Coyote Blog

Most of the campgrounds and recreational facilities our company runs are seasonal, meaning that they are only open from late-Spring to early-Fall.  Many are at high altitude, and are under 10+ feet of snow this time of year, so that they couldn't be kept open even if there was any customer demand.

The problem with this business model is that it tends to saddle us with a huge unemployment tax bill.  For those that don't know how unemployment taxes work -- and I certainly didn't before I got into this -- each time someone files for unemployment, the business is sent a notification.  If the person was fired for cause, or quit when work was available, and the business can prove it to the state, then the person is either denied unemployment or your business is at least not hit with the cost. 

In any other case, the person will get unemployment, and your business "experience" account is hit for your proportional share of that person's payments -- if you provided them with 100% of their employment the last couple of years then you get 100% of the cost.  Each year your tax rate (a percent of wages) is reset based on your experience account - so more unemployment claims by your ex-employees drives higher tax rates.

Even before recent problems I will describe in a moment, I have always felt that unemployment tax systems unfairly punish seasonal businesses.  Unlike at another company where a person might think they are getting a permanent job, then get laid off, my employees join in March and accept the job knowing that the job ends in September.

Well, I could live with that problem- we get hit with a month or two of unemployment until folks find another job.  Unfortunately, we now have a much worse problem, particularly in California (of course). 

Many of the people we hire are full-time RVers, meaning that they no longer have a permanent home, but roam about the country all year in their RV (I wrote about this trend here).  They work for us in the summer, and then many of them vacation all winter in places like Arizona and Mexico.  Unfortunately, many of these folks, particularly Californians, are filing for unemployment all winter while they play.

Now state rules, including those in California, require that folks applying for unemployment be looking for work, and so certify on a regular basis to the state.  However, a number of our folks are, I hate to say, lying about this.  I know of at least one pair who are on California unemployment and are not even in the country right now.  As a result, in California in 2005, I will be paying nearly 7% of wages in unemployment taxes, and the state of California will be paying in additional money from other sources, to help fund these people's winter vacations.

This really, really is irritating me, and I don't know what to do about it.  I have called the state of California on several occasions, but as long as the employee says they are looking for work, the state can't, or won't, do anything about it.  Some really annoying person at the state unemployment office told me that it was my fault, that my business should learn to plan better and this is the cost I pay for messing with people's lives by laying them off. 

Unfortunately, this "the business is evil, the employee is always right" attitude permeates nearly every state labor-related agency I have ever dealt with.  About a year ago I fired an employee for chasing a customer around with a baseball bat -- I even had a letter from the customer testifying to the whole sorry story -- and the state employment department refused to certify that the employee was fired for cause and our experience account got hit with all of the unemployment payments for this individual.

Hope everyone out there has a fantastic Christmas, Hanukkah, Ramadan, Winter Solstice, New Year, etc. (did I get everyone?)  We try to do something different each year for our holiday card.  Here is this year's.

UPDATE

I realized from fellow Arizona blog Speed of Thought, in their link to my post (cool, am I a moonbat?) that I left out Kwanzaa.  Oops, I hope there are not protesters outside my door.  Next week I plan a post on Kwanzaa -- I have zero problem with people making up a new reasons to celebrate, since life is worth celebrating.  However, I will look at the 7 values celebrated by Kwanzaa and consider whether these 7 values are really helping African-Americans (hint:  think socialism).

By the way, Speed of Thought has a very moving image here.

Hats off to ex-Arizona Cardinals cheerleeder and Phoenix resident Sarah Coggin for being part of the work to support our troops by visiting them overseas.  And here is more on other cheerleader visits here at the NFL Cheerleader Blog (as I have said in the past, if I could get paid to write that blog, my life would be set).  And shame on you cynics who think that I posted this just to have an excuse to get a cheerleader picture on the front page.  I actually did it to get two cheerleader pictures up:

I have written a number of times about how I hate public funding of sports stadiums for billionaires.  But, via the Arizona Republic, this is perhaps worse:

Mired in debt, the Insight Bowl is considering leaving downtown Phoenix's Bank One Ballpark unless the postseason college football game receives a public subsidy.

