Are you a lower-middle class taxpayer in Iowa or Arkansas? Elizabeth Warren wants you to buy $3 billion in ferry tickets for the nation’s richest people, i.e., folks who can afford summer houses on Martha’s Vineyard, Nantucket, and similar island retreats: “Markey, Warren, Keating Seek Federal Aid for Steamship Authority”:
With the financially strapped Steamship Authority in mind, the Massachusetts Congressional delegation is requesting $3 billion in aid to keep the country’s ferry industry afloat.
In a letter sent to Speaker of the House Nancy Pelosi and senate leaders Mitch McConnell and Chuck Schumer on May 7, Sens. Elizabeth Warren and Ed Markey, and Cong. Bill Keating pleaded for additional dollars for ferries, citing the SSA’s plummet in passenger traffic and the fiscal strains caused by the pandemic.
What else can middle-class taxpayers in the mostly plague-free “flyover” states buy for us?
(How much does $3 billion buy when it is not a U.S. state government spending the money? Indonesia has a Navy with roughly 140 vessels and 55 aircraft to patrol its 3,000 x 1,100 mile territory, which includes 17,504. islands. The total military budget of Indonesia is about $9 billion (Wikipedia), so presumably the Indonesian Navy spends close to $3 billion per year.)
Related:
- President Obama’s $12 million MVY place
- Zillow shows some decent houses on Nantucket for $10-20 million (example ($12 million for 4,000 square feet on a 0.2-acre lot))
- a $3.1 million house on the ferry-served Bainbridge Island, Washington
Opening schools in the fall is going to be a “bridge too far” according to Anthony Fauci at today’s virtual hearing, but $3 billion sounds about right to keep the ferries to MVY and Nantucket going.
https://bestlifeonline.com/fauci-schools-open-fall/
The flyover states can’t buy anything for you because they’re already paying $1 trillion for Calif*’s benefits for illegal immigrants & Calif*’s teacher unions.
https://sanfrancisco.cbslocal.com/2020/05/11/coronavirus-california-oregon-nevada-washington-colorado-1-trillion-federal-funding/
Wow. This is a supremely ignorant post. Teachers salaries in Calif come from the state budget, not federal money. And in any case, Californians pay more in federal taxes than they get from the federal government.
@Jake: Read what Newsom said. It’s $1 Trillion with 12 zeros: “…to make sure that we are doing justice to you, to your pubic health, to your public safety, to our education system,” said Newsom. Because remember, these budgetary shortfalls are so much bigger than any state, any city, any county. But they directly impact public safety, our firefighters, our police officers, our first responders. They directly impact public education and our teachers.”
They want a trillion dollar check to cover everything from public education to job training. It’s a huge 5 state slush fund to cover California, Colorado, Oregon, Nevada and Washington.
Here’s the letter:
https://www.gov.ca.gov/wp-content/uploads/2020/05/5.11.20-Western-States-Letter.pdf
What a typical Philip blog entry! Question: Of the Martha’s Vineyard and Nantucket ferry traffic, how many are those richest people you refer to? I was under the impression that they traveled there in their Gulfstreams. How much of the $3B would the Mass SSA be getting? Note that the request was for the US ferry industry of which MA is only a small portion.
LinePilot: That’s a good point about the Massachusetts ferries not getting all of the money, but I don’t think your typical lower-middle-class American is taking a lot of ferry rides to the nation’s various island retreats!
How many rich people take the ferry? I know quite a few who will drive their Range Rovers on and off! But even if the ferry ride is being taken by a truck delivering building materials or by a serf coming to work on the estate, the proposed $3 billion hand-out is still a subsidy to the rich property owners. If the taxpayer in Indiana were not subsidizing the ferry, the Obamas would have to pay a little more for their plywood and former Google CEO would have to pay a little more to the serfs who work on his Nantucket estate.
@LinePilot: Let’s be fair. A lot of what they do is tourist traffic, particularly in the summer months. Here’s the SSA Draft 2020 budget:
https://www.steamshipauthority.com/writable/files/staff_summary_a-637_preliminary_draft_of_2020_operating_budget.pdf
They were projecting around $113 million in revenue and $111 million in expenses for 2020.
Interestingly, from the article: “Since then the SSA has steadied its financial ship, with $12 million in expedited federal grant funds that will allow it to operate through July, and secured a $10 million line of credit from a local bank. But the letter to congressional leadership on Friday said more funds are needed.”
The real story of this story is that Baker “demurred” on supplementary funding at the state level — which made it imperative to change the federal rules for FBP funding (Construction of Ferry Boats and Ferry Terminal Facilities Formula Program) to include: “eligible expenses to include general operating costs and emergency measures related to the coronavirus, would ensure that ferry services across the country can still set sail after this pandemic subsides.”
Prior to this request, the FBP funds were much more limited:
https://www.nps.gov/subjects/transportation/upload/FBP_Fact_Sheet_Final.pdf
“Only the capital portion of the cost of leasing a vessel or facility by an eligible entity is eligible for FBP funding. The costs of participation should equal the annual lease costs and federal-aid may not pay for the entire lease period costs up front. Such a lease cannot include the cost of operating the ferry and this funding cannot be used for operational costs of ferry services.”
Unless they put an expiration date in the new rules, it’s anyone’s guess how long it will take to change them back.
@LinePilot: What we’re seeing here, as with the “Western States Pact” is a big shift to fund state programs through the federal government for as long as it takes. $3 billion here for ferries, a trillion or three there for teachers, police, job training, etc., with no definite expiration date, and of course, all in the name of the coronavirus emergency. When will all that unwind? Since we’re never going back to normal, and the Democrats are looking forward to controlling the federal government from top to bottom after the next election, a reasonable guess is: never.
