Say Anything Blog

As an attempt in the House to cap farm subsidies goes down in flames we get news that the economics of farming have changed quite a bit since the justifications for farm subsidies were first laid out during the depression era.

The Agriculture Department forecasts that the average farm household will earn more than $89,000 in 2008, up 6.3% from 2007. That’s a third higher than the average U.S. household income, which is projected to be $67,000.

Despite that, farm-bill negotiators are fighting to keep $5.2 billion in direct payments, which go to farmers regardless of how much they earn or whether they are growing a crop.

Stephen Spruiell has more:

Let’s look closer at that average farm household income statistic. Ninety-two percent of farm-dwellers derive either all or most of their income from sources other than farming or subsidies. Average household incomes for this group have increased steadily since 2006. These farmers are expected to earn between $63,500 and $83,500 this year.

The other 8 percent — commercial farmers who derive most of their income from farming and subsidies — earned an average of $200,000 last year — an increase of 22 percent from 2006. This year, income for this group is projected to hit $230,000 — another 9.3-percent increase. The USDA, which calculated these estimates, reported last year that the windfall for commercial farmers is due in large part to “demand from the rapid expansion of ethanol production.”

According to the Environmental Working Group’s Farm Subsidy Database, the top 8 percent of farm-subsidy recipients received 57 percent of the payments in 2006, for an average payment of $65,613. (The top 20 percent of recipients get 80 percent of the payments.)

Given all this, to the taxpayers really need to be on the hook for hundreds of billions of dollars every year in ag subsidies?

Thanks to North Dakota’s oil boom the economy in my home town is hopping.  Jobs are available all over the place, and as a result a lot of families are seeing both moms and dads going off to work.  The problem this has left people with, however, is what to do with the tykes while mom and dad are off at work?  There just isn’t enough daycare space in Minot to meet demand for childcare.

Admittedly, it’s a good problem to have (better than wondering how unemployed mom and dad are going to feed the kids), but the people who need childcare are looking to the city council to solve this problem.  I’m left wondering why this is the city council’s responsibility.

Seems to me that the city council’s response should be, if anything, to clear some of the red tape away from the childcare industry.  Make it easier for entrepreneurs to open daycares and more daycares will open to meet demand.  That’s the wonder of free markets.

But other than that solution, this is pretty much a “problem” that should be left to solve itself.

I was talking to The Whistler recently about my purchase of a new house (we close next week on Wed. and the wait is killing me) and he told me that when he bought his house the moment he was most excited about was the part where the old owner handed him the keys.  The funny thing was when his closing day arrived the old owner...didn’t have any keys for his house.  He hadn’t locked it up in years and didn’t know where they were at.

Upon hearing that something dawned on me: I don’t have any keys for my old house either.  I guess I’ve never really felt like I had to lock my house up.  The few times we have gone out of town for any significant amount of time we’d lock the front doors but left a back patio door open so we could get back in.

I’ll either have to get some new ones made or have a similar moment with the people who eventually buy the house from me.  But the larger reality - that North Dakotans generally live in communities so safe that a lot of them don’t even feel like they need to lock up their homes - is a comforting one.

Here’s another interesting tid-bit from the newly-launched Sunshine on Schools website: North Dakota public schools aren’t spending all of their money.

In 2007 the schools took in $893,478,692 in revenues but only spent $876,469,559.  That leaves a surplus of revenue at $17,009,133.  Given that enrollment in the schools was 94,587 that works out to about $180 per student, or about $3,600 per classroom of 20 students.

So if North Dakota schools are underfunded, how do we explain a $17 million state-wide surplus on the school budgets?  Do we really need to increase school funding, and thus taxes (like the already too-high property taxes), to send extra revenues to schools that aren’t even using all of it?

