A story on S.B. 313 hit Slashdot Tuesday and was sent over via the Tip Line.  The premise of the bill is that municipalities would have to solicit proposals from the private sector before offering Internet access to their citizens.  The argument of local control of tax dollars or whether or not Internet access is a human right in the 21st century (Vint Cerf, the acclaimed father of the Internet, would disagree with that notion) comes into play, but when municipalities have tried times before of offering Internet access and offering it at prices where other companies can’t compete and then subsequently folding, it seems like it might be a good idea to at least make sure that all other options have been tried.

From TheRepublic.com:

Rogers says cities like Tifton, Marietta and Acworth have tried unsuccessfully to be public providers. He says the legislation levels the playing field for public and private broadband providers.

“The private sector is handling this exceptionally well,” Rogers said. “What they don’t need is for a governmental entity to come in and compete with them where these types of services already exist. We’re not outlawing a local government entity from doing this, but if they’re going to compete, they can play by the same rules and ask the voters if it’s okay before they go out and spend all these dollars.”

Georgia Municipal Association spokeswoman Amy Henderson said the organization has some concerns about the bill. She said the issue is one of economic development.

Rogers says cities like Tifton, Marietta and Acworth have tried unsuccessfully to be public providers, only to lose millions of dollars at taxpayer expense.

“When cities were getting involved in broadband, it was because private industry would not come there,” Henderson said. “Without that technology, they were economically disadvantaged. We feel like it is an option cities should have.”

And from GPB:

Rogers says his bill wouldn’t keep towns from offering the service.

“They can go and set up the broadband service but if they recognize it’s going to lose money they need to be very honest with the taxpayers and go to referendum and ask them if this broadband plan, which they think is so important for their community, is worth exactly what they plan to spend on it,” he said at a press conference.

Tifton officials say the city became an Internet Service Provider in 1997 because no private company would offer broadband service then. City Clerk Rona Martin said it established the service to attract businesses and help existing entities such as the local hospital, not to make a profit.

Martin said the service is now defunct but it proved its worth because now private companies offer broadband service in Tifton.

Now, for disclosure purposes, I have EPB Fiber Optic as my ISP.  EPB is a Chattanooga-based utility that services a small segment of North Georgia (I dunno how that occurred or the history behind it, but whatever) and I benefit from a municipality competing with the private sector to provide Internet access.  I will say this, EPB probably spent a lot of time, effort, and money to make sure that the market existed for fiber optics in the Chattanooga-area and seem to be doing well in terms of solvency.  They offer competitive prices that are comparable with competitors like AT&T, Comcast, and the like.  With free market forces, AT&T or another ISP would probably have come into the area and offered fiber optic.  They may still do it.  However, I believe that the premise of the bill is to ensure that municipalities don’t go out and invest big bucks of taxpayer money into a whizz-bang Internet system whether it be fiber, Wi-Max, or some other delivery system just on a whim.

Ultimately, the free market will allow broadband to reach even the more rural areas of the country (eventually Wi-Max and other 4G technologies will emerge and become pervasive).  It would seem to make more since to have a company come in and wire the community if there are either enough customers to support the costs, enough potential in the area for business growth, or a combination of both.  Currently, this bill is in committee in the state senate but has bi-partisan support.

The Associated Press reports that a power plant in Georgia emits more greenhouse gases than any other source in the United States. From the WMAZ-TV website:

The most detailed data yet on emissions of heat-trapping gases show that U.S. power plants are responsible for the bulk of

Aerial view of Plant Scherer - Image via Wikipedia

the emissions blamed for global warming.

And the power plant that emits the most greenhouse gases in the U.S. is Plant Scherer in Juliette. The plant is operated by Southern Company .

The coal-fired plant reported releasing nearly 23 million metric tons of carbon dioxide, the chief greenhouse gas, in 2010.

This should not be a surprise. Plant Scherer is the largest coal-fired power plant in the Western Hemisphere, the fifth largest power plant in the US of all types, and produces 3,500 megawatts of power. It takes three train-loads of coal per day to fuel the the coal-fired power plant which has a turbine room approximately a mile long.

Southern Company operates the plant through its subsidiary Georgia Power. Georgia Power employess about 9,000 people throughout Georgia, servicing 2.25 million customers with electricity.

Almost exactly two-thirds of Georgia’s electricity is generated by coal-fired power plants and the attention brought to Plant Scherer cannot be considered good for the state. The reconstituted idiocy of carbon tax credits may yet raise its insider-enriching head again. If so, Georgia is in deep trouble. Removing the energy tax from manufacturing is great, but it’s a drop in the bucket compared to the state’s potential damages if carbon-tax credits, by any name, become federal law.

Remember that Georgia sued the Environmental Protection Agency (EPA) back in October over the Cross-State Air Pollution Rule which is the Return of the Son of Carbon Tax Credits done on a state scale. Under the EPA plan, Georgia would be forced to buy “emission allowances” from other states.

It’s past time for some additional nuclear-powered energy plants, don’t you think?