Alex: Good point. It is unclear to me why we even have state governments at this point. Americans demand ever more from the federal government, but they are still paying huge amounts in state tax to keep a duplicate infrastructure going. In France, the central government runs a lot more stuff, e.g., schools, directly. There are dozens of towns in Massachusetts that have just one school and yet a full slate of school bureaucrats, starting with a superintendent on down. Each one of these school superintendents needs to figure out how to comply with a huge slate of state and federal laws. If the Feds ran the school then it would by definition comply with Federal law.
Without research I would guess that in the MVY etc. cases the majority of the ferry traffic is tourism… and probably not the “richest people variety.” I guess you could argue whether or not it is an industry that deserves support. BTW – the majority of US ferry traffic is likely to be commuters in cities like NYC, Seattle etc. There you enter the usual discussion on how much government subsidies public transportation deserves…
Federal vs. State government – that is the “beauty” of our system. It’s messy and inefficient but we want it that way. Local control even at the town level so that Philip’s town can spend, spend, spend on a new school and not have to share that money with other towns! With regard to dealing with fiscal issues related to the COVID response: Looks like Republicans turn into Keynesian converts when they are in charge and want to get re-elected and switch to being deficit hawks when it’s time to get the other guys out of office. Smart but hypocritical. At least the Dems are consistently advocating for spending our grandchildren’s money.
“Spending our grandchildren’s money”.
That’s not actually how it works. Our grandchildren will also be the creditors on those bonds. So it’s equally valid to say “giving our grandchildren money”. Deficit spending is not a transfer of wealth between generations.
It might be a transfer of wealth between other groups, however. For example, if you think that rich people will hold the bonds and poor people will pay the taxes, it could be a transfer of wealth in the future from poor to rich. Or it could go the other way, if you think the tax rate will be very progressive, it may be that the rich people will pay the bonds. Or maybe you think the bonds will just age out due to inflation in which case it’s not clear what the wealth transfer is.
Often deficit spending is simply wealth creation. For example, if someone who builds roads for a living is out of work, no road gets built, yet that person must somehow surive. If we pay them to build a road, we get a road. If deficit spending puts people to work, it can create wealth out of nothing.
@Philg: >There are dozens of towns in Massachusetts that have just one school and yet a full slate of school bureaucrats, starting with a superintendent on down.
People vote for it overwhelmingly. It’s astounding, but I doubt they’ll mess with public school administration too much, at least in terms of staffing. It would lead to a *real* breakdown of law and order. 🙂 Larger towns are even more astounding. I was reading this the other day (Medford == Tufts University):
https://patch.com/massachusetts/medford/medford-names-new-elementary-assistant-superintendent
Not only does Medford apparently have a superintendent for elementary schools, they have an assistant superintendent!
I don’t know whether their website’s Central Administration page is current or covers them all, but the high school (~1400 students) has a Headmaster and four Assistant Principals. Medford isn’t a particularly wealthy town for Massachusetts, but the Principal at Brooks Elementary makes $218,250/yr. salary. That’s somewhere around the 75th percentile for full tenured professors in law school. I’m not trying to single Medford out as being outrageous, they’re probably fairly normal as far as these things go.
And thanks to Corona, when schools do eventually begin allowing students back, they’re going to have to reduce class sizes, which will mean more administrative burden, maybe longer hours, and more teachers. 30 kids per classroom is far too many for adequate social distancing.
https://bestlifeonline.com/schools-after-coronavirus/
“Schools have to consider various ways to cut classes in half so that social distancing is feasible in the classroom.”
My entirely subjective judgement is that the principal of a 1400 pupil school has a far more difficult and valuable job than practically any law professor, never mind one at the 75th percentile.
The real wtf fact here is that legal academics are paid so much! There can’t be another country on earth that pays academics that produce almost no value this much (and make students attend three years of postgraduate law school). Wild!
@Bob: I’ll leave the judgment of whether law professors at the 75th percentile deserve that salary up to the reader. I can say from my own experience that “some do, lots of others don’t.” For example, I knew several professors who were extremely busy year round: teaching several large classes per semester at multiple levels from 1L to specialized seminars, running a Center or Institute while conducting active research and publication, engaging in a lot of behind-the-scenes administrative work on various committees (law schools have lots of committees), actively responding to media requests, peer review matters, supervising research assistants, doing things like moot court and the law review (almost every law school has one). Those people – I would estimate in the top 25% of any law school – do a great deal of work and are constantly busy. I knew a couple who burned themselves out after several years and had to step back. Then there are others you barely see and wonder how they got such a nice tan in the Chicago winter.
Compensation and research assistance and travel expense issues are one of the most vexing problems deans face. You couldn’t pay me enough to be the Dean of law school. The Deans work the hardest in my experience, just keeping things running. And if they’re “activist” deans who are trying to make big changes in the school’s curriculum, ranking, etc., it’s a monster of a job. You don’t want to deal with 60 faculty members (many of whom think they are the smartest person alive) and scores of adjunct faculty members, trust me. A good rule to begin with is the old insight from organizational psychology: “In any organization larger than 10 people, 10% of the people do 90% of the work.” At one time about 15 years ago I knew pretty well who the worthy, hardworking ones were, at many different law schools across the country.
But after they got on the ferry, she hits them with a sock full of quarters and takes their wallets.