Government Bailouts Bankroll Opposition to Amendment 4

[trigger]

The opposition to Amendment 4 is using your money to stop you from having a voice in the future of Florida’s growth and development. Do you want to talk about the audacity of audacity?

At the beginning of this year, the Democratic Congress passed and President Obama signed into law an extension of unemployment benefits compensation. So far, so good: right? But the special interests in Washington DC successfully lobbied to insert something more into the bill: a tax loophole for the homebuilding industry. The homebuilders were able to claim losses over the last 2 years against federal taxes on their corporate profits during the previous 5 years. Basically, this means the federal government is refunding corporate taxes on national homebuilders’ profits during the boom years to compensate for their losses during the Great Recession.

This is a “backdoor” government bailout: nothing more, nothing less.

But wait, there’s more. After receiving their bailout, the national homebuilders report the tax refund as profit to Wall Street, thereby maintaining the value of their shares. Most homebuilder shares lost more than 80% of their value during the financial crisis, broadly dropping from $35-45 a share to $10 or less a share. So, not only is the federal government propping up the obsolete business models of the homebuilding industry that planted the seeds of this Great Recession in the first place but it is also the means to artificially inflate homebuilder share value on the stock market to create another “bubble”.

Oh, and the unemployed? At the same time the homebuilders are receiving billions of dollars in government bailouts, the federal government taxes as income the unemployment compensation payments for the unemployed. This is anti-Robin Hood economics of the perverse. Steal from the future earnings of the poor to bailout the rich today. It’s a house of cards waiting to fall all over again. And, once again, it will be left to taxpayers to cover the bills

But wait, it gets even better! The homebuilding industry has bankrolled 40% of the funds raised to oppose Amendment 4. The rest of the funds raised to oppose Amendment 4 largely come from “vassals” of the homebuilders. Amendment 4 is a ballot initiative designed to give voters a say on major changes to their community’s future land use map; specifically, how our neighborhoods and towns in Florida will grow in the future. They want to deny you a voice about your future.

Many voters are old enough to remember the Watergate adage, “follow the money.” If you do, it’s easy to see they are using your money to tell you to shut up. Let your voices be heard loud and clear this November 2nd. Vote YES on Amendment 4.

January 2010 Fortune/CNN article on "backdoor" government bailout of the homebuilders: http://money.cnn.com/2010/01/07/news/companies/lennar.taxes.fortune/index.htm

The Atlantic article on Amendment 4: http://www.theatlantic.com/business/archive/2010/09/floridas-amendment-4-would-give-voters-say-on-overbuilding/63727/

New York Times article on Amendment 4: http://www.nytimes.com/2010/09/28/us/politics/28florida.html?_r=1&adxnnl=1&adxnnlx=1285862427-0xasmBwbciU3gVwiO8e4+w

[JeffreyS]

I am still a believer in our representative republic.  We are not. Democracy for good reasons. This is a bad bad idea.I understand why we hate bail outs and stimulus except they worked. the wall street bailout work wall street is doing great .the auto industry bailout worked  there is still  american auto industry .  and if we had ignored the republican tradition of no regulation the wall street bailout would have done wonders for small business and jobs. 

[tufsu1]

ok trigger...let's assume you are right about this

If Amendment 4 passes, wouldn't the special interests just spend lots of money trying to win votes...and all one needs to do is look at Rick Scott to see how moeny translates into votes.

Of course, as stated on another thread, I think the Legislature will just scrap our growth management laws and start all over....of course the Legislature doing anything is worrisome to me!

[fieldafm]

If Amendment 4 passes, wouldn't the special interests just spend lots of money trying to win votes

Yes!

[trigger]

Einstein's definition of insanity is doing the same thing over and over again and expecting different results.

Time to try something different. So, when Amendment 4 passes the homebuilders will litigate it to death (of course). The state legislature will act to nullify the effects of Amendment 4 in some fashion. But the fact is approval of Amendment 4 will force SOMETHING to happen. And can it really be anything worst than what we have now? Seriously?

[trigger]

"If Amendment 4 passes, wouldn't the special interests just spend lots of money trying to win votes."

And that is any different than what we have now, how precisely?

[tufsu1]

"If Amendment 4 passes, wouldn't the special interests just spend lots of money trying to win votes."

And that is any different than what we have now, how precisely?

because now there are boards and committees that are tasked with reviewing the information and representing the citizenry at large....not just the small percentage that would likely vote in these referendums.

[JeffreyS]

The flaw in having everyone directly vote on everything is easy to see I can't believe measures like this even make it to the ballot. They do however and will likely pass and be a decade cleaning up the mess. I can't wait to see how many people come to vote on the minimum set back for a new dry cleaner in Murry Hill. Do we only approve projects when there is a major election going on or pay for constant voting to keep the wheels of commerce turning.  One thing I am sure of the NIMBYs will always vote.

[Dog Walker]

The flaw in having everyone directly vote on everything is easy to see I can't believe measures like this even make it to the ballot. They do however and will likely pass and be a decade cleaning up the mess. I can't wait to see how many people come to vote on the minimum set back for a new dry cleaner in Murry Hill. Do we only approve projects when there is a major election going on or pay for constant voting to keep the wheels of commerce turning.  One thing I am sure of the NIMBYs will always vote.

