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Birth$ to teen$ on the ri$e

Posted by Kevin Fischer on Dec. 11, 2007

After falling steadily for more than a decade, the birth rate for American teenagers jumped last year, federal health officials reported, a sharp reversal in what has been one of the nation's most celebrated social and public health successes. The birth rate rose by 3 percent between 2005 and 2006 among 15-to-19-year-old girls, after plummeting 34 percent between 1991 and 2005, the National Center for Health Statistics reported.

I wonder how many of these teens really thought about what they were getting into the way Washington Post writer Michael Rosenwald did?

Expecting The Expenses
$25 Diapers, $12,000 for Day Care, And What to Do About College?
By Michael S. Rosenwald
Washington Post Staff Writer
Sunday, December 9, 2007; F01

Like most new parents, my wife and I didn't need much time to become acquainted with hindsight. We should have slept more before Sam was born. We should have fed him before taking him to the grocery store. We should have kept that burp cloth on a few minutes longer.

Also, we should have saved a lot more money. Kids are not cheap to maintain. This became perceptible a couple of months ago, the first time we dropped $25 on a package of Pampers. "Maybe we should go to Costco," my wife said.

Financing a baby is typically the last topic on the minds of new parents. Hours and hours go by discussing less pressing matters: Do you think the neighbor's daughter is old enough to babysit? What about a theme for the nursery? Sports, animals or clouds? Where should we register? Which stroller? Should we take one last vacation -- a babymoon? Where should we go? How should we prepare the dog for his new sibling?

"Most people don't plan their own spending on their own wants and needs," said Barry Glassman, a financial planner with Cassaday and Co. in McLean. "With kids, it's even a step further in the wrong direction. It's so easy to get caught up in spending in a variety of ways, and there's no planning or accounting for how the dollars will add up."

Oh, how the dollars will add up. We didn't realize just how correct Glassman was until I played around with a "Cost of Raising Your Child" calculator on BabyCenter.com, which charts spending estimates using federal statistics on family expenditures for children. I entered the region where we live. I entered our income. I said we would send Sam to a state college. (He has not yet expressed an interest in an out-of-state school.) Then I pointed my mouse to the "calculate" link, clicked, and prayed.

My computer told me this: "Here's what you're likely to spend to raise a child: $340,552." (Note to self: Praying does not in any way lower the cost of children.) I told my wife the figure. She said, with a chuckle, "I sure hope he's worth it." I told Glassman. He said, with a serious tone, "It will probably be more." I briefly contemplated a garage sale.

Then I set out to do what we should have done nine months ago (or longer): talk to some financial planners. I hammered away with questions to Glassman, himself an experienced parent, and to Clare Stenstrom, a financial planner in New York who describes herself as a "professional aunt" to six nieces and nephews. To make myself feel better, I asked other new parents around the office to describe the financial planning they had done. To my delight, when I asked a new mom whether she had a will -- this was Stenstrom's first question to me -- she said no. We are not alone.

According to Stenstrom and Glassman, here's what we did correctly. For starters, we took advantage of a short-term-disability policy from Aflac, a secondary insurance provider, to help cover my wife's unpaid leave after Sam arrived. This was an important step because my wife is taking three months off to care for him. We paid $100 a month for 10 months before the birth -- the minimum period we needed to be enrolled to receive benefits -- and after my wife had Sam, we were able to recoup about a month's worth of her salary. Note to potential parents: Check to see if your company offers Aflac; my wife's employer does.

A few months before Sam was born, we also increased the number of withholding exemptions for our paychecks. Although this means we will get less back in our tax return, changing our withholdings let us put aside a little extra cash to help defray the loss of my wife's salary for three months. Why wait for the extra money when we could have it now?

The problem is that Aflac and the withholdings strategy are the only financial planning steps we have taken. We did not, as Stenstrom and Glassman suggested, come up with any kind of budget in the year before Sam was born that would allow us to save more money for clothes, diapers, furniture and accessories. We did not, as the financial planners suggested, use a program like Quicken or Microsoft Money to closely track our expenses to analyze where we could cut back to save even more money.

"A young couple should plan for expenses for children much like an engagement ring or their first home," Glassman said. "A couple cannot turn a blind eye to the fact that child expenses are coming. It's easy to look the other way, especially because it's such a fun time in a couple's life."

There is so much more to do.First and foremost, we need a will, Stenstrom said. It needs to clearly state who will get custody of Sam if his mom and dad die. "Both parents dying at the same time happens rarely," Stenstrom said, "but it happens." When she said this, I felt much of my body go limp. But even though the subject is hard to stomach, we must.

