Entries Tagged 'Taxes' ↓

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.

The BID tax is not broken

The mayor often likes to pat himself on the back calling himself a ‘progressive’ person who ‘gets things done’. I guess I could argue with him on a couple of his ventures, but for the most part he has gotten things done, but sometimes in spite of something else. That is where it is no longer classified as ‘progressive’.

The hotel tax (BID) is a great example of this. When I think of progress I think of two things, either fixing something that is stagnant or counterproductive and needs to be fixed or creating a whole new project that improves the community. The hotel tax review doesn’t fit into either category. Since it’s inception, it has proven to be working because it brings in more revenue each year, which shouldn’t take a 14 member task force and a consultant to tell us, the money being spent by BID to market the city is bringing more business to the city. In other words, progress is not described as fixing something that is NOT broken. The BID tax is working fantastically, let it continue to market our city.

Of course greedy cookie jar boy (and last year his wife with the tennis center) want that money for other play things;

“Families, businesses, nonprofits, churches, sports teams, organizations and even governments that challenge the status quo have much greater success rates than those that fight to maintain the status quo,” Huether told a packed Oak View Branch library meeting room. Before today, he hasn’t said much on the topic.

“You know and I know, and our fellow citizens know, we are capable of more,” Huether said.

More then what? First off, as I pointed out above, when it comes to the BID tax, the status quo is working swimmingly, and secondly the proven growth in the tax tells me it is in very capable hands.

But of course, this wasn’t the only bullshit spewing from Mike’s mouth at the meeting, he ended with this tidbit;

“This will be the last time you hear from me until your work is completed.”

Yeah, just like you never hear from anyone talking about the Events Center siding. The task force (that he appointed) is a stacked deck of friends he talks to frequently (partial list);

Randell Beck, Jim Entenman, Tracy Turbak, City councilors Rick Kiley and Rex Rolfing. And then there is the hiring of a consultant firm that stuck us with an indoor aquatic center in the wrong part of town.

All this is is a money grab for the administration. Nothing is broken, let the BID tax continue to market our city.

Let’s raise the ENTIRE tide in this state


Are you as sick of hearing about it as I am? WE NEED TO RAISE TEACHER PAY! And we need to do it with an increase in taxes.

No we don’t.

First off, the money exists to increase education funding, it’s about priorities that our governor and state legislators make when it comes to funding education. Elect more socially conscious representatives that understand an educated society is a better society, and we can fix the education funding problem in Pierre. Keep electing backwoods hillbillies that are more concerned about shooting critters and unborn children (instead of educating the children that are already born) and there will never be more teacher pay.

Secondly, even if it was about raising taxes to increase teacher pay, why would any worker in this state support a tax increase to pay teachers more while their wages remain stagnant?

They won’t. This notion that somehow we are going to convince the hardworking citizens of South Dakota of another unnecessary tax increase to benefit one sector of our workforce (public teachers) just won’t fly.

So you ask, what is the solution? Don’t get me wrong, I think teachers should get paid better. A LOT BETTER! But I also think nurses, welders, plumbers, construction workers and hospitality workers should get paid better also in our state. This is why teachers will never have the support of other working South Dakotans for a salary hike, because we get tired of you whining about a pay increase when you won’t go to bat for the rest of us. Many workers in South Dakota in multiple fields are leaving the state in droves for better pay, we are all in this together, not just the teacher. Heck the state with the help T. Denny had to create an indentured servant program to keep welders here (Dakota scholarships).

My point is simple, when the teachers advocating for higher pay realize this just isn’t about them, but about all South Dakota workers, we will advocate for them, but they need to advocate for us to, you know, the ones paying their salaries.

I’m all for higher teacher pay, but are teachers for higher pay in other fields also? I’m guessing they are. Share the love.

2016 Budget comparisons between Sioux Falls & Rapid City

This is strictly informational. I noticed that Rapid City approved their 2016 budget the other night, so I decided to crunch a few numbers.

I will admit, I would much rather live in SF then RC, but I have friends that live in RC and they love it. They say there is far more recreational opportunities. I still think quality of life is probably better in SF, but that is a matter of opinion.

Now for the numbers;

Sioux Falls proposed 2016 budget; $471 Million, 170K residents, $2,770 per person.

Rapid City’s implemented 2016 budget; $156 Million, 72K residents, $2,167 per person.