Great - using tax money to fund random college bowl games.  And where does the money go - most of the money does to the participant teams and their conferences which this year are Notre Dame and Oregon State.  Why does Arizona need to subsidize the State of Oregon's athletic programs.  And Notre Dame?  They have one of the largest endowments in the country.  Neither of these teams have any connection to Phoenix or Arizona.

OK, I am being purposefully naive.  The money may go directly to the teams, but the purpose of the subsidy is to get those teams' fans to come to Arizona on the week between Christmas and New Years and buy hotel rooms.  In fact, it is an indirect subsidy of the lodging industry.

Why does the lodging industry have so much power in Phoenix?  People come here anyway, because it is warm - our climate is the best advertising.  And during the week between Christmas and New Years all the hotels are probably full anyway - certainly their rates are the highest of the year, as I have found when family have come to town that week.  And don't even get me started on tax money for this.

If the lodging industry values this stuff, let them pay for it via one of their trade groups.  The city of Phoenix does not advertise my business.  In fact, it does not advertise most of the businesses in town.  Why is lodging the exception?

Many people have seen the Steve McQueen movie "the Great Escape", about a group of 60 or so prisoners who cleverly dug a tunnel out of a German POW camp and escaped in various directions across Europe, many of whom where eventually recaptured.

I don't know if such an event occurred in Europe, but an almost identical real-life POW escape (tunnel and all) occurred right here in Phoenix, Arizona almost exactly 60 years ago.

Like many isolated western towns in WWII, Phoenix played host to a number of German POW's, in our case about 1700 in Papago Park.  Phoenix, and in particular Papago Park, with its arid climate and red rocks, must have been quite a culture shock to the Germans.

Anyway, I won't tell the whole story, but it is fascinating and you can read it all here.  A short excerpt:

The German prisoners asked their guards for permission to create a volleyball courtyard. Innocently obliging, the guards provided them with digging tools. From that point on, two men were digging at all times during night hours. A cart was rigged up to travel along tracks to take the dirt out. The men stuffed the dirt in their pants pockets which had holes in the bottoms, and they shuffled the dirt out along the ground as they walked around. In addition, they flushed a huge amount of dirt down the toilets. They labeled their escape route Der Faustball Tunnel (The Volleyball Tunnel).

They dug a 178 foot tunnel with a diameter of 3 feet. The tunnel went 8 to 14 feet beneath the surface, under the two prison camp fences, a drainage ditch and a road. The exit was near a power pole in a clump of brush about 15 feet from the Cross Cut Canal. To disguise their plans, the men built a square box, filled it with dirt and planted native weeds in it for the lid to cover the exit. When the lid was on the tunnel exit, the area looked like undisturbed desert.

There is some dispute about how many people actually escaped -- official records say 25.  Others argue that as many as 60 escaped, but since only 25 were recaptured, 25 was used as the official number to cover up the fact that German POW's might be roaming about Arizona.

The prisoners who led this escape were clearly daring and inventive, but unfortunately in Arizona lore they are better known for their one mistake.  Coming from wet Northern European climes, the prisoners assumed that the "rivers" marked on their map would actually have flowing water in them.  Their map showed what looked like the very substantial Salt River flowing down to the Colorado River and eventual escape in Mexico.  Unfortunately, the Salt River most of the year (at least in the Phoenix area) is pretty much a really wide flat body of dirt.  The German expressions as they carried their stolen canoes up to its banks must have been priceless.

It never occurred to the Germans that in dry Arizona a blue line marked "river" on a map might be filled with water only occasionally. The three men with the canoe were disappointed to find the Salt River bed merely a mud bog from recent rains. Not to be discouraged, they carried their canoe pieces twenty miles to the confluence with the Gila river, only to find a series of large puddles. They sat on the river bank, put their heads in their hands and cried out their frustration.

