Some of the stories and interviews are in and of themselves shocking, but the general theme probably doesn’t feel like anything new or surprising: money powers political considerations, political considerations determine who has money.  For me, the compelling parts were the simple narratives and examples of just how much time and energy the people who ostensibly represent U.S. citizens spend thinking about and raising money, and what distasteful things they have to do as a part of that.

I also appreciated the reminder that for the most part, this system is able to continue because voters can’t be bothered to hold their representatives accountable to a higher standard.  However hard we might try to pretend lawmakers are trying to do the right thing or that our systems of government are only incrementally worsening, it really is a wonder that the country isn’t perpetually in flames.  (See how cheery I am after listening, don’t you want to join me?)

Thanks to Andrea Seabrook (Earlham College class of 1996) and Alex Blumberg for some really absorbing, eye-opening, depressing stuff.  We ignore it at our own peril.

If you’ve followed this blog you know that I am a consistent advocate for transparency in government leadership, and the topic was raised a number of times during last year’s election season.  I appreciate the paper bringing focus to this issue, and look forward to the conversations that result.

Here’s the full text of my editorial submitted for today’s edition:

Most people don’t like to have their judgment questioned or their mis-steps revealed, less so in front of other people. It’s human nature to want to be well regarded and to avoid embarrassment. So we can empathize with elected officials and other community leaders who don’t like the “burning sensation” that can come when their decisions or deliberations are exposed to the bright light of the public view.

But does the potential sting of that exposure mean we should shy away from the pursuit of transparency in those matters? Or do the potential dangers of power abused for personal gain, fraudulent use of taxpayer resources or other wrongs trump the temporary personal discomfort of those who have asked to be representatives of each of us in matters that affect all of us?

Maybe we can’t imagine a modern “Watergate” happening at the local or state level, and we know that most public servants are trying to do the right thing most of the time. But we also know that regardless of political party affiliation or the best of intentions, human beings are complex and historically subject to the temptations of influence and authority. We also know that in difficult economic times, there is no room for even the trivial mis-use of tax dollars.

So let our community leaders strive not just to meet the basic legal requirements of disclosure and transparency, but to proactively offer the documents, reports, data and on-the-record conversations that will make members of the public their collaborators in government efficiency, instead of their adversaries in a struggle for power and information. Let those who have volunteered to be stewards of our hard-earned dollars be completely accountable to our questions, our concerns, our challenges to their judgment…even when it’s uncomfortable, and even when it might lead to embarrassment. And when an elected official struggles with the burdens of disclosure or the challenges of transparency, let the rest of us affirm with our words and our votes that we will always reward those who favor sunshine over secrecy.

You might open a newspaper soon to see an ad like the one at right which appeared in my local paper a few days ago.  It encourages you to “Stand With Main Street” to protest “special treatment” of Amazon.com that allows them to forgo the collection of sales tax on online purchases, resulting in an unfair advantage over “every Hoosier brick and mortar retailer.”  I don’t usually see full-page ads related to Internet commerce in a market this size, so I thought I’d investigate the issues at stake.

The question of taxing e-commerce transactions is a bit complicated to be sure.  If you have a strong and concisely-worded position on it, you’re probably running for national political office, or a Libertarian, or both.

On one hand we can see the clear financial and psychological advantage that an online retailer has with customers who are weighing a purchase from a local store that charges tax against an online store that doesn’t, and maybe offers the item at a slightly lower price too. At the same time, that online retailer may be benefitting from the infrastructure that sales taxes others are collecting help pay for (setting up warehouses, trucking goods around state roads, etc.).

On the other hand, we know that laws around state sales taxation were created prior to the age of the Internet and that the models of online business and affiliate sales have completely changed the way the world does business, and current attempts to rewrite them in order to create short-term bandaids on ailing state economies are probably not in the best interest of business innovation, especially when they favor large retailers (online and off) and send small businesses and people who make a living as Amazon.com or eBay affiliates into a quagmire of tax collection bureaucracy.

(In my company’s work building online stores for our clients, we’ve experienced this firsthand; helping a small business calculate the city, county and state tax rates that affect what they’re selling customers and then keeping that information current can take up a lot of their time.  Services like taxcloud.net are helping make it easier.)

