Happy Taxiversary

With June 1 rolling around, we all need to be reminded about the Hamilton County stadium tax. On June 1, 1996, a "temporary sales tax increase" was enacted to fund the construction of the stadiums for the Reds and Bengals. As most promises and tax ans spend programs go, this one under delivered. And as most taxes and programs go, they never seem to go away (regardless of how poorly conceived and/or out of date the programs are). In stead of writing something new on the 11th anniversary of the stadium taxes, last years blog entry will be re-posted. After an entire year, almost everything is still relevant.

Happy Taxiversary!

June 1, is a very significant day in the Tri-State, yet, nobody will notice (unless they read this). This Thursday is the 10th anniversary of the ½% countywide stadium sales tax. On June 1, 1996, the county enacted a sales tax of ½% to build a brand new, state-of-the-art stadium for the Reds and Bengals. I remember hearing then Governor Voinovich talk about how important this would be for our economy. I remember hearing then Mayor Qualls talk about how, even though she was not a sports fan, this was necessary to revitalize the riverfront. I remember hearing promises about a lot of out of county tax dollars that would pour in. So, here we are, 10 years later, what has happened? Let’s take a look.

The riverfront (now we are calling it The Banks) is hardly revitalized. 10 years later, our politicians are still grandstanding that they will be the one to revitalize it. New politicians, same old promises, same old problems.

Despite the higher sales tax, the stadiums will be running a deficit. In 1997, the sales tax brought in an additional $52.8 million. With a 3% annual increase (as what was projected), that number should have grown to $66.85 million for 2005. Instead, sales receipts in the county have grown by 2.41% per year. That means that $64.06 million was raised in 2005 ($2.79 million short of where we should be!). In fact, if the sales receipts starts growing by 3% per year, by 2032 (when the sales tax is supposed to be retired), we will have a deficit of $80.6 million! If it grows by 2% per year, then we are looking at a deficit of $191.5 million![1]

Can you see another tax hike around the corner just to pay for the first tax?

The economy is struggling. If overall sales for Hamilton County have not increased, it shows that people do not have more money to spend. This shows that the stadiums nor the sales tax did not help jump start our economy. With Hamilton County’s population loss (since 2000, Hamilton County has lost 38,651 people, about 21 people per day are leaving)[2], the stadiums, or the stadium tax, certainly has not made this an area people want to live in.

Let’s remember what we were promised 10 years ago. “For a Major League Future”, we were going to have a vibrant Downtown. We were going to have a vibrant Riverfront. We were going to have a booming economy. We were told that we need this tax. Unfortunately, our politicians were wrong.

[1] Source, Hamilton County Commissioner’s Office
[2] Source, US Census

PRIVATE PROPERTY RIGHTS: UP IN SMOKE?

PRIVATE PROPERTY RIGHTS: UP IN SMOKE?
By Scott Ryan Nazzarine, Esq.*

“There is no fundamental right enshrined in the Constitution of the United States or in the Constitution of Ohio to smoke in public, and this court declines to fabricate such a right.” So said a Hamilton County Common Pleas Court in ruling on our challenge to Ohio’s Smoking Ban last week, and a phrase oft-quoted in the local media when discussing the case.

But with all due respect to the Court, the problem with this “holding” is that it simply misses the mark on so many different levels: legally, factually, and constitutionally.

The first major problem with this statement is that we NEVER argued that there is a constitutional right to smoke. This was a straw-man argument, set up to burn the instant it came into contact with a smoldering cigarette carelessly tossed upon it. In fact, we consciously and intentionally avoided ever raising such an argument because it is only too easy to reject–courts love to say that there is no constitutional right to do this or that specific act and thus dispose of an argument under a deferential standard before the claim ever has a fighting chance (of course, we libertarians know that the 9th & 10th amendments to the US Constitution mean that ours is a government of limited, enumerated powers and that the absence of a reference to a specific act in the Constitution does not mean that we don’t have that right, but, to the contrary, that the government has no power to regulate that act; however, the courts these days are not too fond of quoting the ninth or tenth amendments–but, alas, that is a subject for another article).