And we must also set up a trust that clearly states that we are leaving Sam all of our financial holdings, including my baseball cards. Children typically inherit their parents' money and property in many states, but the advisers suggest drawing up a trust anyway because laws change. Stenstrom suggests naming one of the parents a trustee and someone who understands finances the other trustee. Getting a lawyer to draw up these documents can set us back as much as $3,500.

We also need to enroll with either of our employers in a dependent-care savings account. Like a health-savings account, a dependent-care account allows us to set aside up to $5,000 of our earnings annually, tax-free, for day care. Our day-care bill will be about $12,000 a year, so having almost half of that set aside tax-free is a big help.

And then there is the largest expense of them all: college. Where to begin? T. Rowe Price has a useful -- and frightening -- calculator on its Web site that allows you to figure out how much a college education will cost for any school in the country. If we send Sam to the University of Maryland, his mom's alma mater, by 2025 it will cost $248,798. If we send Sam to my alma mater -- Southern Illinois University -- it will be more expensive, at $313,806. If we send him to Princeton University: $624,771. I read those numbers to my wife and she said, "I hope we are making more money by then."

One savings strategy is a so-called 529 plan available through the state of Maryland, where we live. A 529 college-savings plan is tax-free as long as the money is used for higher-education expenses. Money deposited into the account can be invested in mutual funds and other investment vehicles that are managed, in Maryland, by T. Rowe Price. (The District's 529 plan is managed by the Calvert Group, a Bethesda firm. Virginia's is managed by American Funds, a subsidiary of Capital Group Cos.)

We have opened a standard savings account in Sam's name at Bank of America for all the checks, cash and bonds he has received from family and friends. The advisers say we should quickly move those funds into a 529 plan, along with any other money he gets in the near future as gifts.

The bigger question is: Do we put aside our own money in a 529 plan? An even more difficult question: Do we put aside any money for his college education at all? As the old saying goes, "You can get a loan for a college. You can't get a loan for retirement."

My wife and I, like many other young couples in this very expensive region, are over-mortgaged. We have an interest-only loan on our house. We have yet to put a significant amount of money in our 401(k) plans. The more money we put aside for his college education, the less money we will have when we are too old to work.

That seems like a harsh way of looking at it, and my wife has told me as much. Her family paid for her college education; mine could not.

I took out loans and am still paying back about $200 a month. Looking back on the arrangement, I think I'm better off having done it that way. I was a crummy student in high school. Most of my memories from those days involve cutting class and hanging out at home while my parents worked. (When my mom would occasionally find me in the living room at noon, I'd say, "Bomb scare." It is amazing how many times that worked.)

But when I got to college and knew that I would eventually foot the bill, I blossomed into a great student. As they say in the business world, I had some skin in the game. I earned better grades my freshman year than any of my friends who had actually sat through high school all day. I was a consumer, and I was going to get my money's worth.

Glassman and Stenstrom both advised me not to put aside money for education at the expense of our retirement savings. Stenstrom said, "When the child graduates, you can always help them pay down their loans." Glassman's suggestion: If we are able to put aside money for both purposes, a tax-efficient portfolio might be a better way to go because we could use the money for ourselves or for Sam's education. Our hands would be tied with a 529 plan. It has to be used for education; otherwise, there are penalties.

The good part about everything that we have to do is that it is all relatively easy to set up. The hard part will be the financial implications on our daily lives. We won't have the kind of money we did as a young couple in love -- the trendy restaurants, the weekend jaunts to Cape Cod, the frivolous purchases at Nordstrom. Some of that will go away, and the rest will need to be moderated.

The best part of all of this: Sam's smile is a wonderful return on our investment.

The music of Christmas: The Most Wonderful Time of the Year

Posted by Kevin Fischer on Dec. 11, 2007

The music of Christmas

When I was a mere child, there were certain annual TV Christmas specials you didn’t miss.

In the Fischer household, one of them was the Andy Williams Christmas show.

Williams taught America that it was cool to wear V-neck or turtleneck sweaters.

That was over 40 years ago, but the name Andy Williams is still synonymous with Christmas. When he appeared at the Riverside Theater in December of 2000, Dave Tianen of the Milwaukee Journal/Sentinel wrote this in his review:

If Bing Crosby defined the sound of Christmas in the '40s and '50s, it was Andy Williams and his long-running series of holiday TV specials that gave voice to Christmas in the '60s.