Some states are moving toward “origin-based sourcing” for taxation, where the tax rate is based on the county/state where the vendor selling the goods is located.  This keeps the taxation process simple (the retailer has to know their local rate and doesn’t have to worry about where the buyer lives or what the rates are there) and encourages governments to keep their tax rates competitive for businesses that might locate there.

Indiana is still a “destination” state, where the tax rate is based on where the goods are being sent.  Indiana Congressman Mike Pence, not generally known for advocating taxation, is supporting the move to make Amazon.com and others pay sales tax so that the government isn’t “picking winners and losers.”  But as others point out, the playing field of retail taxation is already off-kilter in favor of big businesses, which get tax credits, exclusions and special pricing that make it very hard for mom-and-pop shops to compete with them.

Back and forth, back and forth.

I don’t have a strong feeling about what direction we should go (hence disqualifying me from running for office), other than that all of this highlights how complex and outdated the modern system of taxation is, for online commerce and pretty much everything else.  When small businesses or people selling used exercise equipment from their basements have to hire tax law professionals just to sell online and be fully compliant, we’re doing something wrong.  I’m not sure the “Stand With Main Street” ad advances the conversation any, but it hopefully encourages more awareness about what’s at stake.

1. Build stuff people want, offer products and services people want to buy
2. Attract and retain quality talent
3. Raise capital to get fledgling ideas to the point of sustainability, create a density of “investors”
4. Create a world class culture that encourages people to stick around even when times get tough

These may not be comprehensive factors, but they could be useful metrics to view your city with.

If I had to rate my own city of Richmond, Indiana, I’d say we have plenty of room to grow in each area:

1. We have a lot of great infrastructure and a variety of desirable products/services but we’re pretty scattered on how to sell them in the global marketplace
2. We think we know a lot about what kind of talent we’re looking for, but there’s often a disconnect between that knowledge and our level of investment in actual attraction efforts
3. We don’t always make efficient use of the limited capital that’s available to us, but we have a lot of generous and heavily invested people living here
4. We’re often short-sighted when it comes to building an attractive culture, but there are pockets of people who see the big picture and are working for change

How does your city do when you look at it as a start-up company?

Perhaps the most striking point for me in Bischke’s piece is the question of leadership.  He says we need more than just strong or experienced leaders, we need people who can think like entrepreneurs:

As we roll into an election year, many cities are in a state of crisis. Budgets are a mess and job growth has been minimal for a good swath of the country. Cities in need don’t just need strong leadership, they require transformational leadership. It’s no easy feat but it’s likely that the more that mayors view their cities through an entrepreneurial lens, the better they will be able to adapt to a rapidly-changing world.

Almost any city across the country could adopt the slogan “Adapt or Die” and it wouldn’t be an understatement of the predicament they’re in and the approach needed to get out of it.  Many traditional businesses are in the same boat.  The businesses/cities that will not only just survive but flourish are the ones willing to use non-traditional methods to make ground-shaking changes in the way they operate.

Whether it is the 2009 Christmas Eve Senate passage of a huge, and hugely controversial, health care reform measure by Democrats narrowly controlling the U.S. Senate or, closer to home, Republicans and Democrats waiting until after a general election to craft their respective political handiwork, this is the stuff that alienates and isolates the public from those who have sworn to represent their best interests.

Through any such conversation we must of course be sensitive to Mr. Welch’s experience along the way.  I certainly wish him the best in recovering his health, and appreciate the years of time and service he has given to the Richmond community and the residents of District 5.  It’s not easy to be a political figure in the public spotlight even when you’re healthy, and so we know that it must have been particularly hard on Bing and his family to have health concerns and questions about his ability to serve in that role all mixed in together.

But when someone is elected to represent the interests of voters, their own story is not the only story that needs considering.  Calls for privacy and sensitivity are legitimate to an extent, but I think elected officials at any level should be held to a higher standard than private citizens when life events affect their ability to do their job.  When a health issue actually prevents someone from doing the job at all, or from making the case to voters that they should be re-elected, that’s when the interests of their constituents are most vulnerable, and the most in need of the protection that comes from extreme candor and accountability.

