Say Anything Blog

Roger Timm, a former campaign director for John Hoeven last seen spamming people to come to Say Anything and stuff a poll we were running, sent out this email to Fargo-area Republicans today detailing cooperation he’s coordinating with a union to support a sales tax increase (I obtained the email through a reader):

Seth Thompson, President of the Building Trades Union, and I met this morning to discuss the campaign for the half-penny sales tax.

The Union is going to staff their phone bank to make calls to all the senior citizens in Cass County and advocate a “Yes” vote for the sales tax measure.  They will have the list and a script provided by us to use in contacting the senior list.  That will be around 4500 contacts in Cass County.  We will then recontact the pro- & leaning seniors on election day to ensure their vote.  We will also help them get to the polls if necessary to vote.  Fargo/Cass Forward will handle the transportation on election day.

The Union is also going to contact the AFL-CIO members who live in Cass County and urge a “Yes” vote on June 10.  Seth will be sending out, on union stationary, a letter or flyer, explaining why the union supports the tax and urging the members to vote in favor.  There are some 3700 AFL-CIO members living in Cass County.  They will also be contacted on election day to get out the vote.

We owe a huge “Thank You” to Seth Thompson and the Building Trades Union.

Rog

Am I the only one wondering how we’ve reached a point in North Dakota where Republicans, in a time of state-wide budget surpluses and booming tax revenues, are joining with unions in an effort to raise taxes?

And not just raise taxes, but raise them to fund a private organization which will engage in economic planning for the area?  Last time I checked, economies controlled by committee and tax hikes weren’t exactly conservative initiatives.

North Dakota Republicans keep asking themselves why they’re losing ground of late to North Dakota Democrats.  It could be because, at least when it comes to fiscal issues, a lot of the NDGOP is indistinguishable from the Democrats.

Nice letter in the Herald yesterday.

EMERADO, N.D. — I read with interest a comment made by Lloyd Omdahl in the May 14 story, “Farm Bureau campaigns against Home Rule” (Page 1B).

Omdahl said there was not a great deal of concern over property taxes at the public hearings.

I attended the informational meeting on Home Rule Charter that Omdahl chaired at the Grand Forks County Office Building. I am now questioning if we were really at the same meeting where there were many questions on a sales tax as well as increased property taxes through consolidation of mill levies. I was one of the people who made comments about my concerns on further taxation.

There were many specific concerns on taxes addressed that evening. The answer given by Omdahl to most questions was, “I would hope that won’t happen”.

Not being comforted by the answers, I voiced my concern to the commission. With more powers, five people could lower my standard of living even further through taxation.

When my husband and I were first married, we made a decision that we would work hard, pay our taxes, live modestly when we were young so we could invest in our farm. Then when we were older, we could retire without having to worry about passing our farm on to another generation to cherish.

However, we didn’t count on all these escalating taxes that would erode the heritage we worked so hard to establish and protect. The decline in my standard of living has been through no action of my own or decisions that we made in our lives. The government has done this to all taxpayers, and we seem to have no recourse after these taxes are implemented.

Grand Forks County residents currently do have recourse on Home Rule. We have the option to vote no on the Home Rule ballot measure June 10. I intend to vote no, and I encourage other Herald readers to do the same.

Here’s what I’ve done on the issue in other posts.  Follow the links on the bottom.

We knew this was coming:

BISMARCK, N.D. (AP) _ North Dakota regulators have granted Otter Tail Power Co.’s request for a special charge to cover its investment in a wind farm.

Otter Tail owns part of a new wind farm south of Langdon in northeastern North Dakota. The project is capable of generating 159 megawatts of electricity. Otter Tail gets 40.5 megawatts of the wind farm’s output.

Otter Tail asked for a special renewable energy charge to cover its share of the wind farm. North Dakota’s Public Service Commission has voted to grant it.

The charge will be listed separately on the bills of Otter Tail customers, starting in June. Otter Tail has about 57,000 North Dakota electric customers. It serves the cities of Wahpeton, Devils Lake and Jamestown.

Commissioner Tony Clark says the charge will be less expensive for Otter Tail’s customers. He says the utility could charge more if it bought wind power on the open market. Clark says it’s better for customers if Otter Tail owns the power source.

