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Posts Tagged ‘Rules&Regs’

Free At Last: Inside the Legals Victory in Ohio

In Competition, Legal Advertising, Uncategorized on August 3, 2011 at 6:18 pm

Years of persistence — what some have called blind optimism and others, insanity — paid off when Ohio Governor John Kasich signed the biennial Budget into law on June 30, 2011. Contained in the 3,264 page document were 420 pages of provisions that bring the legal advertising process into the 21st Century. It is a model of comprehensive compromise in both policy and politics, so much so that the key stakeholders locked in perennial antagonism all declared victory at the end of the day.

Local Government cheered the very real cost savings on otherwise unfunded mandates. The pay-to-read press heralded the preservation of legal advertising in print, which was not entirely a given this time around — and their enthusiasm spilled into an historical whitewash of relentless opposition great and small.

And for the free community paper industry: We’re finally legal in Ohio.

All of which is best for the people — as better informed citizens and as taxpayers footing the bill. But this legislated outcome didn’t happen by itself. It didn’t happen overnight or with a Hail Mary as time ran out. Nor because any major stakeholder suddenly abandoned self-interst for altruism. Columbus Messenger publisher, Phil Daubel, began his personal crusade over twenty years ago with some very near misses along the way. Guess which influential lobby always managed to pull the plug?

From our rise as an industry generations ago, free community papers have fought for the right to publish legal advertising. For at least the last decade and a half, measures have been introduced across state legislatures that would take that public notice out of print and place it all online. During this latter span of time, both alternatives to subscription newspapers made advances at the margins of select types of official notice. But neither vision became the model of wholesale reform of any state’s legal advertising regime since our industry’s victory in Minnesota last century.

What I call the Buckeye Compromise embraces both the realities of the digital age — and the time-tested power of papers without paywalls. Progress was methodically paved over the last half-decade through the legal establishment of a Task Force charged with making change, constructively engaging that commission, having hands in the direct process turning an eight page report into nearly five hundred pages of legislative sausage, and advocating the ultimate provisions as bills and amendments. That is the essence of the long, slow process where all parties were held to their bottom-line gives and takes. Which is not to say that even the agreed-to framework wasn’t subject to backpedalling and covert obstruction.

The publicly endorsed nuts and bolts — legalizing free community papers with audited circulations, capping rates at lowest earned commercial, allowing for internet posting in lieu of second paper for same notice and for summarized descriptions on second consecutive print publication — cemented the fallback position, a mousetrap of sorts. Our peers with the monopoly, and the license to print money, still hoped to stall any movement. While our friends — and soon to be advertisers — would have much preferred doing away with print altogether. That was basically Governor Kasich’s original proposal, and that worst-case scenario feeling quite real drove home, finally, the wisdom of expanding print to save it.

I don’t have enough fingers and toes to count the number of prominent free community paper veterans that have told me these last few years that our Legals ambitions were doomed to the internet. But I, along with enough equally stubborn folks, continued to believe that we could finally achieve reform because of the internet. Ohio can and should become the first state domino in this still-new century. To do so we must leverage the larger fear of the incumbent monopoly — total migration to the internet — and continue working with Local Government to quantify the very real savings we will bring. This won’t change the underlying competing ambitions — to stall just one more legislative session and otherwise to push web-only or bust — but having our fallback option on the table at the beginning increases the odds should process approach endgame. As we now see in Ohio, not only can this be done but all sides can even feel like they won when the dust finally settles.

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Ad Tax Could Result in Net Loss to PA

In Ad Tax, Competition, Rules&Regs on March 2, 2010 at 6:44 pm

In my last post on the perils of Taxing Advertising, I touched on the “multiplier effect” of advertising: Each dollar invested yields a compounded return in economic activity. It can be four-fold, it can be ten-fold and more, but most importantly: It can be quantified. And it has, in robust analysis.

It is critical to understand the commerce-driving function of advertising before looking at it as just another piggy bank to raid. Unfortunately, the Governor’s proposed budget treats it like a static line item on the revenue wish list. Blissfully ignored are projections for decreased spending on advertising, the resulting cascade of lost sales across the economic spectrum and the jobs lost due to imploding revenues at already struggling employers.

So far, even the credible Think Tank analysis of the proposed Expansion of Sales and Use Tax (SUT) to 74 NEW Goods and Services — including competing PA-based heavyweights Commonwealth Foundation and The Pennsylvania Budget and Policy Center, as well as D.C. based Tax Foundation — all seem to swallow the zero-sum fallacy of a New Ad Tax. Meanwhile, the revenue gaps between projected and reality were just released by the Pennsylvania Revenue Department. The farthest off the mark? Sales tax receipts: Year-to-date collections slumped to $265.3 million “less than anticipated.”

We can and must to do a better job “anticipating” the very predictable series of unintended fiscal consequences that would be triggered by a New Advertising Tax. Our Commonwealth’s sluggish sales tax receipts have been driven by numerous interrelated forces in this Great Recession. One of which has been the vicious cycle of declining sales leading to reduced advertising, which have further reduced the volume of goods and services sold. And Taxed. Correspondingly, spending on advertising fell across the media landscape for the sixth consecutive quarter, and the total decline for 2009 was 9% nationally.