I have no doubt there will be some cutting and shuffling going on with the SF budget, but I doubt it will sway to far from the proposed amount.

We don’t need an inflationary property tax increase.

Believe it or not, I don’t always agree with councilor Staggers, but he is spot on that we don’t need to increase property taxes with inflation. We are a growing city, we also have natural increases in property value. There is NO reason to stick it to property tax owners. Let’s take my little Casa. When I bought my home over 13 years ago I was paying about $475 a year, I now pay over $1,100. Think about that if you own something substantial. When you factor in actual inflation, opt-outs and home improvements, you are looking at taking it in the shorts. Also factor in I am single, don’t have kids in the school district and don’t commit crime, they are basically charging me for the ills and social costs of society. You wonder why people ask for TIFs like free coffee refills, property taxes are killing us.

Traditionally, when Sioux Falls policymakers are slated to boost tax rates as they adopt the next year’s budget, the action item is listed as “an ordinance … providing appropriations and the means of financing for the fiscal year.”

That’s not transparent enough, said Staggers, who’s bringing a measure before the council Tuesday to force proposed tax hikes to be listed on agendas as an ordinance “authorizing an increase in property taxes.”

Staggers said the average citizen doesn’t have time to research every item scheduled for council action, and oftentimes skimming titles is how they learn about what’s happening.

“It’s about transparency,” he said. “It seems like a very reasonable and sensible thing. It should be very clear when we’re having tax increases.”

And I would go farther to agree, being dishonest with the public about supposed tax increases is never good public policy. We wonder why people are moving to the burbs in drones?

We know who wants to keep the BID tax review meetings held in secrecy

Here we go again, the most transparent administration in city history hiding behind ‘supposed’ rules. City Attorney, Loophole David Fiddle-Faddle lays it out for us;

Pfeifle said in an email last week that ad-hoc advisory committees do not fall under the umbrella of open meeting rules prescribed in state statute and city charter. Whether or not the meetings are open, he said, will be at the discretion of the review committee.

Oh, Fiddle, then why don’t you advise them to keep them open, heck, even offer them Carnegie Hall for the meetings, or maybe we should hide the meetings on the back nine at Elmwood like they do with the Parks Board meetings.

“There shouldn’t be any secrets, so what’s to hide? I don’t know why it would be closed,” she said.

Because ‘Hizzoner’ is probably requesting it. This way, nobody from the public or from the hotel industry can challenge the decisions being made. But the finance director has a better excuse;

“One of the advantages of having a closed room meeting is people are often times less inhibited about having free and open discussion,” Turbak said.

Yeah, that’s what Hitler used to tell his Generals. Oh, and the irony of him suggesting the discussion will be more open and free by not making it open and free. WTF?

I will compare this to an experience I had last week at the SF City Council working session. During the course of the meeting I listened to the ideas being thrown around by the council, then was allowed to comment on a couple of them. By allowing my comment and one from my cameraman, the council came up with some new ideas about the free pool passes and how EBT cards work. Imagine that, having an open public meeting where the public can listen and make suggestions.

But hey, that’s not how things work in a dictatorship. Give me the money! That is the only thing the mayor wants to hear at the end of the day.

To their credit though, it seems some members of the review board want the meeting to be open to the public;

“I’m an individual who always believes in being open and transparent,” said Tom Bosch, a review committee member who spent 14 years as the general manager of Holiday Inn Sioux Falls before taking a role at Avera McKennan. “I’d be in favor at this point, unless I hear a reason otherwise, … to have it be an open meeting.”

Paul Schiller, another person expected to aid in the review, agreed.

“I wouldn’t have any problem keeping it open,” he said. “I’m hoping for a very open and honest debate going back and forth about how these funds are used.”

I guess we will see how this shakes down.

Is Mayor Huether’s greed starting to rear it’s head?

There has been some rumblings for awhile that certain people at city hall are a little envious of the BID (business improvement district) tax. They want it so bad, they can taste it. In fact, the mayor’s wife tried to snatch some of it up to help market (raise money) for the indoor (private) tennis facility.

My drinking buddy (inside joke) Joe Sneve over at the Argus Leader can fill you in a little bit;

“Much has changed in the past five years in Sioux Falls and it’s prudent to step back and assess whether there are new or different opportunities of which we could take advantage and whether or not the priorities established five years ago remain the priorities today,” the email said.