I had to chuckle when I read this from fellow North Dakota blogger “Jay” over at The Rural Bus Route in response to John McCain’s assertion that the Minneapolis bridge collapse wasn’t caused by a lack of taxation:

Again, people, the GOP thinks you’re stupid. They will continue to harp about the “entitlement” program spending and champion limited government spending domestically. What about that giant sucking sound you hear from the middle east? Pay no attention, they say. Don’t worry about the trillions spent and trillions yet to be spent. The real problem is all the lazy poor people sucking on the government boob. Also pay no attention to the fact that before the neocons came to office, there was a healthy surplus. It’s liberal spending...dontchaknow.

To put Jay’s fiscally illiterate rant into perspective in 2007 entitlement spending in America cost us approximately $1.4 trillion dollars.  In over five years, the war in Iraq has cost a total so-far of $583.6 billion, or approximately $116 billion per year.  Here’s a comparison of per year entitlement spending vs. per year Iraq spending:

More perspective: The entire world spent $1.2 trillion on military and wars in 2006.  That’s about $200 billion less than we spent on entitlements in 2007 alone.

Do we spend too much on military and war?  That’s debatable, but clearly the larger spending problem lays with entitlement spending even if certain factions on the left don’t want to admit it.

Carter Wood (a North Dakota ex-patriat) at the National Association of Manufacturers sent me this picture of a Grand Forks Herald newspaper vending machine in Washington DC last week and I forgot to post it.

Kind of neat to see a local newspaper out in DC, but kind of weird too.  Given the advent of the internet you’d think North Dakotans in DC interested in some news from home would go online instead of tracking down a paper copy.

Or just have a paper copy mailed out via subscription.

My good friend Brett Narloch at the North Dakota Policy Council is announcing the NDPC’s new transparency website for state schools.  It’s called Sunshine On Schools.

From the press release:

BISMARCK, ND – The North Dakota Policy Council announced the launch of their Sunshine on Schools website today. Sunshine on Schools is an online interactive storehouse for financial information on every North Dakota K-12 school district. The data can be accessed by visiting http://www.SunshineonSchools.org.

“This website will be an invaluable tool for administrators, policy makers, parents, and taxpayers in North Dakota,” said Brett Narloch, Executive Director of the North Dakota Policy Council. “We have collected the Department of Public Instruction’s financial data in one place and made it easy for normal people to read and interact with. This is something the DPI should have already done years ago. The data on our site is also on DPI’s website, but in an extremely unreadable form.”

The data includes revenues and expenditures statements, debt information, and personnel compensation data for all North Dakota school districts. It is presented in a simple, easy-to-understand format and access to the website is free and open to the public. All data used to build the website is public data obtained from the Department of Public Instruction.

Here’s the website.  The amount of information in the website is amazing.  It’s going to be terribly inconvenient for those factions in the state who are calling for endless increases in school funding and teacher pay.

For instance, check out this chart showing teacher pay for my hometown school district (Minot Public Schools):

The average compensation for teachers in this one school district in North Dakota, salary plus benefits, is over $50,000/year.  According to the US Census the median household income for North Dakota is just under $40,000/year.  Meaning that the average teacher in Minot is making more per year than the average North Dakota household.

Teacher pay clearly isn’t a problem in the state.

Education spending is a hot issue in the state.  Property taxes (the chief source of in-state revenue for schools) are sky-high, and spending on education has increased 30% since 1999 while student enrollment has declined by approximately 16,000 students.  Clearly there is something fishing going on with education spending in the state, and this website can help us get to the bottom of it.

Kudos to the NDPC for getting this done.  If you like what you see, head on over to their website and donate a few bucks to help them keep this up and running.

Update: Above I use the median household income for North Dakotans to compare to the teacher compensation numbers.  While I think it’s significant to note that individual teachers in the Minot Public School System are making significantly more than entire households, it’s also worth nothing that the per-capita average income for North Dakotans is around $31,000/year.

Meaning these teachers are compensated at a much higher rate than the average citizen.  And teachers get approximately 2 - 3 months off for summer every year too (in addition to vacation and sick leave), which the average citizen doesn’t get.

