I’m quoted in this Reason TV segment by Zach Weissmueller on the problem of municipalities that stake their finances on overzealous fee collection:
“When you have towns like those in St. Louis County that get in some cases, 40 percent of their municipal revenue in fines and fees, they have chosen a very expensive way of taxing their population, one that creates maximum hassle and maximum hostility,” says Walter Olson, senior fellow at the Cato Institute and publisher of the blog Overlawyered.
Aside from Ferguson, Mo., the piece uses as examples the notorious Los Angeles suburb of Bell, Calif., exposed in a scandal as being run for the benefit of its managers, and — a smart choice — Detroit, a city with a long-time adversarial stance toward its small businesses and others trying to do everyday business in the town:
…what really grants Detroit this honor is “Operation Compliance,” an initiative pushed by former mayor David Bing aimed at bringing all of Detroit’s small businesses up to code through costly permitting. The initiative launched with the stated goal of shutting down 20 businesses a week.
Perhaps on the theory that socializing losses beats reducing crime and litigiousness: “The high cost of auto insurance has been one of the key reasons residents have been leaving the city for years,” [Mayor Mike] Duggan said in a statement. [Allan Lengel, Deadline Detroit]
A bankruptcy judge has dismissed a purported human-rights theory outré enough to have drawn interest from both the United Nations and American legal academia, saying the law guarantees no right to draw water from the Detroit municipal system for free or at rates dependent on ability to pay [Detroit News; Aaron Renn/City Journal and more]
So instead it will require private businesses to invest in security measures. I explain in a new Cato post. In January I noted an unsuccessful bill in the Maryland legislature to require gas station owners to maintain videocamera system.
Headline, from WWJ: “Sterling Heights Gas Station Owner Says IRS Grabbed $70K From His Bank Account For No Reason” Mark Zaniewski, “owner of Metro Marathon in [suburban Macomb County], said the IRS emptied out his bank account twice over the course of a week this spring.” No charges have been filed; Larry Salzman of the Institute for Justice, representing Zaniewski, says the accounts were seized on suspicion of bank “structuring” (knowingly arranging deposits to fall below $10,000), even though some deposits were over that threshold. Salzman says his client has been waiting seven months for his cash and in the mean time is unable to get a hearing before a judge. IJ recently took on a structuring case involving a grocer in nearby Fraser, Mich. Earlier on structuring and its intersection with forfeiture law here, here, here, etc.
Update via Dan Alban on Twitter: “BREAKING: IRS voluntarily dismisses Michigan forfeiture cases, will return seized money to owners of family grocery store and gas station. Doesn’t get feds out of IJ’s separate constitutional lawsuit re: right to prompt hearing, Dehko v. Holder.”
“…can be stripped of their cash, cars, and even homes.” Sarah Stillman’s new article in the New Yorker is making a stir, and I write up some of its highlights at Cato at Liberty, including the traffic-stop scandal in Tenaha, Texas, a curious raid on a Detroit art museum, and the plight of a Philadelphia couple whose son sold $20 of pot from their front porch (& Don Boudreaux, Cafe Hayek).
Bonus: “The Civil Forfeiture Implications of the DEA-NSA Spy Program” [Eapen Thampy, Americans for Forfeiture Reform]
“Detroit had the highest property tax rates of all 50 [largest U.S.] cities” [Chris Edwards/Cato, Alex Tabarrok] Some of the city’s weaknesses go back far enough that Jane Jacobs was pointing them out in 1961 [Urbanophile] How other cities avoided Detroit’s fate, and why, as Boeing shrank, “Will the last person to leave Seattle please turn out the lights?” turned out to be such a misplaced joke [Ed Glaeser, 2011 via Amy Alkon] And in two Cato podcasts on the city’s plight, Caleb Brown interviews Megan McArdle (Daily Beast, Bloomberg) and Emily Washington (Mercatus Center). Plus: Some reasons Baltimore is not Detroit [Frank DeFilippo, Splice Today] And Stephen Eide on the pension-negotiating strategies of emergency manager Kevyn Orr [Public Sector Inc.]
Having to watch what bad government has done to my home city of Detroit is a bit like Princess Leia having to watch her home planet destroyed. The fate of the Motor City, writes John Steele Gordon, is America’s “greatest urban disaster that didn’t involve nature or war.” But wait: here’s distinguished New York Times columnist Paul Krugman to inform us that it’s not “fundamentally a tale of fiscal irresponsibility … For the most part, it’s just one of those things that happens now and then in an ever-changing economy.” Just one of those things! I reply — with a hat tip to Cole Porter — at Cato at Liberty. (& George Leef (“A tornado is ‘just one of those things’ because is has no human cause. When a city goes bankrupt, it has many human causes”), Ed Driscoll)
P.S. On the role of long-serving mayor Coleman Young, see pp. 12-13 of this Ed Glaeser/Andrei Shleifer paper (PDF). And here’s a HuffPo tag on Detroit corruption.
Michigan: “Lawyer Offers Free Valentine’s Day Divorce” [Newser, Walter Bentley site, Legal News]