Today, Williams is 73, and it takes the magnetism of Christmas to lure him from his home in Branson, Mo. It was his annual Christmas tour that brought Williams back to the Riverside.

Probably not even Williams would argue that it's a contemporary show. Doubtless, the older audience that nearly sold out the Riverside wasn't interested in a contemporary show. They wanted to bask in the warm glow of Christmases past, and Williams obliged them. Williams opened with his own holiday hit from 1963, "It's the Most Wonderful Time of the Year."

Williams set the agenda when he told the crowd he wanted to sing some old chestnuts.

FRANKLIN'S ACTUAL SCHOOL TAX LEVY INCREASE NOT WHAT THE PUBLIC WAS TOLD

Posted by Kevin Fischer on Dec. 10, 2007

Franklin budgets

The school tax levy increase approved by the Franklin School Board is 11.7% and NOT 5.9% as citizens were told the night in October the Board adopted the 2007-08 school district budget.

The 11.7% school tax levy increase is based on a follow-up I did with the Wisconsin Taxpayers Alliance (WTA) that, as I blogged last week, issued a report outlining the school tax levy increases for every school district in the state. Franklin’s was listed as 11.7%.

The WTA gets its figures from the state Department of Public Instruction (DPI). The DPI gets its numbers from the Franklin School District.

In a discussion I had with WTA Research Director Dale Knapp, he informed me that he double-checked the numbers with the DPI and the 11.7% figure is correct.

Knapp told me that analyzing the expenditure figures for Franklin, there is now way the tax levy increase could work out to 5.9%. Knapp told me the correct figure could only be somewhere between 11 and 13 %.

In a memo dated November 29, 2007 to the Franklin Mayor and Aldermen, Franklin Director of Finance and Treasurer Calvin Patterson writes, in part:

“All taxing jurisdictions have provided the required information to calculate the combined tax rates for the year 2007 tax bills.

The Oak Creek-Franklin school district has the largest percentage tax levy increase of 13.2% and as a result has the largest tax rate increase of 12.9%. The Franklin school district had the next largest percentage tax levy increase of 11.7% and as a result had the next largest tax rate increase of 9.2%.”

Over the weekend, I asked Franklin School Board President Dave Szychlinski to investigate the discrepancy in the numbers. He said he would get back to me and I trust he will, but hasn’t as of 5:00 this afternoon. Here is part of his e-mail to me:

I just saw your posting about the Taxpayers Alliance Report. Very curious. At the October Board meeting, we approved a total equalizedtax levy rate increase of 5.9%. I can assure you that I will ask JimMilzer and the business office to clarify for me on Monday. I'm notsure who is counting what..or if it's apples to apples...and while I don't have my budget documents here....I do remember that the budget document we received indicated +5.9%

dave

This issue raises some very serious questions:

1) How did Franklin school district business manager Jim Milzer arrive at the 5.9% figure?

2) Were the Franklin School Board members advised they were voting on a 5.9% school tax levy increase, and if so, why?

3) Didn’t the Franklin School Board members know what they were voting for?

4) Can the Franklin School Board go back and correct this error?

This is extremely serious.

It reminds me of the Milwaukee County Board approving outrageous pensions, only to plead ignorance later, claiming they had no idea what they were voting for.

The WTA stands by their numbers. The city of Franklin has issued a memo quoting the 11.7% figure.

The 11.7% figure is DOUBLE the increase that the Franklin citizenry, and quite possibly, the Franklin School Board, was told the levy increase was going to be.

It is plausible that the Board, and subsequently, the taxpaying public were issued FALSE information.

In that case, there needs to be accountability. If Jim Milzer gave false information to voting members of the Board, he should resign or be terminated.

An increase of 5.9% was inexcusable. An actual increase of 11.7% when the public was promised for several weeks that the increase would be 5.6% is misconduct in office.

I anxiously await Dave Szychlinkski’s findings.

The cost of crime

Posted by Kevin Fischer on Dec. 10, 2007

Topics talked about on WISN

America has gone soft on crime. Instead of looking for ways to lock up more criminals, we seek ways to let more out onto our streets to re-offend.

And make no mistake, that is exactly what they’ll do.

