Across the Great Divide

Number of the Day: Mine's Bigger Than His.

According to ShowBoats International, a luxury yacht magazine, 916 yachts measuring 80 feet or longer — the traditional definition of a superyacht — were on order or under construction as of last Sept. 1, four times the number in 1997. The biggest gains were among the biggest yachts: 47 yachts were 200 to 249 feet long, up 68 percent from a year earlier, while 23 were 250 feet or longer, an increase of 28 percent.

“When I started in the early 1970s, a 60-foot boat was considered pretty large,” Mr. Sharp said. “A 150-foot boat was queen of the show in Monaco in 1982. In 2008, you wouldn’t be able to find that boat in the marina.”

— "Measuring Wealth by the Foot," New York Times

The superest of superyachts so far is 525 feet long, but a 531.5-foot behemoth is in the works. The article estimates a current cost of $650 million for a 500-footer.

You could rent, of course, for upwards of  $555,000 a week for a really trendy supersclipper. But the former boss of Avis could put you in his sloop for around 350 large.

An industry expert says there are already 2,000 superyachts over 120 feet long, with nearly 200,000 people who could afford to buy them. He seems to think this is a good sign.

 

Number of the Day: Snake Eyes.

The fact that we have not been attacked over the past six and a half years is not a matter of chance.
– President Bush in his weekly radio address

4,460 American military killed in Iraq and Afghanistan. 29,230 officially wounded.
– Since the war began on 3/19/03

70,000 veterans of the conflict treated for hearing loss and 58,000 on disability.

– Associated Press

Veterans Affairs predicts it will treat 330,000 veterans from Iraq and Afghanistan in 2009 — a 14 percent increase over the 2008 estimate of 263,000 — at a cost of nearly $1.3 billion.

– Associated Press

Number of the Day: You Raise, I Fold.

Lottery ticket sales in Minnesota fell 17 percent in January — to $34 million from $41 million a year ago.

Lottery officials said ticket sales do cycle with the economy, but also Powerball jackpots in January weren't has high as a year ago. Another contributing factor could be that most lottery ticket sales are made at gas station convenience stores. Higher gas prices might be making consumers feel less like dropping a few more bucks on the counter.

Now I'm waiting for the new talking point: Gas tax increase will lower state lottery revenues.

Number of the Day: Losing Interest in Roads.

We hear about how Minnesota can't afford to pay more in gas taxes because, well, that would be more taxes and we can't afford 'em.

So we should re-prioritize spending if we want better roads and bridges. You know, get rid of those expensive bike paths and rural vo-tech centers, and if that isn't enough, kick some people off welfare, and if that still isn't enough we can borrow more.

After all, we defend freedom that way; why can't we build roads on credit?

Since 2000, we have been. But not enough to keep up with increasing inflation, more miles driven, and deferred maintenance on roads and bridges getting greater wear and tear.

As a result of all these factors, we're only about $14 billion short of where we would be if we maintained 1986 funding levels over the last 20 years.

You can read about it all here [20yearsbehind.pdf] or here [Legislativeauditor.pdf or simply trust me.

But today's number is here:

Over the past five years, the amount of interest on trunk highway bonds has increased by 650 percent and paying for that interest has squeezed MnDOT’s budget to the point of breaking.

– Rep. Bernie Lieder (DFL-Crookston) is a former highway engineer and chairman of the House 
    Transportation Finance Committee

Number of the Day: Voting Against Permanent Bases.

I have this unhappy vision of each major presidential candidate being brought into a shielded Pentagon room for a classified briefing about the Middle East.

It's about Iraq, of course, and Iran and Afghanistan. It covers Egypt, Syria and Lebanon. Israel and Palestine, too. Saudi Arabia, Kuwait and Abu Dhabi — that's where a vanity license plate just went for $14.3 million in a charity auction.

But mostly it's about oil. How much we need, where it comes from, who else wants it and what happens if we don't get it.

If the candidates went in not knowing how badly we've screwed ourselves, they'll come out with a new and terrible enlightenment. "Permanent bases" and "boots on the ground" will no longer be abstractions about fostering democracy or defending our national honor. Acting as if it matters whether Sunnis kill Shiites or vice versa helps distract the people at home.

To get an inkling of what we're up against — and have little chance of reversing — read this account of what's going on even in the "stable" Arab countries.

I'm working on my taxes and just calculated my annual auto mileage for 2007. I drove 2349 miles total in my car.

It's true, I'm in Colorado part of the year, where there's a 10-year-old Outback whose relatively few miles I don't count for business purposes, and when my partner and I drive somewhere together, we usually take her hybrid.

I don't want to send money to the middle east for bombs or bases or petroleum. But until more of us decide otherwise, our presidential candidates are all going to be pursuing the same policy, no matter how they peddle it to the voters.

Number of the Day: Tillable or Taco Bellable?

The Legislative Auditor released two interesting reports last Friday. We told you yesterday about JOBZ's suspect tax breaks. David Peterson has the story about the Green Acres Program:

Minnesota's 40-year experiment with protecting farmers on the urban fringe has silently spiraled into a vast tax-avoidance scheme that shelters $10 billion worth of land in ways that almost certainly are unintended and unfair – while doing little in the end to truly preserve farmland...

The idea behind the legislation was to protect agricultural land from rising property taxes that might drive farmers out of business as urban growth jacks up the value of their acreage.

A noble goal, and it apparently works for some farmers who want to continue farming.

However, Legislative Auditor James Nobles reported that in practice, the law winds up giving a huge tax break to developers who are holding land strictly for future subdivisions and Taco Bells.

