Entries Tagged 'Taxes' ↓

UPDATE: Using Entertainment taxes for private entity setting a bad precedent

I first want to say I support finishing the State Theatre, I have actually helped with some charity fundraisers for the facility through ZombieWalk and SF Roller Dollz. I think it is a worthy cause and I applaud Denny Sanford for giving money to the goal of completion. But I think that is still the direction the theatre should move in, private donations for a private facility.

Using entertainment taxes sets a bad precedent, as I pointed out yesterday, and I will tell you why.

Seven years ago, former city clerk Debra Owen won an open meetings case over how her termination was handled. During the proceedings, City Attorney David Fiddle-Faddle argued his case based on the opinion of a former attorney general. 4 of the 5 attorneys who sat on the Open Meetings Commission contended that an ‘opinion’ of an AG is NOT case law, so it did not apply. When Fiddle continued to argue based on the AG’s opinion, one of the panelists asked David cynically, “You do understand that the opinion of a AG is not the same as case law? Don’t you?” The crowd in attendance let out an audible giggle. The commission determined that you have to base your arguments on tried case law, not opinions.

The City of Sioux Falls is trying to say they can spend the entertainment money on a private entity in the form of promoting the city based on a opinion of the AG in 1984. But there is NO case law. In other words, the city could be sued if they try to set this precedent. Even if I supported giving the State Theatre MORE tax money, which I don’t, it should come out of the CIP not the entertainment tax.

Listen to Allison Weiland talk about the State on Jon Michael’s Forum

In other news, Cameraman Bruce attended a luncheon today talking about open meeting laws, 3 of the panelists were former State Legislator Dave Knudson, Argus reporter Jonathan Ellis and Jon Arneson (Argus attorney). They all contended that the most recent open meeting laws that Knudson helped write, said that if text messaging or emails during a public open meeting are being used, that correspondence can be used in a court case. So council, if you were smart, you would put the phones and email chatting away during the meetings.

Welcome to Opt-Out Falls!

Well, it was bound to happen, with ALL of our local government agencies in Sioux Falls going Bat Sh*t crazy over opt-outs, the name change is no surprise.

“I will admit I was a little surprised and kind of hurt when I found out the name change,” local philanthropist Lenny Spamford exclaimed, “I mean just how much does a no state income tax paying billionaire in SD have to give before he gets a town named after him?”

The governor, Donita Trump, didn’t seem too bothered by the change either, “I guess we kind of forced it on them, you know, by collecting over 30% of our sales tax revenue from the city and giving them nothing in return. It may not seem fair, well because it isn’t. I told you I would do things differently, and I’m delivering on that promise. Talk to you later, I have to get back to trucker hat shopping and hip-hop dance lessons.”

The latest to opt-out was the Minnerahrah County Commission today voting 6-0 for an opt-out (and 5 of them are Republicans! The shame!).

“The county, especially Sioux Falls has become the place to commit crimes, it’s like it’s trendy or something to drive from Freeman, or Menno or even Highmore to commit crimes in our county,” said county commissioner Gene Bart, “We really enjoy arresting people here and putting them in the endless cycle of the criminal justice system. Heck, just yesterday we arrested someone for looking at the Arc of Dreams the wrong way, on top of that we even put a guy away for trying to burn the newly sodded grass at the Levitt with a magnifying glass. Lawn crimes, just another mole we are trying to whack! Building collapses, not so much.”

Of course nothing gives the Sioux Falls School District more jollies than an opt-out. Superintendent Baron Von Maulher said, “We were getting such a kick out of it, I banned joke books from the IPC. Whenever I see anyone down and out around the offices, I just yell ‘OPT-OUT’ and the whole place breaks out in laughter. Of course, the finance department does get a little trepidation, because they have to ‘count’ (wink, wink) the votes. I always tell them they can do that with their hands tied behind their back and blindfolded. Worked in the school bond election.”

I asked Baron what the opt-out schedule looked like for the school district over the next 5-10 years.

