Small Town Socialism

NLstargrocery

This Bismarck Tribune article about a dispute over opening a deli in a small town grocery store is fascinating.

Apparently Star Grocery in New Leipzig is operated by the New Leipzig Jobs Development Authority, one of the economic development public/private partnerships that are ubiquitous in our communities these days. So, in other words, the grocery store is pretty much owned by the government.

For the last three years it’s been operated by a father and daughter who came up with the idea of opening a deli to serve sandwiches and what not in the store. But the JDA didn’t like the idea, because they were afraid the deli will compete with a cafe that’s already open.

So now the father/daughter team are leaving the grocery, and the JDA (and the taxpayers, by extension) are hurting.

It’s all very interesting in its own right, but even more interesting is this sort of small town socialism which is gripping more and more of our communities. Rather than stores opening and closing based on the vagaries of supply and demand, we have planners deciding which stores should be open and what sort of competition should take place.

It’s worth noting that government-owned grocery stores are nothing new in North Dakota. Stores in Buffalo and Richardton are government-owned too, with the rationalization being that if these grocery stores are allowed to close the communities they’re in will dry up too.

But the thing is, why is it the job of taxpayers statewide to keep these small towns afloat? If the people who actually live in these towns won’t give their local stores the sort of commerce volume they need to stay afloat, why should taxpayers who don’t live in these towns and will probably never visit have to be on the hook to keep the doors open?

The best thing we could do for North Dakota is to yank tax dollars away from these economic development corporations.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

Related posts

  • ec99

    ” But the JDA didn’t like the idea, because they were afraid the deli will compete with a cafe that’s already open.”
    Isn’t this analogous to the state’s inane pharmacy law?

  • Roy_Bean

    This is just the newest evolution of the age old concept of the gate keeper. Small town businesses have always stuck together like glue to keep out any new competition. If it wasn’t the city council running them off it would be the banker.

  • JoeMN

    Stores in Buffalo and Richardton
    are government-owned too, with the rationalization being that if these
    grocery stores are allowed to close the communities they’re in will dry
    up too.
    So people will stay so long as the small town grocery store they pass by on their way to Walmart is still open ?

  • KJUU

    Rob, how much of the EDC/JDA funding comes from the state?

  • factsarefacts

    This will be the new norm in 15-20 years.

    (There will be articles about how a deli is trying to succeed without the government running it.)

    That is, if we allow it and cave to our POTUS.

    • borborygmi

      POTUS is going to be around that long? Wow.

      • Hal801

        We will still be paying big bills on his behalf in that time.

      • awfulorv

        Well, he’ll be retired to his Malibu mansion, but Queen Malia will still be holding court…

  • PK

    Rob. I’m not a big fan of this, but the JDA’s are county and city funded and controlled, not state like you imply. It’s local level government and that’s the way it should be if programs like these are going to exist. Do whatever you want up there in Ward bud.

    • http://sayanythingblog.com Rob

      I was using “state” in the generic sense, in that all government is “the state.” Local governments are just political subdivisons of the state government.

      And local government or state government, it’s still wrong.

      • PK

        It all depends on how they’re run. They could be a positive force in a community. A local JDA giving a new business a loan to help them get started could be a good thing, but overall the whole thing is probably just a big boondoggle ripe for abuse.

    • http://sayanythingblog.com Rob

      And it’s not just local dollars. The New Leipzig economic development authority got a $9,000 appropriation from the state in the 2007-2009 session, and the City of New Leipzig gets about $40k – $50k from the Commerce Department in economic development grants every biennium.

  • http://www.thattalldude.com Shawn K

    As a New Leipzig native, who often did farm work, a deli like that would have been fantastic, something to grab early in the morning on the way to work. I’m not sure how much competition the deli would have introduced anyway. It’s not like Taco Johns vs Taco Bell. It’s Burritos and Breakfast vs Sandwiches. If NL is really serious about spinning the grocery store back into private ownership then they need to give the operators every opportunity to make it a business that operates in the black. If that means a deli and a cafe both operating in the same town, then so be it. Besides, if you can only have one, would you not rather have the groceries?

    • devilschild

      I doubt the deli would have taken more than a minute amount of business from the cafe. It’s a different clientele…like you stated. If anything they would have competed with the munchy counter at the gas station…but that is a good thing.

      • http://www.thattalldude.com Shawn K

        …no gas station.

  • Waski_the_Squirrel

    While I’m totally opposed to this, it should be noted that these “businesses” are supported locally, not by the state.

    I have lived in two small towns where the grocery store closed, and the same just happened in a neighboring town (where I go to church). In each case, the stores closed for lack of business. In the case of one town, a local person purchased the store after a few months and is now boasting great profits. That dry spell convinced locals that they needed to support the local store. Totally private market in that case!