Here are two prime examples of this dangerous trend:

U.S. News & World Report says communities are preparing for the largest exodus of prisoners in American history:

“Getting cons to stay ex-cons has long been one of the most vexing challenges of the criminal justice system. One out of every 31 American adults is in jail, on parole, or on probation, and the central reality is this: Nearly everyone who enters the prison system eventually gets out. The problem is, most of those ex-offenders quickly find themselves back inside. Today, ending the cycle of recidivism has become an increasingly urgent problem as communities nationwide are forced to absorb record numbers of prisoners who also often struggle with addiction and other illness.

There are more than 1.5 million people in state or federal prison for serious offenses and 750,000 others in jail for more minor crimes. Prison populations have swelled since the early 1970s, and now offenders are returning to their neighborhoods at a rate of more than 1,400 per day. In 1994, nearly 457,000 prisoners were released from state and federal custody, and in 2005, almost 699,000 prisoners were released. That is the largest single exodus of ex-convicts in American history.

Revolving door. But it's hardly the end of the story. According to the most recent nationwide study on recidivism, in 1994, more than two thirds of prisoners—68 percent—ended up back behind bars within three years of release. It is that figure, little changed for decades, that has community leaders and criminal justice experts focusing on a fresh approach.

The process of coordinated prisoner reintegration is now known as "re-entry," rather than rehabilitation or release. Whereas rehabilitation assumed that individuals could change on their own, re-entry focuses on educating employers and communities about how they can help the offender on the outside. It aims to break though the red tape that has historically delayed social services for felons and to prevent the snags—like drug treatment programs that reject offenders who have been clean only a short time—that keep them from making a healthy return to society.

In practice, that means synchronizing many different social and correctional services while offenders are still inmates and continuing that assistance after their release. Re-entry programs don't necessarily require more funding, just better coordination of existing resources like job training and stable housing. "Rehab is focused on the individual offender; re-entry is about communities, families, children, coworkers, and neighbors," says Amy Solomon, a criminal justice researcher at the Urban Institute.

Providing free services to murderers and thieves might seem like coddling, but statistics show it's the cheapest and most effective way to keep the public safe. If they can keep just one of the prisoners enrolled in the aircraft sheet metal class out of prison for six months, Wichita officials say, they will save the state money.”

Providing free services to murderers and thieves might IS coddling.

And when we release these prisoners and attempt to use some psychological mumbo-jumbo treatment or service to help achieve “re-entry,” what happens?

Probe Ministries International has done a study on the cost of crime:

In America, the crime clock continues to click: one murder every 22 minutes, one rape every 5 minutes, one robbery every 49 seconds, and one burglary every 10 seconds. And the cost of crime continues to mount: $78 billion for the criminal justice system, $64 billion for private protection, $202 billion in loss of life and work, $120 billion in crimes against business, $60 billion in stolen goods and fraud, $40 billion from drug abuse, and $110 billion from drunk driving. When you add up all the costs, crime costs Americans a stunning $675 billion each year.

We can’t afford to NOT lock up criminals.

Example #2:

Mac Johnson of HumanEvents.com writes about the book, The Deporter, written by former deportation officer Ames Holbrook.

“What if you had to choose whether to release a child molester into your neighborhood, or else release a murderer. Which would you choose to unleash on your neighbors? What if the choice were a kidnapper versus a rapist? One of them must be given permission to live among the innocents in your town, and you‘re the one who must choose which it will be.

What if you had to make impossible choices such as these every day? That’s the situation faced by deportation officers (DOs) in their jobs, as described in The Deporter, written by former deportation officer Ames Holbrook. Deportation officers are responsible for finding and removing the worst elements among America’s foreign population -- both legal aliens gone bad and illegal aliens who never bothered to start on good terms and then went downhill from there.

Deportation officers are set up to fail from the beginning. As a result, they have to choose everyday who they will deport and who, under court order, they will release into America’s streets, Scot free (though one suspects the Scots are not the bulk of the problem here).

The ways that deportation officers are sabotaged are legion, as described by Holbrook’s first-person account of his four years as a DO. To start with, there are only 600 DOs for the whole country -- responsible for deporting the worst among millions of legal aliens and millions more illegal aliens. A ratio that’s this hopeless means that every day thugs and criminals are set free for lack of resources to deport them -- free to rape, to kidnap, to extort, to burglarize, to con, to kill.”

Here’s the entire piece by Mac Johnson.

America has a serious violent crime problem. America bears a great deal of the blame.

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The music of Christmas: Santa Baby

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The cost of crime

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FRANKLIN'S ACTUAL SCHOOL TAX LEVY INCREASE NOT WHAT THE PUBLIC WAS TOLD