My perspective on this is hardly objective – I campaigned for most of a year for a seat on Council and now someone else will be selected after campaigning for part of an evening.  But one of the mantras repeated by candidates in all parties during the recent campaign was that in order to move Richmond forward, we have to be willing to have hard conversations about sensitive topics without taking it personally.   Talking about what’s best for the voters of District 5 and for City Council is one of those conversations, and those who would suggest that we shouldn’t go there because it might hurt the feelings of the Welch family, or who say that a thirst for information should be satisfied by just trusting that the right thing was done, are missing the point.

Make no mistake, no one is suggesting that any laws were broken or that the local Republican party isn’t well within its rights to caucus and appoint a new District 5 representative until the next election.  You could make an argument about what might be more ethical or “fair” to voters, but in this case and many others, “fair” doesn’t necessarily line up with what’s “legal” according to Indiana law or what’s strategic for a political party.  Like it or not, we have to respect that until the law is changed.

But the point the Pal-Item editorial makes (and that I agree with) is that if we want members of our community to feel like their voices matter in the course of electing and working with government leadership, then we must have a higher standard of transparency and communication on the part of those leaders.  If the motivating vision for would-be leaders in a political context is “win a victory at any cost” instead of “do the right thing for the community,” then we’re not going to make it very far as a city.

We don’t know what really happened behind the scenes with Mr. Welch’s health and subsequent decisions by his party about how to handle his seat on Council; their choice was to share as little information as possible, and only when repeatedly asked to do so.  In the absence of the information that should have been forthcoming, we’re left with the appearance that Bing Welch’s health issues were exploited for political gain, and there’s no forward motion for Richmond that comes from that.

Most of the media coverage this week seems to be glossing over the significant detail that the U.S. investment in Iraq, in terms of personnel and dollars, will continue.  Instead of uniformed troops from the military, we’ll have 15,000-16,000 people there in the form of other government employees and private contractors.  We’ll be spending almost $4 billion there in 2012.  These numbers are lower than what we’ve been investing, but they are not small numbers, and they still represent a significant commitment on the part of U.S. taxpayers, let alone on the part of the soldiers still on the ground.  We can’t afford to start thinking or talking as though our involvement in Iraq is through.

It also seems appropriate that when we talk about the human life lost in the course of the U.S. presence in Iraq, we avoid artificial exclusions based on nationality.  The story and cost of war is incomplete if you only recognize the count of killed and wounded on one “side” of any conflict.  As we consider this particular milestone, let us reflect on the totality of what has been sacrificed, taken or destroyed along the way.

Here were some of the phrases state administrators and legislators are using to describe the error:

• “eye-catching”
• “unique”
• we maybe need a “fresh set of eyes”
• “bank error in your favor”
• “We drew the Community Chest card”
• “glitch”
• “It did seem…those payments were light”
• “Christmas came early”
• “We know what happened and we’re correcting it.”

Am I the only one who’s a little bit disturbed at this trivialization of hundreds of millions of taxpayer dollars being hidden away for years, even if through omission or oversight?

Some of those phrases are from Governor Mitch Daniels, who you’ll remember was the Director of the U.S. Office of Management and Budget under George W. Bush before Daniels became Governor of Indiana.  One can’t help but wonder if similar “glitches” were incorporated into tracking the federal budget.

But allow me to suggest some alternate phrasing of public statements for use by the government officials who are talking to the press about this thing:

• We really screwed up on a major scale!  $320 million is a lot of money.
• This is so embarrassing!  We are really upset that this happened.
• There is no excuse for this kind of incompetence.
• Taxpayers trust us to closely track and monitor the collection and spending of their hard-earned tax dollars, and we won’t rest until we’re sure that each nickel is accounted for.
• Our financial software test coverage is clearly lacking critical functional and unit tests, and we will immediately revisit the software engineering methodology used to produce the code that led to this error.
• We know that this is not “free” or “gift” money that we can think of as some pleasantly surprising addition to our budget.  We might have made different decisions about budget cuts and spending over the last few years if we’d had proper track of these funds, and that’s a tragic mistake.

And the list goes on.  The bottom line is that making light of a $320 million error only helps reinforce the public perception of incompetence and imprudence that would have led to that kind of error in the first place.

If they’ve any hope of retaining (regaining?) the trust of taxpayers, state leaders need to speak more sympathetically about the seriousness of this issue, and the equally serious actions they’re going to take in response.

But we can’t let the shared pastime of grumbling about the machinations of politics and the wearing complexity of government trick us into forgetting that, right now, for the future of our city, this is the election that matters.