These mutually reinforcing trends are finally beginning to reverse. But a New Ad Tax would push commerce, jobs and even the hoped-for tax receipts off the cliff. Projections for Lost Sales across sectors run as high as $14.8 billion. The corresponding Job Loss: A staggering 64,040. Which will mean substantially “less than anticipated” Personal Income Tax (PIT) Receipts and a spike in demand for cash-strapped social services. As for the actual SUT Projections: Lost Sales, even at 4%, will blow a $600 million hole in the happy math on that zero-sum spreadsheet. Factoring these unintended consequences, we clearly won’t raise $534 million in “new” revenue. Just the opposite, a New Ad Tax would likely lead to a Net Loss, all things considered.

Beware: Fair Housing Crackdown!

In Fair Housing Rules, Links, Rules&Regs on October 15, 2009 at 9:18 pm

The wrong words could cost you a fortune, and more folks are watching closer than ever before. Your competitors may be looking to turn you in. Worse yet, cash-strapped local agencies are scouring your Housing Ads for something to complain about. Formal complaints, when enforced and ruled against you bring fines in the $1,000s per word. Your settlement becomes their new funding stream.

Feedback I’m getting around the country: Bounty hunters are hungry. First step, be aware of and avoid the wrong words. Check out this word and phrase list. It’s intended as a guideline to assist in complying with state and federal fair housing laws. It is not intended as a complete list of every word or phrase that could violate any local, state, or federal statutes…new words get added by state agencies, court rulings, etc. But this is a really good reference.

If you don’t have a copy on file, here’s HUD’s Fair Housing Advertising Guidelines. If you already have this, it’s worth reading again. Then check out HUD’s Fair Housing and Equal Opportunity (FHEO) Main Page, which has updates and timely resources — and also links to state-specific information.

Saving Newspapers, or…

In Competition, FCC, FTC & DOJ, Rules&Regs, Testimony on October 15, 2009 at 8:07 pm

…Corporate Bailouts. As I wrote before, there’s no shortage of voices on topic. Professors, Think Tanks, Foundations, Advocacy Groups, Big Media…and Us. We’re still at the beginning of this national debate, and we had a seat at the last House Committee Dog & Pony Show. There’s lots more to come and lots at stake. Next up are the Federal Trade Commission and the Federal Communications Commission, and we need to step up our united efforts immediately — Season starts in earnest next month!

Here’s what we can expect from Big Media: On display before a Senate subcommittee this summer, NAA’s reps got softballs on “competition” and hit them over the Sherman, Clayton and Cross-ownership walls, i.e. tear down the last legal barriers to total local market domination for “our survival.” Go figure, their reporters don’t spell it out that nakedly. And recently before the latest House Show, the voice for Gannett, Tribune, NewsCorp & Fortune 500 asked for Tax & Pension Relief.

Sounds good? Here’s my caution on NAA’s ask: Fails to note that businesses with revenue under $15 million got the 5 yr operating loss carryover (v. current 2 yr) as part of the stimulus package that passed. Those above a part of a fairly select group enjoying multiple other perks, loopholes and other advantages we don’t have. Factoring offshore havens, goodwill impairment write-offs and a host of other “savings” that come from complex organization and the ability to hire the very best accountants and tax attorneys, many of these folks already pay proportionately much less than we on gross revenues. (NOTE: They also have better access to cheaper capital, pay 20% less on health insurance not trapped in small group market, and on…)

And on deferred payment to defined benefit plans, just know that we’re all ultimately on the hook. At USPS this makes sense, where H.R. 22 tackles the double funding concession they made to get the Military’s rightful obligations off the Postal books. By contrast, USPS is multiples better funded than the private sector — and my real concern is the fall-back for Fortune 500 pensions is the Pension Benefit Guarantee Corporation (PBGC), which is so disastrously underfunded that over the last yrs they’ve redefined “underfunded” and “at-risk liabilities” a few times to make the looming Armageddon only look like Hiroshima. Big Biz’ underfunded pensions are backed by the underfunded PBGC, which is backed by we taxpaying citizens and small businesses.

Beware Federal Regs: Red Flag & Product Safety

In Links, Rules&Regs on October 12, 2009 at 9:50 pm

You’ll need to pay attention to a couple of obscure, new Federal Regulations: The FTC’s Red Flag Rule & the CPSC’s Product Safety Bans on Used Kids’ Stuff.

From the bowels of bureaucracy, the unelected faceless folks that made rules that impact our daily lives, come these efforts to curb identity theft and save children from the harms of toys once recalled but recycled below the retail radar. From the Federal Trade Commission comes the Red Flags Rule, with more in the way of clear guidance to come before they begin enforcement this November 1st. Businesses that extend credit to individuals will be expected to have a written policy in place to detect suspicious activity that could evidence or lead to identity theft. Neither one-off, nor business customer transactions are covered in the scope, but ongoing billable relationships with sole proprietors appear for the moment to require particular scrutiny — as guidance is released, I will share a model policy handbook to handle dealings with contractors and doing-business-as type accounts.

As for the Consumer Product Safety Commission and the “Improvement Act” of the same name, there are new guidelines and ongoing rulemaking process. It is illegal for anyone — from thrift stores to your neighbor by way of yard sale — to sell merchandise recalled from the retail market. And there’s a bigger budget for enforcement, especially for children’s toys, clothing and cribs. Publishers seem to be off the hook for penalties, but it might be good to suggest some warnings for ad copy on choking hazards of small toys. Otherwise, here’s the link to the Official Handbook to point clients to for their own protection.