Entries Tagged 'Taxes' ↓

Huether’s Hypocrisy of Audits

After listening to Mike’s temper tantrums this week, especially about monitoring these numbers like a hawk, and the lies from his finance office, his hypocrisy is beginning to show.

His comments yesterday about audits and the CVB Bid tax weren’t even close to reality. He wants to audit a $2.9 million dollar tax so he can get a million of it for what? Cheerleading & Dart tournaments?

This is were his hypocrisy kicks in. He wants to audit such a minute amount of money (that is apparently working as it should) but hasn’t let the public see any expenses or audits when it comes to the Events Center. Finance Director Tracy Turbak even admitted on Tuesday that he doesn’t even know if he has change order files but knows what the subcontractors were paid, maybe. How is that? You don’t know what the change orders are, and you have no idea how much money Mortenson made, but he can get you that information, as long as the Argus wasn’t suing for it.

I agree with you Mayor Huether, let’s audit the CVB, and let’s release that audit the same day as the EC building expense and siding settlement audits get released. We could throw one big audit party. I’ll drive the black Mariah.
But all this audit and tax talk has also got me thinking about the mayor’s possible opposition to the car rental fees for the development foundation. While we may both agree on this, I have a feeling the Mayor opposes it for two reasons. First off because he wants it all for the city and secondly he was pretty much left out of the negotiations when it came to Foundation Park and the GOED. As the rumor goes, “Foundation Park is moving forward in spite of Mayor Huether”.

Seems there is a lot of things that are moving forward these days ‘in spite’ of Mayor Huether

Mayor Huether says ‘The Status Quo is our Nemesis’ when it comes to the bid tax

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bid-tax

“Just a few things the mayor wants to spend hotel tax on.”

As I have often said, if the Status Quo is working, you don’t need to fix it. In some bizarro world where Huether lives he seems to think people are mis-spending money if he can’t have it. Makes you wonder how bad of financial shape the city is in if he needs to get his hands on a portion of the $2.9 million.

I can follow your rules . . . what were the rules again?

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A dramatic piece of Sioux Falls City Council theater just happened on January 19, 2016. Rex Rolfing was supposed to present the rental car tax ballot proposal but decided to break Council rules by having a private citizen do it instead. Poor Dale Froehlich, chairman of the SFDF board who was doing Rex’s job, was left standing bewildered at the podium as the Mayor and Rex Rolfing argue Robert’s Rules and Council procedure.

A few Council concepts to understand:
First, the City Council has a period for Public Input at the beginning of every meeting where anyone can show up to talk about any topic not a resolution or 2nd reading.
Second, the 1st reading is a procedure reserved for staff or Council members to present the item for further discussion and then establish the vote.
Third, No private citizen is allowed to present an item for final vote placement.
Fourth, Don’t arrange questionably legal secret Executive Sessions to place your personal projects on the agenda and ballot.
Fifth, Don’t argue with the chair in public, it’s not respectful and it could be hurtful.

Let’s just say, all but Rex sided with the mayor. Dale went to sit down with Tim Stanga as Rex placed the motion to a stunned room. Can we say it was a proposal for disaster?

A sneak peak of Cory Heidelberger at Democratic Forum, Jan 15, 2016

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Cory Allen Heidelberger of Dakota Free Press showed up to the Sioux Falls Democratic Forum on January 15, 2015 to give us a sneak peek of his views concerning the upcoming teacher pay legislative debate.

Full video coming . . .

UPDATE: I’m all for visitor taxes, but I also like transparency, and the democratic process

A new visitor tax is being proposed in Sioux Falls. Okay (A copy of the proposed ordinance DOC: rental-fees;

The Sioux Falls Development Foundation wants Sioux Falls voters to decide whether to enact a $3 per day tax on most vehicles rented in the city to help fund economic development.

I have no issue with this, well a couple, and I will get to that. I have often thought that the room tax in Sioux Falls is NOT high enough, and having another visitor fee or tax is fine with me, as long as it is directed properly. But here are my issues, and I had to pinch myself agreeing with councilor Dean Karsky;

Councilor Dean Karsky said insurance companies often pay for rental cars for customers involved in car accidents while repairs are made. Protecting Sioux Falls residents from the proposed tax would help minimize any increase in insurance premiums that could result from a local car rental tax.

“80 percent of the rental cars are rented by non-residents of Sioux Falls, so if we could exempt residents from the tax, I think it would be the right thing to do,” he said.

Dean is right, that exemption should exist. This SHOULD be a visitor tax, not a local tax.

I also question the city take. It is estimated they will be paid $175K for administering the tax, which I find high. An almost 18% take is nothing in comparison to what CC processors take, which is around 1-3%. Seems like a city payoff to get on board.

I also wonder if getting this on the Spring ballot should not have been done thru petitioning actual voters instead of the city council, and the almost silence on this initiative up until this point.

The City Council is scheduled to hear a first reading of the ordinance Jan. 19. If given the council’s blessing, a public vote on April 12 would be required before collection of the proposed tax starts in July.