    In Richardton and Buffalo, the stores are closed because better selection and prices are close: in Dickinson and Fargo respectively. New Leipzig is a bit more isolated, but the grocery store in nearby Elgin is a suitable alternative.

    Stores can’t stay open for a reason. Artificially propping up a business with tax dollars actually prevents business from coming in. Though I had to see a socialized grocery store in Elgin, I’m glad that the local government had the decency not to compete with a locally owned deli.

    • http://sayanythingblog.com Rob

      While I’m totally opposed to this, it should be noted that these “businesses” are supported locally, not by the state.

      I’m not sure that’s true. This town gets about $50k annually in economic development grants from the state.

      And local tax dollars or state tax dollars, it’s still poor policy.

      • Waski_the_Squirrel

        Definitely poor policy. But, was the grant given to run a grocery store or just for a more blanket “economic development.” If the latter, then no extra money was spent by the state.

  • Guest

    This is absured!

    I cry for my Dad’s little town of Hannah in Cavalier
    county. From 11 elevators, two newspapers, Movie theagter, Hardware,
    clothing, cafes, body shop, Drugstore, Flour Mill and more and 400
    people to less that 15 today. It is sad, I miss it, but life goes on and
    no one in any town is gauranteed a tomorrow. To keep a business open
    this way is crazy.
    We need to understand that North Dakota is more
    of a socialized state than it ever has been a conservative state (in
    name only IMHO).

  • Guest

    This is absurd!

    Rob: But the thing is, why is it the job of taxpayers statewide to keep
    these small towns afloat? If the people who actually live in these
    towns won’t give their local stores the sort of commerce volume they
    need to stay afloat, why should taxpayers who don’t live in these towns
    and will probably never visit have to be on the hook to keep the doors
    open?

    I cry for my Dad’s littl town of Hannah in Cavalier
    county. From 11 elevators, two newspapers, Movie theagter, Hardware,
    clothing, cafes, body shop, Drugstore, Flour Mill and more and 400
    people to less that 15 today. It is sad, I miss it, but life goes on and
    no one in any town is gauranteed a tomorrow. To keep a business open
    this way is crazy.
    We need to understand that North Dakota is more
    of a socialized state than it ever has been a conservative state (in
    name only IMHO).

  • R David Adams

    This is absurd!

    I cry for my Dad’s little town of Hannah in Cavalier
    county. From 11 elevators, two newspapers, Movie theater, Hardware,
    clothing, cafes, body shop, Drugstore, Flour Mill and more and 400
    people to less that 15 today. It is sad, I miss it, but life goes on and
    no one in any town is gauranteed a tomorrow. To keep a business open
    this way is crazy.
    We need to understand that North Dakota is more
    of a socialized state than it ever has been a conservative state (in
    name only IMHO).

  • Flamejob5

    Doesnt suprise me. The longer i live the more i realize we live in a largely Socialist state rather than Conservative.

    As unfortunate as these stores are, at least these particular examples of socialism are confined to small communities. The more expansive and larger Socialism becomes, the more people will inevitably end up suffering and becoming miserable. …or perish.

  • Sayint It

    How about the property tax breaks given to businesses and industry, that want to setup shop in the larger cities in ND?
    City commissions grant property tax exemptions to entice business and industry to locate in their community. This giveaway of tax revenue has to be made up somewhere. Either reduced services and/or higher taxes for the property taxpayers that do pay.
    You could consider that these businesses and industry interests are getting subsidized by the government, too.

    • http://sayanythingblog.com Rob

      I agree with you.

      I think any sort of a carve-out that lets an individual, or a business, avoid taxes everybody else has to pay is a sort of subsidy. Granted, we’re allowing them to keep more of their own money, but it’s special treatment. A perk. A little bonus tossed out to the politically well-connected.

      We should want tax policy that is flat, broad and low without exceptions.

  • ladyknownaslou

    One of the stupidest ideas is that we should accept as “normal” or “proper” that government should be in the “jobs development” or “economic development” business. These jobs and economic enterprises, if they are likely to succeed in the first place, will go where they CAN succeed! They won’t go to a moribund hamlet somewhere, true. But where we have government meddling in these things we end up with results like “mortgage-gate” or the bailout of GM. This is counterintuitive. America was (past tense intended) a success because we allowed business to open or close as the economy invited. In the end it always gave us a better result. We now have massive Metropolitan Planning Organizations, funded by government, local and federal, cooperating in the dictating of local business decisions. Our city councils seem to think it’s now their job to regulate their town’s economy through manipulation of business enterprises that used to be private. The best thing we can do for ourselves and our country is to get rid of the micromanagement of meddling governments in our “economic development”.

Top