I know how they feel every summer when we go to Lake Powell and find the water lower than the previous year.  Anyway, we shouldn't just make light of the escapees.  Apparently the prison guards made Sargent Schultz look like Sherlock Holmes:

Although the men left in the wee hours of Christmas Eve, the camp officials were blissfully unaware of anything amiss until the escapees began to show up that evening. The first to return was an enlisted man, Herbert Fuchs, who decided he had been cold, wet and hungry long enough by Christmas Eve evening. Thinking about his dry, warm bed and hot meal that the men in the prison camp were enjoying, he decided his attempt at freedom had come to an end. The 22-year old U-boat crewman hitched a ride on East Van Buren Street and asked the driver to take him to the sheriff's office where he surrendered. Much to the surprise of the officers at the camp, the sheriff called and told them he had a prisoner who wanted to return to camp.

One of the last to be re-captured was U-boat Commander Jürgen Wattenberg, the leader of the breakout.  Interestingly, Captain Wattenberg hid out in the hills just a few hundred yards from my current home.

UPDATE

One reason I thought of this story, beyond being close to the anniversary, was this story about new Harvard Law professor Jack Goldsmith.  Though I am not necesarily a supporter of Mr. Goldsmith's views, the article is a good insight into where campuses are today in terms of academic freedoms.  His conservative views and opinions are treated like some hidden scandal that was missed in his hiring and would surely have disqualified him for the position if known.  I am sympathetic not because I am conservative, but as a libertarian and defender of free markets, I was thought to be an odd duck on campus as well.

The part of the article that got me thinking about the Great Escape was this:

Before he stepped down from his post as a U.S. assistant attorney general this summer, Goldsmith penned a March draft memo arguing that Central Intelligence Agency officials could transfer Iraqi detainees out of their native country for interrogation without violating the Geneva Convention.

The memo said that detainees would still have to be treated in accordance with international humanitarian norms. But Goldsmith's position has drawn fire from human rights activists and some scholars who argue that the memo marks a dramatic reinterpretation of the 1949 treaty, which safeguards the rights of prisoners of war.

I know nothing about the 1949 treaty, but it seems odd that holding POW's in other countries would be outlawed so soon after we did so much of it ourselves in WWII.  Generally, my understanding is that detention of German prisoners in the US went very well for all concerned - in fact, the biggest problem I have ever heard about is that many Germans did not want to leave and be sent back to Germany after the war (see also here).  My guess is that such a ban may have resulted from Soviet actions in the later stages of WWII.  The Soviets sent many, many German prisoners back east, never ever to return, living out a life of slavery in Siberia and other happy locations long after the war was over.  Anyone have any other background on this?

Good news for our business (I run a campground management company), the AP reports via our Arizona Republic that RV sales continue to surge, despite high gas prices.

RV sales are definitely riding the front end of the demographic wave, as new retirees look for more flexibility and mobility in their retirement years.   RV businesses are also benefiting from a post 9/11 reluctance to travel overseas or vacation at high-profile resorts or cities that might be targets.  I wrote on some of these trends in my post "the New American Nomads".

Today, on NPR, I heard my state of Arizona getting bashed by some young reporter at the local affiliate based on Arizona's rankings in the latest NEA state rankings.  So, I thought I would check the report out myself.  The cover of the report tells us what we should expect to find:

This report is an update of data from NEA Research's report, Rankings & Estimates: Rankings of the States 2003 and Estimates of School Statistics 2004, based on the latest information provided from state departments of education. NEA Research collects, analyzes, and maintains data on issues and trends affecting the nation's public education systems and their employees.

OK, so lets open the report and see what statistics the NEA thinks are the best measures of public education.  Here are all the stats in the report, in the order they are reported (presumably their importance):

1. How much, on average, did teachers in each state earn per year?
2. How many students were enrolled in each state?
3. How many teachers were working in each state?
4. What was the student"“teacher ratio in each state?
5. How much money, on average, did each state spend per student?
6. How much money did each state spend for operating schools, including salaries, books, heating buildings, and so on?
7. How much money did each state spend in total for schools, including operating expenses, capital outlay, and interest on school debt?
8. How much revenue did school districts receive from state governments?
9. How much revenue did school districts receive from local governments?
10. What were school districts' total revenues?

