Mark Cuban has written an excellent blog post about executive compensation and layoffs. In a nutshell he's simply asking why we don't reward executives who bust their butts to avoid laying people off. It's a good read, and love him or hate him, I think you have to admit he makes a great point. The first paragraph gives you a taste:
I have a simple question. Why are profitable companies laying off people ? I can see if a company’s survival is at stake. If payroll can’t be met. If debt can’t be paid. Then layoffs are a necessary evil. Even if companies have created cash flow deficits through their own mistakes, that’s the nature of business. Mistakes are made. What I have a problem with is that discussion of executive pay never includes whether or not the executive has been good enough to pre empt or prevent layoffs.
One of the things I love about this blog is that I often hear from people with different viewpoints and who really get me thinking with their comments or emails sent in response to something I've posted. Dwight Defee sent me an email about my Revaluation post from March 29 and I liked it so much I asked his permission to post it here. He graciously said yes so here it is:
This is response to your post of March 29, 2009. Jon. I can’t say that I disagree with you about annual appraisals: However, if that happens you and I had better be prepared for higher tax valuations and higher taxes annually.Even though annual valuations would reflect more accurate property values, who’s going to pay for the additional cost associated with such an accelerated project?We will, of course, because we are property owners and we are asking for additional services provided by the County Tax Assessor. In North Carolina, Counties are considered a political subdivision of the State.The State requires Counties to revalue Property every eight years but permits more frequent valuations. Quite a number of years ago ( I was a county employee at the time) the Tax assessor, Harvey Pardue, recommended that the County move from an eight year valuation cycle to a four year valuation cycle.He was hailed as a hero by the Utilities and Business communities and as a demon by residential property owners. The reason for this, as I understand, is that utility and business property was valued annually and residential property was valued every eight years. Since this was a period of growth for our County, Utilities and Businesses were clearly paying more than their “fair share” of the tax burden.When Harvey retired, his assistant, Jack Sprinkle, continued the quadrennial valuation schedule but was able to reduce costs with technological advances.After Jack’s retirement, Pete Roda took the reins as Tax Assessor/Collector and in my opinion has done a good job.As a former associate of Harvey, Jack, and Pete, I say unequivocally that I have the utmost respect and admiration for the job that they performed for the County. Now if you can convince the County Commissioners to provide for annual valuations, I’m sure Pete can handle the job…BUT…you and I had better be ready to help foot the bill for more employees (think salary & benefits), more space and equipment (think office space, desk, computer, etc), Transportation (some of these people have to visit property sites across the County), and other employee expenses that I can’t enumerate at this time. Sorry to be so verbose but I needed to respond to a person quick to criticize professionals employed by public entities which are governed by officials elected by the likes of you and I. DwightDefee Former Personnel Director Forsyth County, NC
Here's part of my reply to Dwight that explained a little better (I hope) what I'm thinking when I say that annual revaluations would be better than every four years:
Dwight, Thanks very much for the email. I think you make very good points andI have to say that I agree with you. I thought about the extra stafftoo but I figure that it will be paid for by the extra revenue thecounty would see.
In retrospect one of my errors is that I came across as thinking thatI blame Mr. Roda or the other folks doing the work. I don't. I alwaysassumed that they were working within boindaries set by the legislature. In other words if they calculate the property valuesusing a formula it is one they've been given and they do the best theycan. But that's not how I said it and that's my fault.
I actually think that if the revaluations were done annually it wouldwork out best for everyone, just like I believe that a flat income taxof 10% on everyone without any deductions would be better for everyoneand meet the country's needs (but that's a whole other topic). I alsoagree with you that we'd have to be prepared to closely watch ourcommissioners and the tax rates they apply to us.
I want to emphasize what I wrote in that second paragraph: I absolutely agree with Dwight that the assessor is doing his job very well. As far as I know he doesn't get to decide how or when revaluations are done, he simply makes sure his office carries out their mandate efficiently. What I'd like to see is that the people who do decide how revaluations are done find a way to do revaluations that are more representative of a properties real current value. Okay, I'm now off my soapbox.
The news story from Davidson County is one of those "stupid criminal" stories we get fairly regularly; a woman tried to pay her bail with counterfeit money. Here's the part that gives it that distinct North Carolina flair: she was arrested at her home on Nascar Fan Alley.
Well my post about the Time Warner's move to charge variable rates for high speed internet garnered more comments in a few minutes than I ever typically get on any post. Lots of good points were made and questions asked in those comments, the most obvious of which is how customers are supposed to tell how much data they're pushing through Time Warner's "tubes". Ben offers some excellent tips for how to track your internet usage here. I'm sure there will be much more on this story to follow.