This is in addition to the federal subsidy for wind energy which I believe is 1.5 cents per kilowatt hour.  That doesn’t sound like that huge of a subsidy when we’re paying something like 8 cents per kilowatt hour.  (I’m not even sure what it is.) But most of that price is transmission and delivery costs.  The power companies are probably only paying a couple cents for generating electricity.  (If anyone knows I’d like to hear what it is.) (Update:  I was looking at Minnkota Electric’s annual report and I think they were reporting that I was in the ballpark with 2 cents to generate a kilowatt hour.  It depends on what plant)

Even with this huge subsidy that we’re paying for, Otter Tail customers are STILL going to have to pay extra to generate their power from wind.  All of this for a computer model that hasn’t predicted the cold trend we’ve seen the last ten years.

We need to tell these politicians to keep out of what they don’t understand.

For the record I don’t hold this against Otter Tail and the Public Service Commission needed to allow this. But the government should quit threatening and actually carrying through their mandates and demands for something that is not competitive.  It doesn’t hurt the power company.  It hurts us.

Given that I do have to dig into Tony Clark.  He says that this is cheaper than buying wind energy on the open market.  So?  It would be an heck of lot cheaper to not have the wind energy in the first place.  Does the guy not understand that?

Because the farm bill represents the will of the American people.  Or something.  I’d argue that most Americans probably resent the fact that they’re forced to fork out billions for the defacto nationalization of the ag industry, but whatever.

What’s interesting is that Kent Conrad is calling President Bush “tone deaf” for taking a stance on the farm bill that isn’t all that different from one taken by Barack Obama, which is the candidate Conrad himself personally endorsed for President.

Somehow I doubt Conrad would call his buddy Barry tone deaf, though.  And I doubt anyone in the North Dakota media would be willing to ask Conrad a tough question or two about Obama’s stance on the farm bill.

This is the problem with green advocates: They make bold pronouncements like this one and then expect everyone to live up to it regardless if it’s even possible.

The reality is that energy is a market much like any other.  Unless energy from alternative sources can compete with energy from traditional sources (fossil fuels, etc.) nothing short of government mandates (and/or big time subsidies) will have those sources being used.  But the problem with mandates and subsidies is that they rely on politicians to choose the right energy sources to mandate/subsidize.  And what if they choose the wrong source?  What if they base their choice more on political expediency and the influence of lobbyists than on which source is the most reliable and viable?

I think it’d be great if we could find an energy alternative to fossil fuels.  I think it’d be great if we could get all of our power from solar or wind sources or something like that.  But I don’t think it’d be great if we leave the choice for where we get our power up to politicians instead of millions of free people making free choices in a free market.

Yesterday Rob did a story on Fargo and Cass county’s idea that a NEW sales tax should be imposed on the public in order to pay for economic development.  That got me to thinking what exactly is the justification for these programs.

Let’s not talk about the morality of forcing someone to pay a tax and giving it to another person who didn’t earn it.  Let’s also leave the discussion of why so many of these programs fail.  Let’s talk about the reason why the proponents say they’re worried.

It seems that these folks try to sell these things with the idea that if the community grows than everyone will be better off.  If there’s more people paying the tab then everyone’s tax bills should go down, right?

But if history shows us anything that after the people sink tons of money into economic development their taxes just never seem to go down.  Fargo has been very successful, or so I hear, with their economic development efforts.  But if that’s the case then why do they want a new tax?  If they haven’t been successful then why would you throw more good money after bad.

Another example is my home town of Grand Forks.  The Industrial Park is nearly filled up.  City council member Doug Christianson said that they need to raise taxes to pay to buy more land.  But when did taxes ever go down because of the businesses moving into the Industrial Park.  If it’s going to cost us more and more money for economic development then why do it?

In today’s Grand Forks Herald the subject was the competition between Grand Forks and East Grand Forks about who could subsidize new home builders to build in town.  Isn’t that something just crazy to be fighting about.  I mean if we get a new good neighbor who cares if they live across the river.

For the average Joe, this economic development stuff just doesn’t make sense.  So why is there so much pressure to do it.  I think a lot if not most of it is the egos of the various city leaders.  For some reason they aren’t satisfied in just running a good city.  They feel they have to meddle in areas beyond their expertise.  Then if the city grows they can take credit for it.  (I don’t remember them taking the blame when these same companies leave for the next better deal.) I think they also look to the towns that do play this game with a bit of ec-dev envy.  If another town is growing they think we’re doing something wrong.  I disagree that we have to be the biggest, I think we should work on being the best.

And the city employees are all gung ho for more people, more tax revenue, more pay and more workers so they have less work.  Why wouldn’t they be?  The thing is do we run the city for the people that work for the city?  Do we run it to stoke the egos of the elected officials?  No we should be running the cities for the benefit of the people that work there.  And you know what, if you do the job right then there won’t be a problem with growth because it will come. 