“Well, since Pierre really doesn’t care how much we raise taxes, we figured we would push the envelope a bit,” Von Maulher replied, “We are going to try 6-12 opt-outs per year through the board, and if the people whine about having a choice, we will hold an election, but this time there will be only ONE super precinct, and it will be in my office.”

The city council is also infamous for raising property taxes. In fact, I don’t think a city council has voted down an increase in over 15 years.

City Council Vice Chair, and RS5 self-appointed leader, Ned Greitzert explained it like this, “When someone hands you lemons, you make lemonade, when the state hands us an opportunity to raise the tax rate, we make grenades, uh, I mean lemonade.”

Well, that would explain the potholes.

I asked him about all the other numerous increases in fees and taxes the city imposes on the citizens, and couldn’t they just take it a little easy?

“Funny you bring that up,” replied Greitzert, “The majority of the council, the ‘RS5’ as we like to call it, or the ‘He-Man Steely Hater’s Club’ is all about positivity and progressive measures to keep our city’s high level of quality of life at a maximum, that means if we are going to raise fees on water, sewer and other stuff, we have to keep that tradition of caring  and due diligence with property taxes. Wouldn’t it seem odd to you that your water bill went up last year but your property taxes didn’t? Where’s the consistency there? If you want inconsistency with taxes, just vote Steely for mayor. All she’ll do is bankrupt the city while giving taxpayers a break. The next thing you know, we will all be swimming in an outdoor pool in the middle of January.”

I didn’t have the heart to tell Ned that I didn’t know how to swim, especially under ice.

Some question why all the local entities have to constantly raise our tax rates when valuations have had record growth over the past 6 years?

Mayor TenBibleverses’ Chief of Staff took a stab at the question, “I call it the candy syndrome, something I kind of started when I worked for that last crook, I mean, mayor and quit ONLY after I was forced to write the largest TIF in city history for the Spamford Sports Complex,” said Jericho Speck, “We just started handing out TIFs, tax rebates, excusing tipping fees, ignored environmental laws, built millions in infrastructure for ice cream warehouses and just said, screw it, corporate welfare for whoever wants it. Don’t tell my pastor.”

I asked, “The Candy Syndrome?”

“Yeah,” Speck said “Whatever rich developer in town that needs a handout for NO reason at all, we just give it to them. No questions asked. No proof of economic impact. No proof of job growth, or even good paying jobs. We just make sure the request is signed and we approve it. The city clerk’s office handles petitions in a similar same way.”

I wondered if this haphazard way of giving tax cuts and tax incentives was driving up everyone else’s property taxes.

Speck responded, “What? Are you stupid? Does beer like foam collect at the bottom of Falls Park every Spring for the past 100 thousand years?! You certainly are the poster child for the large percentage of South Dakotans that don’t go to college. Ever think about taking up welding? There’s a program I could refer you to.”

I had more questions, but I had to get back to my call center job, my 8.5 minute break was over.

While this was satire, some of the sh*t is true, mostly everything but the fake names.

West River math VS. East River math

So this is an interesting story;

RCSD – $250m – $20/month increase in property taxes on every $100,000 of value  =  $240 yr
Morrison/Vik/Maher MATH:
SFSD – $190m – $2/month increase in property taxes on $100,000  =  $24 yr
So which finance director is telling the truth?
I do know that the SFSD rearranged their capital outlay levees, but the disparity is strange. I also wonder if they plan to pay off the bonds a lot faster in RC?

UPDATE: Is Sioux Steel Development looking for a ‘Massive’ Record Breaking TIF?

UPDATE: Big Thanks to Snevelicious for following up on this story!

So this is taking place next Thursday, April 11 (City Council Meeting Calendar)

4 PM Architecture Ideas and Presentations

Held at the receiving building of Sioux Steel Company, 196 1/2 E. 6th St.