Our argument was not that the Smoking Ban (the so-called Smoke Free Workplace Act) violated any “right to smoke,” but rather that it violated the fundamental right to own, use, and control private property, one of the most basic tenets of our society and our government, and an “inalienable right” enshrined in the very first Section of the very first Article of the Ohio Constitution: “All men are, by nature, free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing, and protecting property, and seeking and obtaining happiness and safety.” As the Ohio Supreme Court stated just last year in its landmark eminent domain ruling of Norwood v. Horney, “[t]he rights related to property, i.e., to acquire, use, enjoy, and dispose of property,” are “among the most revered in our law and traditions.” In declaring that Ohio’s protection of private property rights are significantly more stringent that those under the federal constitution (as a first step before later holding that the State cannot take private property for private development only), the Ohio Supreme Court recognized that the right to control private property in Ohio is a natural right that is so fundamental it precedes the constitution, noting “indeed, property rights are integral aspects of our theory of democracy and notions of liberty,” and “[t]here can be no doubt that the bundle of venerable rights associated with property is strongly protected in the Ohio Constitution and must be trod upon lightly, no matter how great the weight of other forces.”

You see, under our current state and federal law, if a right or liberty interest is considered “fundamental,” then any governmental action which limits this right is unconstitutional unless it is shown to be necessary to promote a compelling governmental interest. In contrast, if a right is not considered fundamental, then, according to the current jurisprudence at least, the law must only bear a “substantial relationship” and must not be unreasonable or arbitrary, a standard that is so deferential to the legislature (or the voters) that essentially anything goes. Thus, our argument is that, because “Ohio has always considered the right of property to be a fundamental right” then a smoking ban which clearly impinges on that right by prohibiting smoking in any place “open to the public” or “with employees” must be analyzed under the strict scrutiny standard of review. And since, even if we are to concede for the sake of this argument that limiting secondhand smoke exposure is a compelling governmental interest (and to be clear, the science is inconclusive at best, but even conceding for the sake of argument that this is at least a legitimate interest), there are still clearly less restrictive ways to further that interest, and thus the law is unconstitutional on its face.

Indeed, the government has essentially admitted there are less burdensome ways to accomplish the goal of reducing secondhand smoke to non-consenting adults when it carved out an exemption for private clubs. That is, if adults can make the informed choice to enter a private club that allows smoking, then they can similarly make the choice to enter a private business that allows smoking, so long as there is fair warning that the establishment permits it. In other words, if there’s a sign on the door that says “smoking permitted inside” and an adult chooses to enter or chooses to work there, then they have consented to possible exposure to secondhand smoke, and any compelling interest the government ostensibly had claimed is thereby immediately snuffed out.

But, the way I see it, this is where libertarian-minded folk and many others (even many who are generally sympathetic to civil liberties) differ: libertarians understand that private property is just that: private; on the other hand, unfortunately a lot of other people somehow think they have a right to enter a private establishment or a right to work at a particular private business, and that somehow this private property has been converted to a “public” place because they are allowed to enter. If you accept this latter premise, then, yes, maybe it is logical that the government could have the rightful authority to restrict harmful secondary effects to persons who do not want to be exposed to them (although, again, there are still less-restrictive ways to accomplish this goal). But, until the day a non-consenting adult is forced to walk into a bar, a child is compelled by the government to eat at a particular restaurant, or a person is conscripted into working at a specific business, I refuse to accept the initial premise, that these are “public” places or that persons are entitled to enter. To the contrary, these are private establishments that choose (at least in some cases) to open their doors to the public. No one is forced to enter and no one is forced to work there, and thus no one can rightfully claim that their supposed “right” to breathe clean air supercedes the proprietor’s right to run his or her business behind closed doors as he or she sees best.