This year ends the 14-year production run of Gulfstream’s mid-size business jet, the G200. The mid-sized cabin jet will be replaced by the large-cabin G280 in 2012. Savannah Now has the complete story. Below is an excerpt:

The G200 set the standard for the new super mid-size category and quickly established an important market niche. It

Gulfstream's Savannah Location - Image via Wikipedia

became a mainstay aircraft for NetJets and many corporate operators. It also opened new markets for Gulfstream in China, Brazil and other emerging economies.

“The G200 took the basic cabin dimensions of a large-cabin aircraft and made them available to a broader market by offering a shortened, eight- to 10-place, two-seating-area layout with solid transcontinental U.S. range,” said Stan Dixon, vice president of mid-cabin programs for Gulfstream.

“It led the category for its time, as will the G280 going into the future.”

The G280 offers the largest cabin and the longest range at the fastest speed in its class. The business jet is capable of traveling 3,600 nautical miles at Mach 0.80 and has a maximum operating speed of Mach 0.85.

Two hundred fifty of the G200s were manufactured. The planes have had a dispatch reliability rate of over 99 percent.

Gulfstream Aerospace is headquartered in Savannah and has eight other US locations, including Brunswick, Georgia, along with locations in London, England, and Mexicali, Mexico.

H/T to Baker at That’s Just Peachy.

Waco businessman Bill Looman, owner of U.S. Cranes, LLC, has made a new company policy: A hiring freeze has been established until Barack Obama is no longer the President of the Unitted States. In the 11Alive news story by Jon Shirek, the former US Marine makes it clear that it’s not a political decision, but a business decision caused by the policies of the Obama Administration.

About six months ago, Looman put signs on his company vehicles that read, “New Company Policy: We are not hiring until Obama is gone.” A picture of one of those signs from his Facebook page went viral earlier this week. Now, with the 11Alive report and a headline on the Drudge Report, Looman is suddenly receiving a lot of attention. Shirek reports that Looman has unplugged his phone due to the amount and timing of the phone calls.

I know some people won’t like it, but it’s Mr. Looman’s business and his opinion places the continued economic disaster with the policies of the current administration. There is much evidence to suggest that he is either right or, at the very least, not entirely wrong.

The reactions have been mixed. As for me, I sent him a Facebook friend request.

Whitfield County’s unemployment rate continues to be a source of depression in the area, and compounded by Shaw’s recent announcement that they will close down Plant 20 in Dalton and the elimination of 270 jobs from the area.  Whitfield County and Dalton voters will have a question before them come November:  Should the county or city be allowed to create tax allocation districts for economic redevelopment?  Although, what’s interesting is that the phrase “tax allocation district” won’t be in the wording of the question on the ballot.

From the Dalton Daily Citizen:

TADs [Tax Allocation Districts] are based on the idea that development in an area will increase property values and retail sales. So local governments reserve the extra revenue they expect to get from any development to pay for infrastructure, land, buildings, public artwork or other amenities to attract a developer or developers to that area. That “extra” money does not go into general revenue.

[Dalton/Whitfield Chamber President Brian] Anderson said TADs can speed up development in an area by allowing local governments to pay the upfront costs off with projected revenue from the development. Officials said that if some property owners in any area don’t want to be included in a TAD, the plan can be drawn to exclude them.

…

After posting two notices and holding a public meeting, local governments could vote to approve the plan.

Residents would not get to vote on the plan. Nor would they get to vote on any bonds that might be issued to finance projects in a TAD.

Dalton-Whitfield Joint Development Authority Executive Director Elyse Cochran says TADs are structured so neither a city nor county nor any redevelopment agency guarantees any bonds.

“The private developer secures the bonds. If he or she bankrupts, the bond holders are left holding the bag — not the community,” said Cochran.

How would TADs affect the local school systems?

Because the city school system operates under from the city of Dalton’s chater, the city school system cannot opt out of the TADs, said Cochran.

“The county school system, because it is a separate taxing authority, can opt out of participating in the TAD and would immediately begin receiving new, increased taxes following the redevelopment of the property contained in the TAD,” she said.

There are currently 30 TADs within Georgia.  The BeltLine in Atlanta receives most of it’s local funding from a Tax Allocation District.  The cities of Rome and Duluth also have these TADs as well.  With more manufacturing jobs being eliminated in north Georgia, it will be interesting to see if these districts will be effective in revitalizing the area if it passes in November.  A question that might be raised is that will cities and counties use the TADs over the Local Option Sales Taxes since TADs are effective for 25 to 30 years rather than the constant renewal of LOSTs.  Eh, lets be real.  There’s no tax that a government doesn’t like.

I’ve got an op-ed in the Macon Telegraph this morning about an outside group that formed in Macon to help get Miriam Paris elected to the State Senate and Robert Reichert re-elected Mayor of Macon.

I’m told the group mobilized with the help of Mitch Hunter of COMM 360, a Republican and former chief of staff to Rep. Phil Gingrey and Democratic consultant Chris Carpenter of Peachtree Battle Group, Roy Barnes’s campaign manager for the 2010 election and the Democratic consultant who’ll help lead the Georgia Chamber of Commerce’s efforts for the regional transportation SPLOST fight.

It turned out to be an effective model to help overcome resistance of local business leaders to get involved directly for a local candidate. Hutner and Carpenter did a good job keeping it quietly working below the radar.

