in the form of certificates of deposit in local communities through a bid process.
It's interesting that she's so proud of how she's investing the Veterans Postwar Trust Fund. There's a back story there.
The Veterans Postwar Trust Fund was created, originally, back in 1943. It's been through a number of incarnations at different times of war, but it's current incarnation is written into the North Dakota Constitution:
Section 25. The veterans' postwar trust fund shall be a permanent trust fund of the state of North Dakota and shall consist of moneys transferred or credited to the fund as authorized by legislative enactment. Investment of the fund shall be the responsibility of the state treasurer who shall have full authority to invest the fund only in the same manner as the state investment board is authorized to make investments. All income received from investments is to be utilized for programs which must be of benefit and service to veterans, who are defined by legislative enactment, or their dependents, and such income is hereby appropriated to the administrative committee on veterans' affairs on a continuing basis for expenditure upon those programs selected at the discretion of the administrative committee on veterans' affairs.
Attorney General Wayne Stenehjem's office has advised that the funds in the Veterans Postwar Trust Fund need to be invested following the "prudent investor rule." (See A.G. Letter) There are limits on how the fund can be invested. According to the A.G., "A trustee who invests with proper care and skill is not liable for a loss of trust funds in an investment," so you might reasonably extrapolate that a trustee who does not invest with proper care and skill is liable for the loss of trust funds.
State Treasurer Kelly Schmidt took the veterans' money -- millions of dollars -- placed it with a retailbroker and told her broker that she's willing to accept a 20% risk of loss on the veterans' money and that she's willing to spend three times as much as the State Investment Board pays in administrative/management fees. That's not me talking; that's Republican State Auditor Bob Peterson's Office's finding. See, North Dakota State Auditor Bob Peterson's office has taken a look at Schmidt's investment of our veterans' trust fund and here's what his office has said:
Our interpretation of the prudent investor rule in NDCC 21-10-07 does not include investing in securities that could lose 20% in a year. It appears [Kelly Schmidt] has taken on more risk than a prudent investor would be willing to take.
The Auditor's Office also apparently computed that Schmidt was wasting $23,400 in excess fund management fees -- per year -- given to the broker she chose to manage the money, rather than having the fund managed by the State Investment Board at 1/3 the cost. I don't know for how many years Kelly Schmidt paid the $23,400 in excess annual fees to the retail broker (maybe I can get an answer to that question for you). Anyway, when the SAO called her on this, it seems obvious that she frantically moved the money out of the risky investment and into this BidND thing she now gloats about. I don't know how much -- if anything -- she had to pay the retail broker to get out of the contract, either. Maybe nothing. Maybe a lot. That'd be interesting to know.
This probably wouldn't be such a big deal except that we're talking about millions of dollars that Schmidt is supposed to be prudently managing for the benefit of veterans returning from war. We've watched the Bush Administration neglecting our veterans' needs, but I never thought there was a reason to consider our State Treasurer's neglectful conduct. As it turns out, instead of managing the veterans' money wisely, Schmidt turned the money over to one of the retail members of her "partner" organization, the Bond Market Foundation, and paid them tens of thousands of dollars so they could lose something like 7% or 8% of the veterans' money [on the market]. [Update #2: I should note, too, that it's hard to blame the retail broker for this; they got Schmidt to sign a contract in which she acknowledged her willingness to lose 20% of the money they invested, and she agreed to the fees. Those are contract terms she agreed to. She's actually lucky to have not lost 20%. It's not the retail broker's conduct that needs to be looked at here; it's Schmidt's.] She only moved the money -- recently, mind you -- into this new BidND thing after the State Auditor's Office pretty much told her she had to.
Now she gloats about what an awesome job she's doing managing this money.
Reminds me of Bush's "Heckuva job, Brownie" comment to the FEMA manager who botched the management of the Hurricane Katrina disaster. Same thing here, only it's Schmidt talking to herself about managing the veterans' postwar trust fund. "Heckuva job, Schmidty."
In part one of this discussion I had mentioned there might be another connection between Schmidt and the Bond Market Foundation. As noted above, the broker through whom Schmidt invested the veterans' trust money was Edward Jones, a member of the Bond Market Foundation, Kelly Schmidt's "partner." Someone ought to ask Schmidt whether Ed Jones or the Bond Market Foundation (or Association) has wined or dined her at all.
Some might say what Schmidt did with the veterans' money was a breach of the State Treasurer's Office's code of ethics, but they'd be wrong. Know why?
[That's a trick question, by the way.]
