Using tax incentives to bring in job creating businesses is popular with Jacksonville city government.  From September 1998 to August 2009, the Jacksonville Economic Development Commission (JEDC) claims that it created 6,444 new jobs according to a list of JEDC “job generating projects” provided to the Concerned Taxpayers of Duval County.  Well, that sounds impressive, right?  Sure, you could point out that it is not clear whether these jobs would have been generated anyway without  incentives.   But if the JEDC had anything to do with the new jobs, then tax incentives for job creation sounds like a great deal!

Not so fast! A recent study appearing in the Harvard Business Review suggests that the secret to job growth is not in doling out tax breaks to big employers in an attempt to entice them to move to your city. If anything, cities with a lot of smaller firms tend to have higher job growth than cities with only a few large firms. Having a business environment that promotes entrepreneurship by reducing business startup and other small business costs imposed by the government is a far better way to improve the job situation in a city than tax incentives to larger established firms.

The benefits are not only in job creation, but also in product innovation. In the book From Poverty to Prosperity written by Arnold Kling and Nick Shulz, the authors argue that innovation does not tend to originate from established firms, but from entrepreneurs risking everything on a novel idea.  Established firms tend to be more conservative in their risk taking than entrepreneurs, but risk taking is essential for innovation.  So lots of entrepreneurs with big dreams lead to a lot more great ideas for goods and services that improve our lives.

I am sure that some government official is reading this and saying to himself “Maybe, we should increase the corporate welfare that is going to small businesses and entrepreneurs!”.  And he would be missing the point!  The best thing that the government can do is to provide the essential government services that cannot be provided by the free market and then get out of the way!

Here is one way for government to get out of the way of entrepreneurs.  When monks tried to sell simple coffins in Louisiana, the State Board of Embalmers and Funeral Directors threatened them with fines and jail time.  Their crime?  Not being part of the funeral parlor cartel that uses the government to protect itself from competition.  The free market does not need government help to weed out the entrepreneurs who do not provide anything of value to their customers that they cannot already find cheaper and better elsewhere.

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The Concerned Taxpayers of Duval County, Inc. (CTDC) and a group of individual citizens announced today that they have filed new counts in their ongoing lawsuit challenging the right of the Jacksonville government to enter into a 19 to 25 year, multi-hundred million dollar, no-bid contract extension with Waste Management to operate the City’s Trail Ridge landfill and future waste disposal technology.

Specifically, they have amended the complaint filed last year against the City of Jacksonville and the City Council to request that the Court declare the passage of Ordinance 2010-217 to be both illegal and void. The several grounds asserted include multiple City and Council violations of Florida’s open government meeting (“Sunshine”) law.

The lawsuit further seeks to protect the public interest by asking the Court to force the City to correct violations of the public records law, which require government and officials to make records available to every citizen for review and copying. The City has failed to create and provide minutes of a public meeting (related to Trail Ridge), and refused to make a Council member’s records of the official business use of his cell phone available to the public.

A press conference will be held at 12:00 noon on Thursday, June 3, 2010, in front of the Jacksonville City Hall, 117 West Duval Street, Jacksonville, Florida, by Victor Wilhelm, President of the CTDC, and John Winkler, lead attorney for the Plaintiffs.

The Concerned Taxpayers of Duval County, Inc. is a not for profit corporation and nonpartisan political committee dedicated to serving the community as a watchdog group, using public information to oppose corruption, waste, and “Sunshine Law” violations in government. Additional information is available from the author of this press release, immediate past president John Winkler, who can be reached at 904-384-9918.
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We have reached round two of the dogfight between the city of Jacksonville and Waste Management.  The Jacksonville City Council held a committee-as-a-whole meeting on April 19th and narrowly voted down the proposed settlement of the Waste Management lawsuit against the city of Jacksonville by a vote of 9-8. We are not completely out of the woods yet. This vote has to be confirmed by the full City Council on April 27th. A change of heart by a member of the City Council and the April 19th vote could be reversed.

Here are some interesting news items concerning the landfill contract controversy. Clay County is doing what Jacksonville should do – bidding the landfill contract!  I guess that Waste Management did not have previous contracts with Clay County government that it could twist to its advantage and keep its competitors at bay.

The Florida Times Union editorial board complained that the committee-as-a-whole meeting mentioned above did not provide adequate time for discussion concerning the proposed settlement. We could hardly disagree with the Florida Times Union’s assertion that a contract worth more than $400 million over 26 years merits more than two hours of discussion. Let’s hope that Council President Richard Clark listens to this wise advice.