You may have heard that the City of Atlanta is making life difficult for street vendors outside Turner Field having outsourced their kiosk program to a private company that is charging a substantially higher amount, from $250 per year to as much as $1,600 per month through the new company, for the ability to conduct their business. Obviously, this poses a risk to the livelihoods of these vendors and the Institute for Justice, a DC-based libertarian public interest firm, has filed suit against the city to protect their economic liberties:

Larry Miller and Stanley Hambrick own two well-known vending businesses outside the Atlanta Braves stadium. Their businesses create jobs, offer inexpensive snacks and souvenirs to visitors, and make the sidewalks safer by keeping an eye out for fans who need help. But two years ago, Atlanta handed over all public-property vending to a single company—the first program of its kind in the country. Now that company wants to throw Larry and Stanley out of the spots they have worked for decades to build kiosks that rent for almost $20,000 a year. If it does so, Larry and Stanley’s businesses will be destroyed.

Unfortunately, many American cities put up roadblocks that keep would-be vendors from climbing that ladder. In Streets of Dreams, the Institute for Justice reviewed vending laws in America’s 50 largest cities. It found that of those 50 cities, 45 have one or more anticompetitive restrictions on vending. Atlanta has some of the most onerous burdens in the country, and the monopoly Atlanta has created has cost vendors their jobs and threatens to kill vending as a way for ordinary Atlantans to succeed.

To protect the economic liberty of all Georgians, Larry and Stanley have joined with the Institute for Justice to challenge Atlanta’s vending monopoly. This lawsuit, filed on July 28, 2011 in the Superior Court for Fulton County, Georgia, is the second case in the Institute’s National Street Vending Initiative. It argues that Atlanta lacks the power to grant an exclusive vending franchise and that its actions violate the Georgia constitution. A victory will not only free Atlanta’s vending community; it will make other cities think twice before entering into similarly anticompetitive arrangements.

IJ has been successful in fighting similar regulations put in place around the country. Hopefully, they’ll find success in fighting Atlanta. And if you’re at a Braves game, make sure you buy from the vendors outside the Ted to show them support.

Columbus, GA seems to be quite an economic boom-town in the state of Georgia right now.

Aflac is well-known for the annoying white duck and based in Columbus, but in recent years, Kia and NCR have moved in to the area giving a needed shot in the arm to our struggling economy.  What’s interesting is that NCR might have started a trend in the manufacturing business to bring jobs back on-shore from China.  This was highlighted on CNBC yesterday.  You can watch the video here.

Thanks to Senator Josh McKoon for passing along that video.  It’s good to see our state highlighted in a positive light, and I hope more and more businesses will take that approach as wages in China start to rise.

Rare to give props to the news publication on the actual news headline, but Margaret Newkirk and the rest of the team at the AJC has been on the Cobb EMC/Cobb Energy story for years.  Without them, I doubt we would know the following:

1.  Cobb EMC sold off some of it’s assets to the for profit “Cobb Energy”, with Cobb Energy owned by many of the insiders of the non-profit Cobb EMC.

2.  Cobb Energy then entered into a contract to manage Cobb EMC with a markup of 11%.

3.  Cobb Energy diverted assets to Cobb EMC, with those being returned after co-op members sued the board for diverting the profit making assets. 

4.  The CEO of Cobb Energy was still subsequently indicted on 31 counts of racketeering and theft in conjunction with the asset transfers from Cobb EMC.

5.  The Board of Cobb EMC then sued co-op members who were a party to the original settlement, claiming that they weren’t supposed to tattle on the illegal stuff as part of their original settlement.  This suit was later dropped.

Which brings us to today.  As part of the settlement (and not just because of that silly 31 count indictment), the Cobb EMC CEO will resign.  But the board claims they can’t find a single person qualified to replace him, and thus they want to hire him back.

But if the co-op’s board has its way, he won’t be gone for long. The co-op’s board asked a Cobb County court to allow it to rehire Brown, 65. Meanwhile the board said Brown will remain an “independent consultant.”

“Nobody knows our co-op and the electric industry better than he does, and his expertise will help us continue . . . supplying reliable and affordable power to our members,” board chairman Larry Chadwick said in a statement.

He said the board interviewed eight candidates to replace Brown but none was deemed as qualified.

Note that this board is the same one that has been in place since 2007.  You know, the same ones that were allowing the double corporate entitites which allowed a for-profit company owned by insiders to enrich themselves off the efforts and assets of a non-profit co-op.

The settlement set a schedule of board elections that would have allowed the co-op’s customers to replace most of its governing board in 2009. The two sides continue to fight over the terms of those elections. The co-op has asked the state Supreme Court to overturn an April appellate ruling that it violated the settlement terms related to the board votes.

Co-op members have not been able to vote on co-op board members since 2007.

I’m a Cobb County resident.  Reading this story, however, almost makes me glad I only get to pay the Don Balfour ‘Only Little People Pay Rate Increases’ Tax to Georgia Power.  Almost.

My column from this morning’s Courier Herald:

While speaking to the Atlanta Press Club yesterday, Atlanta Mayor Kasim Reed spoke on a variety of topics with a somewhat common theme: Working with various other state leaders to “reduce the notion of two Georgias”. 