[UPDATE #1: Kelly Schmidt is debating her opponent, Mitch Vance, on Bismarck's community access TV tonight from 5:30 p.m. to 6:30 p.m. (CST). If you aren't in Bismarck, I think you'll be able to watch the live stream of the debate on the internet at freetv.org. I sure hope someone brings up this issue during the debate. I'm also considering opening up a chatroom, here, during the debate. Is there any interest? Again, I'm not 100% sure I could even make it. If anyone is interested, let me know.]
I'm pretty sure I'll be able to find enough material for this segment from now till November. Since Sarah Palin herself bleeds publicity I think it's time Joe Biden got some play. Here's the one for this week:
I have to ask McAngry, what are the fundamentals that he's talking about? Home ownership? Unemployment? Wage growth? Maybe it's how many houses he owns...
The removal of the woman in the video might be defensible, but I don't think so. Here's what I can tell you about the facility:
The Denver Performing Arts Complex is 4-square-block site owned and operated by the City and County of Denver that offers 11, 260 seats in 11 performance venues. The Denver Center for the Performing Arts is the primary user of the theatres in the Complex, although several arts organizations, such as the Colorado Symphony, Opera Colorado and The Colorado Ballet also call the Complex home.
So this is a city-owned facility, but there is apparently an assortment of tenants who rent the facility for various uses. If it was rented by someone -- say the McCain campaign or one of his monied lobbyist friends -- and the event was a private campaign event, I can kind of (almost) understand the exclusion of a dramatically, horribly "offensive" (though true) sign like "McCain = Bush." But if this was truly a "town hall" event hosted even partly by the City of Denver (the owner of the building), then I've got a problem with excluding this woman and her sign.
Though the Bush Administration has been succesfull in neutering many of our constitutional rights, I want to think we still have the First Amendment.
It's a beautiful morning on the lake. I woke up crazy early this morning, made coffee (decaf) and had breakfast after starting a fire in the fireplace. The sun wasn't up yet and it was fairly dark outside, but the moon in the west cast a bright streak across the lake. Nobody else is up.
A while later, the sun still not yet popped up in the east, a loud commotion outside the sliding glass doors distracted me from my book. I turn around to look out the sliding glass door, but the mirrored reflection of the fire in the fireplace makes it impossible to see out. I get up, open the door, and before I step out onto the deck it becomes clear what the sound is. It's a huge flock of geese setting down on the lake. I watch them set down and then head back inside, closing the door behind me.
It's cold out there. Feels like Fall.
The photo, above, was taken a couple hours later, after the sun poked up over the east horizon. If you look closely, you can see that where the sun is hitting the lake, there's steam rising up off the water. At first I saw the steam only along the far shoreline to the west, but it's moving this way as the sun lifts itself off the horizon.
The deck is saturated from all the rain we got last night. It was cold on my toes as I watched the geese come in. The cold in my feet is the kind of cold that goes all the way to the middle of the bones. It's nice to have a fire in the fireplace this early, but we're low on wood. Hopefully it warms up a bit today.
I think I'll put the boat in the water so we can do some fishing. It might be that kind of morning.
NorthDecoder.com has a mobile version. I've had that feature turned off at times and turned on sometimes. Those of you who check out the site on your smartphones know what I'm talking about. Lately it's been turned off. I just turned it back on this morning. If anybody out there has a strong preference one way or the other on whether I should have that feature turned off or on, please post a comment or shoot me a note and let me know.
Long, you will recall, was a top-level executive insider at North Dakota's Workforce Safety and Insurance (WSI). When he blew the whistle on corrupt activities he personally witnessed at WSI, the corrupt officials he caught red handed retaliated against him and dismissed him from his job. The corrupt individuals who fired him remain at WSI and no meaningful investigation has been pursued by Attorney General Wayne Stenehjem or by Governor John Hoeven. They brought in another good-ol-boy, Bruce Furness, to make like there's nothing wrong at WSI. Furness has expressly stated he will not investigate the corruption exposed by Long.
If you've seen Long give his stump speech or talked to him at your door, you know he has promised to take on North Dakota's corrupt politicians and insiders and will clean up WSI while also fighting for a better, more affordable healthcare system and, with his background in education, will fight for appropriate K-12 funding.
District 14 is one of North Dakota's huge gerrymandered districts, roughly 2 or 3 times larger than the state of Rhode Island -- stretching from Lincoln, avoiding all of Bismarck, going up pretty close to (but not including) Wilton and East. It includes McClusky, Goodrich, Hurdsfield, Harvey, Fessenden, Sykeston, Regan, Wing, Tuttle, Robinson, Pettibone, Tappen, Steele, Driscoll, Sterling and everything in between. It includes all of Kidder and Wells Counties, the southern 1/3 of Sheridan County and the eastern 3/4 of Burleigh County (all of Burleigh county minus districts 8, 30, 32, 35 and 47). Click here for a map.