Please park on the west side of the Sioux Steel Building or in The Market

5 PM Heavy appetizers and drinks at The Market, 196 E. 6th St

The Sioux Steel Development folks have already mentioned they want to build a 900 stall parking ramp (or around that size) they have also mentioned using TIF. What they haven’t said is how much. I believe the largest TIF ever given out in Sioux Falls was for the Sanford Sports Complex (I can’t remember the actual dollar amount, but I think it was $9 million and I believe 20 years). The rumor going around is that the Sioux Steel will be asking for a TIF in the amount to cover the construction costs of the parking ramp a number that could range between $20-30 Million dollars. The largest TIF ever given out in the history of the city. It also seems the event next week is away to smooze the city council into this.

Some would look at this as an ‘opportunity’ for the city to get out of paying for a parking ramp like we did Downtown already, but as I look at it, we shouldn’t be contributing anything. TIFs are the largest form of corporate welfare. We should be focusing tax incentives on rebuilding our neighborhoods.

Oh, but it gets even better. Another developer is rumored to be offering the city to buy some of the RR redevelopment land. He said he doesn’t want any TIFs or tax reductions, but he is only willing to pay HALF of the appraised value. They always have to have something. This developer has already raked the city over the coals for other DT developments along the river greenway.

I think it is ironic that all these FREE market, ant-socialist Republican developers in town are the biggest socialists of them all. Maybe we should rename the area ‘Karl Marx Greenway’.

CVB & Hoteliers talk ‘BID TAX’ on Air BNB

I guess the CVB had a luncheon (today?) and a little birdy told me the discussion quickly went to how Air BNB is hurting the hotel industry in Sioux Falls and maybe it is time to start charging them a Bid Tax.

Gee. I wonder whose idea that was? Probably some idiot blogger.

The operators of Air BNB already have skirted paying other lodging taxes (they pay sales taxes) and avoid the same health inspections Hotels, Motels and Bed & Breakfasts have to endure.

Maybe it was just idle bitching, but I have never known the leader of the CVB to remain idle to long.

UPDATE: Correction on Tax Incentives for Dakota Gold

There seems to be some confusion of where Dakota Gold Alliance was previously located and what the tax incentive is for. I have to do some more digging.

There was a group of properties in the area by the old Avera Sports Dome. The ownership group was listed under Leggett Family Trust. While researching County tax records, they had Dakota Gold listed to the property (which is a possibility because it is a warehouse that could be used for storage, and warehouses fall under the ‘INDUSTRIAL’ designation for tax reductions). Another source tells me that Dakota Gold was located at another office in that cluster, but that would have been their formal offices. So the tax reduction was for the warehouse, I’m just not sure at this point if Dakota Gold was using the warehouse at that time, and perhaps that is why they were listed on the tax records.

Folks, this is what happens when secretive administrations don’t tell the public or council anything for almost a decade.

According to a city ordinance that was passed by the city council in 2008;

March 3rd, 2008 – Sioux Falls City Council

http://amv.siouxfalls.org/OnBaseAgendaOnline/Meetings/ViewMeeting?id=1838&doctype=2#

DEFERRED ACTION: 2ND READING: AN ORDINANCE OF THE CITY OF SIOUX FALLS, SD, AMENDING THE REVISED ORDINANCES OF THE CITY BY REVISING THE NAME OF PERSON TO RECEIVE APPLICATION FOR REDUCED TAXATION ON NEW CONSTRUCTION.

Document:  Ord. 1017

Proposed Amendment:

Section 39-139. Discretionary formula report:

In July of each year, the assistant director of planning and building services shall submit a report to the city council of all eligible completed new construction projects which qualified for the discretionary formula beginning in December of 2008. The report will include the description of each qualified property, the base full and true taxable value, the new adjusted full value of new construction and improvements, and the amount of discretionary loss of taxable value as defined in city ordinance of 100%, 80%, 60%, 40% or 20% for each year of the eligible tax abatement.

In other words, by city charter, the city council was supposed to see yearly reports. This gets more interesting by the day.