A Couple of weeks ago, I wrote for PeachPundit.com that Kasim Reed is the man with political clout in Georgia.  He has been the point man to work with President Obama’s Democratic administration in an attempt to secure funding for expanding the Port of Savannah on behalf of a solidly Republican state.  He has become the key negotiator in solving the Atlanta regions’ transportation plan in preparation for an upcoming regional transportation sales tax vote.  And he has stood shoulder to shoulder with the Governor to announce the two would use every means necessary to ensure that Atlanta Public Schools do not lose accreditation.

As mayor of the capitol city, Reed has influence far beyond his half million constituents.  His frequent references to “unprecedented cooperation” with the Governor, Lieutenant Governor, Speaker of the House, and Congressional delegation underscored the symbiotic relationship the various parts of the state have, and the abilities of Reed and the others to bring Georgians together.

Many of the issues that Reed spoke of centered on economic development, and most of those issues have transportation at the core.  He spoke of the state’s long history as being a center for logistics, and shared a vision that Georgia would be nothing less than the logistical center of the Western Hemisphere.  Thus, the Port of Savannah will be linked to Hartsfield airport, with massive cargo ships bringing in goods that can be distributed quickly throughout the southeast and beyond by Hartsfield’s massive network and expanding air cargo capabilities. 

But Reed also discussed issues that are closer to home, that if left unchecked would threaten the image of the city and blunt the best economic development efforts.  In addition to his firm stance toward the Atlanta School Board, Reed discussed plans to reduce crime, increase environmental sustainability, and deal with the city’s massive housing/foreclosure problem.

But the real challenge for Reed will begin today, when he will receive recommendations to deal with the City’s significantly underfunded pension program.   Though he said he could ignore the problem through his expected two terms, he indicated if he did so, the next mayor would have to declare the city bankrupt.   He would prefer to get the city back on track to a properly funded program now, while actions can still be taken.

City employees, however, are a large and influential voting bloc in Atlanta.  Changing their compensation package is not without significant political risk, and poses perhaps the first real test of his administration. 

During his first year in office, Reed has built up considerable clout and goodwill from Republican Georgia.  It will be interesting to see if that translates into the ability to convince his Democratic base to accept less.  If it does, we’re a lot closer to having “one Georgia” than most might expect, and Kasim Reed will be its undisputed mayor.

I really wish I had time to do this one justice, but frankly, if I had that kind of time, I would spend another hour on hold with “Good Corporate Citizen” AT&T trying to drop services from my U-Verse account, which I’ve been unsuccessful in doing for months.

Yesterday on twitter, myself, Jason Pye, and a few others were having the great and never ending debate over which cable providers is the worst.  The answer, as always, is “whichever one I have now”.

Let me highlight my experience with AT&T and their new U-Verse service.

I signed up for a U-Verse “bundle” for TV, land line, and internet service about a year ago, in order to receive a $400 gift card (as I don’t use a land line, but decided I could add it for $400).

I tried ordering online.  Their system crashed twice.  After having an online tech support help, he then told me to go back and do it online again, that he couldn’t help me, but they were aware of the problems.  This took almost two hours to complete.

Worse, there was an online pricing adjustment notice stating that at the first of the following month, the prices would change to an amount $5 lower than the quoted price.  When I asked the online helper, he told me he was sorry, but that was for non-Southeastern states, and I would pay more.  I told him that wasn’t what I was being quoted, and he said “We’ve had problems with that for a while, but the price on that notice doesn’t apply to you.”  I asked why Georgian’s had to pay more, and got a “that’s the way it is” answer.  I told him I expected him to honor the online price, and got “I guarantee you, you will never get that price”.

I decided just because this one guy was a jerk wasn’t enough reason to not get a service that friends of mine loved, so I re-keyed my order, again.

The tech showed up at the end of his four hour window (better than Cabletown Comcast, who never shows the first time), and then proceeded to do a 4+ hour install.  When he was done, he had a router sitting in the middle of my dining room wall after drilling a hole through the exterior wall (without asking), and when I complained, told me “that’s the only place it could go” and left.

An hour later, the cable went out.

I had to re-schedule another 4 hour window on another day, but the tech arrived at the beginning of that, which was good.  What wasn’t good was that he had to completely re-install the service, taking over 3 hours.  But when he was done, the router was next to my TV in the living room, not on my dining room floor.

After approximately 14 hours of my time, the install was a success!

I have to admit I like the service, but I would almost rather imagine Ray McBerry as Governor than call AT&T for anything.

A few months ago, I realized that I never received anything to claim my gift card.  When I called to ask about it, I was told “that’s expired, there’s nothing we can do.”  After a couple of more dismissive exchanges, I asked for the agent’s name, and she replied “Let me get my supervisor to see if there’s anything she can do.”

The supervisor decided to begin the conversation by lecturing me on waiting too long to ask for my rebate.   That was her added value to the conversation.  Nice Touch.