Jeffrey,  You are building a strawman with that example.  Amendment 4 has nothing to do with ZONING or building codes or setbacks.  Comprehensive plans have to do with land use patterns over huge areas.

So, yeah, if for some reason you wanted to put a dry cleaning store in the middle of a cow pasture in the middle of designated agricultural land, then you would have to get a Comp Plan change.  Or if you wanted to put a pig farm in an area designated for residential use, then you would have to get a Comp Plan change.

Historically, most Comp Plan changes have involved getting cheap agricultural designated land, re-purposed for residential development rather than building on the more expensive lands closer to the city and existing infrastructure.  Comp Plans were intended to restrict just this kind of sprawling development.

Please, let's get our City Council people out of the pockets of the development and construction interests.  Make them put there proposals out in public view rather than slipping them into the Green room.  OK?

[ChriswUfGator]

The flaw in having everyone directly vote on everything is easy to see I can't believe measures like this even make it to the ballot. They do however and will likely pass and be a decade cleaning up the mess. I can't wait to see how many people come to vote on the minimum set back for a new dry cleaner in Murry Hill. Do we only approve projects when there is a major election going on or pay for constant voting to keep the wheels of commerce turning.  One thing I am sure of the NIMBYs will always vote.

Jeffrey,  You are building a strawman with that example.  Amendment 4 has nothing to do with ZONING or building codes or setbacks.  Comprehensive plans have to do with land use patterns over huge areas.

So, yeah, if for some reason you wanted to put a dry cleaning store in the middle of a cow pasture in the middle of designated agricultural land, then you would have to get a Comp Plan change.  Or if you wanted to put a pig farm in an area designated for residential use, then you would have to get a Comp Plan change.

Historically, most Comp Plan changes have involved getting cheap agricultural designated land, re-purposed for residential development rather than building on the more expensive lands closer to the city and existing infrastructure.  Comp Plans were intended to restrict just this kind of sprawling development.

Please, let's get our City Council people out of the pockets of the development and construction interests.  Make them put there proposals out in public view rather than slipping them into the Green room.  OK?

+1

[simms3]

The opposition to Amendment 4 is using your money to stop you from having a voice in the future of Florida’s growth and development. Do you want to talk about the audacity of audacity?

At the beginning of this year, the Democratic Congress passed and President Obama signed into law an extension of unemployment benefits compensation. So far, so good: right? But the special interests in Washington DC successfully lobbied to insert something more into the bill: a tax loophole for the homebuilding industry. The homebuilders were able to claim losses over the last 2 years against federal taxes on their corporate profits during the previous 5 years. Basically, this means the federal government is refunding corporate taxes on national homebuilders’ profits during the boom years to compensate for their losses during the Great Recession.

Actually that is a standard carry back (like a carry forward).  It's perfectly legal under certain circumstances and there are limits as defined by FASB.  Many companies use this "loophole" as you say, even small businesses that know what they're doing.  You can carry forward earnings, too, for up to 7 years under certain circumstances so that you aren't taxed like crazy.  It's really much more complicated than I'm making it seem right now, but take whatever info you were reading with a grain of salt, that is nothing new and commonplace business tactics.  If you took extraordinary losses (like many companies did, homebuilders even worse than most) or extraordinary gains in any particular year you, too, would want to be able to even out the bumps so you aren't penalized or put out of business for macroeconomic circumstances beyond your immediate control.

Even we taxpayers on an individual basis can carryback our net operating losses 3,4 or 5 years (used to be 2 or 3 years, but I hate accounting and can't remember).  It's not a bailout.

The second part of your paragraph I agree with.  While I think there should be stricter limits to unemployment in most circumstances (this recession may be an exception), I don't think unemployment should be taxed as income while carry backs and carry forwards take place.

Also, I am firmly opposed to Amendment 4 and I am a student, working for neither the homebuilders or Washington lobbyists or anyone afiliated with either side.  I think we have the set up correctly and it's just as much the people's fault for electing certain people to certain positions as anyone else's.  Everyone cuts deals, not just the "evil" developers, it's a part of human life.  Some cut more deals than others, and unfortunately the voting public fails to pay attention to these kind of details and elect these people into office (who then in turn appoint people like them to other positions).

Also, most people nowadays prefer to live in the burbs in a sprawl development, etc (just for the schools right?).  Well these same people are hypocrites.  They want their faux stucco or brick 5-4-door home in the cul-de-sac near the suburban public schools, etc, and then get mad when other people want the same and their suburban sprawly area becomes congested.  These same people are pushing for Amendment 4 because they think the sprawl has to end, and they are correct, except they are also hypocrites.  They elect the leaders into office who allow the sprawl, they themselves live in sprawl, and now they want a say so they can stop other sprawl from happening.  Yea, sure.

Our system could work beautifully if we just elected better people who knew more about city planning and transportation planning/land use planning.  Instead, we don't.  It's that simple.