So ER ends tonight after 15 seasons. Personally I don't think I've watched it in at least 10 years, but when it first started airing Celeste and I would watch it every week. I have fond memories of watching the show in its early years because our kids were toddlers at the time and we had no social life. We were living in the first place we'd ever purchased and we didn't have two nickels to rub together, so our entertainment was limited to whatever we could find on the tube. Even though we knew the show offered a portrayal of emergency medicine that was as accurate asCSI Miami's portrayal of police crime scene work we still found it a nice change of pace from everything else that was on the tube at the time. BTW Law & Order was another staple of our viewing week and that show's still going strong and it's one we still watch fairly regularly.
It's hard to believe that those same toddlers who were crawling around when ER premiered are now in high school and working on getting their drivers licenses. It's also hard to believe that I don't think I yet owned my first cell phone when the show premiered and I'm sure I never imagined that my kids would communicate with each other (and me) primarily by typing short text messages on their cell phones when the show finally came to an end. Man I feel old.
Time Warner announced that they're going to start charging customers for high speed internet access based on the amount of data they transfer each month and if customers exceed their designated amount of data they'll be charged extra. From the piece on WXII's website:
Customers will select from plans that cost between $29.95 to $54.90 a month and will be charged overage fees when they exceed their monthly allotted amount, according to an article in BusinessWeek. The company is planning to offer four levels at 5, 10, 20 and 40 gigabytes (GB) respectively. Time Warner said customers will be charged $1 for each gigabyte downloaded that exceeds their plan's cap.
Authorities in Germany thought they were chasing a female serial killer all over the country for 16 years based on DNA evidence found at scores of crime scenes. Ends up all the DNA was found on the cotton swabs used by technicians and those swabs were apparently contaminated by a woman working at the manufacturer's facility. Take that, CSI.
Rockefeller and other congressmen, along with doctors and consumer groups, say that more accountability and transparency are needed in how insurance companies determine out-of-network rates, and that patients need to understand how it's done to avoid sticker shock when they get their medical bills.Typically, health plans will pay a set percentage, say 70 percent, for an out-of-network visit.
But unknown to many consumers, when patients go out of network, their plan doesn't actually pay 70 percent of the doctor's visit cost. It pays 70 percent of what it determines is the "usual, customary and reasonable" cost for the procedure or doctor's visit in question.
Insurance companies determine that cost themselves or use figures from a database of their choosing, and there's scant regulation or oversight of how they do it.
Don't you love it? This is akin to me saying to you, "Hey look, if you pay me $50 a month I'll agree to pay for 90% of any repair you need to have to your car as long as you take it to one of the following garages. But if you're stuck on the road and need to use another garage I'll pay 70% of what I think are reasonable charges. Now I have this wonderful database of what is reasonable to charge for any car repair so don't you worry about it." Then when you get the oil changed at a garage outside the network and they charge you $25 but my database tells me a reasonable price is $5 then I'll pay 70% of the $5 bill and stick you with the rest. But here's the kicker: I won't ever tell you what my "reasonable" rates are so you'll just have to live with it and when you're stuck on the road you'll just have to hope and pray that the nearest garage's rates are within shouting distance of my "reasonable" rates.
Revaluations should be done annually, not every four years. One reason for this are that you are more likely to get an accurate reflection of a property's current value, and not a value skewed by a housing market that was hot three years earlier and is significantly cooler now. Another is that you spread the tax gains (and pain) over time, which is better for both the government and the taxpayer.
But given that the county is doing revaluations every four years they should at least come up with a formula that weighs the change in the marketplace. My understanding is that they are taking the average home sales for a certain area over a set amount of time, which I believe is the five year assessment period. If your neighborhood had 200 home sales in the first 3 years of the assesment period and home prices were rising, but then only had 50 home sales over the last year of the assessment period while home prices were falling then the average would skew to the higher prices of a rising housing market that no longer exists. That means your home value will not accurately reflect its current value in the home valuation, but rather an average of its value over the five year period. What makes that inherently unfair is that you will be stuck with that higher valuation for five years, even if the value continues to decline.
The potential saving grace of the process is that the county commissioners determine our tax rate so they can lower the tax rate in order to lower the tax burden of higher property valuations. Still, since most people don't trust politicians this is small comfort to most.
Another point: when the property valuations are low at the beginning of the valuation period and then there's a sharp increase in the property values the county actually misses an opportunity to capture that increase in terms of tax revenue. If we moved to an annual revaluation they could capture those increases in real time and even if the commissioners lowered the tax rate they would most likely still see an increase in tax revenue, but they would probably have fewer complaints from homeowners because the revaluations would more accurately reflect current values and would thus seem more reasonable. Also, instead of seeing large changes in value from one revaluation to the next we'd see gradual changes that are easier to swallow.
Befuddled 