The report notes that the developers taking advantage of the program may get away paying one-tenth or less the normal tax liability. With $10 billion in land being sheltered, $40 million in taxes get shifted to other taxpayers.

Hobby farms and acreage leased to real farmers might qualify under a generous interpretation of the law, but the auditor says 38 percent of the land claiming the break isn't even tillable.

The program doesn't really protect agricultural land long term; meanwhile, guys in suits are harvesting greenbacks.

The report is available here.

Number of the Day: Why JOBZ Information was Private.

How much should it cost taxpayers to encourage job growth in distressed areas of Minnesota?

Yes, Number of the Day is Back.

On New Year's Day, I wrote that the state should have better disclosure of the tax breaks granted to businesses under the JOBZ economic development program.

Research into such subsidy programs has shown they rarely increase employment on a regional basis, but rather induce companies to move from one locality or another — or pay them for expansions they would have made without the incentives.

Judging the effectiveness of the Minnesota JOBZ program was impossible because it does not provide enough information about the costs, which come in the form of lost tax revenues. JOBZ companies get reduced state and local tax bills, and other taxpayers — sometimes including their competitors — make up the difference.

Because individual and company tax returns are private — and the state agency overseeing the program didn't collect the information — there was no way to verify the actual value of the tax breaks. Participants said revealing that information could harm them competitively, so all we had to go on was the state's estimate.

On Friday, the Office of the Legislative Auditor released a comprehensive report on JOBZ, which found fault with the program. My summary of the findings and links to the report are here.

Although state reports have put the cost per job created at $5,000, or about $2,400 in recurring annual costs, the Legislative Auditor calculated the average annual cost per new job created by JOBZ at about $26,900 to $30,800. Under more generous assumptions, the average annual cost per job would be about $11,300 to $12,900. The average annual wage paid to JOBZ employees is $30,700.

It's much clearer now why companies didn't want to disclose how much they received in JOBZ subsidies.

I can think of  two words other than "economic development" to describe a $30,000 tax break for a $30,000 job.

Number of the Day: God Sends Another Convoluted Message.

Andy Birkey at Minnesota Monitor reports on evangelical stirrings that ascribe special spiritual signficance to Interstate 35.

Evangelicals throughout the Midwest, from Laredo, Texas, to Duluth, Minn., have been praying at 24-hour prayer rooms for a month for Interstate 35 in order to "light the highway." Young people in the movement have been holding "purity sieges" in front of LGBT businesses, abortion clinics and stores that sell pornography. So far, Minnesota has been spared of "purity sieges," but 24-hour prayer rooms have been set up in Minneapolis, Albert Lea and Duluth.

If you follow some of the links in Birkey's story, it just sounds like a church in Dallas decided on some new outreach and chose the Interstate that runs through town and up the middle of the country.

But others are certain there's much more to it.

The scriptural basis for the new movement comes from Isaiah 35:8, which reads, "And a highway will be there; it will be called the Way of Holiness. The unclean will not journey on it; it will be for those who walk in that Way; wicked fools will not go about on it." Because of chapter 35, believers say the highway mentioned must be Interstate 35.

Even if God knew 2000 years ago there'd be an Interstate Highway System on a sparsely inhabited continent  unknown to the Middle East, the prophets certainly didn't index their own writings. So God also had to know that his obscure revelation to Isaiah was going to become part of chapter 35 someday. Awesome.

But it gets even better. One local prayer group sees all kinds of insidious connections: Between the date of the I-35 W bridge collapse and the date of Israel's claiming of Jerusalem;  the fact I-35W passes an area of Minneapolis called the West Bank, which has a high proportion of Muslims; Keith Ellison, a Muslim, was the newly elected Congressman for the district....

Okay, just read it.

Number of the Day: Half Rations.

[A]ll 50 U.S. governors - the commanders in chief of their states' National Guards - signed a letter to President Bush imploring him to immediately begin reoutfitting their depleted National Guards. But little changed, and the Guard now has only 56 percent of its required equipment, the lowest level in nearly six years, according to the Government Accountability Office.
– Governors Say War Has Gutted Guard, Chicago Tribune [via Truthout]

That 56 percent number is nationwide. Many states sit below 50. For example, North Carolina has about 39 percent of its equipment while neighbor South Carolina makes do with about 49 percent.

The Bush administration says the depleted states can share resources when disasters strike. That was the argument when cattle in eastern Colorado were threatened by a blizzard last winter. Yeah, that should work, provided we have disasters that are reasonably orderly and decently distanced in time and space.

Number of the Day: When "Highest" Isn't Highest.

I won't even bother citing where Republicans, starting with the Governor, have called the Senate-proposed new top income tax bracket of 9.7 percent the highest in the nation. You probably think that, too.

Well, it's almost, kinda, sorta accurate, and it sounds a lot better (or worse) than the truth. Let's be charitable and say Gov. Pawlenty is simply  misleading us by ignoring a couple of facts pointed out at Invest in Minnesota.

California has a 10.3% income tax rate on taxpayers earning over $1 million a year, and high-earning New York City residents pay more than 10% in state and local income tax.
[...]
The House bill would set the top rate at 9%. In addition to the two listed above, four other states are at 8.97 or higher – Iowa, NJ, Oregon and Vermont.  All have outperformed Minnesota on per capita personal income growth since 2003.

So if the Senate bill were to pass over the Governor's dead body, Minnesota's top tax rate would be third behind New York and California — two states that are notorious — NOTORIOUS — for driving rich people to take up residence in Iowa and South Dakota. And if the House bill passed, well, we'd just be somewhere in the lead pack.

Which doesn't make a very crisp soundbite.