Seriously:

Last December, Obama blasted the Senate version of the Farm Bill, the vote on which he skipped, saying, ‘Once again the lobbyists stepped in to make sure that big agribusinesses got the multimillion-dollar giveaways that they’ve come to count on.’ But last week, he expressed his support for the final version of the Farm Bill, the vote on which he also skipped, calling it ‘the good’ of which we should not let ‘the perfect’ be the enemy. What changed? According to a spokesman, Obama’s harsh words for the Senate version referred to its ‘failure to cap subsidy payments.’ Here’s the thing: The Senate version of the Farm Bill capped subsidy payments at exactly the same level as the final version of the bill.

And this is the guy North Dakota Democrats endorsed.  Personally, I stand firm in my opposition to all ag subsidies but you’d think Obama would at least be honest enough to be consistent on the issue.  And maybe hazard a vote or two in the Senate on it.

That’s right, the AARP of all organizations is rallying opposition to initiated measures to create an oil trust fund in the state and cut personal/business income taxes.

The organized campaign to pass a permanent oil tax trust fund into the state’s constitution could meet some big organized opposition this fall.

North Dakota’s 86,000-member strong AARP branch has been reaching out to other groups across the state to form a coalition against that measure.

The coalition also is being organized to combat two other potential ballot measures that are in the petition stage: a statute change that would cut personal income taxes by 50 percent and a constitutional change that would restrict government spending growth to the inflation rate.

Linda Wurtz of the AARP said her group’s opposition to the measures is rooted in the organization’s nationwide policy to oppose setting tax policy in a state’s constitution. A similar measure in Colorado has had negative consequences on that state, she said.

“You can’t predict now what kind of situation your legislators will face in two years or 10 years,” Wurtz said.

What’s really going on here is the AARP is the nation’s biggest, baddest proponent of entitlement spending, and if the state cuts taxes or diverts funds into an oil trust fund that’s lest money for the group to lobby for.  Put simply, the AARP doesn’t want you to keep more of your money.  The AARP wants the government to have that money so that the politicians the AARP lobbies can spend it as the AARP sees fit.

You’ll remember that this is the organization which opposes any effort to fix the Social Security boondoggle and supported the expansion of Medicare to include a prescription drug entitlement.

What’s really troubling about the group, however, is that it lobbies for increased entitlements for a core constituency that pays little or nothing in taxes in the first place.  Most retirees don’t pay much in the way of income taxes or payroll taxes, so when the AARP demands massive new entitlements it’s not the group’s membership that will be paying for them.

Which is exactly why the AARP doesn’t want to see a cut in state income taxes.  The group’s membership doesn’t really pay those taxes.

I’ve been hearing an endless number of ads on the radio for Byron Dorgan’s (and “Republican” Governor John Hoeven’s!) energy summit in Bismarck featuring some guy who won the Nobel Prize for something or the other.

I don’t really care what Dorgan has to say at the summit, but since he’s here in North Dakota waving the “energy” banner about perhaps it’s time for some enterprising reporter at a state media outlet to ask the Senator a few tough questions.

Like “Why, if you support lower gas prices and moving America away from foreign oil, did you vote against an amendment in the Senate that would have opened up a small portion of the Alaska National Wildlife Refuge to oil exploration?”

Or “Why, if you really want cheaper gas and less foreign oil, did you vote as a member of the Senate Appropriations Committee to kill legislation that would have allowed the exploration and exploitation of oil shale deposits in Colorado?”

Or even “Why do you support drilling for oil in North Dakota if you don’t think we should drill for oil in Alaska or Colorado?”

These are perfectly legitimate and topical questions for the Senator, and it’d be interesting to see him squirm as he answers them.  Sadly, though, I don’t think there’s a reporter in North Dakota interested in asking the Senator any tough questions.

Brian Walters is the president of the Greater Fargo Moorhead Economic Development Corp.  He backs a big hike in the Cass County sales tax so that his economic development corporation can spend it on attracting new jobs to the area.

That’s right.  This guy actually thinks that it’s possible to tax your way into prosperity.

Brian Walters points 50 miles to the south when explaining why now is the time for Cass County to change its economic development focus.

His aim settles on Wahpeton, N.D., where Imation Corp. will close its floppy diskette plant at the end of the year, eliminating about 390 jobs – some of which will end up in Mexico.

“That could very easily happen to us, and we could have hundreds of people out of work, and then there’s a ripple from that,” said Walters, president of the Greater Fargo Moorhead Economic Development Corp.

