Meals Tax questions...

The papers didn't have any details on the 2% Meals Tax approved by the MA Senate, so I waded through many amazingly ugly state government web pages and eventually found it. One part of it puzzles me, though:

The commissioner shall remit 50 per cent of the amount collected to the originating city or town, 7.5 per cent to the Municipal Regionalization Incentives Fund established in section 35FF of chapter 10 of the general laws and the balance to cities and towns that have accepted this section; provided, however, that no city or town shall receive more than the total it collected from such sales tax on meals within the corresponding calendar year.

So 50% goes right back to the town, 7.5% goes to the Regionalization Fund. And how does the other 42.5% get divvied up... according to population? Number of Towns? Something else?

Why not just have 92.5% go back to the towns? One of my pet peeves is the multitude of confusing state revenue sharing formulas we've got in this State; are we about to get another one?

I have no idea what the Regionalization Fund is. What if I don't WANT to be regionalized?

Anyway, if this version of the Meals Tax becomes law, and if my interpretation that 90-something-percent of the money will go to the Towns is correct... spiffy!

Climate Economics

I consider myself a global warming moderate; I believe that global warming is happening, but I don't think it will destroy the planet or throw us back into the Paleozoic.

I'm not sure the future benefits of doing stuff now to fight global warming are worth the present costs.

And I'm reasonably certain that it's all a moot point, anyway-- we won't be able to convince India and China and Africa (let alone Kentucky and Kansas) to sacrifice For the Good of the Planet and Future Generations.

Anyway, I've been impressed with the quality of information at the RealClimate blog, and so was pleased to run across "Real Climate Economics" (thanks Joseph).

And then I was disappointed.

The home page says: "The peer-reviewed literature demonstrates that there is rigorous economic support for immediate, large-scale policy responses to the climate crisis."

OK. "Rigorous economic support" -- is that the same as a general consensus among professional economists?

So I dig a little deeper, and read Frank Ackerman's "Climate Economics in Four Easy Pieces," which is a philosophical piece basically saying that we should assume that the worst is going to happen and we shouldn't try very hard to measure costs and benefits because our environment is priceless. And don't worry, because spending lots of money on global warming stuff will actually be GOOD for the economy.

Well. I'm not a big believer in assuming worst-case scenarios. That's a good way to do stupid stuff like spend money on an extended warranty for your IPod or invade Iraq. But reasonable people can disagree about the validity of the precautionary principle.

As for not trying to measure costs and benefits: What? How can we have a reasonable discussion without trying to get a handle on how big the problem, and how expensive the solutions, are? Yes, it's hard. Yes, reasonable people can disagree about what value to put on ecosystem destruction or species diversity. But what's the alternative? Just do what feels right? Spend as much as the public will bear? (That's what we'll actually end up doing, of course, but I was hoping for a more rational approach)

And if spending lots of money on global warming will create cool new technologies and create lots of jobs... well, wouldn't cost/benefit analysis show very low costs and very high benefits?

When I have more time, I'm going to give Real Climate Economics one more chance. Here's my "are they biased" test: Do they refer to at least one paper on their web site that computes the benefits of Global Warming on the climate in some places?
Or are they 100% gloom and doom?

CPA Woulda Coulda: six cents

On Monday I spent three long hours voting for Community Preservation Act projects. Well, except for $7000 to fix the roof of the North Congregational Church -- how did the CPA committee vote 7-0 to recommend that when Town Meeting overwhelmingly voted against it?

Anyway, the State says they'll match only 29 cents for every local dollar of CPA money collected this year. Amherst rejected an increase in the CPA tax last year; if we had voted for the increase, we would be eligible for "round 2" funding, which made me wonder: what is the 2009 match going to be for the round-2-eligible towns?

Simple question, right? Ummm, no:

...all CPA communities received a first round match of 67.62% for the October 2008 distribution. In addition, the 71 communities that adopted CPA with the full 3% surcharge received additional funding in the second round distribution. The percentage match for those communities ranged from 68% to 100%.
Source: www.communitypreservation.org

So some of those communities received almost no extra matching funds, and some received a bunch. Based on a really... interesting... formula that depends on population and property values.

Amherst does OK in the formula ("decile 4 -- 110% of base match"; same as Deerfield and Dunstable). Playing with the Department of Revenue spreadsheets, I can see what would've happened if Amherst was eligible last year for the round 2 funding. We woulda got $470,000 in round 1 funding, and $110,000 in round 2 funding from the State -- an 80% match.

For 2009, it looks like the State match numbers will be roughly half-- less revenue plus more communities participating means less money from the State. So if we'd voted to raise our CPA taxes to 3% we'd tax ourselves about $700,000, get about $200,000 in round 1 funding and about $50,000 in round 2 funding-- a 35% state match instead of the 29% we're gonna get.

I think Amherst voters did the right thing.

Wherefore Art Thou, Stimulus?

The unemployment rate is at 8.9%.

The graph over there on the right is what the Obama folks predicted would happen if we did or didn't pass the stimulus.