 

More tax incentive for developers

I guess if you have a lot of money, you get all the price breaks. According to the City in this informational presentation (PDF DOC: Tax Reduction Program – Informational Jan. 8.pdf;

Reduced Property Taxation

Any person desiring to claim reduced taxation on new construction shall make application to the Planning and Development Services Department on or before October 1 in the year in which the project is completed and shall first appear on the tax rolls as a completed or modified structure. The application shall be submitted on a form prescribed by the city. Upon Planning and Development Services’ approval of the application, the staff shall notify the applicant within 30 days stating whether the facility is eligible to receive reduced taxation.

Since 2008 the City has reduced approximately $14 million in property taxes. Seems strange when we are trying to find money for new infrastructure, like a sewer plant, we would be allowing these many cuts.

One of the arguments for these cuts is that the businesses will create jobs;

Review the requirements for projects to receive incentive:

◦ Job creation

◦ Types of jobs

◦ Increase in Tax base

Do we really believe with the wages these places are paying they will make up the $14 million in unpaid taxes? I think a requirement that should be under review is if these properties are paying living wages. Otherwise it is no different then TIFs, just another corporate welfare program.

IM 25 is a bad way to fund education

Forget the fact that IM 25 will probably become a slush fund for state government, it is a horrible way to fund Technical education.

Am I against increasing tobacco taxes? Not at all, if the money was directed at cessation, prevention, healthcare or even drug treatment programs, I would be all for it.

So the question remains, how do we fund Technical education? The first question we have to answer is “Why is South Dakota the highest in the region for tuition?” My educated guess (no pun intended) is because of high administrative costs and staffing. I know the teachers are NOT making highest wages in the region, in fact most tech teachers make less than K-12 instructors.

So after we get that part straightened out, how do we get costs down for the students? I think it is simple. First, make apprentice programs easier, and pay the apprentice. Many of these students could skip technical education all together and start in these jobs right out of HS.

As for the more technical skills for the medical field, electronics, engineering, etc. make the industries that need these positions the most pay into a scholarship fund that students can apply for with the agreement they will work in SD for so many years.

If we want extra money for tech schools, shouldn’t the employers who need these employees pay into a special fund or tax since they are the ones benefitting from reduced tuitions with skilled labor? Seems like an easy solution that makes sense.

Still don’t know how they linked tobacco to tech schools. Of course, we only have to look at the clown who cooked this up, Former Lord of the Lords, Mark Mickelson who wants to make money off of the backs of poor smokers. Some things never change in South Dakota, the business elite want handouts and welfare and they want the poor to pay for it.

And this is why IM 25 is Lame, just like it’s creator. VOTE NO!

UPDATE: If you watch the Rotary debate today, both Noem and Sutton voted against IM 25 and cited some of the same reasons I stated above for voting against it (and I posted this before watching the debate – HA!)

UPDATE: SFSD sends $100 million in interest payments to East Coast Bond Investors

UPDATE: It was fun watching the SFSD Board Meeting in which they quickly glazed over the finances so they could have a 10 minute presentation about marching band (don’t get me wrong, it was a great presentation) I just thought talking about tax payers expenses would have garnered the same attention.

When they did get to the Demographic report where they mentioned almost 50% of students are on Free or Reduced lunches, Board Member Kate Parker said, “We need to talk about that one of these days?” Well since this has been on the climb for almost a decade, when will that ‘magically day’ come Kate? When it hits 70%, 80% or maybe 90%? It always chaps my hide when we are constantly screaming teachers need to get paid more in SD (I agree, they do) but all wages in this state need to rise, so parents of these students can afford to feed their children, rising tides raises all boats.

As I predicted before the school district bond election, we were going to take out bonds which would cost around $100 million in interest payments over 20 years. Those interest payments DON’T go towards education, they DON’T go towards teacher pay, programming, or even building the new facilities. They go towards East Coast bond investors.

This was the fundamental issue with the bonding. We could have bonded less, built the schools we need now AND paid for the future schools through Capital Outlay. We would have still had to pay bond investors, but it would have saved us about $50 million. I will say it again, I am all for public education, I am even NOT against my taxes going up for it. But with all of our growth in SF we can pay for these projects as we need them with the current tax structure. We don’t need to line the pockets of Bond Investors.