Thats it.  That is the entire sum total of performance metrics they have for states and their schools.  So, what's missing?  How about any dang measure of student learning or performance!  I know that the NEA wants to criticize every test out there, and in fact resists standardized testing at every turn, but is it too much to think that we might measure the quality of education by the, um, quality of education, and not by how much the employees make? 

To be fair, the NEA does talk about NAEP test data on their web site, to the extent that they point out that some test scores are improving (they don't mention that this is improving off a disastrously low base).  This NEA web site section on student performance reminds me a lot of the environmental protection section on the Dow Chemical web site -- it's there because it's important to public relations but its not really a topic that dominates their priorities. I have a related post here that fisks the ideas for improvement on this NEA page, but if you don't want to read that post suffice it to say that they boil down to 1) spending more money; 2) hiring more teachers; 3) paying teachers more money ; 4) testing less or putting less emphasis on tests and measurable performance; and 5) more certification and protecting the guild.

Look, I don't begrudge the NEA's role as the union and collective-bargaining agent of the teachers, and as such, they should be very concerned with salary levels (more on that in a minute).  However, the NEA and their supporters constantly try to piously position the NEA as not a union - oh no - but as a group primarily interested in the quality of education.  I hope this report and its contents effectively dispels that myth once and for all.  The NEA today as an institution cares no more about the quality of education than the UAW cared about the quality of GM cars in the 70's (by the way, I am careful to say the NEA as an institution-- many individual teachers care a lot).

Continue reading ‘Latest NEA School Report is Absurd’ »

Previously, I explained why I like Football Outsiders here. Their week 12 statistical rankings of teams is here.

If you really want to dig into NFL stats, this is a great site.  Also, they just ran their model restrospectively on the year 2000.  And, what do you know, our beloved Arizona Cardinals again came in dead last, with the worst full-season score in the history of the rankings.

I have written several times as to why the libertarian party, while philosophically sound, falls far short as a political force.  Arizona Watch has a nice article and several links with suggestions to make the party a more viable political force.  You can find some of my problems with the party here.

Every year, between November and January, tens of thousands of modern nomads descend on the lower Colorado River.Spread out from Yuma to Lake Havasu City, but with their center in the normally small town of Quartzite Arizona, RVers will join together for a month or two in the Arizona desert.  Barren fields alont Interstate 10, totally desolate and empty for 9 months of the year, suddenly become a huge encampment.

One of the little talked about trends within the larger story of the aging of America and the growing population of retired people is the substantial number of people who have given up the traditional notion of a fixed home and neighborhood and headed for the open road. While some still own a home, and travel for many months of the year, an increasing number have sold their home, bought an RV, and live on the road -- with absolutely no attachment to any fixed location. They may spend a day or several months in any one location, but most tend to drift north during the summer and back south for the winter.  These are not people who take their RV out on vacation -- these are people who live on the road 365 days a year.

For reasons of weather and tradition, while you can find RVers in the summer months in every state, in the winter months a large number will converge on Quartzite. Friendships will be renewed. Business will be transacted. Jobs for the summer months will be solicited. A thousand and one vendors will pitch a tent in the desert to sell their wares. These gatherings remind me of how the old western trading posts may have looked during the winter, surrounded by wintering Indians and trappers. The only difference today is that most of the nomads are Caucasian, and many of the trading posts, in the form of Casinos, are run by the Indians.

Some of these new nomads are able to completely retire and live off their savings. Others need to work to bring in a bit of cash, or at least to pay for a place to park and hook up their RV to utilities. In our business, we hire over 400 of these folks a year, usually working the summer months in exchange for a free site for the RV and some money for relaxing in the winter. RVers are generally comfortable with fairly modest pay, but they won't stand still for very long if they don't like the job or their boss or their co-workers. After all, they all have wheels on their houses and can leave with little notice.

