The Calgary Herald reported today that the Calgary Public Library faces a repair tab of $53M.
For more than 20 years we have heard the epistle that the solution to government was to reduce it. "Starve the beast!" the neo-cons would harp.
Well as residents of Calgary we have a choice to make. Do we want a library? Does the use of the library's services help us achieve a quality of life we want?
If so, then it has to be paid for. Can a library be a private profit-making enterprise? Possibly so. We do have Blockbuster. Mind you for Blockbuster to sustain itself it has to focus on the best sellers, and that is not working particularly well as Blockbuster constantly crosses the line into unprofitability and possible permanent closure. The supply is then gone.
It seems that when security of supply is paramount, the profit-making enterprises are iffy choices as sole sources. Additionally, when there is economic competition among those sources, they may be driving down prices to consumers but they are also putting each other out of business, thereby further threatening the supply. Add to that the constant downward pressure on the prices earned by artists supplying to these operations and their ability to supply wanes as fewer and fewer artists can afford to write, perform and produce the knowledge material we rely on at the library.
It seems pretty clear that we need a publicly supported library as an enterprise of government. That means it's supported by taxes so each person's library materials budget adds to the overall budget and enables greater choice for each and all.
The 20 plus years of budget cutting has already limited the ability of public and academic libraries to stock their shelves with the breadth of material they and their users need.
Now the cash budget cutting has put the library into an unsustainable position. The books and other materials may well mould and rot. The air in the library could become toxic and unsafe for human use.
The "Starve the Beasters" may yet succeed. The cost of catching up on that foregone maintenance, the infrastructure deficit, may yet convince the decision-makers that the library must be closed as the impact of bringing it back to usable condition is too great. The "beast" will have been starved to death. Taxes will have been reduced permanently. Calgarians will be richer for having paid lower taxes.
I guess with nothing else to do, Calgarians could volunteer to clean up the tailings ponds, abandoned well sites, hydrocarbon polluted lands under former petroleum storage and refining facilities and gas stations and volunteer for other necessary and worthwhile causes.
On the other hand, maybe Calgarians would like to choose how we achieve our quality of life. If that includes having a usable and comprehensive library then we should beware of drinking the "Starve the Beast" cult's Kool-Aid.
Monday, May 31, 2010
petro-patch plus health care
So, suppose each Albertan has supported the petro-patch to the tune of $430. That means each Albertan's government has a revenue shortfall of $1.5B over three years, but actually a little over $1.0B in the third year and presumably every year thereafter.
Can this be made up with the return of health care premiums?
Is it possible not every Albertan has a stake in government policy and participatory democracy?
Can this be made up with the return of health care premiums?
Is it possible not every Albertan has a stake in government policy and participatory democracy?
Friday, May 28, 2010
Alberta Petro-Patch Return on Investment
So Alberta gave up $1.5B in royalties to get action going in its petro-patch as reported in today's Calgary Herald.
http://www.calgaryherald.com/news/Alberta+gives+royalties+rolling+industry+incentives/3080017/story.html
The new policy comes in the context of an interesting series of news stories in the last few weeks capped by the announcement of the Alberta government's changes to the royalty scheme.
Some thoughts arise.
Let's see. It seems to me there were recent stories about the fund-raising achieved by the Alberta Progressive Conservatives and the Wild Rose Alliance Party.
There was also a recent story about population trends in Alberta with the current population at about 3.5 million.
If we add up all the funds raised by all four leading political parties in Alberta, if memory serves me correctly, it works out to about $4.4 million last year.
That total included a shift of corporate donations, mostly petro-patch dollars, of about $700k from the Alberta PC's to the WRAP.
Also, the headline's story reads that Alberta gave up $1.5B in future royalties.
Put another way, each and every Albertan invested ($1.5B divided by 3.5 million people), about $430 into the petro-patch in the expectation of earning some benefit or return on that investment. The headline could easily have read that Albertans gave up $1.5B in royalties.
The petro-patch invested $700k to persuade the government to change the royalty scheme from the one that got the Premier the party leadership and eventually won him the general election. That $700k was what the PC's lost and the WRAP gained.
Now that $700k will probably have to go back to the PC's each year over the next three years, the time frame for the given up royalties, so the total 3 year incremental investment in the form of political donations will probably come to $2.1M.