I was then transferred to the folks who could eliminate my phone service and downgrade my internet speed, called “retention”.  There, a caustic woman also told me it was my fault that I didn’t ask for AT&T to send me something I needed to claim my $400, but if I didn’t cancel my phone, she would give me $100.  So I said fine, give me the $100, and I’ll cancel it tomorrow. This did not please her, because she told me the credit wouldn’t process if I cancelled tomorrow.  So I asked, “How long do I have to keep the phone service to keep my $100 credit.”  She refused to answer, but just kept insisting that I had to keep the phone service if she gave me the $100.  I then asked if I was entering into a contract similar to my 2 years of indentured servitude I am required to perform for AT&T so that I can keep my iPhone.  She insisted there was no contract, and that I could cancel at any time.  So I said I’d like to cancel as soon as my $100 credit cleared. 

She was not amused.

After at least 5 minutes of listening to her type, we agreed I would keep the phone service and I would get $100.  Except that I didn’t. 

When my bill came for the next month, no credit.  So I didn’t pay it.

And the next bill came, no credit.  So I had to call. 

The gentleman who answered was only the second person I’ve spoken with from UVerse that pretended to care (with the first being the tech that fixed the bad install).   He understood my problem, worked to get my credit back (after telling me the five minutes of typing from the unamused woman was documentation that I refused the $100 credit).  He got me a credit for my $100, and then agreed to stay on the phone while I was connected with “retention” to get my phone service terminated.

So he called, and we were put on hold.  For 25 minutes.  Apparently, “retention” doesn’t staff for Saturday hours.

So, he told me that rather than continuing to hold, he was emailing 4 – FOUR – “supervisors” letting me know the problems I was having, and one of them would call me back.   That was two months ago.  NADA.

In the mean time, I went online and found U-Verse support, and tried a live chat.  I still have the screen shots of that (and from my initial order where I was told I couldn’t have the advertised price because I live in Georgia).  Online support kept insisting that I call the number that I wasted more than a half hour on a Saturday only to have my number taken to receive no return call.

I requested the chat representative get her supervisor, so that he could make that call.  She declined, saying that was a totally separate part of AT&T.  I suggested that if her supervisor would get on the line, if he couldn’t make that call, then he could call his supervisor, and that person would either have the authority to call a “totally separate part of AT&T”, or could call his/her supervisor.  Eventually, someone would either have the authority to call that other part of AT&T or even better, would be a person over both parts.

45 minutes of this foolishness later, NADA.

AT&T wants another payment for services I don’t want.  I decided to use my time that I would have spent on hold with them this morning writing this screed.

Then, this afternoon or tomorrow, time permitting, we’ll be cancelling a lot of services.

Between my iPhone and cable, AT&T gets $300/month from me.  That’s a decent lease payment on a 2011 car.   Yet, they can’t even answer their phones in “retention”, nor will they authorize on-line customer service to provide any meaningful action to resolve a problem.

Off topic to Georgia politics, absolutely.  Except it’s not.  Every utility lines up at the General Assembly every year with a team of lobbyists to tell every legislator what a good corporate citizen they are.  And every year, we get bills that transfer consumer rights over to large companies who are moving jobs out of state, and customer service off the menu.  And we’re told we have to take it, because somehow stacking the deck in favor of these “good corporate citizens” via government action is an example of the “free market” at work.

Monopolies and Oligopolies are not an example of the “free market”, they are exceptions.  But I’m fairly certain we have a few enterprising folks around here who can come up with was we as consumers can help to begin to level the playing field.  Put your thinking caps on, and let’s discuss.

Update/Resolution:

After getting the CEO of AT&T’s email address posted below, I sent a copy of this post to him, and received a response a couple of hours later, requesting account and other backup information.  On Monday, I was contacted by an AT&T rep in Atlanta that had been forwarded this post by Chuck Eaton, Georgia Public Service Commissioner, who also requested some basic account info.  During the day, I was notified that the rep who called Monday would be taking over from the rep who had emailed from the President’s office, so as not to burden me with multiple contacts and requests for the same info.

After sending some screen shots of my online interactions, the rest was handled via email.  AT&T sent a rep to my office to pick up the extra set top box I was not using, with a message of apology from him as well.  Credits were issued for the services I had tried to cancel or downgrade from my original request date, the credit for the undelivered gift card was also issued to my account, and a credit was issued for the documented time I spent trying to correct this problem.

Most importantly, I hope, is the information that was given is being circulated to various managers within AT&T for evaluation of ways to improve customer contact and problem resolution areas.  Given that the actual service from U-Verse has been near flawless, it has only been the “customer touch” experiences with them that has been the choke points.   I remain a U-Verse TV and internet customer, as well as an AT&T wireless customer.

The following is my column from today’s Dublin Courier Herald:

Only days after receiving his appointment as Chairman of the Committee on Banking, Senator Jack Murphy (R-Cumming) is being sued by federal regulators for “Breach of Fiduciary Duty” and “Gross Negligence” from his service as a director of the now failed Integrity Bank.  The FDIC is seeking $70 Million in damages from Murphy and 7 other directors and bank insiders.

Murphy’s reaction has been to classify this as a civil action, which is technically correct, and says it has no bearing on his ability to chair the committee which sets Georgia banking laws.  Georgia currently leads the US in the number of bank failures since 2008.

Two members of the Senate’s Committee On Assignments, Jeff Mullis (R-Chickamauga) and Cecil Station (R-Macon), have indicated they back Murphy remaining, though Senate President Pro Tem Tommie Williams (R-Lyons) did acknowledge that the COA will meet today to discuss the situation.