Walters hopes Cass County voters will approve a half-cent, 12-year sales tax on June 10 to fund the economic development corporation’s Growth Plan, which charts a different path to attracting new, better-paying jobs.

First, it’s worth noting that the close of that Imation plant in Wahpeton had more to do with advancing technology than anything economic.  The plant made floppy computer disks.  Most people don’t use those any more.  Thus, the plant’s reason for existence has become obsolete and it closed.

Not much anyone can do about that.

Second, why should tax dollars be flowing to this private corporation?  Do the people of Cass County get to vote on who leads this corporation?  Do they get to vote on the plan the corporation is planning to implement?  Sure they get to vote on whether or not to send this corporation tax dollars from the sales tax, but is it really appropriate for the public to be funding a private corporation in this manner?

I don’t think it is, and I also reject the notion that economic development can be planned by a sort of committee in any meaningful way.  Fascism is a strong word to throw around in modern politics, but it’s worth noting that Benito Mussolini - the founder of the fascist movement - saw his ideology as being a “third way” between capitalism and socialism.  In his view government shouldn’t own the means of production (meaning that the state shouldn’t own the businesses) but they should control and direct the economy. 

I think that’s what we’re getting with these economic development corporations.  They’re being funded with our tax dollars for the sake of managing our local economies.  I don’t like that because a) it creates a environment ripe for corruption and cronyism (imagine not being able to get ahead in the business world unless you snuggle up to the right people in the economic development corporation) and b) I don’t think any committee can plan out an economy.

Markets, even on the local level, are huge and so full of variables that no bureaucracy can ever hope to keep up.  Thus, what we should trust in is not the edicts of some committee or corporation but rather the millions of decisions made by free people operating in a free market every single day.

What our political leaders should be doing is clearing the tax and regulatory path so that as much economic activity can take place with as little hindrance from the government as possible.

Back in July of 2007 the North Dakota legislature cut the tax on newly-drilled oil wells in the state from 11.5% to 7%.  Unfortunately it was a temporary tax break and is now set to go back to the higher rate on June 30th (unless a given well hasn’t reached a 75,000 barrels-pumped threshold in which case it can be extended through the end of the year).

Industry experts are saying that this tax increase (because despite rhetoric from liberals like Senator Kent Conrad letting a tax cut expire is, in fact, a tax increase) won’t hurt oil production as oil prices are high, I’m wondering if North Dakota can really afford such a large tax increase on the industry that is driving so much economic growth in the state.

The state is running massive budget surpluses.  The state treasury just announced a record-setting balance.  So why raise taxes?  We don’t need this additional revenue, so why not make the tax cut permanent so that the oil industry can continue to flourish and drive economic growth in the state?

Would a return to the higher tax rate hurt oil production in North Dakota?  Maybe, maybe not.  But we do know that a) it won’t help oil production and b) the state doesn’t need the tax revenue.

So why let this tax break expire?

Simplistic rhetoric about “greedy oil companies” aside, the truth is that these high gas prices aren’t any better for the oil companies than they are for the average gas-buying American.

After last year’s stellar profits, American refiners are going through a traumatic period. In a time of record gasoline prices, some of them actually lost money in the first quarter, and for virtually all refiners, profits are down sharply.

Experts say the refiners are caught in a double bind. The price of their raw material, oil, is rising because of strong global demand. At the same time, consumption of gasoline in the United States is falling as a result of slower economic growth and consumer efforts to conserve.

However much the companies would like to raise gasoline prices enough to pass along the full increases in oil, analysts say they have been unable to do it. Oil prices doubled in the past year, while wholesale gasoline prices rose a mere 39 percent.

“Refiners are having a terrible time,” said Lawrence J. Goldstein, an economist at the Energy Policy Research Foundation.

Those who are demanding that the state of North Dakota build a state-owned refinery should be paying particular attention.

This June voters of Grand Forks County will be asked to approve an home rule charter giving the county more powers.  If you’ve been reading my past work on Grand Forks County you will know that I believe (and am willing to back it up) that they are a most dysfunctional organization.  Because of that I tend to not want to give them any more power.