Why has the public been left out on this tax increase? Sounds like they wanted it to go under the radar. I have no problem with the public voting on this as they should, but the process up until this point has been anything by democratic. The Development Foundation should be ashamed.

UPDATE: After talking to several people about the fee proposal today, I’m starting to lean completely against it especially after a foot soldier who follows city government sent me this today;

How will we be able to exempt local citizens?
1.  Is it even legal to say that if you are from Sioux Falls let’s say you don’t have to pay the tax, but if you are not you have to pay the tax, on the same good/service sold at the same place?
2.  Is that even good policy?
3.  Assuming we do this and its legal (exempt locals) that brings up the question of administration and compliance.
    a.  I assume the rental car agency is going to have to determine if you are in the city or not when you reserve the car and charge it or not charge it.  There is an administrative burden there.
   b.  When you implement something like this sort of local tax, and it has a specific clause excepting local citizens, that brings in compliance issues.  Who is going to audit or oversee these businesses to make sure the tax is collected, and waived in the right circumstances?
As an aside, there is also the philosophical discussion about what taxes should be and how to administer them.  You might have a cigarrette tax to try to get people to not smoke (change behavior) and pay for health costs for it.  You might have a booze tax to pay for all its social ills.  You might charge a wheel tax to people who license cars, in recognition that those cars are breaking up the roads, and those roads need to be maintained.  In those instances there is a clear cause/effect type relationship.  Those who benefit from a service, or, those who impose a cost on the whole society pay to address those costs.
What does someone renting a car have in relationship to paying for sewer lines out at Foundation Park?  There really is no relationship.  Its picking one specific industry and taxing that narrow activity, and really for something that isn’t related at all to the people using it, or, the activity they are engaging in.
Phase 1 of this development they say will generate I think they said 150 million+ in construction activity.  Phase 1 is 1/4 of the property.  So let’s say this will be all told 600 million of construction.  The infrastructure is 40 million.  So why not just wrap it into the total cost and impose the extra cost to those who buy parcels there?
Sure there would be a benefit, more taxes, more jobs from this development.  But the thing is any time someone starts a little business in any corner of our city they generate more taxes and jobs.  They all have some impact.  Some more than others obviously.  But some little guy starting a restaurant doesn’t necessarily have the connections to get a tax imposed for them, by their government, and interestingly on a customer base that may have nothing to do with or ever use their services.

 

Half a penny Bullsh*t!

I’m not going to link all the feel good stories about getting taxed more to give a pay raise to people who work 9 months out of the year to educate children that are not mine.

I already pay their wages with my property taxes.

I figured as a single dude I will paying about $130 more a year in regressive retail taxes so a certain sector of our South Dakota society can make more then me, though I work just as hard.

Do I think teachers deserve more pay. Hell Yah! But I also think balancing ag taxes with urban property taxes would fill this gap. I also think a corporate education income tax would fill this gap.

Why is it that the poorest among us should fill a gap that can be fixed by re-organizing or re-porposing current taxes could fix?

The governor’s plan is not only short-sighted it is directly targeted at the have-nots to pay for the things the rich don’t want to. Not only should the governor and his minions be ashamed at such a half-ass plan, but anyone drooling over it should be to.

We can do better in South Dakota. Tax wealth to educate our children. It only makes sense.

BID Tax Buffoonery

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Still not sure what Mayor Huether thought he would accomplish by putting together this committee. The probable outcome doesn’t surprise me;

A fund used to attract conventions and visitors to Sioux Falls won’t be diverted to brick-and-mortar projects anytime soon.

Steve Westra, chief operating officer for hotel owner Hegg Companies and a vocal critic who has questioned the need for the review, said the review committee was an unsuccessful “money grab” by the mayor. He said he appreciates that the committee isn’t recommending capital spending as a legitimate use for the fund.

“(The mayor) has taken several runs with trying to use dollars outside of what it’s intended for,” Westra said. “We get the sense that the mayor sees it as a road block.”

Well, you know how I feel as a citizen constantly chasing down the spending habits of this mayor, they are out of control. This is evident in his attempt to raise rates on Paratransit (instead of just streamlining it) and to eliminate free swim passes for poor kids.

Turbak blamed those perceptions among the hotel and travel industries as a reason for the group’s failure to come up with bolder recommendations.

“I think the influence of the strenuous defense of the status quo is certainly reflected in the recommendations,” Turbak said.

As I have said before, when the status quo is working (Using the BID tax to promote visitors) you don’t need to fiddle with it. Westra is exactly right, this was just a ‘money grab’ scheme by the mayor and his cronies.

The Bungling of the BID Tax

As I expected, a bunch of the same old loud mouths in our community flapping their traps and throwing anything at the wall to see what will stick;

But former City Council member Jim Entenman says the City could do more with a “venture fund” to help organizations which bring events, such as the Summit League Basketball tournament to town.