As you might imagine, in this Federalist country we live in where most government services occur at the state level, this nomadic lifestyle can lead to confusion. If you spend the entire year traveling around the country, where is your voting precinct? Where do friends send you mail? How do you get bills? Where is your bank? In which state do you pay taxes? If you think you have trouble getting W-2's out to your employees, trying tracking down 400 nomads with no permanent address!

To a large extent, technology has helped solve a number of these problems over the last decade. Cell phones provide telephone service nearly everywhere in the country. DirecTV does the same for television. With a national ISP like EarthLink or AOL, email doesn't care where you RV is parked "“ it will get to you.

In addition, a whole cottage industry has arisen to serve the needs of full-time RVers. Despite advances in technology, most people still need an address for the mail to go, and the IRS still is kindof fussy about having a mailing address for folks. So, entrepreneurs, mainly in Texas and Florida, have created huge PO box operations to serve RVers, with flexible options for holding or forwarding mail. Full-time RVers, living 365 days in their vehicle, have demanded and gotten larger and more elaborate RV's from manufacturers, up to and including RV's built on bus frames. And, new, more elaborate and upscale RV parks are being built to accommodate the more affluent new RVers.

Other people, including, predictably, the government, have not caught up with this trend. For example, many RVers are living on retirement and social security payments. Most state revenue departments have laws in place that if you are a resident of that state for some number of days, then you have to pay income taxes on earnings, even retirement pay or investment earnings, in proportion to the time spent in the state. These laws are mainly put in place to snare some incremental taxes from wealthy athletes and traveling sales people, but they can can hurt RVers.

An RVer who is totally honest about the states they were a resident in during a year might end up having to fill out five, six, or more state income tax returns. No one wants to do that, especially for small sums, so very very few people observe these tax laws. In fact, that is why PO Box drops are in Texas and Florida, because neither have state income taxes. Their pension and investment and social security checks go to those states, and no one has to be any the wiser about what other states they may have parked their RV in for a while.

There are a number of places to get more information about full-time RVing. Web sites and magazines line the Roaming Times and Trailer Life cater to full-time RVers. Working RVers can find information about work camping jobs and camp hosting as well as the whole workamping lifestyle.  Finally, look for good places to camp at goRVing.com, at ReserveUSA, or of course at my company's directory of forest service campgrounds.

Previously, I explained why I like Football Outsiders here. Their week 10 statistical rankings of teams is here.

Despite the win last week, our Arizona Cardinals have finally returned to their usual stomping grounds -- in the bottom 5 teams, along with Miami, Oakland and San Francisco.  Hard to argue about these teams being the worst.  Perhaps the biggest surprise is the team fifth from the bottom - Dallas.  Cowboy haters rejoice.  Parcel's record of second year improvement seems to be in serious trouble.  If the season ended today, San Francisco would set the record for the worst statistical performance since these guys started keeping the stats, beating the second worst team, the 2002 Cardinals and the third worst team, the 2003 Cardinals, but just shy of the 2002 performance of the expansion Texans.  (Gotta love our Cards).

The top three, unsurprisingly, are New England, Philly and Pittsburgh.  New England has taken the top spot, which is where I think they belong.  For a while, Philly's special teams rank was carrying them, but history in these rankings has shown that special teams ranks are very volatile and tend to regress to the mean.  Philly's soft defense may well spell another playoff disappointment for the Eagles.

COTV #113 is up Food Basics, yet another on the growing list of Arizona Blogs.  This site has its article on Meyer's Law featured.

Note that this is the newest in my series of "real-world" small business issues.  Other posts in this series include Buying a Small Business and Working with the Department of Labor

One of the things I did not mention in my series on buying a small business was the notion of complexity.  Our business manages over 175 sites with 500 seasonal employees in 10 states.  I have friends who own businesses that have the same sales, and more profit, from working alone from their home.  As I often tell people, I love what I do, working in recreation and spending most of my time in National and State Parks, but it is overly complex for the money we make.