The review committee will be comprised of councilors, CVB-BID board members and representatives from the public and business community. The group have three goals: find better ways to use available tax revenues, find any “quick-wins” that could be applied in the coming year, and make recommendations for long-term changes to diversify how BID revenues are spent, potentially using them for brick-and-mortar projects or expenses.

The original intent of this money was to market our city to bring in tourism, which is economic impact, which is funded by tourists. Seems to make sense. Use the extra ‘tax’ to fund marketing to bring in more travelers and tourists who use our hotels.

But it seems our mayor sees another cookie jar he can rob from for his ‘quick wins’. Not sure who will be on the BID review board, but I hope they recommend to keep things just the way they are, use 100% of the tax to market our city.

As for the mayor for proposing this review (to ultimately take some of this money) he really should be ashamed, but that would require him to actually have any shame to begin with . . . maybe with the help of God he can create some.

Only if John Oliver was around before the Events Center vote

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SMG basking in the ‘black’

The Events Center will be in the black.

Wait for it . . . . BAHAHAHAHAHAHA!

Oh, but let’s just take their word for it;

As for the Denny Sanford PREMIER Center, Torkildson expects the facility to be in the black by the end of its first year.

Oh sure, you betcha! SMG will make money. Ovations will make money. The utility companies will make money. The promoters will make money. The operations will be covered.

The taxpayers, we get to make a mortgage payment.

While applaud all of these entities making money and the city getting the operations covered, the taxpayer of Sioux Falls is still stuck with the mortgage payment (and building maintenance) each year which is an almost $10 million dollar deficit to our CIP each year. Money that could be spent on roads, parks or a million other useful things in the community. So while we get to make the payments on the EC, all the contractors associated with the facility get to bask in the ‘Black’ while we get to swim in the ‘RED’.

Common Sense killed 135

This failed for a reason, and it wasn’t the political power machine that killed it, it was many people with common sense behind the scenes lobbying against higher regressive taxes that just burden the working poor. It is counterproductive to fund projects on the backs of people paying higher taxes on food and utilities. If we really want to tap a hidden tax source it would be an income tax on corporations and high wage earners. Other then that, it astonishes me that the mayor of SF would support this, a person who is often telling us we are swimming in money. A little history lesson for Mr. Whitney (who apparently has no clue what has been going on in city politics for the past 10 years) We recently switched our water/sewer over to ‘enterprise funds’ this was a way to direct our fees into fixing infrastructure, which makes sense, though I think it was done to justify higher rates and to free up CIP money for ‘play things’. We don’t need higher sales taxes in Sioux Falls, especially under an administration that gets giddy every time they open the city checkbook. The next time the city needs extra money for NEEDED infrastructure, I suggest they cut elitist indoor tennis centers named after our esteemed emperor instead of looking for more ways to screw the poor.

Of course, let’s look at Whitney’s version as to why this went down (am I the only one who doesn’t laugh at his satire pieces but think his serious columns are hilarious?)

Consider the plight of Senate Bill 135, a sales tax measure that appeared reasonable enough when first submitted by Republican state Sen. Corey Brown back in January.

Yes proposed by Mr. South Dakota ALEC himself. An organization that likes to have taxes paid by the working class, while corporations run free from taxation. I can almost guarantee Brown saw this as a way to protect his corporate interests.

Bolstered by the South Dakota Municipal League, the bill would have granted cities and towns the ability to impose up to a third penny of general sales tax — if approved by voters — to pay for capital expenditures such as land acquisition, street or bridge repair and other infrastructure projects.

And that is the major flaw with the legislation, it’s wording, infrastructure projects can mean anything from a bridge, a sewer pipe or an indoor pool.

“Voters had to approve it, it was specifically for infrastructure, there was a hard sunset on it and it could not be extended or renewed,” says Yvonne Taylor, executive director of the South Dakota Municipal League

The ‘Sunset Clause’ song and dance. We know how that rolls. Remember the 2nd penny implementation for roads? Well we don’t entirely spend it on roads anymore, just a portion of it. Or the ‘entertainment tax’ that was used to pay off the Washington Pavilion bonds. Well that was paid off, but we are still paying the tax. The sunset clause is a ruse, because as soon as the project is paid for, government will find another project to spend it on. History has shown this. Do you study history Yvonne?