50% of Capital Outlay goes towards debt service

This finance report is very telling;

Over half of our current Capital Outlay goes towards debt service. No where in the reports can I find the school district’s current debt (before taking out $300 million in bonds). But my educated guess is somewhere between $100-200 million. This would have been an important side note before we took out even more debt before the election.

Demographics Report of the SFSD

It seems we have a lot of smart people in the District educating our very poor student body;

As you can see, the more students that are enrolled in our elementary system need more assistance.

*What I also find interesting about posting the Monday agenda for the SFSD board meetings is that the final documents and attachments don’t get updated until Sunday. Is it because a school district employee is posting these docs on Sunday? Probably not. There is this little trick with the internets where you can ‘time stamp’ postings. I do it all the time with my blog. In other words I can schedule a post well in advance by using a ‘time stamp’. This tells me the District has this information in advance but chooses to post it only 24 hours before the public can view it. Why do they do that? Well that is a very good question.

UPDATE: Is the TenHaken Administration getting ready to get ‘TIFaliscious’?

Well, that wasn’t to tough, they got Brian Allen at KSFY to roll over and talk about how great TIFs are. Funny, the important part missing from Allen’s story, the actual economic impact;

A KSFY review of active Tax Increment Financing projects in Iowa, Minnesota and South Dakota shows there is a dramatic drop-off in TIF usage.

You know why? Because several studies have been done showing they have very little economic impact. I also find if comical that Allen only interviewed PRO TIF folks and NO one who is against them. I also like how some in the interview talk about how South Dakota does them ‘different’. Good stuff. Yet there has been NO extensive study done in South Dakota showing the actual economic impact of them. Why? Because the results would be grim.

What other people don’t realize is that when we give wealthy developers TIFs we all pay more in property taxes to supplement them to fund things like our counties, cities and public education.

I think the TenHaken administration is gearing up to start handing them out, literally like candy. His COS, Beck, wrote the Sanford Sports Complex TIF while working for the city (the largest in state history) and she also wrote the most recent one while working for Lloyd Companies for the Cascade project that is mostly marketplace apartments.

Tonight the city is hiring a finance director who worked for the Costello Companies (a major developer in SF) who is also an expert in TIFs.

It is pretty clear to me they are getting us prepped and they are probably chiding our local media behind the scenes to talk about the ‘positivity’ of TIFs.

Let’s face it, they are simply a tax rebate for private developers who could easily pay the taxes with or without the TIF. We don’t have a growth problem in Sioux Falls. In fact we are developing so much and building so fast we can’t hire people fast enough. The city council even gave SE Tech $100K for more job training programs. This tells me we don’t need to be subsidizing growth and development in Sioux Falls, it actually tells me we need to find ways to slow this growth and concentrate on SMART-STEADY growth not FAST URBAN SPRAWL.

The TIF model in itself isn’t a bad idea, but I think it should be applied to cleaning up neighborhoods. Giving tax rebates to single family homeowners and small apartment owners to clean up the neighborhoods would be a better approach, and it would be a visible economic impact. When individuals have to spend less on taxes and divert that money to improving their properties and lives that means they spend more money on other things that help with sales tax revenue that truly impacts our community. Businesses who use TIFs to expand their businesses don’t pay sales taxes, they just collect them. Give the rebates to individuals who will actually use them to improve lives and contribute to sales tax revenue.

Let’s face it, TIFs right now are truly ‘Corporate Welfare’ and not much else.

UPDATE: Did anyone catch Dusty Johnson in the interview? Mr. Fiscal Conservative ANTI-WELFARE wants to raise the Social Security age gladly preaching the ‘WINS’ about TIFs? We know exactly what Dusty would do in Congress, handout to big business while stepping on the little guy. If I was the Bjorkman campaign I would be clipping this little piece of corporate welfare pie for a future TV commercial.