Well, it sure looks like they screwed up. Maybe they underestimated how big the recession was going to be. Maybe they underestimated how long it would take $800,000,000,000 to work its way into the economy. Maybe they're spending the money on the wrong things. Maybe printing lots of money and spending it isn't actually a good way to create a healthy economy.

I'm a stimulus skeptic-- I don't think that even the smartest, wisest, best-est politicians and economists in the world can micro-manage the economy to keep inflation low, growth high, ensure that everybody stays employed in a well-paying secure job, and keep America's vital industries (steel, automaking, corn-growing, defense-contracting...) robust forever. You can't micro-manage complex systems; instead, you have to create feedback loops so that the system is self-regulating and so that it evolves in a positive direction.

Maybe our tribal origins make us want to believe that a Wise Leader can help us take a Great Leap Forward, even though that hasn't worked out very well in the past:

The official toll of excess deaths recorded in China for the years of the Great Leap Forward is 14 million, but scholars have estimated the number of famine victims to be between 20 and 43 million.

The stimulus and bailouts and spending won't kill millions of people, at least not as directly as China's experiment with central control of the economy. But those policies are, I think, making millions of Americans a little poorer.

My CongressCritter Supports Quackery

Health care costs are rising. A Medicare funding crisis is just around the corner. So I was dismayed to find out that John Olver is a co-sponser of the Federal Acupuncture Coverage Act of 2009:

Amends part B (Supplementary Medical Insurance) of title XVIII (Medicare) of the Social Security Act and federal civil service law relating to the Federal Employees Health Benefits Program to cover qualified acupuncturist services.

(from the excellent OpenCongress web site)

It looked for a while like acupuncture actually worked, and, unlike homeopathy (which is a 100%-pure placebo), it seems plausible that sticking needles into your body could work.

But then some researchers started testing "sham acupuncture" -- they just pretended to stick needles into people. And in study after study, they found that sham acupuncture is just as effective as real acupuncture. Acupuncture is a placebo; it makes you feel better because you think it should.

Don't get me wrong, I'm not specifically anti-acupuncture: researchers who have tested surgery for certain types of back and knee pain against "sham surgery" got the same results; you can't tell who got the "real" surgery and who got the fake surgery. "Mainstream" medicine can be just as screwy as "alternative" medicine, and we should hold both to the same standards.

All of which leads me back to the Federal Acupuncture Act. We've got a system where the Government pays for about half of all medical care (mostly through Medicare and Medicaid). I think our medical system would work a lot better if patients were given the money and allowed to spend it on whatever treatment they thought worked best, whether that was acupuncture or aspirin.

Instead, we get Congress-Critters deciding what gets covered and what doesn't. So greedy drug companies, arthroscopic surgeons, and acupuncturists all spend lots of time and money lobbying Congress to get their share of the Medicare pie. Consumers don't care what the various treatment options cost, they just care whether or not a treatment is covered or not, and they trust that the Government wouldn't cover dangerous or bogus treatments. So health care costs rise (because the incentive is more lobbying for more expensive treatments), and dubious practices survive.

Maybe acupuncture is the most effective-for-the-money treatment for (say) lower back pain for people who really, truly believe that thousands of years of traditional Chinese medicine can't possibly be wrong. I think they should be free to spend money on whatever treatment works best (or whatever treatment they think works best) for them, but we need a health care system that exposes them to the costs of their decisions; when faced with a decision between paying $100 for a visit to an acupuncturist or spending $10 for a bottle of pain pills, they might decide that the needles aren't such a good idea after all.

Town Meeting Tonight

Amherst's Annual Town Meeting begins tonight. Assuming we take the warrant articles in order, I predict we'll zoom through the first six and then spend over an hour debating and dividing Article 7, the proposal to extend the Municipal Parking District. We'll spend lots of time arguing over whether or not a couple of residential properties should be included or not.

Personally, I'd like to extend the Municipal Parking District (MPD) to all of Amherst, because I don't think it's a good idea to MANDATE parking (and the MPD frees developers from the "you must provide at least XYZ parking spaces" zoning requirements).

I suppose people are worried that a developer will create a big-old apartment complex next door and expect their tenants to park on the street (in front of THEIR house!) instead of putting in adequate parking. That Amherst will end up like Hoboken New Jersey, with cars circling the streets for hours looking for parking spots...

I suppose there's a very small chance that could happen (I don't see Amherst ever getting as dense as Hoboken), but even if it did wouldn't that be a good thing? All of the Master Plans I've read, going all the way back to the late '60s, say that one of the goals for Amherst is to encourage walking, bicycling and public transit and discourage car ownership.

Either people like to talk about alternative transportation but don't actually want to take concrete actions to promote it.

Or maybe a majority like alternative transportation (so it gets into the planning documents) but a large enough minority secretly like their cars enough to block any zoning amendments that might inconvenience them (it only takes 33% of Town Meeting to defeat a zoning change).

I bet it's a combination of both.