In concluding, the Court held that “[a] law may be thought ill-advised, paternalistic, and generally obnoxious, and still not be unconstitutional.” Well, at least we seem to agree on something: that this law is indeed ill-advised, paternalistic, and, well, wholly obnoxious. Unfortunately, this is where our opinions and our legal analysis separate: I cannot for the life of me see how a law can be all of these awful things and still be constitutional. At least not where it affects a fundamental right or substantially impairs our freedoms. Not in a society built upon private property and the rights inherent therein. Not in a country or state which is based on inalienable rights of life, liberty, and the pursuit of happiness. Not under a constitution where “[t]he enumeration of certain rights shall not be construed to deny or disparage others retained by the people.” Not under any government that I have consented to.

I think one sentence in the Court’s opinion sums it up best: “Absent some warrant in the law, this court is not permitted to set aside the will of the people of the State of Ohio as expressed in legislation duly enacted under the popular vote.” Property rights be damned! The people have spoken! The only problem with this statement, of course, is that liberties and constitutional rights are not subject to popular vote. It’s a real slippery slope from there to fascism, folks. Sorry to tell you, but this is not a democracy, it’s a constitutional republic. And the will of the majority does not get to trump the protections of the minority. That is why we have a Constitution.

Interestingly, I always hear people and the media say, “but it is the will of the people that smoking be prohibited in these places. It passed overwhelmingly.” In response, I always point out that the ban only passed by about 58% to 42%, which is hardly overwhelming. And considering that, according to the state’s own statistics, only about 20% of Ohioans smoke, that means at least 20% plus of non-smokers voted against the ban (and probably significantly higher because a lot of smokers voted for the ban since restricting other people’s rights is apparently alright if it makes it easier for them to quit). Therefore, since we can safely assume that most of these non-smokers didn’t vote against the ban because they somehow like being around secondhand smoke, then it is rather clear that at least some people understood that this issue is not about smoking; its about people being able to make their own choices, about private property rights and about freedom and liberty. Well, at least somebody understands that. Perhaps there still is hope.


*Scott Ryan Nazzarine is a member of the Executive Committee for the Libertarian Party of Ohio and is also one of the attorneys representing the Buckeye Liquor Permit Holders Association in their challenge to Ohio’s Smoking Ban. He is, coincidentally, a smoker, but when he quits he will still fight for the right of private businesses to decide for themselves whether to allow smoking in their establishments without paternalism and heavy-handed coercion from the government.

On This Date, 1977

On this day…, May 9, 1977, President Jimmy Carter signed a bill that was to save Social Security. In 1972, a bill was passed that allowed Social Security benefits to increase at twice the annual rate of inflation. This did not happen because of political promises, but it happened as a result of a mathematical error. The bill that President Carter signed into law would have reduced the benefit increases to match the rate of inflation.

What is most notable is President Carter’s quote:

"Now this legislation will guarantee that from 1980 to the year 2030, the social
Security funds will be sound”[1]

Today, even the Social Security Administration states that the Social Security fund will not be able to meet all of its obligations by 2018 (only 11 years away).

Just remember that quote the next time a politician promises to ‘save’ social security.


[1] Sylvester J. Schieber and John. B. Shoven, The Real Deal: the History and Future of Social Security. (New Haven and London: Yale University Press, 1999), p. 182

June 1 is Around the Corner

One month from today will be the 11th anniversary of the Hamilton County stadium tax. This is the tax that was used to fund the building of the two stadiums on the river. As usual, our politicians over promised and under delivered. It has not revitalized Downtown, sales for the county are still flat (whereas neighboring counties are growing), and the Riverfront is still pretty useless.

Over the past two years, I have asked the question to people involved with local government, and people who were around Cincinnati in 1970 if there was a tax hike to help pay for the construction of the old Riverfront Stadium/Cinergy Field. It is shocking to see that nobody knows. If there was a tax hike to pay for the stadium construction, should there have been a tax cut after the debt was paid off in 1996? Or after the stadium was destroyed in 2002? Nobody seems to remember.

On June 1, 1996, Hamilton County imposed a 0.5% sales tax hike to build those stadiums. We were originally told the debt would be retired in 30 years. As of last year, it looks like it will be retired in 32 years, if the local economy takes off. Let's not forget this tax, and let's not let it be permanent.