Finally, Concerned Taxpayers of Duval County (CTDC) President Victor Wilhelm had a letter to the editor concerning the landfill contract controversy published in the Florida Times Union. The CTDC has never wavered from its initial position that the contract must be bid and Wilhelm’s letter reflects this position.

What can you do? Let your City Councilperson know that competitive bidding of this contract not only makes good economic sense but assures an open and transparent process free of corruption.

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Due to court ordered mediation, a proposed new deal between Waste Management Inc. and the city of Jacksonville provides Mayor Peyton another opportunity to settle the dispute over the Trail Ridge landfill. The legislation implementing this tentative agreement has been introduced as City Council bill 2010-0217. The Concerned Taxpayers of Duval County continues to oppose any agreement between the two parties that circumvents competitive bidding and there is nothing in this new agreement that indicates that the Mayor’s Office is any more committed to competitively bidding the garbage landfill contract than it was when its first negotiated agreement with Waste Management was rejected by Jacksonville City Council.

See below past President John Winkler’s commentary on the landfill question.

It doesn’t take knowledge of rocket science to operate a landfill. Whatever Waste Management (WM), Republic/Southland, or anyone else in the garbage disposal industry may want the people of Jacksonville and their City Council to believe, spreading out household trash and covering it with dirt really is something that anyone able to operate a dump truck and bulldozer can do. While it may or may not be the kind of civic duty Jacksonville cares to perform using its own employees, there is nothing so special about the creation of a thousand-layer trash pile that it can only be done by giving exclusive rights to do so to one outfit, without competitive bidding, for the next thirty-five years.

Wait, you say, is this a rerun column? The whole “bid the landfill” vs. “Waste Management Forever” debate was fought out last year, you remember, and won by the forces of light when City Council rejected the Mayor’s no-bid, 35 year, $750 million contract extension on running the Trail Ridge dump, right? Didn’t the City then leap at the chance to litigate with Waste Management if need be in order to establish our right to either build our own trash mound or have the low bidder do it? Yes, that happened, but suddenly there’s a new deal proposed by the Jacksonville General Counsel that is a whole lot like the Mayor’s old deal. Call it landfill redux, deja vu all over again, or lipstick on a pig – no matter how you slice the new proposed landfill contract, it’s still (at best) last year’s baloney. Unlike last year, however, there is no time for a deliberative process at City Council. The new proposed contract (Ordinance 2010-217) demands City Council accept it by April 30, 2010, as presented, with no changes allowed.

When a group of us at the Concerned Taxpayers of Duval County (www.jaxtaxpayers.org) sued the City last year to get a ruling that Jacksonville had to either bid out a contract this huge or do the work themselves, we pointed out several legal problems in the Mayor’s tentative agreement. One provision of that proposal (still available for review at www.coj.net under Ordinance 2008-538) was an illegal clause which could have, under certain circumstances, forced the sale of the entire thousand acre Trail Ridge landfill site, and an adjacent “borrow pit” (dirt mine) site, from the City to Waste Management without any competition. Another illegal aspect of the earlier version of the no-bid contract under state law was that it could have gone on for an indefinite period of years, since it defined WM’s right to spread garbage in terms of tons (42 million) rather than time. Interestingly, the proposed contract now thrown in front of City Council avoids these two problems by leaving out the bargain land sale provision and defining a maximum number of years that Waste Management will have the exclusive right to run the City’s landfill(s). The new proposal essentially allows no more than ten years as the period WM would have been running the existing landfill before it would have been full, another 19 years for WM to operate any expansions or new landfill, with another possible six year extension “upon mutual agreement.” Not, in my opinion, coincidentally, this potentially 35 year agreement is the same length of time as the estimates on how long the Mayor’s earlier proposal would have run.
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At the January 11th board meeting, the Concerned Taxpayers of Duval County adopted the following resolution:

A RESOLUTION OF THE CONCERNED TAXPAYERS OF DUVAL COUNTY IN OPPOSITION TO CITY COUNCIL BILL 2009-0940

Whereas City Council Bill 2009-0940 exempts the Gerdau Ameristeel steel plant located near Baldwin from paying the public service tax on electricity for five years; and

Whereas the Concerned Taxpayers of Duval County supports low taxes but only when they are applied equally to all businesses and individuals subject to the tax; and

Whereas the Concerned Taxpayers of Duval County opposes City Council legislation that is clearly tailored to providing a benefit to an individual business thereby ensuring city government a role in determining the winners and losers in the local economy;

Now therefore be it resolved that the Concerned Taxpayers of Duval County opposes City Council Bill 2009-0940.

The resolution was read to City Council members at their January 12th meeting.