On June 10th there will be a crucial election in Grand Forks concerning Grand Forks County’s desire to attain more power through a home rule charter.  It’s my belief that we need to do everything we can to stop this from happening.  To my knowledge the county hasn’t implemented any spending cuts to make up for their jail fiasco.  Instead they want to stick that and more on the taxpayer.

Grand Forks County could be the most dysfunctional political entity in North Dakota.

The worst example of that is the jail that they built without taxapayer approval.  The County Commission said at the time that they needn’t bother the voters about it because according to them it wouldn’t cost the taxpayers a cent.  Well they were wrong, dead wrong.  They used made up numbers to project that.  When it came out how badly they had figured it they made the jail administrator a scapegoat and fired him.  I’m sure he was partly to blame but it’s the responsibility of the commission to investigate before they take action.

They’ve had other problems as well.  Last summer they tried to sneak a new tax on the voters with an unpublicized election with very few open voting sites.

Commission members also had a well publicized feud with the Sheriff in which they only managed to look silly.

To me, a taxpayer the biggest thing is that according to American’s for Prosperity’s report they’ve increased spending by 50%, inflation adjusted, since 1997.  During this time the population went down and services are not up.  I believe that 50% increase in spending is before they jacked up property taxes to pay for their jail fiasco.  Why don’t they roll back some of those spending increases to pay for the jail and other needs?

Clearly the county commission cannot be trusted with the power that they have, let alone more power.  According to Citizens for Responsible Government which is fighting this Home Rule power grab the county would gain a number of powers to get more money from the beleaguered taxpayers:

If this passes, here is a list of some of the taxes that could be imposed:

sales and use tax
gross receipt tax
motor vehicle fuels
special fuels tax
motor vehicle registration fees

There is also a provision where the state limit on property tax for counties could be voided, thereby creating a massive property tax increase. 

I don’t know who all is active in this group but Terry Bjerke, City Council Candidate is one of them.  If you want to help you can contact them at:

Citizens for Responsible Government
PO Box 12296
Grand Forks, ND 58208-2296

The Whistler is sending them $100, today.

In related news CT Marhula who is running for the County Commission had a letter to the Herald yesterday. CT’s a flaming Democrat, but he’s got this paleo-conservatives unreserved support in the coming election.  Go get ‘em CT!

You can see the actual Home Rule Charter up on the county’s website.  Also here’s a link to the last post I did on the subject.  I’ve got other links on the bottom of the page in case you want to catch up. 

I found it interesting that when I Googled “Grand Forks County Home Rule” the first two entries were posts that I’ve done on the subject.  I wouldn’t be surprised if Say Anything isn’t the best place to get information on this subject as we come up on the election. 

If you have any information about the issue

David Drovdal, a Republican state representative from District 39 (Arnegard), has an op/ed in the Bismarck Tribune today blasting the North Dakota chapter of Americans for Prosperity over its proposed cut in taxes.

That a Republican would issue such a nasty, accusatory aspersion at a conservative group seeking tax cuts in a time of massive state budget surpluses is simply amazing.  And an indication that the NDGOP has some serious internal problems.

Drovdal’s main line of criticism lays with quoting Tax Foundation figures which he claims shows that North Dakotans aren’t taxed that much compared to other states.  And that is true.  Looking at a percentage of income, North Dakota is pretty “middle of the pack” when it comes to state and local tax burdens.

By my question to Drovdal is: Why should we care what the tax burden is in other states?  And in light of massive state budget surpluses, what justifications do we have to keep taxes high?

I think we can all agree that North Dakota, as a state, is constantly on the look out for new citizens and new businesses.  Given that we do have big budget surpluses right now, why wouldn’t we lower taxes right now while we can afford it so that we have a friendlier tax environment for both businesses and individuals?

The question for North Dakota is not “What does our tax situation look like compared to other states?” The question for North Dakota is “Do we need to keep taxes high or should we lower them to help attract businesses and citizens?”