$2.1M returns $1.5B in reduced royalty costs. Don't try to make a meaningful percentage return out of that, it's astronomically high. (about 71400% or $714 dollars of return for every dollar invested. Bill Gates, Steven Jobs, Warren Buffet - eat your hearts out!)
In any case, each Albertan invested $430 spread out over three years. Let's think about the return for a few example cases. What return can each of the following people expect to see?
Bob the police officer?
Stan the retiree?
Andrew the financial adviser?
Joanne the teacher?
Jody the writer?
Doug the coffee shop owner?
Laura the welder?
Wayne the construction supervisor?
Jan the nurse?
Lexi the high-school student?
Cam the university student?
Phil the college instructor?
Paul the farmer?
Adam the petro-executive?
Joe the gardener?
Kiersten the designer?
Kevin the mechanic?
The point is that it gets trickier to see the possible return as one moves away from petro-enterprise. Dave Yeager suggests it's even unlikely the petro-sector's production service companies and employees are going to see any direct benefit.
How can that amount of donated cash have so much influence in the presence of ballot boxes? After all, it wasn't some artificial being, the Province of Alberta, that gave up the $1.5B, it was Albertans - Alberta people - Alberta individuals - who gave up $1.5B or $430 each.
The return on that $1.5B of foregone royalties better make economic sense and it better be clearly explained in terms each Albertan can understand within her or his own context.
Mike
http://www.calgaryherald.com/news/Alberta+gives+royalties+rolling+industry+incentives/3080017/story.html
The new policy comes in the context of an interesting series of news stories in the last few weeks capped by the announcement of the Alberta government's changes to the royalty scheme.
Some thoughts arise.
Let's see. It seems to me there were recent stories about the fund-raising achieved by the Alberta Progressive Conservatives and the Wild Rose Alliance Party.
There was also a recent story about population trends in Alberta with the current population at about 3.5 million.
If we add up all the funds raised by all four leading political parties in Alberta, if memory serves me correctly, it works out to about $4.4 million last year.
That total included a shift of corporate donations, mostly petro-patch dollars, of about $700k from the Alberta PC's to the WRAP.
Also, the headline's story reads that Alberta gave up $1.5B in future royalties.
Put another way, each and every Albertan invested ($1.5B divided by 3.5 million people), about $430 into the petro-patch in the expectation of earning some benefit or return on that investment. The headline could easily have read that Albertans gave up $1.5B in royalties.
The petro-patch invested $700k to persuade the government to change the royalty scheme from the one that got the Premier the party leadership and eventually won him the general election. That $700k was what the PC's lost and the WRAP gained.
Now that $700k will probably have to go back to the PC's each year over the next three years, the time frame for the given up royalties, so the total 3 year incremental investment in the form of political donations will probably come to $2.1M.
$2.1M returns $1.5B in reduced royalty costs. Don't try to make a meaningful percentage return out of that, it's astronomically high. (about 71400% or $714 dollars of return for every dollar invested. Bill Gates, Steven Jobs, Warren Buffet - eat your hearts out!)
In any case, each Albertan invested $430 spread out over three years. Let's think about the return for a few example cases. What return can each of the following people expect to see?
Bob the police officer?
Stan the retiree?
Andrew the financial adviser?
Joanne the teacher?
Jody the writer?
Doug the coffee shop owner?
Laura the welder?
Wayne the construction supervisor?
Jan the nurse?
Lexi the high-school student?
Cam the university student?
Phil the college instructor?
Paul the farmer?
Adam the petro-executive?
Joe the gardener?
Kiersten the designer?
Kevin the mechanic?
The point is that it gets trickier to see the possible return as one moves away from petro-enterprise. Dave Yeager suggests it's even unlikely the petro-sector's production service companies and employees are going to see any direct benefit.
How can that amount of donated cash have so much influence in the presence of ballot boxes? After all, it wasn't some artificial being, the Province of Alberta, that gave up the $1.5B, it was Albertans - Alberta people - Alberta individuals - who gave up $1.5B or $430 each.
The return on that $1.5B of foregone royalties better make economic sense and it better be clearly explained in terms each Albertan can understand within her or his own context.
Mike
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