The one advantage of this is that, despite being a small business, I get to observe business practices in many parts of the country.  And one business-related practice that varies tremendously from state to state is sales taxes.  (By the way, before I bought this business, I was a strong Federalist.  Putting most regulatory power in the states slows government encroachment.  It also limits anti-business regulation, because states know that such unilateral regulation will just chase employment across state lines, as California has found out.  However, having to deal with 10 different tax and regulatory regimes every day is causing me to revisit Federalism a bit).

Anyway, based on this experience, I will dedicate the rest of this post to my observations of the good and bad of state sales tax systems.

Continue reading ‘The Good, the Bad, and the Ugly of State Sales Tax Systems’ »

Previously, I explained why I like Football Outsiders here. Their week 9 statistical rankings of teams is here.

Miami still can't nail down that bottom spot. San Francisco and the Raiders both have fallen below the Fish (so much for Bay Area football). Miami has the worst offense in the league by a HUGE margin, but its defense keeps it off the bottom, as it probably should:  A good defense will win you a few games, no matter how bad the offense is.  My Arizona Cardinals continue to fall, down to their rightful place in the bottom quartile, despite having a pretty good defense. At the top, Pittsburgh, New England and Philly are threatening to run away and hide, which just goes to show that every once in a while, BCS notwithstanding, computers and common sense can converge.

Hello to Arizona Watch, which seems to focus on politics and news here in AZ.  Anyone with links all over their site to Cato, Eugene Volokh, Virginia Postrel, and Assymetrical Information can't be all bad!

Previously, I explained why I like Football Outsiders here. Their week 7 statistical rankings of teams is here.

A couple of observations. For the first time in recent memory, our hapless Arizona Cardinals crack the top half of the rankings. Woohoo. Arizona is ranked 5th in total defense, and first in rush defense. Good thing, since we can't score to save our lives. Also of note, Miami pulls out of last place, ceding the spot to cap-hangover suffering San Francisco. I can't believe the Cards lost to those guys in the fourth quarter. Yeah, I know what you are thinking - you can't believe anyone really cares about the Cards.

Also, this weeks Tuesday Morning Quarterback is up. Always entertaining.

Congratulations to Edward Prescott, our hometown hero from Arizona State, who shares this years Nobel Prize in Economics.

Why is it that the Nobel committee gives its highest economics prizes to people who consistently put more intellectual nails in the coffin of socialism, then go out of their way to give the "soft" prizes, such as literature and peace, consistently to communists, socialists, and enablers of totalitarianism?

UPDATE

Marginal Revolution has a good roundup on what exactly this economics prize was won for. I should have been more specific when I said "more intellectual nails in the coffin of socialism". The link explains it better, but one argument against free markets is that recessions are proof of market failure and a "better" system would not have them. Prescott and Kydland, among other things, show how:

Recession may be a purely optimal and in a sense desirable response to natural shocks. The idea is not so counter-intuitive as it may seem. Consider Robinson Crusoe on a desert island (I owe this analogy to Tyler). Every day Crusoe ventures out onto the shoals of his island to fish. One day a terrible storm arises and he sits the day out in his hut - Crusoe is unemployed. Another day he wanders out onto the shoals and finds an especially large school of fish so he works especially long hours that day - Crusoe is enjoying a boom economy. Now add into Crusoe's economy some investment goods, nets for example, that take "time to build." A shock on day one will now exert an influence on the following days even if the shock itself goes away - Crusoe begins making the nets when it rains but in order to finish them he continues the next day when it shines. Thus, Crusoe's fish GDP falls for several days in a row - first because of the shock and then because of his choice to build nets, an optimal response to the shock.

UPDATE #2

This is very timely. Our new Nobel Laureates did a lot of work on short term / long term economic paradoxes. For example, they work a lot with problems such as prescription drug regulation, where people can be made happy in the short term (lower prices) but really unhappy in the long term (via forgone research and therefore fewer new drugs). Interesting given that Kerry/Edwards are advocating just such a short term fix that would lead to long-term disaster. The press made a big deal out of how the Nobel Committee slapped Bush in the face with its Peace Prize to Jimmy Carter. Don't hold your breath waiting for anyone to point this one out.