Given that I see little reason to keep state taxes as high as they are now, I think the answer to the question is “lower taxes.” And the best proposal to do that, which doesn’t add additional paperwork and administrative expense as Governor Hoeven’s property tax rebate has done, is AFP’s initiated measure to cut income taxes by 50% and corporate taxes by 15%.

An interesting quote from a Canadian paper today:

Even in North America, we are not running out of fuels. Between the Bakken, the Marcellus Shale, Alberta’s tar sands, and two centuries worth of coal, North America is rich in fossil fuels. What we now face is our own decision not to use them.

Quite right.  We have plenty of resources here in America, but we deal with supply problems and high prices because we’re inflicting those problems upon ourselves.  Or, more accurately, politicians are inflicting them upon us through excessive regulation and taxation.

Am I the only one thinking that a credit card company offering debit accounts for students to put their “excess financial aid” in for spending is an indication that we are subsidizing higher education entirely too much?

This is happening at the University of North Dakota, apparently, and I don’t like it.  Seems to me that if we are going to subsidize higher education those funds should go to tuition.  Maybe books.  That’s it.  There shouldn’t be “excess aid” in any amount significant enough to put into a debit account.

The abuse of higher education aid is rampant.  Even in my personal experience I know of several friends who used their aid not for books or tuition but rather for home entertainment systems, cars and vacations.  Clearly, this is an indication that students are getting too much.  And with colleges consistently raising tuition because of the amount of higher education subsidies available (more subsidies means that students can afford higher tuition) the conclusion is clear: We need fewer education subsidies, not more.

But that’s a hard sell for politicians.  After all, who wants to be the person to get up on the campaign stump and say “We need to give our college students less.” He or she would be immediately castigated as being against higher education simply because he/she feels the government is spending too much on it.  They’d still be right, but in politics perception is unfortunately as important as reality.

My letter to the editor about that Kristin Hedger op/ed I posted on last week was published today in the Grand Forks Herald.

Rep. Earl Pomeroy, who is facing a challenge from Republican Duane Sand this campaign season, is found of telling North Dakotans how much clout he has in Washington DC.  His campaign website says, “As the only member of the House of Representatives with both a seat on the Ways and Means Committee and Agriculture Committee, Earl is in a strong position to put North Dakota producers.” During past campaigns he has talked about how his “seniority” in Washington DC gives him an advantage.

While it’s true that Pomeroy certainly has a lot of years in Washington DC under his belt, the truth his that the amount of clout he has is marginal at best thanks mostly to the fact that he receives more support from people who aren’t North Dakotans than from people who are.  Case in point: The current battle over the farm bill.

A recent Associated Press article details how the farm bill has, thanks to fighting over tax provisions, ended up in front of the Ways and Means Committee chaired by Rep. Charles Rangel of New York.

The Democratic chairmen of the House and Senate agriculture committees, Minnesota Rep. Collin Peterson and Iowa Sen. Tom Harkin, have lost control of the legislation as tax packages were added to both bills to help pay for them and win votes.

That has brought into the mix House Ways and Means Committee chairman Charlie Rangel, who represents few farmers in his New York City district. He and Senate Finance Chairman Max Baucus, D-Mont., are charged with finding an extra $10 billion for the bill but have agreed on very little.

At a farm bill meeting in Rangel’s office Thursday, shouting could be heard behind closed doors. Several senators, including Baucus, left angrily.

“Let’s just say it wasn’t good,” Sen. Saxby Chambliss, R-Ga., said afterward.

Now, Pomeroy would undoubtedly tell us that he’ll use his clout and seniority on the Ways and Means Committee to influence Chairman Rangel for a favorable outcome on the farm bill for North Dakota.  But one wonders how Earl is going to do that when he’s in Rep. Rangel’s pocket.