First off, as I have said in the past, I didn’t think we needed this advisory board, this isn’t about the status quo or keeping up with the Jones. The BID Tax programming is not broken, in fact it is working just the way it was suppose to by putting more bodies in Hotel Rooms.

Of course, Jim, who doesn’t even sit on the city council anymore (and actually helped create the BID Tax) can’t resist to do the Mayor’s bidding. Venture Fund, that sounds like something out of one of Huether’s goofy salesman books.

“We are an advisory board only and we shouldn’t pretend to be otherwise. There’s nothing wrong with throwing out in each of those categories, ‘Here’s some good ideas,'” Randall Beck said.

Here’s a better idea Randy, admitting that these entire proceedings have been a gigantic waste of time and tax dollars, which committee member Knobe proves with this vague non-statement;

“There’s a lot of collaboration going on and that’s good, but the concern I have is that I would like to see a more formalized system for collaboration,” Knobe said.

Huh?

NO NEW SALES TAXES!

It seems the state’s largest municipal government lobbying group is at it again, trying to squeeze water out of a rock;

Taylor said she’ll likely propose a bill in 2016 that would allow cities and towns to collect a penny sales tax to finance infrastructure projects.

Under the proposal, each city’s officials could choose what projects need public funding and at what cost. Voters would then decide whether to increase the city’s sales tax by one cent temporarily to fund a bond for those projects. Once the project was fully funded, the sales tax would cease.

What part don’t they understand? Not only has the state legislature and voters rejected sales tax hikes, they really aren’t necessary to begin with. First off, ending the sales tax after a project is completed is one of the most hilarious things I have ever heard of. Just look at the 7th penny tax we have in Sioux Falls, used to pay down the Pavilion bonds. Well, the Pavilion has been paid off for quite awhile, guess what, we are still paying the tax (basically because the contractors did such a piss poor job on the building, we are spending millions each year in maintenance costs).

As for the whining about 100 year old pipes, I would suggest that the citizens of these towns elect intelligent people to lead them through creative prioritizing when it comes to budgeting, instead sticking their hands out while burying their heads in the sand. There are several Federal and State programs that can assist in these projects, in fact, the city of Sioux Falls borrows millions from the state each year for projects.

Just like funding education, this is about putting together a reasonable budget that takes care of the actual needs of citizenry instead of corporate welfare.

I don’t believe for a second this is about 100 year old pipes, this is about another money grab. The Municipal League needs to knock this shit off and drop the matter once and for all, and get back to finding ways municipal government can actually serve us prudently instead of bleeding us recklessly.

A View on Regressive Sales Taxes from Bread for the World

A statement showing up in the news lately is misleading, in that “Sales tax has not been raised since 1969” is only a small peek into our sales tax history since 1969.

Consider food. In 2003 we paid 5% on groceries. Now we pay 6%. This is equivalent to 3 weeks worth of food out of a year. The tax on food went up at the city level, but the customer feels the whole 6%. State tax law changes brought this on. (Thankfully, SNAP purchases, aka food stamps, are not taxed. However, most low-income households with SNAP receive only partial allotments. They must pay the sales tax to buy the rest of their food. Some, especially seniors, receive SNAP benefits as low as $16 a month.)

Another way to raise sales tax is to expand the tax base. Many more items, mostly services, have become subject to SD’s sales tax in years 1969, 1978, 1979, 1995, and 1996. For examples: newspaper subscriptions, haircuts, taxi fares, snow removal, tree trimming, pest control, cell phone bills, cable TV, internet access, funeral services, music lessons and sports coaching, auto repair parts and labor, services of lawyers, architects, personal trainers, and plumbers, . . .  The list goes on.

Sales tax is inherently regressive and is a large factor in SD’s ranking among the “Terrible Ten” states for regressive taxes.*  I think it’s a cryin’ shame and a failure of creativity that sales tax is being considered for funds for teacher pay. Higher sales tax would raise the tax on some basic necessities and make South Dakota’s taxes more regressive!

That being said, I sincerely hope anyone possibly supporting any form of a sales tax hike would insist that the proposal include taking tax off food and heating bills. There is no tax on food in any of South Dakota’s bordering states. Only 2 of our 6 neighbor states  (NE, WY) tax home heating bills.

Note that I recommend “food and heat,” not “food and clothing”. Here’s why: Low-income people tend to spend little on clothing. Between the poor and the wealthy, there is a much narrower range of spending on food or heat than there is on clothing. I believe taking tax off clothing is more a gift to the wealthy than a help to the poor. You cannot buy used food. You cannot buy used heat.

*Some argue that being regressive isn’t so important because overall taxes are lower in SD. However, for the lowest-income 20% of the non-elderly population, state and local taxes in SD average higher than the national average.

Thank you for reading this and considering it for the sake of people burdened by our tax structure, which is stacked in favor of the well-off and against the lower-incomes. Please share this information with people who may not be informed or may not be remembering all this, especially if you see or hear the sentence about sales tax not being raised.