Senators need to ask themselves this question: Can a Senator who would not be allowed by the FDIC to serve as a banking officer or director be allowed to chair the committee who writes Georgia banking laws?

I spent 7 years as a banker as a branch manager and small business lender after I graduated college, and remember filling out compliance forms regarding the status of our officers and directors.  I traded messages with some of my contacts at a large Atlanta law firm that previously served as our outside counsel yesterday to confirm today’s officer requirements are similar.  I found that a person who has caused a loss to the FDIC is, by rule, not qualified to serve as a director or officer of a bank seeking a new charter.  In addition, the FDIC does not look favorably upon such individuals serving in this capacity at established banks, and would usually note such during routine compliance audits.

Any prospective purchaser of assets from a failed bank by the FDIC are furthermore disqualified if they have “ever been an officer or a director of a failed institution” and “alleged in a judicial or administrative action brought by the FDIC” to have breached their fiduciary duty to that institution.

As someone who also has had to work though financial and legal issues related to the collapse of the housing market, I can and do sympathize with the issues Senator Murphy is facing.  Unfortunately, that does not extend to finding a justification to see Murphy continuing as Chairman over a committee that draws banking laws for institutions he is no longer qualified to work for.

Senator Murphy should cede his chairmanship, and if he does not do so, the Committee On Assignments should make a change today.

The topic of alcohol sales on Sunday tends to fire up people. Some pastors get their congregations fired up on how Jesus won’t love you for purchasing and consuming alcohol from grocery/convenience/package stores on Sunday (even though you can do it the other 6 days). Bills have come up before the General Assembly before that would remove the state-wide ban on alcohol sales and and allow for a referendum question put before the counties and municipalities on whether or not to allow alcohol sales on Sunday.

Republicans generally want to try and keep power at the closest level to the individual citizen. I believe allowing each county, rather than the state, to decide on whether or not an individual can purchase alcohol on Sunday is good. Some of my socially conservative friends here in northwest Georgia would object to this, but I don’t really care what decisions an individual makes as long as they do not harm others.  Buying alcohol on Sundays at a grocery store more than likely won’t affect others and would generate some additional revenue.

Governor Deal may sign a “local control” Sunday Sales bill if it passes the General Assembly. The last Sunday Sales bill was introduced by Representative Roger Williams of Dalton, but was opposed to former Governor Perdue. A new governor mixed with the need of additional state revenue might be the perfect storm to get the legislation passed. I’m curious as to the firestorm that could erupt. Deal had a lot of support from social conservatives. I wonder if a loud outcry from them in opposition to Sunday Sales legislation would change his mind.

This past weekend was one that Columbus, Georgia takes in stride each November. As thousands of protesters from all over the country head our way every year to show their displeasure for the School of the Americas-which, by the way, goes by the name Western Hemisphere Institute for Security Cooperation (WHINSEC)- Columbus business owners look for the little boost to local economy and our local law enforcement officers prepare for a few more folks to spend the night in the county jail. While many view this as a bunch of long-haired, hippie type, pinko Commies, we here in the Chattahoochee Valley also see dollar signs, not just in court fees, but in motel (not HOTEL) rooms, restaurants, gas, and their favorite spot-and mine- Ruth Ann’s.

Columbus Police Officer, Kenny Herring.

This year, 21 people were arrested with fines varying from $200 to over $1000, and 2 people were sentenced to six months in prison, the maximum the Judge could give.  The two protesters sentenced to prison time, Father Louis John Vitale, 78, and Michael Omondi, 24, scaled the fence onto Post. After Omondi’s attorney told Judge Hyles that his client decided to climb to fence at the last minute, Omondi said:

“With all due respect to my attorney, I came from Los Angeles with the specific intention of climbing that fence.”

While most of folks protesting would argue that it is a “peaceful” protest, many come with the intention of breaking the law and trespassing on to Ft. Benning from Columbus. And that is why I have to brag on our local Police Department, Sheriff and Marshall Offices. With efficiency, authority, and the safety of Columbus citizens in mind, the three departments come together to enforce the law and keep general order. Yes, it is these protesters’ right to voice their opinion, but when they break the law, our men and women in blue and tan are there to restore the peace and make sure the proper consequences are put into place.

So, as the Hippies ride off into the night, we here in Muscogee County say “See ya next year…and don’t forget to bring your cash.”

We’ve had some lengthy discussion here in the past about the two halls of fame in Macon, the Sports and Music Halls for those you unaware. Tonight the Macon City Council will be voting on whether they should give the beleaguered Halls of Fame an additional $500,000 over the next three years.

This money would be in addition to the money the Halls receive from the local hotel tax, from the General assembly, and through donations. An organization called “Save the Halls” is pushing for a more aggressive donation solicitation scheme, to include some inductees of the two Halls actually appearing at events.

“This is the last time we’ll come and ask the city and county for money,” he said.

The financing plan required with a bid for the halls demands that the institutions become self-supporting within five years. Dyer said the nearly complete financial plan predicts that, but acknowledged that it’s an uphill climb. The state subsidized the halls with a total of $790,000 last year.