Why?

As I campaigned during the primary season and met with concerned voters, business owners and community leaders, and as I’ve observed the economic, social and cultural forces at work in our area, I’ve come to see that the next four years are going to be a critical time in the history of Richmond, Indiana:

• We’re having basic conversations now about “what are the essential functions of a city government?” that will affect policy, legislation and quality of life for decades to come.  The decisions we make now about what government should do for us, and what it shouldn’t do, will determine the path that Richmond takes when it comes to economic development, upkeep of infrastructure, and caring for the needs of all citizens who live and work here.  And when we decide now that something is or isn’t a part of what we want the City of Richmond to do for us, it will be much more difficult to change that decision later.
• Richmond faces unprecedented challenges in unprecedented economic times.  Things we’ve taken for granted in the past about the way job creation, governance, energy costs and community building (and how you fund those) are changing right under our feet, and the way we react to those changes could make all the difference between barely surviving and thriving as a city.
• Citizens are looking for new models of leadership and collaboration at all levels of government.   The frustration with national, state and sometimes even local leaders is palpable – voters are tired of broken promises, wasteful spending, political bickering and unwieldy government agencies that, in the end, don’t work for the people.  The people we elect to serve in City government now will determine whether Richmond sets its own course and actually works to serve the people who live here, or whether we slip back into business as usual.

Of course, these factors are just the beginning.  Every time the Mayor’s office decides how to spend the time and resources of City employees, every time the City Council meets to discuss a proposed tax abatement or new ordinance, or to set the budget for the coming year, we will be making decisions that ripple throughout the community and into its future.  Richmond is not a fragile town, but it is a place that needs those ripples to be of energy, creativity, and new perspective, not “wait and see” or “that’s not politically expedient” or “here’s how we’ve always done it, there is no alternative.”

I’m running for City Council because I think I can be a force for good at a critical juncture in the history of a community I love and call home.

I’m running because I can see no greater calling at this point in my life than to help make Richmond a stronger, more vibrant place to live.

I’m running as one way to celebrate the fact that, at least for now, the voters of Richmond still have the power to set the course for our future, and put into office officials who will honor the hope and trust placed in them.

But more importantly, the conversation about raising the debt ceiling is the wrong conversation to be having.

I’d like to present those observations, but instead of referring to “the U.S. Government” every time, I’ll just refer to this guy “Sam.”

Please tell me if I’m wrong or over-simplifying:

• Sam consistently spends more money than he makes. This means that Sam will always be short on cash, and that his lifestyle is by definition unsustainable.
• In order to keep living the life he wants to live, Sam makes up for being short on cash by borrowing money from his neighbors.  Sam has found a lot of different neighbors who are willing to loan him money, and he’s always reassuring them that he’s good for it.
• At some point, even Sam recognized that he couldn’t just borrow money without limits, so he set up a maximum amount of money he wanted to owe to his neighbors at any given time.  He called it his “debt ceiling.”
• But over time, as Sam got even more used to his lifestyle and didn’t bother to fix his inherently unsustainable cash flow, he realized he’d set the debt ceiling too low. So he raised it!  After all, it’s just his own self-imposed limit, so he can tweak it a little here and there and then lower it again later.  It’s similar to Sam’s friend who has a problem with alcohol abuse but always thinks he can handle one more drink when out at the bars.  Sam has raised his debt ceiling 10 times already.
• Sam’s friends (some of them experts in financial management) have tried to convince him to stop spending more than he makes so that he doesn’t have to keep borrowing money and raising his debt ceiling.  But this way of life is so enjoyable for Sam (at least when he’s not worrying about the neighbors he owes), he’s forgotten any other way to live.  Sometimes Sam gets angry when his friends and neighbors won’t leave him alone about his spending habits.  A few times he’s used physical violence (or the threat of it) to get some of his lending neighbors off his back for a bit.  Some people say they’ve seen Sam outright stealing from others to pay his bills.

If Sam were a person, we’d know that he is on his way to some pretty serious lows in life.

Bankruptcy, losing family, friends and neighbors, health issues, homelessness and possibly violence or early death.  Maybe someone would stage an intervention, maybe he’d get help after a close call, but maybe not.