You see, since 2000 Earl Pomeroy has received $8,000 in political contributions from Rep. Rangel’s campaign fund and another $27,000 from Rangel’s National Leadership PAC.  Given that Rangel is one of Pomeroy’s biggest political benefactors, and that in general Pomeroy (like most North Dakota Democrats) receives the vast majority of his money from interests outside of North Dakota, one wonders how Pomeroy plans on serving North Dakota in Washington DC in anything but the most marginal of ways.

It’d be a lot easier to believe that Earl Pomeroy wields a significant amount of clout for North Dakontans in Washington DC if he were more beholden to actual North Dakotans for his political money than people who are not from North Dakota, and probably have never been here either.

This Friday I’ll be guest hosting Scott Hennen’s old “Hot Talk” program on WDAY 970AM in the Fargo/Moorhead area.

The show airs from 9:00am - 12:00pm, and you can listen to it online here.

A transcript from a television news report about gas prices last night:

(Sen. Byron Dorgan/ D-ND) “We need to work to put downward pressure on gas prices. This is a ridiculous situation.” Senator Byron Dorgan says the plan announced last week by fellow Senator John McCain to have a holiday on the federal gas tax might have a short term benefit to you at the pump

(Sen. Byron Dorgan/ D- ND) “He wants to borrow money to have a gas tax holiday. What I would like to do is have a holiday for some of these major integrated oil company profits.” Dorgan says another problem is the amount of oil the nation puts in reserves

He says each day about seventy thousand barrels of oil is put underground in this country in case of an emergency

(Sen. Byron Dorgan/ D-ND) “That puts upward pressure on gas prices. We ought to do exactly the opposite and put downward pressure on the gas prices.” However, with no relief in site… you continue to stomach the pain

The number of outright lies and half-truths apparent in even these few short statements is astounding.

First, it’s worth noting that there are a lot more than three major oil companies.  There are about a dozen major, international oil companies operating around the globe with several dozen more smaller, more regional oil companies competing.  None of these companies are “integrated” any more than Ford and Honda are “integrated,” though certainly that bit of populist brow-beating plays into Dorgan’s other economically-illiterate rantings quite well.

Second, no tax on a business in the entire history of market-based economies has ever driven the price of goods or services offered by that business down.  New taxes on business always result in the price of goods and services offered by that business going up.  So while Byron Dorgan talks about putting “downward pressure” on gas prices out of one side of his mouth, he’s talking about a tax that would do nothing but drive up gas prices out of the other side.  That Dorgan expects to be able to engage in that sort of cognitive dissonance without being called out on it is both a commentary on his opinion of the average North Dakotan’s intelligence and a scathing indictment of North Dakota’s media outlets which let him get away with such nonsense.

Third, as I’ve already pointed out, the amount of oil the government is putting into reserves has little-to-no impact on the overall oil market:

First let’s keep in mind that oil flows out of the strategic oil reserve as fast as it flows in.  Unless the size of the reserve itself is being expanded, the daily purchases of oil are done to keep the supply up as older oil in it is shipped out.  Much as with any product, the reserves can only be stored for so long and need to be kept fresh.  Thus some of the older reserves are sold to be used in the market while new reserves are purchased to keep the supply at the level mandated by Congress and the President.

This means that the SPR’s impact on the market is essentially neutral.  The Department of Energy lets as much out as is put in unless the overall size of the reserve is being expanded.  But that isn’t happening right now.

Second, let’s also keep in mind that 70,000 barrels of oil is a drop compared to overall US oil consumption.  Our country uses approximately 20 million barrels of oil a day.  Even if that 70,000 barrels of purchased oil didn’t have a neutral impact on the market (as I just explained) it would still represent just 0.35% of overall oil purchases in a day.

The conclusion?  Byron Dorgan doesn’t really care about high gas prices.  If he did, he’d advocate for lowering federal gas taxes and easing restrictions on domestic oil exploration (he has been a staunch opponent to oil exploration in the Alaska National Wildlife Refuge).  What Byron Dorgan really cares about is taxing the hell out of oil companies (as though they’re not already being taxed to death) so that he and his fellow tax-and-spend liberals have more of the people’s money to play with.