KeNo's Housing and Economic Portal: Sunday December 26 Housing and Economic stories

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Why pay bridge tolls if you have government license plates? - (www.mercurynews.com) For 18 months Scofflaw No. 593 blew through FasTrak toll plazas at two Bay Area bridges almost every day and never paid up. Scofflaw No. 593 -- named for the random number assigned to the anonymous driver in regional toll reports -- was able to do this because the driver was part of a largely outmoded program that prevents certain government employees' addresses from being traced through their license plates. Because they can't easily be traced, some are abusing the system by intentionally zipping through FasTrak lanes without an electronic toll account. In all, 1.5 million government employees, elected officials and their families have the so-called "confidential address" plates, part of a program started in 1978 to protect police and others involved in law enforcement from being tracked to their homes by criminals. Those drivers could be police officers, an officer's spouse or child, judges, prison guards, child abuse investigators, state legislators or even museum guards. Who are they specifically? Don't ask. It's a secret, even when laws get broken. Public records show Scofflaw No. 593 dodged a bridge toll -- $4 at the time -- 467 times in 18 months, sometimes twice in the same day. That's $1,868 in unpaid tolls. If the average citizen did this once, a ticket would soon arrive in his or her mailbox ordering payment of the skipped toll plus a $25 fine, though the fine would be waived if the driver signed up for FasTrak. And Scofflaw No. 593 isn't alone. He or she is one of 4,415 drivers who blew through Bay Area bridge tolls 27,335 times from June 2008 to May 2010 without paying while driving a car registered through the Department of Motor Vehicles' confidential address program, playing a game of catch-me-if-you-can with toll authorities while the rest of the motoring public coughed up the $4 toll or faced fines.

Less Than a Full-Service City - (www.online.wsj.com) More than 20% of Detroit's 139 square miles could go without key municipal services under a new plan being developed for the city, with as few as seven neighborhoods seen as meriting the city's full resources. Those details, outlined by Detroit planning officials this week, offer the clearest picture yet of how Mayor Dave Bing intends to execute what has become his signature program: reconfiguring Detroit to reflect its declining population and fiscal health. Yet the blueprint still leaves large legal and financial questions unresolved. Mr. Bing's staff wants to concentrate Detroit's remaining population—expected to be less than 900,000 after this year's Census count—and limited local, state and federal dollars in the most viable swaths of the city, while other sectors could go without such services as garbage pickup, police patrols, road repair and street lights. Karla Henderson, a city planning official leading the mayor's campaign, said in an interview Thursday that her staff had deemed just seven to nine sections of Detroit worthy of receiving the city's full resources. She declined to identify the areas, but said the final plan could include a greater number. "What we have found is that even some of our stronger neighborhoods are at a tipping point with vacancy," Ms. Henderson said. "Vacancy adds to blight and blight is a disease that takes over the whole neighborhood. So the sooner we can get those homes occupied, the better for the city."

Jumbo loan market completely evaporated - (www.doctorhousingbubble.com) The jumbo loan market is virtually non-existent showing that many homeowners in these “prime” areas used subprime tactics in buying their homes by over leveraging and buying something they could not afford. As we have shown, many million dollar home buyers in key areas like Beverly Hills or Newport Coast were only able to buy because of the mania of the housing bubble and debt fuel that allowed people to over spend and leverage. Since these loans can’t be funneled to the government, banks are not putting their money on the line in these markets. After all, you would think that if banks had faith in their “wealthy” customers they would be making large numbers of jumbo loans. Does the above chart look like that?

Montgomery looks to tackle budget woes with fresh ammunition - (www.gazette.net) The Montgomery County Council looked to tighten its fiscal belt this week equipped with a fresh analysis of the county's budgetary plight and a plan to ensure that an arbitrator, if called in to break an impasse, would first and foremost consider the county's ability to pay union contracts. The proposal comes as a study by the county's Office of Legislative Oversight reports that the primary driver behind a 71 percent increase in spending by the county over a decade was a 64 percent increase in personnel costs. The average Montgomery County employee salary increased 50 percent and the cost of benefits rose more than 120 percent during the 10-year period, according to the study by OLO. The report, requested by the council, is "a message to the executive branch and county employee unions, ... that somewhere there has to be a balance met," said council Vice President Valerie Ervin (D-Dist. 5) of Silver Spring, who has proposed changing county law to make affordability the "priority" consideration in arbitration. Ervin's proposed bill would require an arbitrator to give the highest priority to the county's ability to pay. It also would require the arbitrator to weigh other factors, such as the interest and welfare of county taxpayers.

New bill would help contain runaway spending in Montgomery County - (www.washingtonpost.com) PUBLIC WORKERS in Montgomery County have enjoyed a spectacular run over the last decade, thanks to munificent politicians, powerful unions and a badly tilted playing field that favors workers over management. Many workers who were on the county's payroll in 2000 have seen their salaries double, in addition to receiving ever-improving benefits. Since salaries and benefits amount to 80 percent of county spending - and almost 90 percent of school spending - the fruit of the county's profligacy is a structural deficit that has proved impervious to repeated tax increases. A bill before the County Council would provide officials with a lever to restore some balance. It was introduced by the new council chair, Valerie Ervin, a product of years in the labor movement. That Ms. Ervin would sponsor legislation to trim the power of public-worker unions is a hopeful sign - and a telling one of how tilted the field has become. The result is that Montgomery has the fattest and least affordable contracts in the region and is now cutting services to pay for them. In the event that an impasse in contract negotiations leads to arbitration, Ms. Ervin's bill would require the arbitrator to give priority consideration to the county's ability to pay without resorting to tax increases. This is common sense.