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The title of this post is from the song Downtown sung by Petula Clark in the mid 1960s.  The song was inspired by composer-arranger Tony Hatch’s visit to New York City in which he extols the vibrant atmosphere of Broadway and Times Square.  Having been to New York City, I would agree with this characterization of Manhattan.  With its museums, nightspots and Central Park, New York City truly is the city that does not sleep!

If you read the recent Florida Times Union series on downtown Jacksonville, you get a sense that Jacksonville’s political leaders really want to transfer some of that vibrancy to Jacksonville’s city core.  According to the Florida Times Union, downtown Jacksonville is essentially dead in the weeknights and weekends and is short on residents and workers. What city leaders envision is a walkable downtown full of shops, restaurants, condominiums and lots of people frequenting and living in them. As usual, this vision requires tax money and city government planning.

Before we go flying off the cliff in our enthusiasm to keep moving forward with this vision, let us pause for a second and ask why we need a vibrant downtown.  Even if we agree that the downtown area should be different from what it currently is, is it possible for realize this new vision for downtown? How should we realize this vision? How much taxpayer money are we willing to sink into downtown to realize this vision?
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A fee does the city no good if it doesn’t get paid. That is the issue with the stormwater and garbage fees. According to the Florida Times Union, 17% of the stormwater and garbage fees have not been paid to the city even though it appears to be more like 30% lately.  The city would like to reduce this statistic to 5% by adding the fees to your property tax bill.  When that happens, failure to pay the fees could get a lien placed on your property.   With this motivational trick, the mayor is hoping to persuade Jacksonville residents to pay the unpopular fees.

The up side of putting the fees on the property tax bill is cost savings.  The cost savings projected by the Central Operations department is about $737,000 per year. In a tough budget year, that is not exactly chump change.  Billing customers is a major expense for businesses which explains why so many businesses like e-mailed billing notices and automatic debits which reduce this cost.

On the other hand, the down side is that the fees become more entrenched as they become easier to collect.  Many of us were not happy with the fees mainly because they rolled back the property tax relief provided to us by the Florida Legislature in 2007 and which we taxpayers approved in 2008.  Personally and I speak only for myself and not for Concerned Taxpayers, I have no problems with the fees in and of themselves and I actually like the idea of diversifying the city’s revenue base.

However, my problem with the fees is that the political establishment in Jacksonville was not willing to give up its obsession with spending other people’s money even when the Jacksonville taxpayer was clearly being overtaxed.  Sometimes, the money is spent on indispensable services like police and fire suppression.  Other times, it is spent on government charity and corporate welfare which I believe the taxpayer should not be forced to fund.  Until Jacksonville city government restricts its responsibilities to the core functions of government (police, fire suppression, parks, etc) and not whatever pet project some City Council member or Mayor fancies at the moment, I will reject any tax increase that makes hard earned taxpayer money available to politicians to play with.  That is especially true in hard times when a failure to pay the fees could lead to the loss of your home.

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As pointed out by Abel Harding in a recent Florida Times Union blog entry, Florida and Jacksonville taxpayers are on the hook for $918,000 in incentive money given in 2006 to commercial lender CIT Group Inc which is now in the 5th largest bankruptcy in U.S. history.  There is no word on whether the Jacksonville taxpayer will get any return on its “investment”, i.e. jobs promised in return for the incentive money, even though this seems unlikely now. Wouldn’t we have more fun if the government would simply throw all our money in a pit and set it on fire so that we could at least roast marshmallows over the flames and sing “Kumbaya” together?

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We have another “emergency” bill probably coming up for a vote at the Jacksonville City Council meeting this Tuesday. The bill is 2009-467 and its purpose is to appropriate $168,078 for the installation of a new batting cage and picnic pavilion at Wingate Park in Jacksonville Beach.  Apparently, the “emergency” is that the contractor specified in the bill (Jaguar Builders of Jax, Inc.) is working at a location close to the park.  On account of this lucky break, the contractor avoids the competitive bidding process and the usual construction bond requirement. It would be very unfortunate that after the City Council made the right decision by rejecting the no bid Trail Ridge contract that they would so quickly abandon the competitive bidding process on such flimsy grounds. The bill is sponsored by the incoming City Council President Richard Clark. Hopefully, this is not a sign of the City Council’s future under his leadership.

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As usual, the Jacksonville Economic Development Commission (JEDC) is prostating itself in front of another business that is moving jobs to Jacksonville.  Whertec Inc. is planning a move to the Westside of Jacksonville and the JEDC already has its checkbook open to the tune of $48,600 (yes, we taxpayers fund the bank account on which the checks are written!). Is it just me or does it seem like every business decision these days starts with “What kind of government grant can we get to finance our business expansion?”

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