Appropriations Committee Chairman Mike Cranford noted that local governments already have invested nearly $8 million in the halls, counting land and construction work.

“In my mind, we’re protecting an investment we’ve already made,” he said.

Dyer said that if attendance and support aren’t going as expected after three years, Save the Halls would acknowledge that, cut its losses and turn the halls back over to the state.

On one hand, these Halls obviously mean a lot to some members of the community and significant capital has been invested in them. On the other, if the dog ain’t huntin’ . . . then you retire the dog. I don’t think anyone contests that the best possible thing to happen is for the Halls to be solvent and be able to not rely on infusions of cash from the government. It just has not happened.

I can honestly say I have never been to the Sports Hall of Fame. I have been to the Music Hall of Fame – and I enjoyed the experience, though I am not sure it was something I would want to spend the price of admission on again nor was it anything to write home about. I think there is a two-fold problem here, one the attractions just do not inspire people to visit and secondly the other nearby attractions like the Hay House are more impressive for tour groups.

But that is a systemic problem. You need capital to improve the attraction. How do you get capital? By attracting more people. Here’s hoping these two Halls get on the right track, because too much money has been sunk in for them to just disappear without Macon receiving any benefit.

We have an all too familiar post theme here that often leads us into our weekend, known as Bank Failure Friday.  Late on a Friday or early on a Saturday, we’ll get business wire report that more Georgia banks have failed.   Georgia still leads the nation in number of banks that have failed during the past 24 months, and based on two new reports, that doesn’t appear to be slowing down any soon.

The AJC reports that 79 Georgia banks currently have a “Texas Ratio” greater than 100.  In laymans terms, a Texas Ratio is a measure of a bank’s problem loans relative to the banks capital.   A ratio of 100 means that the problem loans equal the amount of the capital the bank holds in reserve.  The measure has often been used to determine which banks are in declining health, and on the more extreme side, which banks are most likely to fail.   

There are 13 Georgia banks with Texas Ratios above 500, with two having ratios greater than 1,000.  They are:

Chestatee State Bank–1,085

Enterprise Banking Company–1,037

Montgomery Bank & Trust–907

North Georgia Bank–755

Habersham Bank–681

Oglethorpe Bank–647

American Trust Bank–590

First State Bank–582

Security Exchange Bank–563

Douglas County Bank–539

Darby Bank & Trust Company–521

United Americas Bank, National Association–514

Mountain Heritage Bank– 507

To help put Georgia’s situation into perspective,  you can consult this list of undercapitalized banks prepared TheStreet.com and reported by CNBC.   Using different criteria, they have identified 155 institutions in the United States they deem undercapitalized.  42 of those, or roughly 27 percent, are chartered in Georgia.   The next nearest state, Florida, with a much larger population, has 17, just less than 11%.  Michigan ranks third with 9 institutions on the list.    To emphasize the problem’s severity, when these banks are ranked by percent of total assets that are non-performing, Georgia has 13 of  the worst 20.

The sad reality of the situtation is that at this point, little can be done to save these institutions.  While some may find new investors or merge with stronger institutions, the worst among them will be methodically absorbed by the FDIC, with deposits transferred to healthier banks and assets disposed of through various fire-sale methods. 

As we’ve discussed here before, there is not one cause or point of blame for Georgia’s poor standing in this national ranking.   Failure to respond to changing banking laws in competing states in the 80′s, the ease of opening de novo banks during the 90′s and 2000′s, the absurd amount of capital chasing real estate investments during the last decade, abdication of loan underwriting in favor or credit scores or character judgements, and the concentration of “growth” as the major industry in the Atlanta area that community banks funded are chief among them.  There are others, and there is a lot of blame to go around.

But blame won’t pay a past due loan.   Nor will adding penalizing “regulation” to a bank already on the brink.  In reality, there is not a political solution to this problem.  Any political action or re-action must be based on a plan that growth will one day resume, but when it does, Georgia’s banking laws prohibit us from ever being first on these lists again.

Eric Johnson has joined the McGuireWoods Consulting Firm as a Senior Advisor, according to Insider Advantage (subscription required.) McGuireWoods describes “our people” as follows:

In the end, it’s all about people. Staffed with political professionals from both sides of the aisle, McGuireWoods Consulting offers an experienced team of lobbyists at the local, state, and federal levels. Our strategic communications and grassroots experts come from politics, journalism, and non-profit organizations. And our infrastructure and economic development team has played a major role in significant economic development projects—always helping to bring the best deal to the table for our clients. We work as your partner, helping you to build long-lasting relationships with government and key decision makers that bring value to your company.

This news comes just as Governor-Elect Nathan Deal has rolled out his transition team, according to the AJC, with Johnson, Deal’s former rival, listed prominantly among the group.

The AJC has the story here.

Jurors probed five county land purchases, finding fault with four of them. The report claims commissioners used some purchases to reward political allies and punish rivals. It says the county routinely paid 10 percent above appraised value for land, even after the real estate market tanked.

The result: Taxpayers spent millions of dollars more for some land than it was worth.

The jury indicted Commissioner Kevin Kenerly for accepting or agreeing to accept $1 million to win the approval of one purchase. Jurors decided not to indict Chairman Charles Bannister for perjury after he offered to resign.