Gov. Dennis Daugaard, for all his talk about local control, wasn’t thrilled with the idea of cities being able to address their own revenue issues, especially with his push for highway and bridge funding taking top priority in Pierre. If someone was going to raise taxes, it was going to be him.

Well, I’m not one to defend our tight wad governor, but it seems he was using common sense by pointing out raising taxes and fees for road repairs on a state level then allowing municipalities to also implement a tax increase at the same time wouldn’t sit well with taxpayers. It doesn’t take a genius to figure that out.

Deputy state revenue director David Wiest opposed SB135 in Senate committee, saying consumers already pay four cents on the dollar in state sales tax and that collecting more locally would push the burden too high.

“That’s not going to work for citizens in the state,” he told legislators. “They won’t permit it.”

And he is right. I haven’t talked to one single person who thought this was good legislation. The other flaw pointed out to me by my conservative friends was that it should take a 60% majority to approve a tax increase, this was NOT in the bill, and I believe that is why a lot of legislators didn’t like it.

Throwing out a scary number (especially one that could not possibly come to fruition and that Taylor of the Municipal League called “mind-boggling”) was gimmicky politics at best, but the tactic was repeated in op-ed pieces and voter outreach spearheaded by the state chapter of Americans for Prosperity.

It may have been ‘gimmicky’ but not to far from the truth. In fact if we raised the taxes by a penny just in Sioux Falls, it would be around a $50 million dollar tax increase. That’s not a gimmick, that is the truth.

“It’s no secret that Sioux Falls would have reaped the rewards of this legislation, but cities and towns all across the state were clamoring for its passage as well,” Huether said this week. “It was a full-court press for local control.”

Local control?! Let’s talk ‘gimmicks’. Besides the public approving such a regressive tax increase, that is where our ‘control’ would end. We have a city administration that is famous for handing out money to special interests with little public input. In fact, our mayor is so brazen about it, after cutting a $500,000 check to the Indoor Tennis Palace, he slaps his name on the building. Now that’s local control!

Those projects total an estimated $100 million in a city that has about $30 million a year to take care of all of its maintenance, reconstruction and extension efforts, city public works director Mark Cotter told state legislators. To use public bonds, the city would spend more than “$52 million in interest alone” over 20 years to pay for the work, he added.

$30 Million? What did I say earlier about the 2nd penny? The fact is we have been robbing it (CIP) for play things and bond payments on those play things. If we truly spend ALL of the 2nd penny on it’s true intent, we would be driving on streets of gold, and they would be paid for. Instead we consistently rob the cookie jar for entertaining ourselves. The money exists for these projects, make no mistake, but it takes an administration willing to make prudent decisions about infrastructure instead of worrying about what color the bathrooms will be at the Events Center (something I heard he was very involved in).

After the efforts made in Sioux Falls and the personal involvement of Huether to articulate the importance of the bill to the state’s largest city, those votes did not go unnoticed.

“Sioux Falls brought out the big guns to promote the passage of this critical bill,” Huether said. “Then to find out it was some of our very own legislative team that didn’t even let us enter the corral for the gunfight was very disheartening.”

Oh Yes Mike, it’s always about you, isn’t it? This bill was defeated because it just wasn’t fiscally responsible. Besides, what gun fight did you get into? Did you testify in Pierre on it’s behalf? I don’t recall hearing about that?

Darrin Smith, the city’s community development director, said that the bill’s defeat is a setback for Sioux Falls growth.

“I don’t think there’s any question that this will put significant economic development opportunities we have at risk,” Smith said. “This would have allowed us to invest even more in infrastructure to create more jobs and diversify our economy, but you can’t be successful if you’re afraid to lead, so we’ll do the best we can now.”

Wow! Darrin, did you just read what you said? If we were so afraid of risking economic development in Sioux Falls, why did we borrow $117 million for an Events Center? Or rob Federal levee paybacks to build an indoor pool? Or have $37 million in surplus accounts? I don’t think we are risking anything, except over extending ourselves on play things.

“I cheer for our governor more often than not, but this is one topic where I respectfully disagree,” Huether said. “I am not fighting against my governor, but rather fighting hard for South Dakotans, east of the Missouri and west. I know he is too.”

Mike, you cheer (and cry) for one person, and we know exactly who that is.