Still the subject is a bit complicated.  Are their any benefits to the taxpayer?  The North Dakota Farm Bureau has weighed in:

“The proposed Grand Forks County Home Rule Charter just doesn’t measure up,” Grand Forks County Farm Bureau President Paul Galegher said. “If the voters of Grand Forks County adopt the proposed Home Rule Charter on the June ballot, it is very likely that the next step will be a county sales tax…

“We see a lot of problems with the proposed charter, specifically language that would give the county commissioners the ability to consolidate mill levies without a vote of the people,” Galegher said. “They would no longer need to fund the original intended use, and in many cases, these designated funds were approved by a vote of the people. Consolidating mill levies allows commissioners to supersede the will of the original taxpayers’ vote.”

Galegher said the proposed Home Rule Charter would grant the county commissioners authority to levy and collect new taxes, such as property taxes, sales and use taxes, gross receipt taxes, motor vehicle fuels and special fuels taxes, motor vehicle registration fees and more.

“We already pay federal and state gasoline taxes,” he said. “Why should we open the door to paying yet another gas tax — this time a county tax? Why is the ability to levy these taxes even in the charter at all? How many times to do we have to pay taxes on the same products and services? It’s time to stop these local taxes that just don’t measure up.”

I think that’s a very strong statement and a lot of great reasons to continue my opposition to the measure.  The Herald gave a proponent of Home Rule a chance to present the other side.

“They say it would be abused. The county has not levied to the maximum,” he said. “The County Commission has been very frugal in their dealings with property taxes .?.?. There’s no reason to fear this home rule.”

That’s a quote by Lloyd Omdahl, former Lieutenant Governor of North Dakota, contributing columnist for the Grand Forks Herald (I think he’s still active), retired UND professor and chaired the home rule committee for the county.  He’s a very prominent person and a strong supporter for the charter.

But really with all of those credentials can anyone take him serious.  He’s said that the county has been VERY frugal.  That’s absolutely wrong.  From 1997 to 2006 county property taxes nearly doubled at the same time the county actually lost population (that’s a 72% increases adjusting for inflation!).  That was before the jail fiasco when the county commission jacked up property taxes last year to cover their mistake.  By the way the (.?.?) in the quote was in the Herald article.  Maybe somebody there thought it was a remarkable statement as well.

The county is now in second place for property tax bills after the school.  They passed Grand Forks city last year. 

Clearly nobody can be taken seriously when they say that the county has been frugal with our property taxes.  They’ve been spending irresponsibly.  In fact every time I post on the county I challenge anyone to point out where the county has rolled back some recent spending increases in order to pay for part of the jail.  The voters need to tell the county commission to do everything they can to pay for their mistakes and quit acting like they have a blank check. 

Here’s some previous work I’ve done on the subject with links to go back to older works. 

The Bismarck Tribune reports today about staffers leaving the Duane Sand campaign.  Of course, Say Anything readers knew all about that 10 days ago.

A while back we were posting on Say Anything about Sioux Manufacturing, a company owned by Fort Totten’s Spirit Lake Sioux Tribe, which settled a lawsuit with the federal government over millions of dollars worth of Kevlar-armored helmets for our troops.

The helmets were of an insufficient quality (the Kevlar weave was not done to standard), and so the company was forced to pay $2 million back to the federal government.  A mere slap on the wrist given that the contract to manufacture these helmets was around $70 million.  But what’s worse is despite the fact that personnel at Sioux Manufacturing knew the helmets were faulty and sent them off to be used by our troops in combat anyway, the company still got a $74 million contract to replace the faulty helmets they originally made with new helmets.

Now comes news that the Department of Justice is investigating this turn of events.

16 May 2008 - Washington, DC – Earlier this year, in light of evidence that Sioux Manufacturing, a company that makes Kevlar helmets, has been outfitting our nation’s troops with substandard Kevlar helmets, Citizens for Responsibility and Ethics in Washington (CREW) sent a Freedom of Information Act (FOIA) request to the Department of Defense asking for all records related to Sioux Manufacturing. In response, CREW has received a letter from the DoD Inspector General’s office stating that there is an ongoing investigation into the matter.

This past February, it was reported that Sioux Manufacturing had agreed to pay $2 million to settle a lawsuit alleging that the company had shortchanged the armor in up to 2.2 million helmets for the military, including helmets used by American troops in Iraq and Afghanistan.

The Department of Defense, aware of both the problem with Sioux’s helmets and the company’s efforts to cover it up, awarded another contract to Sioux a mere 12 days before the lawsuit was settled.

I hope part of this investigation centers on Senator Byron Dorgan, chairman of the Senate’s Indian Affairs committee.  Dorgan is no stranger to securing government contracts for companies in his home state, and given his cozy relationship with the Indian communities in North Dakota I wouldn’t be at all surprised to see his fingerprints all over this.