The grand jury made a series of recommendations, including either paying the commisioners more to be “full-time”, having more commissioners to dilute their individual power, ending “district courtesy” where the commissioner over an district is given lattitude to essentially make decisions over zoning as if a sole commissioner, and comprehensive ethics reform.

The Commission will soon have  three of five new members.  There is a special election scheduled to replace Chairman Charles Bannister who resigned to avoid indictment.  Meanwhile, Governor Perdue will reportedly call for a review of indicted Commissioner Kevin Kenerly.  This review may lead to the suspension Kenerly.  Regardless, Kenerly did not stand for re-election this year and his seat will be filled by John Heard.  Lynette Howard will replace Bert Nasuti who also did not stand for re-election.

Thus, with a majority of commission members new, and a vocal electorate still seathing, there is a stronger than normal chance that these recommendations will see some form of implementation.

Given that I generally telegraph my feelings in my posts well in advance, the “my ballot” post from yesterday had few surprises for most. But a few commenters posted (or emailed, or called..) as to why I could oppose an elimination of a tax on businesses.

As a conservative, we generally view eliminating a class of tax as a good thing.

As an economist (by training, anyway), I understand that businesses don’t pay taxes, consumers do.

Yet, I’m opposed to this referendum. Thus, a lot of “WTF?”.

I was able to resolve one of my issues with this legislation yesterday after confirming this only eliminates the state portion of the tax. My primary concern was that this was yet another attempt by the general assembly to claim they cut taxes when the revenues would have otherwise gone to local governments. I.e., axe the tag tax; i.e., Great Tax.

I did learn in my research, however, that there was a bill last session, sponsored by Jay Powell and Ed Lindsey, and others, that would have allowed local governments to eliminate these taxes at the local level for economic development. So long as local control is preserved, I’m all for it. Unfortunately, Governor Perdue vetoed the bill, but I am assured by Rep. Lindsey that they will reintroduce this bill this session, and I will strongly support it’s passage.

So, back to my now more relecutant opposition to this referendum, I’ll refer back to one of the better classes/teachers I had in Econ. We learned at some point the priciples of fair taxation (not in any way to be confused with the FairTax!) that a tax, to provide the least distortion to an economy while raising revenue, should be as broad based and low as possible, with the fewest exemptions.

Yet, the modus operandi of the General Assembly the last few years seems to be to systematically create a lottery to see who wins tax breaks. As Republicans, we seem to enthusiastically go along, claiming that any tax cut is a good tax cut. Yet, inventory taxes are the least likely to spur economic development in most cases. In a Just-In-Time inventory world, inventories are located closest to the customers. Only a few cases at the margin will companies move inventory to avoid taxation. Thus, this is a broad based tax that a cut is not likely to spur additional economic growth to offset the lost revenue.

As such, I favor waiting on this tax cut until the commission currently studying a comprehensive statewide tax reform can release it’s findings. Rather than the patchwork of incompatible tax cuts we’ve crafted over the past decade, I prefer a targeted, comprehensive approach.

If eliminating business inventory taxes is the solution, I can wait a year for it to be part of a comprehensive solution.

(Pictured: Cuban dictator Fidel Castro after being asked to wink if he thinks Georgia’s Governor, Sonny Perdue, is a doofus.)

Looking for the final piece of the puzzle to cement his legacy as a staunch opponent of liberty and freedom, Georgia’s Guv’na Sonny Perdue has decided in his final months he needs to make some new friends of real quality. The kind of friends who will have his back if he ever gets in real trouble for his myriad “shady” land deals and GDOT shenanigans.

He’s decided to become a BFF of Fidel and Raul Castro!

Governor Sonny Perdue will lead a 43-person delegation in a business mission to explore trade and tourism opportunities with Cuba, the Governor’s office announced today. The group will leave for Havana Sunday, June 6 and return to Georgia Tuesday, June 8.

“Our intent with this mission is to develop relationships that can bring more business for our companies and for the state,” said Governor Perdue. “The global accessibility we can provide through the Georgia Ports and Hartsfield-Jackson Atlanta International Airport already position Georgia as a prime trade partner for Cuba, and open other economic development opportunities for us as well.”

Swell. Meanwhile, Kim Jong-il e-mails in to note, “I torture and starve my population, too! And I’m free all month for a trade delegation visit, Sonny! Just be sure to bring some blueberries from state Rep. Tommy Smith’s farm! Yum!”

The place that the U.S. State Department says “is a totalitarian police state which relies on repressive methods to maintain control” seems to be ‘jus peachy for the Guv’na to set up shop and start doin’ some bidness! Further, Perdue can take a few pointers from the Castro brothers on how to encourage the majority caucus to continue to pass legislation in the General Assembly which makes sure to tell Georgians how they can behave in their own car and, perhaps, when they can blow their nose.

No word yet if the Ladies In White will be allowed to greet Georgia’s supreme leader on the tarmac in Havana. Their jailed, tortured dissident husbands sure won’t.

And I don’t give a rats patootie that this isn’t the first trade mission. The most recent one should have been the last until the despot in charge of that “people’s paradise” becomes fossilized and the populace can overthrow the oppressive yoke placed upon them which, unfortunately, is supported now by the State of Georgia.