But we know that Sam’s financial habits don’t work, aren’t sustainable, and aren’t to be emulated.  Sometimes, we know that it’s only by hitting bottom and facing these hard realities head on that someone with a problem like Sam’s can actually begin to rehabilitate himself.

It seems unfortunate, then, are we willing to allow our representatives in Congress to distract us with a conversation about raising the debt ceiling AGAIN because “there is no alternative,” knowing full well that it just enables the government to defer confrontation of its unsustainable way of operating.  All of the back and forth about who wants to cut what spending, who will get taxed how much, etc. is political theater, hand-waving and misdirection so that we don’t pay too much attention to the underlying problems.

Would a good and helpful friend of Sam’s indulge him in a long conversation about whether to raise his limit on borrowing today or next week, or whether he should continue his unsustainable spending on this restaurant or that piece of clothing?  When Sam says, “C’mon dude, get off my back, I’m just trying to have some fun here,” would we lay off?  No, a good and helpful friend would shake him by the shoulders and say (or scream) “Sam, you’ve got to find a new way to exist that doesn’t require you to perpetually borrow money from your neighbors.“

Unfortunately, as U.S. taxpayers, we’re all affected by and responsible for Sam’s actions.  He’s family, and the harm he does to himself is harm he does to us.  Are we going to let Sam go on this way, or are we going to intervene and make Sam try something different?

(Thanks to Planet Money for this explanation of the debt ceiling that inspired this post.)

The Center City Development Corporation has asked that $300,000 of the $5 million in funds available through Richmond’s Certified Technology Park account be used to support renewed operations of the organization and its Uptown Innovation Center facility.  The Palladium-Item covered the request today in a news article and related editorial, the latter of which painted the request as just another ask for taxpayer funded handouts to support private business efforts and essentially encourages a “no” vote by the Redevelopment Commission, the entity that approves the funding request.

It’s important to note here that the $5 million in the CTP account has been sitting around for close to eight years, and that the City is coming up on its third renewal of its CTP designation without any significant use of those funds.  Those I’ve talked to about it have expressed some concern that if the State of Indiana, which administers the CTP program, sees this under-usage of those funds, there could be an understandable attempt to move them back under state control.  So an argument can be made for spending at least some of the funds sooner rather than later to demonstrate that we’re a town with a plan.

I should also note that I’ve been a part of some conversations about how to use these funds, and I have even put my own proposals on the table for what might make a good partial use of them (that’s a blog post for another time).  I started and have managed a high-tech business in Richmond since 1997, and we’ve created a number of technology jobs here, so I definitely have something to say about what might further encourage tech businesses to locate/grow in this city.  I’ve shared some of those thoughts in this space, e.g. Growing a Geek Culture in Richmond.

Is allocating $300K to Center City the best and highest use of the funds?

Maybe, maybe not.  I haven’t seen the details of the request.  I know that Beth Fields and Jason Whitney, co-Executive Directors of the organization, and board chair Rhett Baumgartner are three people who are deeply, personally invested in the health and well-being of this community, and that they wouldn’t attach their names to this request if they didn’t believe it to be a viable, impactful way to use the money.

The money can’t be used for just anything, as the CTP program requires that it go to support “the attraction and growth of high-technology business in Indiana and promote technology transfer opportunities.”   Questions in the paper about the necessity of proposed fund usage will surely be answered by the detailed organizational budget already submitted to the Redevelopment Commission.

As already noted, in the absence of other formal requests to allocate the funds to a given project, this is a relatively small slice of that pie that could be used to move something forward with long-term implications.  We say as a community that we want new and exciting opportunities to be taken on that spark growth and encourage further investment in the community.  We have to embrace the fact that these efforts require non-trivial investment and risk to get going, and the CTP designation was created for just that purpose – investing in new and exciting things that will lead to job creation and community building.

As a small business owner eagerly trying to find qualified technology workers to add to our staff, and as someone who has invested heavily in the success of the downtown business district, it’s encouraging to think of a renewed, well-funded Center City organization focused on exactly those things.  There’s a pool of money that’s been made available for just this purpose and that might go away if unused, and now someone is saying they’re willing to put it to good use.

As a community, we (as represented by the Redevelopment Commission) should ask good questions of the proposal and probe the details, but we should be very careful about saying “no” to people who are investing in moving the community forward.

Updated at 2:53 PM to include link to Pal-Item editorial, now available online.